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To patent or not to patent – provisional patents for Australian SMEs and start-ups

Great ideas often come from startups and small to medium enterprises (SMEs), but the difficult question is what to do next, and at what stage should intellectual property (IP) protection be considered? It’s important to devise an IP strategy of what to protect and when, and costs can be a factor.  

Luckily, not all IP strategies need to be expensive and they can safeguard your future income streams. The most common intellectual property rights relevant to startups and SMEs are trade marks, designs, copyright and patents.

Copyright is free and overseen by the Department of Communication and the Arts. To learn more about copyright laws visit http://www.copyright.org.au.

The prices for trade marks, designs and patents can be found at ipaustralia.gov.au. For startups and SMEs that require a patent, I recommend considering a provisional patent. Provisional patents are relatively cheap, costing a $110 fee to IP Australia plus the cost of having a patent attorney draft your patent specification.  Where appropriate (and in particular in the specialised area of patent drafting) it’s always beneficial to seek professional attorney advice. However, pick an attorney who has familiarity with your product or technology and ensure you get a clear statement of the relevant fees upfront. The Institute of Patent and Trade Mark Attorneys offers a free 30 minute consultation with a specialist Patent or Trade Mark Attorney for IP creators and users. This is a great place to begin for any SME or startup.

Provisional patents don’t require the application to meet the same level of detail as a full patent. Provisional patents give you a priority application date, which establishes the fact that you are the first person to file a new invention with us. While a provisional application doesn’t provide you with the protection of a full patent, it does give you up to 12 months to consider your options and test the market before deciding to proceed with a full patent application. Think of it as a placeholder.

The provisional application doesn’t require a full description of the claim, meaning you can use the 12 months to fully develop and strengthen your patent claim. Also the application is not published and so never becomes public knowledge, which provides certainty that the knowledge of your product or technology will stay within the control of your company.

Having a patent can boost the value of your business to investors. If you can prove you have a new product or technology that is protected by IP rights, investors will be much more likely to finance your venture. IP rights are something that can be monetised.  They give investors an asset to back and they are defensible in court. Investors can invest in your business and be certain that it has the rights to license, sell or commercially use the relevant IP.

While professional advice is usually the most expensive aspect of securing an IP right, it can be money well spent. However there are ways to help keep a lid on costs and get the best value out of attorney services. Before meeting with an attorney ensure you have a basic understanding of patents. This will help you maximise the efficiency of your meetings. The patents section of IP Australia’s website can help with this initial research. Some further preparation to do before meeting with an attorney is to research the similarities and differences between competing products or technologies. IP Australia has a tool called IP Nova, which is a simple web based application which allows users to visualise IP data, making it easy for anyone to explore over 30 years of patents or other IP rights information. This will be a good starting point for discussion with your attorney.

It’s important to remember that applying for a provisional or full patent with IP Australia will not protect your IP overseas. However, if you want to base your overseas patent application on your provisional patent, you will need to submit your Patent Cooperation Treaty (PCT) application within 12 months of filing your provisional patent.

See also: IP Australia adopts image recognition tech to help SMEs better protect their trade marks

About the author

Patricia Kelly is the Director General at IP Australia, which is an agency of the federal Department of Industry, Innovation and Science. 

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Patricia Kelly

Patricia Kelly

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