ECA

Exporters - Are You Giving Away Your Important Business Assets?

06.05.2021 Spruson and Ferguson

In my experience Australia is a ‘clever country’ and Australian businesses frequently produce highly innovative products and processes. However, I have often seen that business owners are sometimes too quick to dismiss their products and processes as not being innovative enough to warrant patent protection.

Business owners fail to understand that ‘next-generation’ products and processes, even minor improvements to their existing commercial products and processes, may be eligible for protection by way of an intellectual property (IP) right.

These misunderstandings can lead to businesses essentially ‘giving away’ their innovative products and processes, especially when it comes to exporting. This issue is briefly addressed in this article by way of short questions and answers.

1. Can I still protect my commercially available product or process?

Generally speaking, IP protection for the product or process must be sought prior to publicly disclosing the product or process. If too late, it may yet be possible to protect the product or process in some countries by way of a patent and/or design registration (known by various names in different countries). This possibility will depend on the country in which you are seeking protection, whether it is a product or process, the nature of the public disclosure, and the date of the earliest public disclosure.

Australia, New Zealand, the USA, and Canada, for example, provide a 12-month grace period against self-disclosure. This means that you may be able to obtain valid patent protection for your product or process, provided that you file a suitable patent application in each country of interest within 12 months of the date of earliest public disclosure.

2. What is the difference between a patent and a design registration? Can I do both?

A patent protects the inventive concept. Whether it is a process or a product, protection may be provided for something more than just the commercial form (embodiment) of the invention. A design registration, on the other hand, protects the appearance of a product (but not a process).
Although there are similarities between patent systems and design registration systems between different countries, there are also important differences. Australia, for example, provides a 20-year term standard patent for protecting novel (new) and ‘inventive’ products and processes, as well as an eight-year term innovation patent for protecting novel and ‘innovative’ products and processes. A product or process that does not qualify for a 20-year term standard patent may nevertheless qualify for an innovation patent. Some countries also offer dual patent protection systems, and some countries offer a design registration system (note that the Australian innovation patent is due to be phased-out later this year).

And yes, products can usually be protected by way of both patents and design registrations.

3. Can I protect my ‘next-generation’ product or process, even if it represents a minor improvement over my commercially available product or process?

As alluded to above, various countries differ with regards to what is protectable by way of patents and design registrations. For example, a ‘next-generation’ product which differs in appearance from the commercially available product may yet be registrable as a design and possibly also protectable by way of an innovation patent or equivalent utility model in some countries. For example, a ‘next-generation’ process which differs slightly from the commercially available process may yet be registrable by way of an innovation patent or equivalent system in other countries.

4. Can I delay filing for IP protection overseas?

In most cases the answer is yes. Australia as well as many other countries are party to the ‘Paris Convention’ (for the protection of IP). This means that you can file a patent application in Australia first, then delay filing in other ‘Convention’ countries up to 12 months later without penalty. That is, the ‘Convention’ filing in the foreign country will be entitled to a priority date established by your Australian filing. In practice this means that if a competitor copies your invention in any ‘Convention’ country after your Australian filing, then you have up to 12 months in which to file a ‘Convention’ application in that country in order to stop that competitor.

The same is true for design registrations, except the deadline for filing in ‘Convention’ countries is six months as opposed to 12 months.

5. Is there any point in filing for IP protection if I am not prepared to enforce it in a court of law?

My view is that if you have a commercially valuable product or process then there are advantages in filing for IP protection, regardless of whether you end up obtaining a valid patent or design registration, and regardless of whether you seek to enforce it in a court of law.

If IP protection is not sought, then the invention is open to copying. Markings such as ‘patent pending’, ‘patent granted’, ‘design applied for’ and ‘registered design’ can disincentivise competitors from copying your product or process. Pending or granted IP rights can be licensed or sold on a country by country basis. Pending or granted IP rights can help attract and secure commercial partners, such as distributors, agents and the like, with the promise of exclusive rights to the product or process. Pending or granted IP rights are also an effective marketing message.

Regardless of what stage you are at in your export journey, if there is a possibility that you are giving away your business assets, speak to an intellectual property attorney as a matter of priority.

This article is intended to provide general information only. The contents should not be relied upon as detailed legal advice for any specific case. Specific advice should be sought from your legal advisor.

This article is written by Gint Silins, Principal at Spruson & Ferguson





 

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