The private inventor or small company tends to regard intellectual property protection, for example patent applications or trademark applications, with some dread. The help given by the patent or trademark agent can range over everything from the mechanics of patent applications to utilising intellectual property to develop a business, nevertheless the resulting charges can be somewhat bruising. This becomes even more pronounced when the issue of international protection arises.
Shortly after a UK patent application is submitted, and certainly within one year of initial application date, this issue must be faced. Unfortunately if UK intellectual property protection is complicated, the international scene is even more bewildering for the layman.
How should a small entity with limited means view international intellectual property protection, particularly protection for technical developments?
In the first instance one must ask the very practical question as to why international protection is necessary. If the product is one which will have a good market in the United Kingdom and the developer is new to the field, perhaps a certain modesty might be appropriate. In other words, would it not be sufficient to concentrate on developing a first successful product for the UK from which a reasonable return could be secured which will provide the basis for other developments. The initial thrill of developing a new product should never blind the inventor to the dangers of biting off more than can be chewed. Over-ambitious attempted exploitation of a development internationally can be just as fatal in new product development as it is with any other commercial project.
Iain C. Baillie
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Editors Note: Since this article first appeared in Inventors World magazine there have been some changes in legislation. The advice is sound but some prices and procedures may differ. Check with your IP professional.
Assuming that some form of international protection is commercially justified, then the next step is to analyse the countries in which protection should be sought. This will be based generally on the possible competitors. As in other areas of intellectual property protection, one is not primarily interested in where you are doing business but where you wish to have control over the business, particularly competitors or potential licensees. There are a number of factors which one balances; competitors' manufacturing locations, principal markets, ease of enforcement. For instance in the case of a mechanical device one would probably look at the markets since there a number of countries, particularly in the Far East, where patent protection is both expensive and difficult to enforce so that, although the competitors' manufacturing locations are located there, it is best to control the actual marketplaces. One would estimate the size of potential markets. The implications of potential licensing as a means of exploitation needs to be considered. For instance if one supplies a market purely by importation then this may give rise to compulsory licensing problems which must be taken into account in the patent programme. Commercial practicality may suggest that, although there is a good market in a given area, nevertheless by timing correctly manufacture and distribution one could get into the market places when the product reaches a certain level of success, have a reasonable return over two or three years and then accept that competition will encroach upon that return. One could avoid incurring the major expense of long term patent protection both before entry and after entry which may have only a limited value because of difficulty in enforcement of a patent.
Trademark protection is an instance of this problem because, if a mark is not used in a country, then it ceases to be enforceable after about seven years because of the risk of attacks because of non-use. Accordingly therefore early protection worldwide of a trademark is not justified unless there is an equally early likelihood of market penetration. Given the difficulty of clearance on a multi-national basis, it is probably cheaper in many cases to examine each market as one is about to enter it and, if necessary, develop the marketable identity for the specific market, i.e. trademark, at that time rather than try and forecast trends five to ten years in advance. One may have the benefit of "famous mark" law in some instances though this is very variable.
For a technical development, one has to have registered protection, i.e. by patents and registered designs, unlike copyright which protects computer programs etc. automatically and the possibility of re-branding which would apply to trademarks if a mark is not available for a new market. One still has a number of management factors which can be used in developing international protection. From the historical position in the early 1970s in which the only way of protection was by individual national filings before the invention had been publicised, one now has a number of vehicles by which total costs can be monitored. In Europe, of course, one can take advantage of the European patent which now covers all of Western Europe with the exception of Norway. Although rather expensive, one can protect a number of European countries at a basic cost of about £2200 plus £180 for each of the countries selected. An even better means of cash flow is the use of the Patent Co-operation Treaty system from which nearly every major country in the world, except in the Indian subcontinent and some of Latin America, can be elected for a relatively basic cost of about £3000 (up to 10 states) plus £1600 for the preliminary examination and one then has from the date of initial filing in, say, Britain, a total of 30 months within which decision making can be effected.
The point to remember about these systems is that they are cash-flow controls. Any patent agent can explain the consequences of using these systems so that expenditures can be deferred for as long as possible. In the context of licensing one can develop a promotion programme in which a potential licensee will support as part of the licence investment at least some of the costs of legal protection although the actual control of legal protection should remain firmly with the developer.
In trademarks one has had a rapid growth in the last year or so of the European Trademark, which gives single protection for the whole of the European Union. Following closely behind it and probably becoming more effective over the next year or so is the so-called Madrid Protocol arrangement which will considerably reduce the total cost of international protection. Given, however, the problem mentioned above of the necessity of using a trademark, this system will probably still have to be monitored very carefully in relation to commercialisation.
If patent protection is deemed necessary commercially, the initial investment in patent protection should not be skimped and one must make sure that the patent application is as definitive and of as broad a technical scope as possible. The days of the so-called brief British provisional are long gone when measured against international protection. It is important that the initial document first submitted to a Patent Office be as carefully drafted as possible to give broad protection and to support adequately protection, not merely in the UK but in other countries where the law differs, particularly for the European Patent Office and, even more importantly, the US Patent Office.
A relatively "inexpensive" patent specification may contain hidden traps if adequate consideration has not been given to all the issues. Equally if multi-country protection is to be considered, a reasonable search on an international level should be effected very soon after the application is first submitted. One can often credit the cost of such a search, if carried out properly, against the cost of subsequent stages, e.g. by carrying out an EPO search, one may have credit against the costs of the actual EPO application at a future time. One does see very inexpensive proposals for obtaining patent applications but this is very much a matter of 'what you pays you gets' and a patent application for a few hundred pounds in a complex system will probably not meet the strict requirements of, for example, the US Patent Office.
To summarise the position:
• Undertake a careful analysis of intellectual property protection cost against commercial value of legal exclusivity;
• For technical developments a significant initial investment in a strong patent application is worthwhile, both in terms of long term legal protection and in terms of having something to sell to investors;
• During the initial year continue to undertake careful business analysis of the market potential and key points for protection which may be guided by features which might not at first appear apparent, e.g. trade routes and markets rather than manufacturing;
• Use all the technical information on the methods of cash management flow in relation to international protection, e.g. European patent applications or European patent applications following from Patent Co-operation Treaty applications;
• Look for cash sources out of promotional support, e.g. licensees.
Probably the greatest secret of all is to make sure that you draw upon not merely the patent professional skills of your advisors but their commercial skills arising from their long commercial legal practice for the best way of getting the maximum legal protection for the minimum amount of money.
Remember that prompt technical support for every query raised by your legal advisor will considerably cut costs. Very often there is a tendency to regard the giving of the support to your patent legal advisor as being low down on commercial priorities whereas in fact it can be a major commercial factor on success.