The most costly yet avoidable patent pitfall

After seeing this mistake (yet again) from another promising Australian business, we couldn’t help but write this post as a warning to others.

 

The business in question had designed and released a smart vehicle storage product. They have a strong foothold in Australia and recently piqued the interest of US companies wanting to stock their product.

 

With the potential for international expansion into their largest target market, the Australian founders excitedly reached out to us to discuss patent protection.

 

“And when did you start selling the product?"
"About two years ago."

Did you hear the sound of their patent prospects evaporating?

 

Yes, the founders were right to enquire about patent protection. After all, their product represents a technological improvement and solves existing problems.

 

And of course, the founders were right to be thinking about guarding their intellectual property, especially given their commercial success and interest from the US. Having a monopoly over a sought-after product is about as good as it gets for any profitable venture.

 

What they got wrong was timing.

Patents protect inventions, and by definition, inventions must be novel and inventive. Something is not novel if it is already known or exists in the public domain. In this case, the business’s own product sales render their product, in the present day, not novel. 

 

No matter how we looked at it, there was simply no way they would be able to secure valid patent protection for their product. 

 

Even if an unscrupulous patent attorney filed patent applications for their product, those applications would ultimately be rejected by patent offices around the world when they inevitably uncover that the product had been publicly disclosed before the founders filed their first patent application.

In our experience working with Australian businesses, this is one of the most common, costly, yet avoidable patent mistakes that can be made. 

 

Before applying for patent protection, it is crucial to keep the invention confidential. After details of an invention enter the public domain, the ability to secure valid patent protection can be entirely jeopardized.

 

While some countries provide grace periods to address prior disclosures, these grace periods may only apply if certain conditions are met (e.g., the disclosure was without consent) and only if the first patent application is filed soon after the first disclosure (e.g., within six months).

Confidentiality in practice

It can be difficult to keep an invention confidential, particularly during the R&D and prototyping stages during which industrial designers, engineers, and brand whisperers might be involved in bringing a product to life. In these situations, non-disclosure agreements and employment agreements with robust IP clauses can fill the vacuum. Discussions with patent attorneys are privileged.

 

While we thrive on helping Australian businesses protect and commercialise their new products, it pains us to meet them too late when the genie is out of the bottle. It’s often the worst news we have to give and we hope you never have to receive it.