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Preparing for war – 9 tips to protect & defend your IP

Posted 7 years ago

Over the past couple of weeks, I have found myself having a few difficult and awkward conversations.

After sitting down with a few clients and running a diagnostic over their business or startup, I quickly turned into the bearer of bad news.

They thought they had their intellectual property protection all sorted, but unfortunately, two of them will have to incur significant extra costs to recover a meaningful IP position. And one of them, we have established, has little to no IP protection at all.

Securing your company’s IP is like preparing for war: you need to ensure you have a defensible position in case someone attacks your territory.

You need to be able to assert your ownership if someone crosses into it and starts exploiting it without prior agreement.

Like war, it can be expensive and bloody. If you don’t have solid and strategic protection, there will be casualties.

Here are nine tips to prepare you for war:

1) Take stock of your inventory and troops, and develop a solid battle plan.

Understand what IP assets are important for your business to protect and defend, and the relevant costs. Get educated.

Know what forms of IP rights exist within your business now, and what future IP rights might be created. Determine what IP rights are important to protect and understand the costs of both protecting and defending that IP if it were ever infringed or contested. Here’s an easy guide from IP Australia on the different forms of IP.

2) Don’t give away your position.

This is one of the most important rules of engagement. Disclosing your IP before you have protected it is a quick way for it to wind up dead or with not much left to salvage.

Some jurisdictions allow ‘grace filings’ in the event of a disclosure (e.g. in Australia within 12 months of disclosure) but that means you have ruled out a number of jurisdictions and the intelligence is intercepted – your competitors could be off and running or could have even filed before you if they were fast enough.

You need to talk to people about your invention to effectively develop and take it to market. The smart move is to understand who you should disclose to, when, how to approach it, and under what terms. To cover the risk of disclosure it’s common to use confidentiality agreements. These can maximise your opportunity to recover damages; but remember, these documents are only worth what you are willing to defend in court, so be smart and calculate what’s at stake…remember this is war!

3) Make sure you own the territory before you go out guns blazing.

It sounds trivial but you need to ensure your company or a dedicated holding company owns its IP and has full rights to use it. You need to ‘lawyer up’.

This is something people get wrong when using contractors to develop IP on their behalf. The common scenario is when a company uses a contracted marketer/copywriter/graphic designer/photographer/web developer. In most jurisdictions, these service providers will create IP that is automatically protected by copyright owned by the creator (meaning it doesn’t need to be formally registered).

Without an agreement that includes an IP assignment clause, your company will not actually own that IP, despite having paid the person for that work. For employees, contractors or anyone else who may create IP during their engagement with the company, you will want to ensure all relevant IP rights are either licensed or assigned to the company.

Lawyers can be very expensive but there are many out there who don’t charge ridiculous rates for adjusting their template agreements to fit your needs. This is one area where it pays to spend a little money to ensure you capture and retain chain of title to your company’s precious IP.

4) Do not take it lightly; this is war and countries take it very seriously.

Don’t treat registrable IP protection as just an administrative exercise. I have seen this mistake too many times.

For the uninformed, it is easy to view IP protection as just a bunch of forms you have to fill out with a range of expensive administration/registration fees. This couldn’t be more incorrect, and I implore you to appreciate that this is not a ‘tick box exercise’.

For registerable IP rights such as patents and trademarks, you are applying to a country to seek monopoly rights for your technology or branding in that region, and this is not something they take lightly. Your application will be examined by one or more experts and will often be argued based on the way the application has been structured and articulated.

It is the examiners’ job to try to find a flaw in your application. The default answer is “no” and your job is to convince them that it should be a “yes”. Even if you get through examination, the protection then needs to be defensible if contested in court. Again, this requires trained wordsmithing to ensure you have a robust IP asset that can stand up to attack.

5) Timing is everything, so know when to strike.

Particularly when it comes to patents, timing is critical. Deciding when to file has a range of strategic and cost implications which should be carefully considered.

It is not always best to file at the earliest opportunity and here are a few reasons why:

  • As soon as you file, that sets the priority date and therefore the length of your monopoly rights period (e.g. 20 years). You can withdraw and refile a provisional before you file a complete application but the priority date moves with it.
  • If you are in a position to delay filing, you will consequently delay the expiry date of the patent rights. Even six months at the height of product sales can mean a significant amount of extra revenue.
  • Do you fully understand the invention yet? You need to be very clear about what your invention is to ensure the scope of the claim covers what you will ultimately commercialise. You also need to have the data to support the claims you are seeking and show that it works. For example, you have an idea for a widget and you have built a prototype yourself. You file a provisional, which ultimately gets filed as a complete application. At some point around year 1-2 you find yourself talking to manufacturers and realise that suddenly the prototype cannot be manufactured as per your design and you are forced to redesign. That redesign results in a functional change to how the widget works. Suddenly, your claims no longer cover the widget you are ultimately going to make and sell.
  • You seek monopoly rights in a country in return for disclosing your invention to the world so others can use that knowledge to create further innovation. As the information will be published after 18 months, it is important to consider strategically when you are willing to disclose the details of your technology to the world.

Getting the timing right is a delicate balance between filing early to avoid any prior art being developed to destroy novelty, protecting before the first commercial sale, and delaying as long as possible to realise the full commercial potential of the monopoly rights.

6) A mistake at the start can lead to losing the war. Get the expert advisors in early.

A lot of people are always concerned about the high costs of IP protection and often delay seeking advice. Seek advice early so you don’t pay more dearly for your decision later.

Most IP attorneys will not charge for an initial consult and the value that you can get out of an initial phone call or coffee meeting can be the difference between life and death for your company’s IP.

Take advantage of that time and ensure you cover all bases to ensure you don’t let something slip through the cracks. I have seen and heard of scenarios where people don’t seek advice due to concerns about confidentiality. Remember from point (2) that managing disclosure and confidentiality is all about getting the who, why and the how right. A patent attorney is most definitely the number one person you should disclose to and the discussion will be bound by confidentiality under the Code of Practice upheld by the Professional Standards Board.

7) The right soldier can win the war. Focus on the individual soldier, not the army.

Find the right attorney, not just anyone from a high profile or nearby firm. This is a big one.

I recently witnessed a scenario where an individual went to a top-tier IP firm to file a patent for their start-up’s core technology. After the filing was published, an attorney who was an expert in that field saw the patent filing and immediately got in touch with the inventor, because he was concerned about the quality of the filing. After catching up for coffee and understanding the invention better, the inventor realised that the attorney from the top tier firm had not, unfortunately, understood the invention correctly and mis-represented the invention in the patent filing.

The result? A patent that is fundamentally worthless to the company and one that may inhibit them from protecting the IP properly moving forward. This is not a one-off occurrence, so I really want to stress the importance of finding a good attorney. Ask around to find one with both a good reputation and the technical experience which aligns with your invention. Impact Innovation Group has an extensive network of trusted patent attorneys and we can connect you with some individuals to explore your options.

8) Use expertly trained soldiers, not untrained civilians. Otherwise, expect casualties.

Don’t self-file…please don’t do it.

I don’t want to go on a rant here but I want to ensure you don’t make the mistake I have seen so many people make. I am not an IP attorney, so I am not chasing fees here. I am providing this advice because I am dismayed by the number of fantastic missed opportunities that I have seen from people getting their IP protection wrong, often through not engaging a professional and doing it themselves to save money.

The numbers speak for themselves, eloquently expressed put in an article by Mark Summerfield from Patentology:

“Overall, when I look at Australian patent applications filed by small, self-represented, applicants, I see at least 90% of all provisional applications, 77% of all standard patent applications and 95% of all innovation patent applications ultimately resulting in absolutely no enforceable rights whatsoever. And this does not account for the fact that even where enforceable rights are ultimately obtained, they may be of minimal commercial or legal value, considering that the applicant may have had only a limited comprehension of what they were doing in the course of examination.”

The stance of ‘something is better than nothing’ does not apply in the IP theatre of war, and in fact often the opposite may be true, whereby you are better off not to make a filing and maintain your invention as a trade secret.

To put things in perspective, I have been working in and around IP commercialisation for many years, read patents on a weekly basis, and would not consider self-filing.

In Australia, only registered patent attorneys are legally permitted to charge fees for drafting and filing a patent. There’s a reason for that. They are highly trained and they are required to maintain their accreditation through continued professional education. This includes staying abreast of current case law and disputes to understand how to translate court reasoning into patent drafting practice.

It truly is a dark art, so respect and value the work of the IP wizards.

9) It is war, you can’t let emotions get in the way, and you need to do what’s best to protect your country.

Don’t be afraid to seek a second opinion.

You are not being unfaithful if you engage with another IP attorney. Don’t be concerned about hurting someone’s feelings. This is business, so you have to check your emotions at the door and do what’s best for your company. It can be a valuable exercise to have another attorney look at your IP filings early in the process when adjustments can still be made (12 months post-filing) to see if they can find any holes.

This can be particularly useful when you have facilitated a filing locally for an international IP strategy and have a key overseas market where protection will be critical. It’s prudent to find a local attorney in that jurisdiction with litigation experience to gain an opinion on defensibility in that market.

If you can get this advice for a reasonable price, you either gain peace of mind that you have the best possible protection, or you catch any potential for improvement whilst there is still time to implement it. You’ll rarely get that advice from an IP attorney though, because it is their job to get it right the first time and they often can’t see the error in their own work.

IP is a mine-filled battlefield, open to attack from any front. I hope you now have a little bit of wisdom out of this post to set you on the right path.

In war, everything comes down to having the right soldiers and advisors; in business it can be very difficult to find the right people. Impact Innovation works with clients to help them to successfully commercialise their IP assets. We love helping companies get their war game right and can help your company to find the right attorneys who are the experts in your field or potential market.

– Dr Luke Holtham, Impact Innovation Group Commercialisation Strategist

Disclaimer: The content of this article is for information purposes only and should not be construed as legal or commercialisation advice. Please call us on 07 3041 1128 if you have questions about protecting and commercialising your company’s IP.

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