Patent and Trade Mark Tips for Australian Businesses
In this webinar, Warren was delighted to chat with Tasmania’s Enterprize community and share his insights on a range of IP issues faced by many businesses, including:
- how a small Australian business defines and distinguishes itself on the global stage by protecting its valuable intellectual property;
- what it takes to secure exclusive trade mark protection;
- how to pick a good business name and trade mark;
- how to make sure your trade mark is free to use;
- why it’s crucial to keep your invention and new products confidential before filing for patent and registered design protection;
- the benefits (and downsides) of relying on graces period;
- the importance of securing an early filing date by filing a provisional patent application;
- when it is advantageous to file a PCT patent application to maintain your internationally pending patent rights; and
- a cheap and effective way of finding out how patentable your invention is.
For a cleaned-up version of the webinar, click the transcript tab.
Hi everyone, thank you all for being here.
Just to give you some background, my name is Warren, I work in intellectual property for an IP firm based in Melbourne called Cooper IP. And in normal circumstances, we actually come and visit Tasmania for a couple of days every month, stopping by Hobart, Launceston and Burnie and we provide free IP consultations to startups, young businesses, established businesses and anyone in between. But in the current circumstances, we’ve been very well-behaved and we’ve been working from home and we haven’t visited Tasmania for about three months now, so we’re very grateful to Enterprize for running this IP event for us, and we’re hopeful that we’ll be able to visit Tasmania again soon.
We like to give these kinds of presentations really to educate people about intellectual property. We find a lot of Australian businesses aren’t that familiar with intellectual property, it’s not something most people are talking or thinking about, and even if they are, there can be some pretty big misconceptions, and that can really hurt a business when it comes to protecting what they create, and capturing value from what they create.
So as we go through these slides, I think it will become clear that IP is really relevant when there’s change. And in the context of businesses, what I mean is it’s when a business is starting, it’s when a business is pivoting from selling one thing to another, or if they’re innovating and creating new technologies altogether. It’s at all these phases of change where IP can be very important to think about.
And while in normal circumstances I already I think it’s important to know about the kinds of things I’m going to cover tonight, given the current economic shock and almost reset that the world is going through, I think it’s even more important and relevant to have all this IP information in your minds right now, especially as we’re seeing businesses really having to think on their feet and maybe even needing to change the way they operate, or the very product or service they provide.
So for example, we recently worked with an Australian business that found a patented product in the US which is receiving a lot of attention right now because it allows you to open and close doors with your foot. And so the Australian business wanted us to find out if there would be any patent infringement issues if they were to sell that product in Australia.
We also worked with another other client recently who’s quite convinced that people aren’t going to go out as much to have certain cosmetic work done, so she’s created this product which actually helps you keep a certain look for longer – I have to be a bit vague at the moment, but essentially we helped her file a patent application to protect the product, and trade mark applications to protect her branding.
So these are just some really obvious examples where businesses are pivoting or popping up to try and address new demands in the market.
So with all this change that’s happening, I think it’s really important to have a good understanding about what intellectual property is, and the role it can play in a business – especially at these inflection points.
So my goal tonight is to make IP a lot more familiar to everyone and to look at where things often go wrong so that you can spot them before they happen.
So here’s a quick look of what we’re going to go through today.
I’ll start off with a brief introduction of what intellectual property is, and I’ll do that in the context of a real Tasmanian business.
Then I’ll take a deep dive into trade marks and patents – these are the two most common IP rights people apply for and we’ll look at where things can go wrong. Now I’m going to warn you upfront, this is not going to be a very general presentation – I’m going to go into some pretty nuanced aspects of trade marks and patents because I want to make sure you have something new to take away from tonight.
Then at the end we’ll have time for some questions, but of course if you need to leave early, feel free to contact me afterwards, you can find us online at cooperip.com and you can email me directly at firstname.lastname@example.org.
So to begin, what is intellectual property? Now as the name suggests, it’s property of the intellect – I like to think of it as what we create.
Now when people spend a lot of time and energy creating new things – new works of art, new technologies, new companies, it can be pretty unfair and demoralising if others just come along and copy them.
So, over time, IP systems have been developed to give us a bit of insurance, so that if people do create something new, we want to make sure that it’s possible for them to have some control over what they’ve created.
Now when some people think about intellectual property, the first things that come to mind might be the patent battles between Apple and Samsung, or maybe you’ve heard about the recent trade mark disputes between Kraft and Bega.
But it’s not just these giant companies who dabble in IP. We work with a wide range of small businesses where, sometimes a lot of their success comes from a handful of key products that they’ve managed to protect really well. So I want to start off by looking at one of these businesses, and we’ll see how they’ve used their IP to their advantage.
So one business we work with is Scootboot. They’re a Tasmanian business, founded in Hobart in 2015 by these two. There’s Dave on the left and Annette on the right.
And what they’ve done is create a high-performing boot for horses. Now I don’t know if you’ve seen a horse boot before, I certainly hadn’t until I worked with Scootboot, it’s a pretty niche product, but their boot has really taken the horse-riding world by storm.
The boot replaces horseshoes, it’s super comfortable for horses to wear, and it’s really easy to put on and maintain.
Now at this point, Scootboot is probably the world’s biggest seller of horse boots. And that’s all the more impressive when you know they’re just a small business operating out of Hobart.
So having spent a lot of time and resources perfecting their Boot, they wanted to make sure that if they brought it to market, it wasn’t going to be ripped off by a competitor, and so they wanted to protect their boot as much as possible.
Now the first form of protection they turned to was patent protection.
So patents protect inventions.
Now when many of us hear the word invention, we might think of something high tech, like the bionic ear or a new drug, but in the world of patents, an invention can be anything that does something new, or has a new function.
So you can think of patents as being legal rights which protect new functions.
Another IP right Scootboot used to protect their boot is the registered design.
Basically, a registered design protects the look of a product. Scootboot considered the look of their boot to be quite unique and so they wanted to make sure others couldn’t copy the look of their boot either.
So you’ve got patents protecting functionality on one hand, and registered designs protecting appearance on the other.
And of course, we have Scootboot’s logo and name which they’ve protected as registered trade marks.
Now, Scootboot has come a long way since their founding in 2015. They’ve won the Tasmanian Telstra Business of the Year Award, the Australian Export Awards, and Dave mentioned he knew their business had made it when he saw their boots worn by US police horses at the Superbowl.
Often, it can be hard to know whether copycats or competitors would have popped up at all, but at the same time, it’s only when you don’t protect your IP that you can get into trouble.
For example, we used to act for a large international retailer, and one of its business models was to find products which were selling well, copy them and then sell those products for much cheaper.
Now to make sure they could do this without infringing any IP, our job was to find out if there was any IP protecting the products they wanted to copy. If there wasn’t, they’d have a field day. But if there was IP protection in place, they’d steer clear.
Now if I was one of these IP rights holders, I would never have known that my IP ended up protecting me, and so the value of my IP can sometimes feel invisible.
But in the case of Scootboot, we found out first hand that their patents play an important role in securing their edge in the marketplace. Because it wasn’t long after Scoot Boot started taking off that a competitor actually engaged their own attorneys, and started making submissions to the Australian and US patent offices trying to challenge Scootboot’s patent applications.
Thankfully, those attempts haven’t been successful, and Scootboot’s market share has remained intact, but I thought I’d start with this quick look at Scootboot because I think it’s a great example of how a small Tasmanian business has been really able to thrive and carve out their niche internationally and keep competitors at bay by protecting their intellectual property.
So now I’d like to dive deeper into trade marks, and talk about the kinds of things that can go wrong. But before we get there, I just want to start with a quick background to trade marks.
Now, the first thing to say about trade marks is that they can be any type of sign which acts to tell consumers where a product or service comes from.
Trade marks are often visual, and come in the form of logos and words and phrases, and when a company gets a registered trade mark, they have the exclusive right to use that trade mark, meaning no one else can use it in the course of trade.
But when IP systems give out these exclusive trade mark rights, they need to make sure others aren’t going to be blocked from using common words and phrases. So for example, if I wanted to open a computer store, I shouldn’t have exclusive rights to the word, computer. So to make sure that doesn’t happen, in order for a trade mark to get registered, it needs to meet two main requirements.
The first is that all trade marks must be registered under certain goods and services.
For example, with this BOAGS trade mark, it’s registered in trade mark class 32, which covers beer, ale and stout or porter. What this means is, the company has the exclusive right to use the word BOAGS with these products. It doesn’t mean they have an exclusive right to this word in general.
The second requirement for registration is that the trade mark must be “distinctive”.
Now, for trade marks to be distinctive, they can’t be words and phrases that others are likely going to want to use with their own goods and services.
And if you think about it, the most iconic trade marks in the world have very little, if anything to do with the goods and services they’re used with. So for example, if you’d never heard of these companies before, and looked at these trade marks, you’d probably have a hard time guessing what these companies do.
Now, with that all that background information about trade marks out of the way, the first trade mark trap I want to touch on is when people pick trade marks that aren’t distinctive.
This can be quite a common problem with new businesses that might not have a lot of customers or exposure, and so they want to come up with a name that tells customers exactly what it is they do, and the result is that they come up with trade marks that are really descriptive of their goods or services.
So there are two main problems when it comes to using a non-distinctive trade mark.
The first is that you can’t register it as a trade mark, and so you won’t be able to get exclusive rights to that trade mark. And because of that, you’re bound to run into competitors who are going to use the same trade mark, or trade marks that are very similar to it, and so you’re going to find it hard to distinguish yourself from competitors.
The second problem, which flows on from the first, is that it’s just going to be difficult for customers to find you. This is especially the case for new businesses, who are just not going to be found on platforms like Google.
So, my first trade mark tip is this: if you want exclusive trade mark rights, if you want to be found, and if you want to more easily distinguish yourself from competitors, you’re often much better off picking a distinctive trade mark.
So let’s say you’ve picked a trade mark that you think is pretty distinctive. Now before you go ahead with plastering your trade mark everywhere and using it in your marketing and social media, you should actually check that it’s free to use.
Because if someone else has already registered the trade mark you’ve come up with, your use of that trade mark, or something similar to it, can result in trade mark infringement.
The worst case scenario is when we see a business really commit to their branding without doing any trade mark searching – so their branding is all over their website, it’s on their products, it’s all over their marketing and Instagram account, and out of nowhere they receive a cease and desist letter.
It’s only at this point that they might seek trade mark advice, but by this point there’s often very little they can do besides rebrand.
So, all that is to say, once you’ve decided on a trade mark, make sure you check it’s actually free for you to use, because on the off-chance it’s not, the consequences can be pretty drastic.
The good news is, this kind of problem is really easy to avoid if you know to avoid it in the first place.
The Australian Trade Marks Office has an online trade marks database that is really easy to use.
You can search by words, phrases, and even images – so if you’ve had a logo designed, you can actually upload that logo and search to see if similar logos are already registered.
One final thing to add is that trade mark rights, like patent and design rights, operate on a per-country basis, so if you’re only going to use your trade mark in Australia, then you only need to make sure it’s free to use in Australia, but if you have plans to expand overseas, then you want to make sure your trade mark is free to use in those countries too.
Now the last trade mark issue I want to touch on relates to trade marks in China.
Now, China is Australia’s biggest trading partner and we do see Australian businesses wanting to tap into the Chinese market, so it’s important for them to know how to manage their brand in China.
In most countries, including Australia, when it comes to trade marks, it’s a first to use system. What that means is that, generally speaking, trade mark rights belong to whoever first uses the trade mark.
Now the same can’t be said for China. Rather than being a first to use system, China is a first to file system, which means the owner of a trade mark is the one who files for trade mark protection first. So even if you’ve been using your trade mark there, you can end up infringing someone else’s later-filed trade mark.
This first to file system has led to a pretty terrible practice of trade mark squatting, where people file trade mark applications with no intention to use them, other than to sell them off to a company that actually needs it, often for a large sum. This is pretty similar to the practice of domain name squatting that happened during the early days of the internet.
Now, while the Chinese IP system is taking steps to combat trade mark squatting, it’s still an issue to be wary of right now, so if you have any intention of entering the Chinese market, you need to be thinking about trade mark protection early, and definitely before selling your products or services there.
Alright, so before I talk about where things can go wrong with patents, I want to mention three things to give you some background information about how patents work.
The first is that when you file a patent application, you need to include what’s called a patent specification. The patent specification is a written document which describes how your invention works. This is part of the deal for getting a patent. You need to share how your invention works and in return, you get a monopoly for your invention.
The second thing to note is that for your invention to be granted patent protection, your invention needs to be novel. In other words, it needs to be new.
And the final point is that patent applications are filed with patent offices, and it’s at these patent offices where they actually read your patent specification to understand how your invention works, so that they can try and determine whether your invention is new.
So, with that background information out of the way, when it comes to patents, the most important thing to keep in mind is to keep your invention confidential until you’ve filed for patent protection. So let me show you why.
So here we have your invention, and this is the day you filed your first patent application. Now when a patent office examines your patent application, they will search for publicly available material to try and prove that your invention isn’t new – and they’ll search through things like patent databases, Google, academic journals, even YouTube.
But, they’re only allowed to refer to material that was publicly available before the filing date of your patent application. That’s why you want to avoid disclosing your invention before filing your patent application, otherwise you can get into this tricky situation:
So here, you’ve actually publicly disclosed your invention before you filed your patent application. Maybe you started selling your invention, or you posted about it on social media – however you disclosed it, your own disclosure can be used to attack your own patent application, and can be used by the patent office, or competitors, to argue that your invention isn’t new and shouldn’t be granted patent protection.
I will add that confidentiality is just as important for registered designs.
So, while confidentiality is extremely important, you can imagine there are going to be situations where inventions accidentally get disclosed. Sometimes the inventor just doesn’t know better.
So there is a little bit of leniency for these kinds of oversights. Some countries have what are called “grace periods”, where even if there is a public disclosure of your invention, if you apply for patent protection within the grace period, that public disclosure won’t count against you.
So for example, the grace period in Australia is one year, so if you file a complete patent application within one year of the public disclosure, you’ll be safe in Australia.
Now, some people who hear about this grace period are tempted to rely on it, and might use the grace period as a way to find out if their invention has any potential without actually applying for patent protection – this is a really big risk I want to flag, and I’m going to show you why.
Firstly, many countries don’t have grace periods. So by disclosing your invention before filing for patent protection, you can actually ruin your chances of getting a patent in those countries.
Secondly, grace periods vary between countries. So for example, Australia’s grace period is 12 months, but Japan’s is only 6. So if you were to wait for Australia’s 12-month mark to file your patent application, you’d have already ruined your chances of patent protection in Japan.
Thirdly, some grace periods are quite strict. So, for example, China has a six month grace period, but you can only rely on it if certain circumstances are met. One of those circumstances is that your invention was disclosed by someone else and without your consent.
So, while it’s nice to know that grace periods exist, they’re really a last resort type of safety net. You really shouldn’t be relying on grace periods as your plan A.
Now, the next couple of slides deal with a patent myth I’d like to dispel.
Now I don’t know if you’ve heard this myth before, but it goes something like this: the myth is that even if you protect your invention with a patent, someone else can just change your invention by 10% and they can get around your patent.
We’ve run into a lot of people who have heard this myth and think that patent protection isn’t worth it, because they it’d be pretty easy to vary their invention by 10%.
Now I don’t know how this myth started, but the reason it’s stuck around is because there is a lack of understanding about how patents work. So, I’m going to use a very simple example to show how patents protect inventions.
So consider a hypothetical world where chairs don’t exist, and everyone relaxes by sitting on the ground.
Now let’s say an inventor comes along with this brilliant invention – they’ve created a chair.
Now the inventor might think: oh what’s the point of patent protection, even if I protect this chair, I can think of so many other ways a chair can be made – it’s going to be pretty easy to get around my patent so why apply for patent protection in the first place?
But that’s just not how a patent works. A well-drafted patent specification doesn’t only cover the specific chair the inventor’s come up with.
Now I mentioned earlier that every patent application includes a patent specification, and that’s the written document which describes the invention.
Now at the end of that document, there’s a list of statements called claims. Now the claims are very carefully written because they define the invention and the scope of patent protection. And part of our job, as patent attorneys, is to write claims which are broad in scope and protect the inventive concept you’ve come up, not just how your invention looks on the shelf.
So for example, here’s a potential claim for the inventor’s chair.
We might say, it’s a device comprising:
a surface for supporting a portion of a user’s body above the floor; and
at least one downwardly extending support member associated with the surface and configured to engage the floor.
So here, the claim can sound a bit strange, but really what we’ve done is used very broad language to capture the essence of the invention – and in essence, the inventive concept of this chair is basically providing an elevated surface which supports a user.
So, not only does our claim cover the inventor’s chair, it also covers these other types of chairs too.
So this is basically how a patent works, and you can see there’s no 10% difference between the inventor’s chair and the other chairs that can be measured.
So, the take-home message here is that there is no such thing as this 10% difference when it comes to determining what a patent protects. Instead, that’s determined by the actual language used in the patent specification.
So now that we’ve had a quick look at what goes into drafting a patent specification, I hope it’s clear that the language used is vital, and perfecting this kind of language is something that can take years to master. So all that is to say, filing a patent application without a patent attorney can be disastrous.
Now in our experience, many self-filers don’t include claims. And, even when they do, they’ll write something like this.
Clearly, this claim doesn’t define an invention and wouldn’t be granted patent protection.
Now in addition to having good claims, for a patent to be granted, it needs to meet a range of other requirements, and two of those are here.
The first is the enablement requirement. Now basically, the patent specification needs to describe the invention in enough detail such that someone else in that area of technology, can pick up the patent specification, read it, and understand how to put the invention into practice.
The second requirement is the best method requirement. Basically, at the time of filing a patent application, the patent specification needs to disclose the best method you know how to put your invention into practice.
The problem is that, in addition to not filing good claims, a self-filer is unlikely to meet these requirements. They’ll file the patent application, and then start making public disclosures of their invention, all the while thinking they have pending patent rights when in fact what they’ve filed is essentially invalid.
The worst part is, they generally won’t find out their patent application has any problems until years later when the patent application gets examined, but by that point, they’ve already publicly disclosed their invention, and so they can’t file a new patent application because it’s not going to be new over their own public disclosure, and they can’t go back and fix the application they self-filed. So this is a situation where they end up publicly disclosing their invention, thinking they have patent protection on foot when instead, patent protection was never going to be a reality in the first place.
Now the next issue I want to look at relates to the patent application process.
Typically, to start the process, you first file what’s called a “provisional patent application”. This gets you pending patent rights in over 180 countries around the world and it lasts for 12 months.
At the end of those 12 months, you need to file individual patent applications into each country where you want patent protection.
Now it’s when you’re filing in multiple countries around the world that costs can add up, and for a new business, those costs can be hard to prioritise, especially if your invention isn’t bringing in much revenue yet.
The good news is, there is a way to delay those costs by filing what’s called a PCT application, which basically keeps your patent rights pending for another 18 months.
So by filing both a provisional application and a PCT application, you’re effectively buying yourself a runway of 30 months during which you can refine your commercialisation strategy, start earning revenue from your invention, and figure out exactly which countries your invention will do well in.
Now what you need to be mindful is having bad assumptions about which countries your invention will take off in.
So for example, we work with a client who thought he would only be commercialising his invention in Australia, so he decided to skip the PCT application – he just saw it as an additional cost – and decided to file for protection only in Australia.
Now his invention has since gained a lot of attention, and he’s had investors wanting to partner with him and commercialise it overseas, but when they ask whether he’s got patent protection on foot overseas, there’s nothing he can point to.
The worst part is, had he filed the PCT application, he would still be within this 30-month runway right now, and he could have told investors he has internationally pending patent rights right now.
So the take-home message here is, if you’re unsure of your commercialisation strategy and which markets or countries your invention will do well in, it can be very useful to buy yourself extra time by filing a PCT application.
So the final patent issue I want to touch on just relates to doing research.
Now, patent protection isn’t free, so it helps to find out early on whether your invention is patentable in the first place. You don’t want to be years into the process only to find out your invention isn’t patentable to begin with.
The good news is, there’s a really good way to get an early indicator of how patentable your invention is.
So after you file your provisional patent application with the Australian Patent Office, you can actually request that they do what’s called an international-type search on your invention, and they’ll come back to you with an opinion about the patentability of your invention.
The search is relatively cheap, and another benefit is that if you end up progressing with a PCT application, you can get some of the search fee refunded.
So, my final patent tip for tonight, is that if you want to find out if your invention is patentable, you should consider getting the Australian Patent Office to conduct an international-type search on your provisional patent application.
So that brings me to the end of these slides, and these are the key points I’d like to leave you with:
The first is that protecting your intellectual property can be a very effective way of carving out your niche in the marketplace – and we saw how Scootboot was able to do that.
The second is, when it comes to patents and designs, confidentiality is key. If in doubt, keep what you’re working on a secret.
And finally, seek advice early. If you only wait for an issue to pop up – so for example, someone’s copied your product, or you’ve noticed someone using your branding but you don’t have a registered trade mark – if you only seek advice when these kinds of issues arise, it can often be too late or very expensive to fix.
So that’s all from me tonight, thank you for giving up your time and tuning in, and let me know if you have any questions.