Intellectual Property 101

Intellectual Property 101

Intellectual Property 101

From start-ups to major corporations, students to backyard inventors, similar questions about IP repeatedly surface. This IP 101 addresses the top ten.

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It’s no secret that innovation creates a competitive advantage for your business, protecting your market share, increasing financial growth and attracting potential investment.

If you are investing in innovation, protecting your intellectual property is common sense.

Businesses are increasingly aware of the importance of protecting their intellectual property (IP). One particular form of IP is a patent, but other rights, such as trade marks and designs, can be equally as important.

For over 130 years, Davies Collison Cave has been talking to individuals and businesses, at all stages of business development, about their IP and providing the legal framework to help those businesses grow.

While guiding them through the various protection systems, and crafting individual IP solutions, many similar questions arise.

The Q&A’s that follow will hopefully help to answer some of those questions and dispel some common misconceptions. For further information, please be sure to contact an IP professional.

1. I’ve registered my business name, so I’m protected now, right?

It is important to note that a business name registration, although a requirement for many businesses, does not provide protection for the name itself.

Any commercial enterprise conducting business under a name, other than a personal or company name, needs to register that name with the Australian Securities and Investments Commission (ASIC).

However, an entry on the ASIC register does not confer any proprietary rights in the name.

A registered trade mark, on the other hand, provides statutory rights that can be used against an infringing competitor using the same or similar mark.

As such, a trade mark registration can provide protection for a brand or logo. Care should be taken to consistently brand a business or the goods or services offered by a business in a manner that clearly conveys and maintains the trade mark’s value.

Searches can be conducted of the Australian Trade marks Register to assess whether a trade mark is available for registration, and whether the trade mark will encroach on any third party rights. It is always advisable to search the register for any conflicting marks as part of your business start-up due diligence.

2. Why should I bother registering a trade mark?

A trade mark provides legal entitlement to prevent third parties using the same or a similar mark in relation to competing goods or services.

A trade mark registration represents a property asset that can be used to protect your own goods and services, and sold or licensed to third parties.

This is important if you, say, open a catering business that becomes successful and you end up expanding the business and the brand – you want to protect the name and reputation that you’ve worked so hard to build. A trade mark registration can be used to protect against a competing company attempting to ‘feed’ off your brand.

3. I’ve got a really good idea and my friends think it’s great, what should I do now?

If you have a good idea that involves the creation of a new product or innovating an existing one, there is a chance you may have something that can be protected with a patent.

The best advice here is to make an appointment with a patent attorney. Public disclosure of your invention, even to friends, can be terminal for patent rights.

Most countries demand ‘universal novelty’, which requires that your invention is not publicly disclosed prior to filing a patent application.

Australia, USA and Canada are some countries which still allow a valid application to be filed within 12 months of first disclosure, but it is best not to rely on this grace period, especially if consideration might be given to filing in other countries.

4. What are the different kinds of protection I can get?

The three main forms of intellectual property protection are patents, designs and trade marks. Many commercial products can embody a mix of all three.

There are also several other forms of IP, such as copyright, plant breeder’s rights and trade secrets.

Standard patent protection usually takes a number of years. However, an Innovation Patent may be a faster option and is a comparatively cheaper form of patent that can be obtained in a matter of months.

For designs, and preferably patents as well, it is important relevant applications be filed before any public disclosure of your idea. The development process sometimes makes this difficult, so if it does become necessary to disclose an idea to someone, the disclosure should be done in confidence and a Non-Disclosure Agreement may be appropriate.

A decision should be made at an early stage as to which particular form of intellectual property may be most appropriate for protecting your idea, as registered intellectual property rights can be expensive to obtain. Good advice from an experienced IP professional can be invaluable.

5. What is the cost protecting my idea?

Initially it can appear quite expensive to protect your idea however, in the long run it could cost you a lot more if you don’t protect your business assets properly.

As a rough guide*, if professional attorneys are engaged, Applicants might expect approximate charges as follows:

  • A trade mark application – around $900, for a single class of goods or services
  • A design application may cost around $1,000.
  • A patent application could clock up around $5,000.

Additional charges may be incurred to conduct searches, if required, and of course to prosecute an application through to registration. You should ask your attorney for an estimate of those charges, specific to your needs.

It is possible to file an application yourself, through IP Australia and the only charges will be the official fees. If you decide to take this path, you should ensure you are well informed!

6. I’m told someone only needs to change my idea by 10% to avoid infringement, is that true?

The 10% rule does not, in fact, exist.

Patent infringement occurs if features of a claimed invention are present in an alleged infringing product. There is no percentage consideration.

Similarly, infringement of a design or trade mark registration is determined under established principles, and there is simply no 10% consideration.

7. Do I even need to protect my idea?

There is absolutely no requirement to protect your idea in order to make it a commercial success. But if time and money has been invested in creating your intellectual property, you may not want that to be freely available to your competitors.

If you do have a registered patent, design or trade mark, you are able to provide a commercially protective fence around your idea, which can be used to stop predatory competitors from stealing your idea and making money off the back of it. The resultant IP rights can represent a valuable asset for your business.

With the security provided by IP rights, your business can not only secure market share, but also attract financial investment.

8. I’m thinking of showing my idea to a company, do I need them to sign a confidentiality agreement?

As mentioned above, publicly disclosing your invention prior to filing an application can restrict the options for filing overseas.
If at all possible, file an application first and then disclose it to the company. If not, present a non-disclosure or confidentiality agreement before the meeting.

Many companies refuse to sign such agreements on the basis they might have already been working on a similar project and the agreement would interfere with such work.

If this is the case, serious consideration should be given as to how the idea might be presented without disclosing each and every essential feature of the idea.

Also, for patents, Australia currently prohibits any secret use of the invention prior to filing so care should be taken not to discuss any issues that might be considered as trade or commerce related, such as taking large production orders or similar.

9. Patents are so expensive to enforce, why should I bother?

Contrary to popular belief, enforcement of IP rights is generally not an expensive exercise. Most disputes are resolved between parties with a simple “cease and desist” letter.

IP rights can also serve a passive enforcement role. The mere existence and marketing of IP rights is often enough to scare off a risk averse competitor.

Obviously, high costs are involved with a full blown Court Action, but that is common to any field. Court action represents a last resort option that shouldn’t be a major factor in deciding whether to protect your IP.

10. Do I need to do a patent search before I file an application?

While there is no requirement to search before filing, it is good practice to conduct some form of searching. In many cases, the more informed you are, the better your invention can be defined.

As an initial step, Applicants should at least conduct their own internet-based searches, bearing in mind that these are not comprehensive.

A few useful websites include:

Davies Collison Cave can also provide a comprehensive international type patent search, as required.

There are various organisations that help assess the commercial merits of your invention, such as the invention evaluator.

Please note when searching, that patent applications are not generally published until 18 months after they are filed, so not all documents may be identified.

For any further information or assistance in relation to your IP needs, please contact:

Damon Henshaw, Partner
Davies Collison Cave

* Disclaimer: These figures are a guide only, are subject to change and do not incorporate every possible eventuality. Always consult a professional.