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Patents, products and misconceptions - Part 1
November 16, 2015
There are a huge number of misconceptions around Intellectual Property that can cause problems. Inventors or organisations frequently won't bother investing to protect their IP, because 'it's too expensive', or 'too difficult to enforce'. Even if they do invest, an inventor or organisation can easily spend a great deal of money to get to a certain point, and having spent that money, find themselves in a position where it has seemingly been wasted. The natural reaction in these circumstances is to look for fault, and it's usually the attorney who cops a generous dollop of the flak being ladled out. After all, weren't they paid an awfully generous amount to prevent this from happening? Well, sometimes that's fair, but very often it isn't, and the criticism is based on a misconception of what the patent (or other IP) was for and what it could achieve, and what the Patent Attorney could or should have done. So I intend to spend a couple of posts discussing a few of the more common misconceptions:
1. It's too expensive to get, and too difficult to enforce, so why bother? It's unnecessary.
Is it unnecessary? Yes, it can be. But whether it is or not very much depends on your business strategy. IP is a business tool like any other. If your business doesn't operate in the precision manufacturing space, you wouldn't invest thousands of pounds in a five-axis milling machine. For an SME working in a high-tech field with rapid development and product obsolescence, the costs and timescales involved in getting a patent are sometimes not worth it. As a strategy, 'running faster than the competition' - that is, relying on continual development and improvement to stay ahead, and always being able to offer something better, or something the competition haven't (yet) got is often a better use of resource.
It's a strategy that works fine until you reach a stage where you need to attract external investment, or need to partner with another firm (and provide them with your know-how), in order to expand or grow. At this point, if you haven't protected your IP, then you might run into difficulties. Investors tend to look more kindly on businesses that can show they are serious about protecting themselves. Similarly, if your business strategy relies on being able to licence your technology and let a partner do some of the heavy lifting, you're going to need to have some sort of protection in place in case of future difficulties.
Alternatively, if your business relies on technology that's going to provide a core foundation for your product range for more than a year or two, or if you need to keep the competition at arm's length without 'running faster', IP rights are worth considering. Without protection in place you are effectively 'playing the game with an open goal', and that could be bad news no matter how fast you can run.
Is it expensive? Again, yes it can be. There are a number of fees involved in getting protected in the first place: preparation and filing fees, ongoing fees relating to pushing the application through to grant, etc. And litigation - that is, the actual process of going to court and arguing with a competitor - is undeniably expensive. However, it's also rare, and very much the final step in a multi-step process.
Firstly, the mere presence of a patent or other intellectual property right is often sufficient to deter a competitor or potential copycat. Secondly, even if the competitor is marketing their own copycat product, some initial sabre-rattling by pointing out the existence of your IP rights can be enough to make them back off.
Of course, for this to be effective, you need to at least have an application filed. Otherwise, again, you're playing with an open goal. Litigation or the threat of litigation isn't even an option if your rights aren't protected in the first place. The loss of revenue from copycat products being on the market (with no way to stop them) can easily be significantly more than the cost of the litigation.
It also isn't as expensive or difficult as it used to be. The UK now has a specialist IP court - the Enterprise Court - and smaller claims can be dealt with relatively quickly and inexpensively, compared to the cost of a case in the High Court.
The example of the difficulty of enforcing patent rights in China is also often used. Well, if your market isn't in China, why go to the expense of filing a patent application there? If your market is in the UK, then a (relatively inexpensive) UK patent can be used to prevent the import, distribution and sale in the UK of counterfeit product manufactured in China. On the other hand, if you have a global market, and your product is manufactured in and distributed from China, then filing a patent application there could provide useful protection, and form a crucial part of your overall strategy.
It's all about understanding your needs, and applying the tools correctly. Your IP rights need to support, and be integrated with, your overall commercial strategy. They won't make you money by themselves, but they can help to ensure that your product has the space to do so.