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A useful guide for exporters daunted by the intellectual property minefield.
The business world is littered with tales of stolen ideas and brilliant designs dropped because they were too futuristic to attract support.
If their uniqueness had been safeguarded these concepts might have benefited their creators.
While the best way to keep an idea or invention secret is to tell no one about it, discussions with others
are inevitable to get a concept off
the ground.
We are, of course, delving into the often-dreaded realm of protecting intellectual property (IP) – information that others might like to know that you know and want to
gain from.
IP can be any aspect of a business such as a brand name or product design. In fact, Baldwins’ Intellectual Property partner Philip Thoreau says every export has some element of
IP right.
Businesses need to put aside their fear of these complex issues and realise the full economic potential of their IP, from their company name to information on their websites to new or improved inventions, says Simon Pope, external relations and IP awareness manager at the Intellectual Property Office of New Zealand (IPONZ). This is the government agency that examines all applications for patents, trademarks, design and plant variety rights in New Zealand, and maintains the registers for these.
“Many people don’t realise how much IP they have,” says Pope.
The types of protection for intellectual property are:
• Patents that protect inventions for 20 years, with renewals required at intervals.
• Trademarks that protect brands, identity, logos, etc, for ten years.
• Copyright is an automatic right that comes into existence every time an original work is created, published or performed. But it doesn’t last forever – for example, a book is the author’s property to gain from for 50 years after his/her death.
• Design rights protect the aesthetic features of a product – shape, pattern, ornament and configuration.
• Plant variety rights grant exclusive commercial rights to them for 20 or 23 years.
• Non Disclosure Agreements protect confidential information, typically for three years.
Pope says people confuse the various rights so he recommends they “Lose ‘IP’, and talk about patents, trademarks, copyright, trade secrets, etc, instead.
“Know which ones protect which things, and how to leverage this asset once you have identified it.”
The advantages of patents go beyond protecting inventions from being copied: they are also tradeable business assets. Principal patent examiner Mark Pritchard says around 80 percent of patent applications succeed and an increasing area of innovation is biotechnology.
But preparing a patent specification involves complex technical and legal aspects.
“To get the best scope of protection we would suggest you get a registered patent attorney to help with drafting and other issues that might come up during examination,” says Pritchard.
Strategists and advocates
A patent attorney is not necessarily a lawyer but is qualified to act as a professional intermediary between clients (both local and overseas) and IPONZ. Most are registered with the New Zealand Institute of Patent Attorneys, the organisation that sets legal and technical exams.
Some lawyers also specialise in
IP services.
Pipers’ Patent Attorneys’ attorney Colin Woodroffe explains proprietary information that businesses should keep secret can be wide-ranging – from customer lists to the way they do things, to a breakthrough idea.
“But once it’s not confidential it doesn’t have any value, so you need to arrange protections while it’s secret.”
A Non Disclosure Agreement (NDA) stipulates that the person you are disclosing to is not free to use the information without your consent to disclose it.
“In any western country a business discussion is considered confidential by it’s very nature. But what are the terms? It’s better to have an agreement. People expect it,” says Woodroffe.
Everyone who works on new ideas needs to sign NDAs and keep diaries of when they did what, advises Michael Smythe, design consultant at Creationz.
“Some of the best ideas come out of interactive team work. If these people are not all working for the same employer, who owns the idea? This has to be managed to protect IP rights.”
Defining ‘invention’ is almost impossible, says Woodroffe. Broadly, it’s a new way of making something or using an item, a new action not performed before and not obvious.
Draft patent legislation will bring New Zealand into line with most other countries, such as requiring an ‘inventive step’ (not just small differences from existing inventions).
Smythe points out that a great idea might change considerably once it’s designed and made, therefore requiring a new patent.
As well as focusing on a product’s inventiveness exporters must grasp that by not being on the ground where their product is sold, branding becomes their connection with customers, says Thoreau.
“Look at what you can protect and do, not just designs and technology patents. The more informal IP rights such as trade secrets and copyright are as important as the registered rights.
“File your application before you launch the product in New Zealand,” he says. “International conventions also extend this protection for a period in other countries.”
Industrial Research Ltd (IRL), a crown research institute, helps clients put together IP identification and protection plans and gives general IP advice, but refers them to a registered patent attorney for legal advice, according to IRL’s IP manager Neville Queree.
Technology commercialization consultancy EverEdge IP also sends clients to patent attorneys after doing an IP search and risk analysis.
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Director of IP at EverEdge, Paul Davies, says companies must assess what IP they have, what protections are possible and how that stacks up with supporting a real commercial opportunity. If you have a poor product and poor IP no one will copy you anyway, but if you have a great product and poor IP you are in trouble.
“Pick your countries, know how to market and find the best IP to support that. And match the protection to the type of enforcement you are likely to do,” says Davies.
Country variations
IRL says each country has different IP protection processes and rules, which generally require the assistance of a New Zealand patent attorney who can work with the overseas-based counterpart.
Woodroffe says some products can’t be patented in some countries, for example software, but a patent attorney might be able to dress it up so it doesn’t look like software.
Thoreau explains the World Trade Organisation’s trade related aspects of IP rights (TRIPS) Agreement establishes minimum levels of protection that member governments have to give each other.
But, he says, “The laws can be similar but the details not.”
Davies concurs. “It’s really a global village now, but it’s not a case of one size fits all: be specific per country with strategies.
“Often countries in Africa, Asia and Latin America have poorly designed IP protection systems. Brazil takes five years minimum to grant patents and last year 3600 of 28,000 applications were successful.
“India has a reasonably good patent office but it helps to flick money here and there.
“In China, local government agencies are empowered to raid factories to collect evidence if copying is suspected,” Davies says.
New Zealand recently joined the Madrid Protocol International Trade Mark (TM) filing system, which is expected to reduce the costs of protecting IP from around the middle of 2012.
New Zealanders will be able to file a single international TM application through IPONZ to the international examination authority for cover in around 80 countries.
Dangers of not protecting IP
The greatest risk to a business of having no IP protection is losing the ability to gain from its product or service.
Says Thoreau, “IP protection is not a cost but good insurance against enforcing rights down the track.
“The potential competitor offshore will see your IP in the market or when they search, and not knock you off because most people are looking for a quiet life, not problems.”
There are plenty of case studies in Smythe’s book New Zealand By Design – a History of New Zealand Product Design.
An iconic case was Colin Murdoch, inventor of the plastic pre-filled disposable syringe (and other products) that he filed for patent in 1956. The Department of Health said it was “too futuristic!” but he made prototypes and not long after his concept was published in patent gazettes, multinational drug companies began offering vaccines in such a syringe. The rest is history.
Murdoch got ripped off but didn’t have the resources to sue, says Smythe.
His own experience in registering a patent taught Smythe not to rely solely on a patent attorney.
“You know your product best and have more at stake. Be prepared to do battle [with patent offices].
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