If you’re like most people, you’ve probably already had that world-changing idea, but never acted on it. If your company is like most others, you’ve almost definitely developed a handful of business processes and technologies, but they now sit in the bottom draw of a filing cabinet gathering dust. Why is this so often the case? Caught up with other things? Not sure if that big idea is worth pursuing? Worried about idea theft? Stop worrying! According to our experts, it doesn’t have to be that way.
Contents:
IP to Pave Australian Prosperity in China, India (Griffith Hack)
The Value of IP (Watermark)
IP – The Next Big Thing Reality TV (ShelstonIP)
DIY Patent Searching – Traps for New Players (Phillips Ormonde & Fitzpatrick)
The Secret to Intellectual Property (IP Wealth)
Australian businesses stand to benefit from the effort to develop and standardise the structure and enforcement of patent systems in the region’s developing economies, especially China and India.
This is the view of Tony Ward, Principal at leading Australian patent and trade mark attorney firm Griffith Hack and current President of the Institute of Patent and Trade Mark Attorneys (IPTA), the profession’s foremost representative body.
Contrary to conventional wisdom, Ward says that the Chinese patent system is quite sophisticated and strikingly similar to the Australian system. In fact, Australians actually helped implement the Chinese patent system in the late 1970s and early 1980s.
“For some years now, China has had a perfectly established patent system,” says Ward. “You can get patents in China, but people are wary of their enforcements. I’ve recently done some research on this and I can tell you that there is an enormous amount of IP enforcement that goes on in China, between Chinese nationals. It’s been said that more IP litigation takes place in China than in any other country in the world. But only something like two percent of it involves foreign parties.”
By all indications, the Chinese government (not known for sitting on its hands) is aware of international wariness regarding IP infringement and is toughening IP laws and, crucially, their enforcement.
For Ward, the roll of Australian IP firms is to reassure corporate Australia that China has an enforceable system, which will be backed up by the courts. IPTA is set to announce an alliance with the All China Patent Agents Association, the equivalent industry body in China. This will facilitate the sharing of training and expertise to improve both systems.
“Singapore has quite an established system, but not many practitioners. Similarly, Malaysia is established but small. Indonesia has a system, but there are certainly some doubts about its practicality and enforceability. The Chinese system is much more promising for us,” says Ward.
Nadia Odorico, a fellow Principal at Griffith Hack believes that the firm’s international focus greatly benefits the region. She points to Griffith Hack’s recent patent drafting training courses in Malaysia as a good example.
India’s economic ascendance also presents an immense opportunity for Australian businesses. Its British colonial fathers bequeathed an established patent system, but also some quirks that often make it more difficult to deal with from outside. “The Indian patent system relies quite heavily on the findings of the US and European systems. They don’t usually do their own prior art searches,” says Odorico. “And yet they will often request that a patent be redrafted on the basis of some pedantic and at times nonsensical objections.”
Ward would like to see a day where a uniform and enforced patent system exists globally. “Internationally, it’s fair to say that there is a growing push to achieve uniformity in IP practice and enforcement. And, if there was a uniform system, it’s highly unlikely that it would be very different to ours. By making the IP systems of our immediate neighbours more sophisticated, we are surely encouraging the opportunities for Australians to trade with those markets.”
The result is a win-win for all involved. “Building up good relations overseas is good for our clients and good for us,” says Ward. “It makes the IP system that much more sophisticated in those countries. It makes their patent offices and the courts understand our principles better. The Chinese will begin filing patents in Australia very soon and we want to help them.”
Tony Ward and Nadia Odorico are Principals for Griffith Hack, Melbourne, and have over 35 years of combined patent and trade mark experience. Tony Ward is President of the Institute of Patent and Trade Mark Attorneys and both Tony Ward and Nadia Odorico specialise in the patenting of mechanical inventions. (03) 9243 8300
So, you have aspirations to license a patent? But where do you start? And how do you value something as intangible as intellectual property? Watermark’s Peter Hallett and Richard Baddeley explain.
Where do you begin with a new client?
RB: If a new client has asked about licensing their technology, the first thing I want to know is whether they have a business plan. Right from the beginning they need to have an understanding of the commercial value of what they are licensing.
PH: Yes, and as the client’s advisers we need to understand our client’s business and where the client wants to take its business. We can then put together a strategy for protecting the client’s IP in the markets of greatest potential value. If our client wants to license in technology, we will start by assessing the strength and breadth of the IP around that technology.
RB: The technologist might be blinded by the technology and possibly discount its commercial value. If they do not have a business plan, I’ll say, ‘Let’s do some market research’. We can assist with identifying possible partners or sometimes provide an introduction. An assessment of the commercial value of the IP, which might sometimes be a challenge, is the best place to start.
Do most of your clients build companies around their IP or license the technology?
PH: Some companies are well equipped to exploit their IP, others might lack the resources or skills to maximise the potential of their IP. They are ideal candidates for licensing out their technology to generate value. And from a licensee’s perspective, licensing in technology can be far more cost effective than internal development.
RB: OEMs (original equipment manufacturers) often arrive with very clear ideas about the purpose of their patents. They will ask us to draft protection around certain commercial considerations.. An increasing number of companies will have the expectation that we will also provide value as ‘business advisors’, in addition to technical advisors.
What sort of information will you require?
PH: We’ll need to know what sort of applications the IP has and what role the IP owner wants to play – will they be hands-on and involved in manufacture and distribution, or do they simply want to receive a royalty stream? Then we can help to identify potential licensees.
RB: Typically, clients operating in an industry already have an idea of who would benefit from the technology. If they are already investing in their technology through the purchase of patent protection, they are very likely to have a reasonable idea of its value and who or what industries would benefit.
How do you value licensable technology?
PH: The two main factors to be taken into account when determining value are what premium the IP will bring and the strength of the IP. The ‘premium’ refers to the cost saving the IP will bring, or the extra revenue it will generate. In short, how it will generate financial value and influence ‘the bottom line’ of a potential licensee. The strength of the IP refers to its scope and validity.
RB: The ‘scope’ of the IP is the extent to which you can stop others using it. It’s your enforcement potential. For example, can the IP be enforced across multiple industries? The ‘validity’ of the IP refers to how different your IP is from what’s gone before – how confident you are that another can’t contest your rights. The combination of strong IP and high premium value measured in the market’s terms will give you a valuable asset.
PH: Finally, the developmental stage will also influence the value. The closer your IP is to market, the higher value it will attract.
Is it worthwhile putting yourself in the position of the buyer?
PH: Yes, most definitely. The buyer will be looking for ways to discount the price. How they value the IP will depend on whether they are looking to exploit the IP in its entirety, or simply looking for freedom to operate, or to stay ahead.
RB: They may also be seeking exclusivity, which will force the licensor to re-visit their overall strategy for licensing the IP. To explain, exclusivity may earn a higher price for the licensor but it is worth considering whether that price will exceed the value of a number of non-exclusive licences commanding a lower nominal royalty. Different types of clients reach different conclusions on this point.
PH: Right from the beginning, it’s best to get both patent and licensing advice. That way, a sound strategy can be developed from the outset
Peter Hallett is a Director for Watermark Intellectual Property Lawyers and specialises in licensing IP. Richard Baddeley is a Principal and Patent Attorney specialising in Chemical Engineering projects. For patent or licensing advice, please contact either Peter or Richard on (03) 9819 1664.
What do the Da Vinci Code, The X Factor and The Block all have in common, apart from being stunningly successful? All had to deal with highly publicised claims that they were based on ideas stolen from someone else.
If you have a great idea for a new TV show (book, movie, etc.), you should be asking the question, “How can I protect my intellectual property so someone doesn’t steal it?” The answer is that it’s not easy, but there are many things you can do to improve your position.
Trade Mark protection
It is highly desirable to register a trade mark to protect the name of the show or book. To obtain trade mark protection, you should choose a name that is distinctive (i.e. not descriptive) and original. This will mean doing some searching within IP Australia as well as on Google or other search engines to confirm that your name is original. We can assist with these searches.
Once you have decided on the name to be registered, it’s important to register the trade mark in the correct classes. In Australia and most other countries, there are 45 classes of goods and services in which a trade mark can be registered.
A good trade mark can be very useful to prevent copycatters and hangers on. There has been a considerable amount of press recently as the owners of the Australian Idol trade mark take action to prevent or shut down other unconnected Idol events. Many proposed Idol events have been cancelled due to concerns over possible action by the trade mark owner. A strong trade mark can provide significant protection for a TV program or book.
However, trade mark protection does have its limits. It is a simple matter for someone to come up with another name. So while trade mark registration does provide a level of protection, it is not enough to protect the TV concept. The other main area of protection is copyright.
Copyright
Copyright cannot protect an idea or concept, only the form in which it is expressed. In Australia, there is no requirement (or indeed forum) to register copyright. It exists on creation of the material. Format elements that are generic – ie common to the particular genre (game show, talent quest, adventure) – cannot be protected and will be ignored in assessing infringement.
To succeed in an infringement case, it is necessary to show copying or that the formats are so similar this could only have occurred by copying. So to enhance format protectability, you must come up with concepts that are unique – and the more of them the better. To resist claims of infringement, keep good records of how the concept was arrived at.
Note that copyright can be infringed where there is reproduction of a substantial part of another show’s format rather than all of it. In this context, “substantial” is determined by reference to quality not by quantity of copying. If your show reproduces a key distinctive element of another program, this may be enough to establish infringement where copying is established.
Chris Bevitt is a partner of Shelston IP Lawyers specialising in protection and commercialisation of intellectual property. Phone (02) 9777 2450 or email [email protected]
The Key lessons
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Many innovators have become sophisticated users of online patent searching facilities. According to Greg Bartlett of Phillips Ormond & Fitzpatrick, four tips can make the process a whole lot easier.
These days it is not uncommon for clients to do much of their patent searching themselves, and provide us with their own list of relevant prior art documents or (worse) a list of patents they might be infringing.
This is good and bad. Sometimes it is quite helpful for the work we are doing for our clients – an informed and knowledgeable client is a good client! However, we often aren’t told of this DIY searching until we are asked to help solve some problem that arises later.
DIY searching has the advantage of being cheap. One reason professional searching costs what it does is it requires experience, knowledge of what to look for, how to look for it and what it means when you find it.
DIY searching is a valuable option, but may only be a first step in searching. Following are some tips for you to keep in mind when doing your own patent searching:
- A patent is like a coin – it has two sides (infringement and patentability).One of the most confusing areas for our clients is that a relevant patent they find in a search might be relevant in two ways.On one side of the coin, a patent is a legally enforceable monopoly right in a particular country. For this, look at its claims – what is the invention defined in them. Don’t worry too much about its description, its drawings or its examples. On the other side of the coin, a patent is a document like any other. Sure, it might have claims, but look at the whole document and work out what it suggests to the reader.If you are searching for infringement (am I in trouble?) purposes, look at the first side of the coin. If you are searching for patentability (is my invention new?) purposes, look at the second side! It’s the same coin!
- The USPTO database – how far back does it go?Most people seem to find the United States Patent Office database the easiest to use for general searching (www.uspto.gov). US patents now number nearly 8,000,000, so there is a huge amount to look at! But if you use key words to search, you’ll only cover documents back to the early 1970s – the older documents aren’t keyed for key word searching. This may not be important for biotech or internet-based inventions, but if you’ve got something mechanical, it could easily have been suggested already before the 1970s.
- Search by key words or by classes?Searching is always dangerous if you rely on the words that someone else has adopted. When you key word search, you are hoping that the author of a document is going to describe their suggestion using the same words as you.Instead, you should consider by the International Classification system, trusting that all of the patents relevant to your general subject matter will all be housed together in the same class. See www.wipo.int/classifications for some guidance on the International Classification system.
- Free downloadingOnce you’ve found a patent on the USPTO website that looks like it might be interesting, how do you go about getting a proper copy of it (one that lets you see the drawings)? There are a couple of good websites where you can easily download free copies of US patents (and patents from some other countries). Try www.patentmatic.com or www.pat2pdf.org.Be careful. Relying on your own search, which may reveal no prior art, then investing significant time and money is a risky proposition. Sure, it’s less risky than doing no research, but a professional search may be advisable.
Greg Bartlett is a patent attorney and is partner in charge of Phillips Ormonde & Fitzpatrick’s Adelaide office. Phone (08) 8232 5199 or email [email protected].
Here’s the secret to intellectual property that the world’s wealthiest and most successful people of our time – Bill Gates, Robert Kiyosaki, Richard Branson, Steven Jobs – already know: intellectual property is a physical manifestation of your business’s success. Show me a successful business and I’ll show you a business that’s bursting with intellectual property. They go hand in hand.
Here is proof you can take to the bank:
Your brand is what attracts your customers to you in droves – they love what you look like, sound like, smell like and stand for. Apple’s iPod has taken the world by storm and the brand – the styling, the logo, the marketing – makes us feel cool, smart, successful. Kiyosaki’s Rich Dad, Poor Dad series is associated with wealth, knowledge and intent.
Your marketing is what pulls your customers in to spend money with your business. Branson is a master marketer of himself and his business, but the marketing machine extends well past Branson himself. This strengthens our belief in his product, whatever that product is, whether it be Virgin Airlines, Virgin Credit, or even his book, ‘Screw It, Let’s Do it!’
Your innovations are what propel you past your competitors and open up new markets. Recently Steve Jobs launched the iPhone to huge fanfare and something that his IP track record helped to create – anticipation. The iPhone includes new features that make us feel like the future is now and to ‘watch this space’, because amazing new products will emerge over and over again. The iPhone is intellectual property wrapped around intellectual property – the software, the firmware, the design, the interface – you could go on and on.
Clearly intellectual property adds value to your business. Here are our five tactics to help you make the most of your intellectual property:
1.Identify your IP to find the riches in your business that perhaps you haven’t seen until now. There are seven types of intellectual property to discover in your business and then to capture through asset registers, which can be as simple or as comprehensive as you wish.
The seven types of IP are as follows:
- trade marks
- copyright
- confidential information
- designs
- patents and patentable material
- plant breeders rights
- circuit layouts
2. Protect it to make it more valuable, enduring, saleable, inheritable, transferable and tangible.
3. Manage it, help it grow and align with your business plans – anything cultivated with intent will grow more quickly and more powerfully. It also happens to multiply!
4. Monitor your IP and that of your competitors – to keep your competitors honest, but also to give the innovators in your business inspiration, food for thought, benchmarks and perspective.
5. Train your staff to become advocates and protectors of your IP. Assume the best, but prepare for the worst through security measures and recruitment and exit procedures.
The secret to business success is creating and cultivating your IP — just look around for all the proof you need that success equals intellectual property.
Alicia Beverley is Chief IP Strategist at IP Wealth Pty Ltd and specialises in identifying, protecting, managing and monitoring intellectual property assets for its clients around Australia and overseas. www.ipwealth.com.au
| Want to learn more about the five IP tactics of a successful business? IP Wealth’s Intellectual Property Education and Training Academy (IPETA) provides training programs for business leaders, managers and staff and has trained over 1,000 CEOs to date. For details about this CEO Master Class half day seminar and other IP training, go to www.ipwealth.com.au or call 1800 857 070. |
