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Why Do It?

If you don’t legally protect your intellectual property (IP) you can’t safely disclose it, profit from it or defend it. There are several forms of protection known as intellectual property rights (IPR). Some are free and others affordable, while a patent - the best known but least well understood - can be a highly expensive double-edged sword. Usually, the best way to protect an idea as it evolves is to use a strategic combination of the cheaper forms of IPR for as long as possible, and consider patenting only when it’s both commercially justifiable and unavoidable. This Project can help you plan your protection strategy. Be aware though that IPR is a complex area of law that holds many dangers for amateurs. A key aim of this Project is to help you make better use of patent attorneys, not do without them.

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Protecting Your Idea

Let’s tackle something head on right here: protecting your idea doesn’t just mean getting a patent. We’ll deal with patents in due course but for now, hear this:

  • A patent is not the only form of legal protection for an idea.
  • Nor is it necessarily the most appropriate or the most commercially valuable form of IPR.
  • But it is, usually by a very long shot, the most expensive and complicated way of protecting an idea.
What we therefore want you to do in this Project is plan an effective intellectual property protection strategy that makes use of every appropriate form of protection. That may indeed have to include at least one patent, but because of the cost your strategy (unless you’re already wealthy) should be to delay patenting until (a) you’re confident you actually need one and (b) the time is right to file an application.

What is intellectual property (IP)?

  • Broadly speaking, intellectual property or IP is anything that:
  • Arises from the thought processes of one or more named people and
  • Can be recorded in some way (for example text, drawings, images, audio) and
  • Is distinctively different from anyone else’s work or IP.
Examples of IP include novels, poems, plays, movies, videos, TV programmes, ideas for TV programmes/movies/novels etc, music, paintings, photos, computer code, designs, technical drawings, rules of games, logos, trade marks, brand names - and inventions. The common denominator is that all IP starts with an original idea. IP exists whether or not there is any commercialisation, so unpublished novels, unperformed plays and unexploited inventions all still count as IP.

To convert your idea into the raw material of IP you should prepare a written technical description accompanied by the best visual representations you can manage - technical drawings, sketches, photographs, computer simulations or all of these.

Keep your prototypes if practical, especially if they show the evolution of your idea. To establish dates of origin, photograph or video them and date the images using copyright procedure (see later). It’s vital to do this if you can’t keep prototypes, otherwise who is to know they ever existed?

Dates of origin can matter enormously, so every item in your IP portfolio should carry a clear date and you should use copyright or design right (see later) routinely as you make significant changes to your idea.

The totality of your IP should explain exactly what your inventive step does and how it works. In theory your IP should enable someone familiar with that technology - in legal terminology, ‘skilled in the art’ - to understand your inventive step well enough to physically make it.

In practice your IP needn’t be so technically detailed that a factory could start turning out product straight away, but it does need to be as clear and complete as you can make it. Any woolliness or ambiguity may (a) make it hard for potential stakeholders to spot its commercial potential or (b) weaken the legal protection you get for it.


What Are Intellectual Property Rights (IPR)?

Once IP exists, the next logical step is to establish that someone owns it and has a right to be rewarded for its use. This is the concept of intellectual property rights or IPR. In the UK and all other significant trading countries, IP ownership is recognised in law.

In essence, IPR protects from the egg forwards rather than from the chicken backwards. The ability to protect ideas as well as the things made from them is essential in societies which progress by innovation, as without IPR there would be very little incentive for anyone to invent and develop anything.

There are several forms of IPR (detailed later) which enable IP to be protected in different ways to suit different purposes. Knowing the strengths and weaknesses of each, and when to use them, is the key to a sensible IP protection strategy.


Why Do You Need IPR?

Three main reasons:

  1. So you can discuss your idea in relative safety with other people. Most ideas need a lot of development and support before they can be exploited, so a limited amount of disclosure is usually inevitable if you’re to make progress with your idea. Some of the free forms of IPR will protect you adequately if all you want to do is talk to people in confidence.
  2. So you can profit from your idea. IPR can be bought, sold, hired or exchanged in the same way as physical property, so when you try to interest companies or stakeholders in your idea, IPR is the real commodity you’re offering. What you hope they’ll want is either a licence from you that permits them to use your IPR commercially, or a share in your own use of it if you commercialise it yourself.
  3. So you can answer key questions should legal disputes arise (see below).


PATENT ATTORNEYS

Because even ‘simple’ forms of IPR can fuel expensive court cases, it’s always advisable to have a patent attorney as part of your team (Project 7). Despite the name, patent attorneys are experts in all forms of IPR. Though they’re not cheap, there will come a point in the development of a potentially valuable idea where it’s false economy not to use their help to protect both the inventive step and you. If you’re James Bond, a good patent attorney is M and Q rolled into one. He or she can:

  • Advise on an effective IPR strategy.
  • Greatly improve your chances of obtaining worthwhile IPR.
  • Guide you round holes you might otherwise fall down.
  • Just possibly pull you out of holes you’re already in.
  • Act for you when problems arise, such as disputes over alleged infringement.
But: no patent attorney can guarantee that your IPR will bring you any commercial or financial reward. That’s entirely down to your efforts, though a patent attorney can often assist at key points along the way.

Many patent attorneys may be happy to give you a purely personal opinion, perhaps based on experience of similar ideas known to have succeeded or failed, and this could be extremely useful information. What they can’t do though is offer this opinion as professional advice. One reason is that they have a defined area of expertise and predicting what will or won’t sell is outside it. Beyond the domain of IP law, your guess is as good as theirs. Another reason is that they operate in a similar way to solicitors and risk being sued if they’re judged to be negligent. For example: your patent attorney says, ‘I don’t think your idea will ever sell. If I were you I wouldn’t waste my money on a patent’. So you don’t. Then you later watch a very similar idea make a ton of money for someone else. You’d be a saint if you didn’t want to rip your patent attorney’s head off.

Also like solicitors, patent attorneys ultimately act on your instructions, so although they may advise on what they think those instructions should be, it’s your responsibility to consider the advice you’re given and make your own decisions.

To find local patent attorneys look in any business directory or contact the Chartered Institute of Patent Attorneys (www.cipa.org.uk). CIPA operates a scheme under which many of its members will give you 45 minutes of free advice. If you do your homework and prepare your questions you can cover a lot of ground in that time. Thereafter, you can discuss what you may need doing and what it’s likely to cost.

Final point: most patent attorneys’ clients are companies, so they’re used to two-way professionalism. While many are sympathetic to private inventors and will make due allowances for a lack of knowledge, the more professionally and efficiently you behave the better you’ll both get along and the more money you’ll save by not wasting their time. Often this boils down to very simple things like responding promptly to communications, making sure you don’t miss official deadlines and not assuming that your patent attorney can read your mind.


What Legal Disputes?

In a sense, the mere fact of trying to own IP is asking for trouble. It’s the equivalent of fencing in a piece of previously unowned land and sticking a sign on it saying: ‘Since such-and-such a date, everything inside this fence belongs to me’. If it turns out that there is oil on your land rather than just a few half-starved goats, it’s a fair bet that at least one neighbour will rush to court claiming that ‘your’ land actually belongs to him. This is what happens frequently in the world of IP. If your IP isn’t worth anything, no one will want it and you’ll have a quiet life. If it’s worth a fortune, everyone will want it and some will use every trick in the book to grab it from you.

Questions around which IP disputes revolve include:

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Your IPR Menu

We’ll now look briefly at each form of IPR. You can then decide which of them you want to use, and when. We give you some pointers under Strategic use at the end of each section. Bear in mind that an effective IPR strategy may need to span years of development and so may usefully involve several and perhaps all forms of IPR.

From the cost-conscious inventor’s point of view the different forms of IPR divide into the free ones (confidentiality, copyright, design right and know-how) and the ones that involve official fees and perhaps professional assistance (design registration, registered trade mark and patent).

Note this though: whatever forms of IPR you use, you alone are responsible for enforcing them. It’s a sore point with many inventors and smaller companies that while governments may take money off you to acquire and keep IPR, they won’t give you any help to enforce it and if you get stitched up by unscrupulous competitors who ignore your legal rights - tough.

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MODEL FOR NON-DISCLOSURE AGREEMENT

The best way to persuade companies and individuals to sign your NDA is to draft one that doesn’t scare them off. There’s no set formula, so it’s quite acceptable to write your own. Whatever you include in it, remember that your main aim is to get people to sign it. A short, simple document may be user-friendly but full of danger for both parties if too much is left unspecified, while a long one bristling with restrictive clauses and legal jargon is unlikely to attract many signatures.

We think the following model - includedfor guidance only - is pitched at about the right level for a company that has already expressed some interest in your idea. It may need modifying if, for example, you’re only approaching someone for confidential advice and there’s unlikely to be any continuing collaboration.

NON-DISCLOSURE AGREEMENT

Parties to the agreement

[Other company/party name and address]

[Your name and address]

Basis of agreement.

  1. The intellectual property to which this agreement relates is [name or brief descriptive title of idea/product].
  2. On the understanding that the parties are interested in discussing possible collaboration in developments arising out of [your name]’s intellectual property it is agreed that the information, documents and material supplied in the course and as a result of such collaboration shall be treated as confidential.
  3. The receiving party undertakes not to use the information for any purpose, other than for the purpose of considering the said collaboration, without obtaining the written agreement of the disclosing party.
  4. This confidentiality applies to both technical and commercial information that may be supplied by either party or its associates.
  5. Disclosure of confidential information by one party to the other does not confer any rights whatsoever to the other party.
  6. Access to confidential information shall be restricted to responsible employees or professional advisers who need to have access for the purposes of our negotiations and obligations of confidentiality equivalent to those contained herein will be imposed upon such persons.
  7. Excepted from this undertaking of confidentiality is any information in the public domain or which the receiving party can show was already in its possession lawfully prior to disclosure.
  8. Any party to this agreement shall on request return any documents or items connected with the disclosure and shall not retain any unauthorised copies or likenesses.
  9. Should any items supplied by the disclosing party in connection with the disclosure be lost or damaged while in the keeping of the receiving party, the receiving party shall return any remaining items irrespective of their condition and shall also pay the full cost of repairing or replacing such items.
  10. After [five] years from the date hereof each party shall be relieved of all obligations under this agreement.

Signed

[Your name and date]

For [name of receiving company/party and date]

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Whatever you draft, you need to plug as many predictable loopholes as possible without sliding into paranoia. For example:

  • Paragraph 3 ensures that the company or ‘receiving party’ can’t cheat by exploiting your idea in ways that don’t technically breach confidence - for example by just going ahead and making it without needing to tell anyone anything.
  • Paragraph 6 brings into the confidentiality fold all the other people who might have a legitimate need to know something about your idea.
  • Paragraph 9 is there to make the company accept responsibility for the wellbeing of your property - particularly a perhaps unique prototype. (We’ve heard of prototypes being deliberately damaged or 'mislaid' to prevent other companies from seeing them.)
  • Paragraph 10 puts a clear time limit on the agreement. We’ve used five years but in different cases a shorter or longer period may be appropriate.
You can soften your approach by including something like this in your covering letter:
As you will appreciate, it is important that all exchanges of information should from now on be in confidence. I therefore enclose a copyof a non-disclosure agreement which I have drafted and hope you will find acceptable. For my own part, I shall be happy to sign your own confidentiality agreement assuming its conditions are broadly similar to mine.


What Can And Can’t Be Patented

An invention is patentable only if it is all of the following:

  • New and previously undisclosed.
  • Distinguished by an inventive step not obvious to someone ‘skilled in the art’.
  • Capable of industrial application - that is, it could actually be made or used and isn’t just a flight of fancy or a physical impossibility. (Though the European patent system now hedges its bets by including classifications such as HO2K53 ‘Alleged electro-dynamic perpetua mobilia’ for perpetual motion machines.)
Things that can’t be patented include scientific theories, literary works, music, offensive or anti-social devices. Computer software is more patentable in some systems than others, so you may need advice from a patent attorney about the current situation. Business methods may be patentable in the USA but not easily elsewhere. (See Patenting in the USA.)

Exploding myths about patents
For most first-time inventors a patent is The Big One. The only form of IPR that matters (or that they’ve heard of). The one that will make them rich. The one that they just go out one day and get, like a loaf. We wish we had a fiver for every time we’ve heard an inventor say, ‘I’ve just had this idea; I need to patent it straight away.’ No you don’t. You need to calm down first, then read what follows very carefully.

For most private inventors of average financial means, patenting is downright dangerous and needs to be approached with extreme caution. Yes, a patent may be commercially justifiable if your inventive step is to be properly exploited, but you should view it as a necessary evil and not something to be in a hurry to get. Patenting is by far the most expensive form of protection so if some other combination of IPR will do the job, let it. If you do decide to apply for a patent, you need to be absolutely sure you’re doing it at the right time and for the right reasons.

The reality of patenting includes these facts:

  • Getting a patent can take 3-4 years and is a complex, expensive process. If it costs more than any potential royalty income or trading profit, or sucks money and effort away from other vital aspects of developing or exploiting your idea, it will damage rather than improve your prospects.
  • A patent will not on its own make your idea commercially successful. Most patented inventions never become products, for one simple reason: no one wants them. That’s why early market research is vital.
  • A patent will not on its own make you rich. It will definitely cost you money but there’s no guarantee it will ever make you a penny.
  • A patent is supposed to protect your idea but it could have the opposite effect. Many companies routinely (and very sensibly) search published patents to alert them to potential competition. Once they’ve seen your patent it may be easy for them to re-work your inventive step in a way that doesn’t infringe your claims.
  • The granting of a patent isn’t an official seal of approval. All it signifies is that your idea seems for the time being to be original and to contain an inventive step. In commercial terms that could be meaningless.
  • A patent isn’t necessarily yours for keeps. It can be challenged by anyone at any time and if the dispute comes to court you have
    to defend it at your own cost, which will inevitably be large. If the challenge succeeds, you lose all or some (usually the best bits) of your patent and you may also have to pay the victor’s legal costs.
  • There is no such thing as a world patent except in the short term using the PCT system (see later). You ultimately have to pay for each country in which you want patent protection and that can soon become extremely expensive.
  • It's up to you to enforce your patent. No official body will fight or finance your legal battles, or even check whether anyone is infringing your patent.

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Applying For A Patent - Twelve Essential Steps

In our view, effective patenting depends on three things above all others:

Commercial justification. Only consider a patent when you’re confident that there’s enough commercial potential in your inventive step to cover many times over the costs of patenting. This can range from a few hundred to several thousand pounds a year, depending on the number of countries in which you have cover, for up to 20 years. Otherwise, perhaps consider only a short-term, tactical use of patenting (for example, see Step 7 below).

Getting your timing right. Patenting too early is a common and often fatal mistake, so don’t be rushed into it. The official filing date triggers a merciless countdown to big bills and other potential problems, so it can be tactically smart to copy many large companies and delay filing for as long as possible.

A patent attorney. You can in theory write your own patent and handle everything yourself. In practice it isn’t at all easy to do well and most of the self-drafted applications we see are dire to the point of uselessness. In our view there’s no doubt that to stand any chance of a robust, commercially valuable patent, you need a patent attorney.

You don’t just go out and get a patent, any more than you just go out and buy a house.

Applying for a patent is a very strict, formal process governed by usually immovable deadlines. You therefore don’t rush into it. We advise that you plan carefully and well in advance, and take the following steps.

Complete!
Congratulations you have completed all of the steps successfully
    Step 1

    Ask yourself whether you need a patent at all. Just because your inventive step is patentable doesn’t necessarily mean you’ll gain anything from patenting it. Could one or more other forms of IPR protect you adequately at perhaps far less cost? Will prior art limit the claims you might be granted? Will your best opportunity for exploitation be over by the time you actually get your patent? (For this reason, many companies in high-tech markets with very short product life-cycles now question the point of patenting.)

    Step 2

    Work out the best time to file your application. Later is generally better than sooner. The patent system allows you a 12-month ‘free’ period - a kind of IP gap year - to help you exploit your idea before incurring major patenting costs, but few ideas can go from a standing start to licensing or product launch in that time (5-10 years is much more typical). While you can start preparing an application any time you like, it’ll probably be in your best interests to delay the date of official filing for as long as possible: maybe years. Many big companies routinely delay patent applications almost until the eve of product launch, on the grounds that early publication gives too much information away to competitors. In your case you may have to balance the risk of someone else filing first (though not necessarily inventing first - see Copyright) against the probably much greater risk of blowing all your development funds on patenting long before there’s any prospect of royalties or trading profits.

    Step 3

    Top up your prior art (patent and product) searches. You should be doing this routinely anyway to keep yourself up to date with developments in your target market, but it’s essential if you file your application some time after you first searched.

    Step 4

    Get application form 1/77 ‘Request for grant of a patent’ from the Intellectual Property Office (downloadable or by post or from a patent attorney). While you’re on the IPO website, avail yourself of all the free and excellent guidance you’ll find there about patenting in general and the application process in particular.

    Step 5

    You or your patent attorney (preferably the latter) must fill in the form and provide a patent specification (description, drawings, and preferably claims and an abstract). Make sure you do everything the way the IPO recommends. Send the form, patent specification and filing fee to the IPO. The filing receipt you get establishes an official priority date (though once again this isn’t the same as a date of invention). You can now in theory disclose your idea in relative safety, though in practice you should still exercise great caution and use NDAs where appropriate.

    Step 6

    The countdown clock now starts ticking. You have exactly 12 months from your priority date to decide whether to go ahead with a full application. Within that time you should in a perfect world reach a licensing agreement with a company which takes care of your future patenting costs. In the real world you’re extremely unlikely to get so far in such a short time unless you’ve cannily used other forms of IPR to manouvre yourself close to a licensing agreement before you file. To broaden your options, you might also consider using the year to set up your own business, a process over which you have much more control (Project 6).

    Step 7

    Within the same 12-month period you must also apply for any non-UK patents you think you need. Multi-country protection is essential for many ideas but will massively increase your costs, so it should only be done (a) on the back of very strong evidence of commercial potential and (b) with the advice of a patent attorney. A PCT (Patent Co-operation Treaty) application is often the most convenient option, as with one form you can apply in every country you’re likely to need. You’ll be able to use your UK priority date, so we recommend that you delay any PCT filing decision until near the end of the 12-month grace period.

    Step 8

    If within the 12-month period you don’t trigger the full application process by requesting a search (form 9A/77), your application lapses and won’t be published, so no one will ever see it. Alternatively you can withdraw it earlier and re-file the same application, as long as no one has seen it or your idea except in confidence. This may be a worthwhile strategic move if you haven’t made any exploitation progress in the first 12 months. You lose the priority of your first application but have a second (or third, or fourth...) 12-month ‘life’. Withdrawing and refiling gives you more time to get your invention closer to market but there are many pitfalls so you must seek professional advice if you want to get it right. The big risk is that if someone else files the same idea after your first priority date but before your later one(s), you lose out.

    Step 9

    If you do send in form 9A/77 the IPO will examine your application in depth, and you should receive their search report within six months. Eighteen months after your priority date, your patent application will be published. A couple of months later, it will appear on databases. (Publication does not mean, as many inventors believe, that your patent has been granted!) If the search report rubbishes your claims, you can either withdraw your application or get your patent attorney to help you challenge the official findings. This may involve amending your claims.

    There may be some advantage in sending in form 9A early, so that you get your official search report as soon as possible. Knowing how official examiners rate your inventive step can help you and your patent attorney make decisions, particularly about filing in other countries (Step 6b).

    Step 10

    If you’ve filed a PCT application it enters what’s known as the national or regional phase 30 months or so after your priority date. Each selected country processes your application (as long as you’ve paid their fees and supplied, at your cost, any translations required) as though it were an individual application to that country.

    This generates large amounts of paperwork and you need legal representation in each country (which your UK patent attorney can usually arrange). This is where costs unavoidably start to mount up.

    Step 11

    It could be a further 18 months or more (that is, 3-4 years after first filing) before a patent is granted - but the claims you’re allowed may quite possibly be fewer or far weaker than the ones you originally wanted. Yes, it’s a gamble.

    Step 12

    In due course you have to pay renewal fees to every country in which your patent is in force. In the UK that’s up to 16 payments over 20 years and fees rise with time, currently from £50 to £400. Renewal fees in some other countries can be much higher. You may not need to keep your patent for the full 20 years - short product or design life cycles make many patents redundant fairly quickly - but that may be little consolation when the bills roll in.

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    Project 5 Checklist

    The following checklist is partly an action planner and partly a reminder of what matters. If you’re tempted to think ‘I don’t need to do all this stuff’, it may help to point out that we’ve modeled the checklist on questions professionals are very likely to ask if you want their advice, support or money. We therefore have to be stern and say that if you aim to be a respected and successful inventor, you can’t afford to duck any of it.

     
    Protecting your idea generally
    • Indicate which forms of IPR you’re using, or intend to use, and why.
    • Detail your IPR strategy, projected over the next five years.
     
    Patenting
    • Justify any plan to apply for a patent.
    • Justify the timing of a patent application.
    • Have you sought a patent attorney’s advice? If so, what is that advice?
    • Who will draft the application - you or a patent attorney? (While it may be realistic to do some preparation yourself, if at all possible leave the final drafting to a patent attorney. It can be false economy to do otherwise.)
    • What will all your filings cost you over the next five years, including any patent attorney fees?
     
    Remember:
    IPR doesn’t just mean a patent, and patenting brings with it expensive risks. Always seek advice and assistance from a patent attorney before committing yourself to patenting.

    Next Project…..
    PROJECT 6
    Project 6

    Exploitation routes

    You have 3 choices: royalties from a company, known as licensing, or become an entrepreneur, or form a joint venture.


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