IP lessons from Tasmanian businesses
In this Webinar, Michael and Warren discuss the ways in which real Australian businesses benefit from protecting their technological innovations and branding.
A big thanks to our host Seedlab and all the inspiring agribusinesses for attending and their insightful questions and discussion.
Dr Hazel MacTavish-West
So today in Seedlab Tasmania, we’re welcoming Michael Cooper and Warren Wong from Cooper IP to talk about intellectual property, very much from an example point of view. They do a lot of work with businesses in Tasmania and would normally be here in person, but for obvious reasons they’re not, so they’ve got live to you today from Melbourne, and I’d like to hand over to Michael and Warren.
Thanks for that Hazel. Thank you all for coming and giving up your valuable time to discuss intellectual property.
As far as Seedlab goes you’re getting some great exposure and assistance to help you develop your products and take them to market, which itself can be quite a long and difficult process. This involves working with many experts from different fields and today’s our chance to talk about the importance of intellectual property.
Now, we know that Hazel’s had some first-hand experience with IP issues that arise with businesses, and particularly startups. We’ve had some discussions lately about things that have come up within Seedlab so some of you might already have some experience with IP. We hope it’s been positive. Unfortunately though some people have some issues that arise and it’s not entirely positive. But we find that the best approach is to be proactive, so just coming today can set you up and hopefully give you some background into what you’re doing and what you need to be doing to get the best result you can.
About Cooper IP
So before we get into that, I’m going to quickly give you an intro on who we are. We’re a small team: two attorneys, support staff, access manager and a paralegal.
Warren and I both have mechanical engineering backgrounds so the sort of technology we deal with is quite broad. On a daily basis, we deal with things from mining machines and processes to medical devices, consumer products, packaging, hardware and construction.
We also handle inventions in automotive, agriculture and aquaculture areas as well, so it’s really quite a broad area that we play in so there aren’t too many things we can’t help with.
Cooper IP in Tasmania
So we’ve been working down in Tasmania for some time. I’ve been coming up to about five years. We alternate between Hobart, Launceston and Burnie two days a month and we’ve done a lot of work with businesses through the Enterprise Centres Tasmania over the last few years, including through the Department of State Growth, and you’ll find us listed as one of the two contacts on the business Tas webpage.
We’ve got some great relationships with many different organizations in Tasmania such as Seedlab, and we work with a number of different businesses. We’ve just put a snapshot of some of them here that are relevant to the space that we’ll be talking about today. Some of them you may or may not know but there are lots of people down in Tazzy doing lots of great stuff.
Obviously, there are fantastic conditions that really lend themselves to great food and beverage and ag products and that’s recognized not just locally but internationally so when we’re talking about IP, it’s always good to have a mind to what can happen internationally because before you know it, these products can often be picked up and your commercialization landscape changes considerably.
So I’ve been doing this for about 13 years, now. I previously worked with a large firm in Melbourne. One of the most prestigious firms in the country, spent 10 years there. I’ve worked with everyone from big corporates like the ones listed here, down to lots of husband-and-wife teams.
I’ve protected some amazing technologies, worked on some great products and been involved also with multimillion dollar litigations, wo we really have quite a broad experience base between Warren and myself.
One of the things that was missing from the big firm is the ability to have the time and space to get involved with clients and work closely with them and be part of the team and IP is really something that needs to be integrated into the business and our clients that do the best out of it are really involved and we get into it, we help them we become part of the team and they’re the ones getting the most out of it.
So today I’m not going to do a standard IP 101. I’m going to give you some background to IP and what you need to know, but I’m going to do it by way of a case study through one of my Tasmanian clients I’ve done a lot of work with over the years and show you how they use the particular rights mechanisms to protect what they’re doing.
We do a lot of these presentations every year. The reason we do that is purely educational because IP is not a common topic and a lot of people just don’t know about it.
There are so many misconceptions and misunderstandings and even though it can be incredibly valuable, IP is just misunderstood by a lot of businesses and not only are they missing out on great opportunities, it can cost them some money as well.
So we’ll run through this case study and give you a background and show you how it can work. Then we’ll jump to Warren who will do some detailed discussion of trade marks and we’ll come back to me and I’ll run through patents as well just to give you some more depth there. We’ve got lots of time for questions at the end. We really love questions. Don’t be afraid to bring up stuff that’s specific to your business. That’s when the most interesting issues arise.
Introduction to IP
So, what is intellectual property? Well as a name suggest its property of the intellect. We like to think of it as what we create. There are various definitions around but most of them revolve around ideas. For me, it’s often the lightbulb moment that the smart things that we do within our business that make it unique.
Now we’re a creative bunch. We spent a lot of time and resources coming up with new things. New works of art, new technologies, new companies – and pretty quickly realized that for people to put in the hard work to create these new ventures, it’d be unfair if others came along and just copied them. So we historically we’ve established these IP protection systems to give the risk-takers some insurance that when they do create new things that it’s possible for them to get to have some control over how it’s used and give them a chance to make some some return on their investment.
Now within these IP systems, we’ve created various mechanisms. The main ones being patents design registrations and trade marks. Those are the three we’re going to talk about today, they’re the most relevant. Otherwise, copyright can be very important depending on the type of business you’re in but we won’t touch on that too much today.
Plant breeder’s rights
Another one that’s very relevant in this space, but we’re not going to go into too much detail is plant breeder’s rights, particularly, if you’re a fruit and veg grower, if you’re experimenting with your own species that can be really quite relevant. Plant breeder’s rights don’t get a lot of publicity but quite recently there was a case in New Zealand where a kiwi fruit grower had their varieties registered and they were misappropriated. Some cuttings were taken to China and replanted and they were successful in taking some strong action against them and stopping the import so they certainly can be used and they can be used well, and if you are in that space of growing and experimenting then please do reach out and let us know if you need some guidance as to what you can do to try and protect yourself.
Patent protection – case study
So the case study. Now, this is Latte Pro – it arises out of a company called Innovations development Australia in Launceston. I’ve worked with this company for some time. It’s is a great consumer product; it’s is quite simple, quite straightforward. It’s all about accurately and repeatedly heating milk for your cappuccino or latte.
If you’re a coffee aficionado, you know that getting heating the milk for your drink is crucially important; it needs to be not too hot, not too cold and it’s a difficult process that’s often done through feel which makes it inaccurate and difficult to repeat unless you’re highly skilled.
So the inventor saw a need for this product and potential market for it and then he set out to develop it and after spending considerable time and energy developing the perfect jug, which is quite common. Getting any product to market typically takes a few iterations and work affecting the product and prototyping. They spent quite a bit of time getting it right, many trips to China to visit factories and get moldings and stampings correct and assembly processes in place.
So what they wanted to do is to be sure that when they brought it to market it wasn’t easily able to be ripped off. Because it is such a simple product and once you put it on the shelf and you’ve proven the product, developed it, proven the market and distribution channels, it’s easy for someone to come along and replicate it. So the only tool that you have really is your intellectual property protection to be able to stop others from doing those sort of things. So they knew that, they recognized that’s what they needed to do and we set out in advance to protect this jug.
So the first form of protection they turned to was patents. Patents protect inventions. They’re a conceptual form of protection. They protect the way something works, not the way it looks. So what they’ve tried to protect here is specifically the way that the thermometer works. So as you’re heating milk, they have one cell which is shown on screen there in the picture; that’s where you want to be. But as you’re heating up the cells progressively change colors which gives you an indication as to how its progressing.
So that’s the main function that they sought to protect but there are also other inventive aspects of the jug that they came up with as they were as they were developing it, including the way the thermometer is recessed into the jug and the way it’s glued in so it’s dishwasher safe. You can’t quite see it here but at the top of the handle there’s a hole for different grommets to indicate different types of milk. So there are a bunch of technical features that they really wanted to protect with this jug to stop others from replicating them.
Patents protect inventions
So, these are inventions. Now when you hear the word invention you often think something high-tech like a bionic ear or a new drug. But in the world of patents, an invention can be anything that does something new and has a new function. So the simplicity of it is irrelevant. Often the simplest inventions are the best.
The genius of simple inventions
Now over the years, I’ve worked on many simple inventions and one of my clients has been able to negotiate by far one of the best commercial deals that I’ve ever seen. It was a farmer who came up with a new ear tag which helps to prevent eye diseases in cows and bulls – conjunctivitis and the like. He was in the area of live exports and so when you get eye diseases on a ship it can be really quite bad and he came up with a very simply ear tag that helped deter flies and keep them out of the cow’s eyes. Had a great application, really simple product, we protected it and he was getting some amazing royalties from his suppliers.
Likewise, I worked in the past with a medical device manufacturer who had a safety IV catheter. When you pull the needle out of your arm, there’s a little clasp that as you pull the needle tip out, it comes over the tip of the needle and locks it off so you can’t have a needle stick injury. Amazingly simple thing you see at work and you just go “aha, that’s great!” It came out of eight hospitals in San Francisco in the 80s and 90s and saved many many lives and last I heard they’ll make you about 500 million of these things a year. So just an amazing success story of a really simple idea.
So patents can be thought of as legal rights that protect those new functions, and often we have to look at the new invention and see what that new function is, because that’s what we’re trying to protect.
Patents give you monopoly rights – they give you the right to exclude others from doing what you’re doing so you can become the only person in a particular marketplace to use an invention. And use includes making, selling, importing, leasing – it’s quite a broad definition, so patents might be in different countries, for example, where a manufacturing base is, or a country where the invention is being supplied or imported. So there’s many different ways that a patent can be used.
Patents are quite well used in the ag space, particularly around farming machinery. They’re also used a lot in packaging. There’s lots of patents around packaging, different ways packaging works and different ways its formed. I’ve done quite a lot of work in that space and I’m always surprised as to how much technology goes into something seemingly as simple as a cardboard box.
Now another IP right, one that’s not particularly well used or understood is the registered design. A registered design protects the appearance of an article – not the function at all – just the way something looks. Now in our case, IDA recognized the look of their jug was quite unique and distinctive and what they didn’t want was other people making jugs that look the same.
It’s a great form of protection for things that don’t necessarily have a function and they’re quite well used in relation to packaging, models, household goods and things like that. So lots of examples in the consumer space.
A really well known example is Apple. Apple extensively use design registrations: these things here, particularly the keyboard and the charger are relatively generic. One of Apple’s core strategies is obviously great design and they put a lot of time and money and effort into their design and they’re really look protected to stop their competitors from using a similar designs.
Trade mark protection
So trade marks: Latte Pro is obviously a brand name; we protected that both locally and internationally. Trade mark protection stops others from using the name and the branding. It helps them maintain their point of distinction not only on the shelf but also online; it can be particularly important if you’ve got people out there searching feel your product. You don’t want others to be selling products under the same name.
They’re selling through some great distributors, their moving their products all around the world at the moment. They do have issues with copycats – with imitations – and we’re in the process of taking action to stop infringers.
It’s hard to know whether copycats or competitors would ever have popped up – it’s one of the issues with IP. Often your IP is invisible and you just don’t see the benefit of it. In the past we’ve acted for large retailers and wnd what they do is they go out, find products around the world that they’d like to replicate and then come to us and ask as what IP protection was in place. If there wasn’t any, they could go and replicate it, if there was then often it wasn’t worth their time and effort to get into a dispute. So IP is really invisible and often we don’t see how it works. Someone might have a patent then keep it for 20 years and never have an issue and they think that it’s done nothing for them but in reality it could have done a lot.
So some of the great advantages with IP – obviously you get monopoly rights. It can be really useful for licensing, distribution deals, retailers, manufacturers. It’s really all about keeping control of the product and how it’s used, particularly locally and internationally. So if you’re developing a product and trying to get it to market, particularly with a view to going internationally, it’s really quite crucial having your IP in place.
Now at this point I’m going to switch over to Warren. He’s going to take the next part of the presentation.
Trade marks in detail
So I’ll be taking a closer look at trade marks, and I’ll start with a quick summary about how they work, and then we’ll look at the function and role of trade marks through the eyes of some Tasmanian businesses we’ve worked with.
Now, picking a good trade mark can be crucial, because your trade mark is how customers will find you – it’s how they’ll recognise you – and it’s how they might bring your brand to mind.
So for example, if you’re driving around in a new town looking to do some grocery shopping, you’re not usually looking for a sign that says “groceries this way”. Instead, you might be looking for the big green Woolworths apple. And, once you get there, if you’re looking for Vegemite, you’ll probably, without really thinking about it, gravitate towards yellow jars with a red icon on it.
Now these types of logos and names and packaging – they’re trade marks – and these marks of trade act to tell consumers where a product or service comes from.
Now, if you’ve come up with a great brand and business, and you’re growing and building momentum, the last thing you’d want is for a competitor to pop up and start using branding that’s similar to yours, and basically trying to enter the market by taking advantage of your reputation.
And if your brand is growing and expanding nationally and maybe even internationally, you’re going to run into more and more competitors in the same space so you’ll need to make sure your branding continues to set you apart.
This is where IP rights come in. As Michael mentioned earlier, IP systems are all about helping people control and own the things they create. So when it comes to trade marks, you can actually register your trade mark with national trade mark offices.
The great thing about registering a trade mark is that you get to have exclusive rights over it. In other words, you get to own and control exactly how your trade mark is used.
Why you should pick a distinctive trade mark
Now, we’re not going to do a trade marks 101 today – but a key message I want to start off with is that for many businesses, they’re often better off picking a trade mark that’s distinctive.
Now in practice, a trade mark that’s distinctive is typically one that doesn’t directly relate or describe the goods and services the trade mark is used with. So let me give you an example.
Here’s a trade mark you’ll all recognise. The trade mark is for the word TIMTAM, and you’ll see it’s registered in relation to biscuits.
Now the word TIMTAM is completely made up and has nothing to do with biscuits. If you’d never heard of TIMTAMS before and you simply saw this word, you’d have a very hard time guessing the product or service it relates to.
And as I was preparing this slide, I learned that TIMTAMS are actually named after the winning horse of the 1958 Kentucky Derby, so the inspiration for the TIMTAM name really has no connection to biscuits at all.
So this is an example of a distinctive trade mark. It’s a made up word which has no association with the goods it’s used with, and because of that, ARNOTTS has been able to secure exclusive rights to the name, effectively preventing any one else from entering this space with a similar name, and with time, that can go a very long way when it comes to defining your brand and standing out.
The problem of non-distinctive trade marks
Now, just to drive the point home, here is an example of a trade mark that is not distinctive. So here, this company has filed a trade mark application to protect the phrase TASMANIA BLACK ANGUS BEEF in relation to meat and meat products.
Obviously, this trade mark is directly descriptive of the goods, and the trade mark isn’t at all distinctive. The Australian trade marks office has rejected it, which is why you’ll see the status of the application is lapsed – not accepted.
So this company has gone ahead and paid to protect a trade mark they were never going to be able to register in the first place.
Now, this is a very common issue, especially with newer businesses that might not have a lot of customers or exposure, and so to compensate, they might come up with names that describe exactly what it is they do.
Exception to the distinctiveness rule
Now of course, there are certain types of businesses where it can make sense to have a very descriptive trade mark. For example, brick and mortar stores that aren’t looking to expand and which mainly serve customers in a fixed location, like a café or a vet.
But for businesses that want to grow and have a reach that’s beyond their physical location, they’re often better off picking a distinctive trade mark.
Trade mark case study – Tassie distillery
So now I’d like to look at a Tasmanian distillery we started working with recently, and we’ll see the kinds of problems that can occur when you use a non-distinctive trade mark.
So the name of this distillery is essentially: their place name plus the word distillery.
Now, they didn’t know choosing such a name would be a problem, especially when they were starting out, but recently they reached out to us for help because it turns out, another distillery in the same place has set up shop, and they’re also using an identical name in their marketing and website URL.
So the business that reached out to us, we’ll call them Distillery A, they were wondering if they might be able to trade mark their name to stop Distillery B from using the same name.
The problem is, since the name isn’t inherently distinctive, in order to actually trade mark that name, Distillery A would need to demonstrate to the Australian Trade Marks Office that they already have a strong reputation in their name, which in this case, they didn’t.
Another complication is that both distilleries are also selling their drinks online and they’re finding customers using social media platforms. So now Distillery A is also facing the problem of potential customers not finding them because they inadvertently end up with Distillery B.
And, to cap it all off, since Distillery A’s name is so descriptive, they have to work really hard on their online presence, their website SEO and Google Ads so that their pages continue appearing at the top of a user’s search results.
It’d be kind of like owning a café called LAUNCESTON CAFÉ, and hoping that when people type that into Google, they actually find you.
So, unfortunately, by using a non-distinctive trade mark in this case, Distillery A is currently unable to get exclusive rights to their trade mark, they’re having a harder time distinguishing themselves from a new competitor, and prospective customers are potentially slipping through the cracks because they either can’t find Distillery A very easily, or they wind up being directed to Distillery B.
Now, this branding issue is already difficult and costly enough to deal with, and unless one or both distilleries rebrand or go out of business, it’s likely going to be a long-term problem.
And this is just an additional headache that you don’t want to deal with, especially if your resources are limited and you’re in the early stages of growing your business.
So all that is to say, if you’re a business that’s looking to expand and have a reach beyond your physical location, you’d be well-advised to adopt and use a distinctive trade mark.
And it’s something you’ll notice with many international brands – their logos and names and trade marks really have very little to do with the goods and services they’re used with.
So if you’d never seen any of these trade marks before, you’d probably have a hard time figuring out the kinds of goods and services these trade marks are used with.
Trade mark infringement case study
So now I’m going to move on to a different case study.
Let’s say you’ve picked a distinctive trade mark. Now before you commit to it and plaster it everywhere, you should check that it’s actually free to use. This is another very common problem that young businesses face.
Because if someone else has already registered the trade mark, your use of that trade mark, or even something similar to it, can result in trade mark infringement.
And we saw this happen with a relatively young Tasmanian business that makes a certain type of drink – again I’ll have to be quite vague about it.
In this case, we’ll call them Business A, and what happened was while they did choose a distinctive trade mark, what they didn’t know was that another business was already trading in that space and had already registered the trade mark.
Now, during the early stages, Business A had no issues because they were small and they weren’t on anyone’s radar.
But, as Business A grew and started to gain traction, Business B found out about them and quickly sent them a cease and desist letter, basically saying that Business A was infringing their registered trade mark.
Now it was only at this point that Business A got in touch with us, but unfortunately, there was very little they could do besides rebrand.
Now, we’ve never come across a business that’s had an easy time rebranding, and Business A was no exception. They had to pull their products off the shelves, change their name, URL, logos, come out with new labelling, and basically redo the branding on their social media platforms.
So, all that is to say, once you’ve decided on a distinctive 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 quite drastic.
Trade mark searching
The good news is, this kind of problem is easy to avoid if you know to avoid it in the first place.
The Australian Trade Marks Office has a trade marks database which is relatively 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 other thing I want to add here is that intellectual property rights, including trade mark rights, they 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.
Trade mark protection in China
Now the final area I want to touch on is trade marks in China, and I want to look at China separately for two main reasons. The first is that China is a really important market for so many Australian businesses, especially food and beverage and agri-businesses – the Chinese market just loves Australian produce. The second reason is that trade mark laws in China are quite different from those in Australia and if you don’t protect your branding well in China, you can really end up in a world of trouble.
Trade mark squatting
Now, the first major issue I want to talk about is the problem of trade mark squatting.
This is where someone files a Chinese trade mark application, but they have no intention to legitimately use the trade mark – instead, what they’re hoping for is that someone else will start using the trade mark in China and they’ll hold their trade mark as ransom.
This practice of trade mark squatting is a lot like the practice of domain name squatting which was rampant during the earlier years of the internet.
So for example, three years ago, 8 of the top 10 trade mark filers in China were Chinese companies engaged in trade mark squatting – they would just file thousands and thousands of trade mark applications, waiting to pounce on foreign companies entering the Chinese market.
This is a really common problem, many big names have been caught out, so you really need to be proactive and on the front foot when managing your business and branding in China.
So before you start advertising and marketing in China, and certainly before you start trading there, you want to make sure you’ve filed a Chinese trade mark application first so you aren’t at risk of being taken by these trade mark squatters.
Transliterations vs translations
Now the second issue I want to look at relates to what happens to English trade marks in China.
Now China is not an English-speaking country, and most people don’t refer to brands by their English names.
Now, some English trade marks have been translated into an equivalent Chinese name, but a lot of the time, what the Chinese language preserves isn’t the meaning of the trade mark, but the sound, and this is done through transliteration, which is a process where the English trade mark gets mapped onto sounds of the Chinese language.
So here are some examples of transliterations, so we see that Twitter is Tuī Tè, Nike is called Nài Kè, and LinkedIn is Lĭng Yīng.
Now of course, each of these transliterations correspond with Chinese characters which themselves have meanings, so what you want to do is take control of your transliteration and make sure it resonates with how the Chinese market perceives your brand, otherwise they might give your brand its own transliteration and before you know it, someone else will own the trade mark rights to it.
Chinese trade mark case study
So here’s a great case involving the Penfolds trade mark which brings to light both the issues of trade mark squatting and Chinese language trade marks.
So what happened was, a trade mark squatter in China ended up registering different Chinese language trade marks for the PENFOLDS brand, including the Chinese characters here, as well as the text Bēn Fù, which loosely translates to rushing towards riches.
Now, while the owner of the Penfolds trade mark was battling the trade mark squatter in court, their wines were getting pulled from shelves in China because the hotels and retailers selling them didn’t want to risk their sales constituting trade mark infringement.
Now, while the outcome is positive, in that the Chinese trade marks were eventually cancelled and now belong to the rightful owner, it took years and years of litigation and untold costs to get that result.
So, to close, when it comes to China, you can never be too careful. If you’re eyeing the Chinese market, not only do you want to protect your English trade mark there, you’ll also want to give some thought to how your trade mark might be translated or transliterated by the Chinese market.
And with that, I’ll hand you back over to Michael who will now discuss patent protection.
So now we’re going to talk more about patents and the way that they are used by different companies. So let’s explore some of the Tassie businesses we’ve worked with in this space. One of them using the field of rapid aging of whiskey. Now distillation is a difficult game: storing barrels for many years is problematic and commercially difficult and expensive. What a lot of people don’t realize is that when you put a barrel of whiskey away for 10 years, the angel’s share can be up to 50%. So in addition to holding a product for that long, the longer it is held for the less product you actually get, which is makes the process even less efficient.
Patent case study – the importance of confidentiality
So enter this company – the man behind it is an industrial chemist, and he was well aware of this problem and wanted to use science to come up with a solution. What he came up with was a process to use ultrasonics to rapidly age the whiskey with some thermal heat cycling as well. They managed to get a product that similar to a ten-year-old whiskey in about six weeks. So the economics of that are amazing. I can talk about this now because this is actually the subject of a patent application that we filed for this invention. Now the requirements for a patent is that the invention must be new and inventive. Now, newness is assessed worldwide in light of publicly available documents and public acts.
The requirement novelty is often why confidentiality is so crucial to new inventions. In this case, the company wasn’t positioned to go down the route of the patent protection to start with and so they went to market without putting some protection in place only to realize pretty quickly that they should have. Now, unfortunately what they were doing was they were making, selling and publicizing their product so they hadn’t satisfied their own novelty requirement. So it’s important to remember that keeping your invention confidential until you file is really crucial here.
When you file a patent application, it will eventually be examined. The patent office that examines the application will look through all the publicly available material they can find, which is traditionally patent databases, but also includes Google searches, academic journals even YouTube; we’ve had citations from Facebook as well. So that they will look and they will find things that are out in the public space and they can be cited against your application and can be novelty destroying.
So the patent office is only allowed to refer to publicly available material and what gets a lot of patentees in trouble is that they’ve already put their own material into the public domain and that can be cited against them.
So a good example of this we had a few years ago working for a university that had a great R&D project with some great potential. We filed some patent applications for them. We started extending these around the world and then one of the overseas patent offices did some more detailed searching and it came to light at that stage that about three years into the process the inventors had actually published a journal article six months before we filed their first patent application. Obviously, the right hand wasn’t talking to left hand and nobody knew about it until that point, but that was prior art against their patent application and ultimately the journal article disclosed most of what was in the patent application and because of that the application became non-viable was ultimately lost and the project fell apart.
Be careful of relying on grace periods
So, we do have grace periods. Australia has a 12-month grace period which allows you to make a public disclosure up to 12 months in advance of your filing. Now, there’s some really serious caveats with that. The main one being that if you disclose your invention before you file your patent application and somebody sees it in the marketplace and picks it up – so it might be a competitor of yours – they see what you’re doing, they do a search, they see you haven’t filed for your own IP, and so they decide to start commercializing your invention. You might find out in six months’ time and file your patent application, but because they started doing it before you, now you can’t stop them. You can still get your patent application, but you won’t be able to stop this competitor. So filing before any public disclosure is really quite key.
Grace periods are certainly a last resort and not a plan A. Many countries don’t have grace periods. Also the period of the grace period varies between countries, as well as the rules to qualify.
When to file a PCT patent application
So the process of getting a patent is quite long and complicated. Tthere’s no other way to put it – it’s very involved. The main thing is starting – filing a provisional application is typically the start. It gives you a priority date, which is your flag in the sand and your rights start from that day.
After the provisional application is filed, we’ve got 12 months to then go into countries of interest. There’s no such thing as an international patent. There’s an international application that I’ll come to shortly, but ultimately you need to file an application in each jurisdiction of interest.
So your provisional application is recognized in about 180 countries, and you’ve then got 12 months to go overseas. You can either do that by filing in each country individually, or via an international patent application, also known as a PCT patent application. Now, the PCt application only has an 18-month term, so it ultimately delays your requirement to file in each country of interest, but buying that 18 months can be incredibly valuable because in that first 12 months, it can be difficult to work out where your markets are and who’s going to buy a product, so the longer you can delay that decision is typically in the interests of your business.
Unfortunately, these filing decisions are non reversible. So if you decide after 12 months not to pursue foreign protection, then that option is closed off to you. And it’s often after 12 months when you realize that you might have a market for a particular food product, for example. It might be for cultural reasons, you might be able to sell a product into India that China will never buy and until you’ve got time to research and validate those options, it’s best to keep those options open. Now in the case of the distiller, because they had to rely on grace periods, a number of countries were already out, but they still could have potentially filed in the US, but they only filed in Australia.
However, as they’ve grown and developed, they’ve done some more marketing, they’ve got more product out there and is starting to be adopted in the marketplace, and potential foreign investors and commercial partners that have approached them and wanted to do some work with them. But unfortunately, they have lost the chance to pursue overseas protection – had they filed the international (PCT) application they would at least still have the option and would be better-placed to pursue those commercial opportunities.
In this case what they’ve been able to do is to further develop their technology some more and file some further patent applications that they can ultimately extend around the world to try and get some of those commercial deals on their second family of technology. But that the core technology is unfortunately in the public domain, which really compromises the sort of deals that they can do.
Patent case studies – agribusiness
Another company that we’ve done some work for is Cherry Hill up in the north. It’s a great example of how an agribusiness has used technology to improve their processes. They do seed potatoes. One of the issues that they have with the seed potatoes is that they can’t put them in bins bigger than one tonne because the product degrades due to lack of air flow. So if you have a semi-trailer coming in with 18 one tonne boxes, unloading it takes 18 forklift moves as it progresses through the various cycles of a deep cooling system, so they need to have an army of forklists on the go, and this costs them a lot of money, time and energy.
Through some development work, they’ve come up with a way to make a two tonne bin by taking some of the panels out of the side of the bin and adding some perforations and perforated tubes to break up the mass of seed potatoes and allow air flow. So for any particular stage – unloading or loading or cutting or storing – there are half as many forklift moves so that has been a great competitive advantage for them. It’s been a big investment for them as well – taking out their cool store replacing all their all their bins is a significant investment.
Before they wanted to go down that path, they appreciated that it would be important to have stop people copying them so they can maintain a competitive advantage. So they’ve done really well out of that and saved a lot of money. They also not only have the potential to make their own operations more efficient and more profitable, but they can license their technology overseas as well, and drive new revenue streams, or they can even allow their partners in Australia to use it for a fee. So it’s a great use of IP to really help their bottom line.
Shellfish Culture Tasmanian is another company that we’ve done some work. You wouldn’t think that oyster farming would have much technology Innovation, but one of the things that is big around the world is verification of place of origin. Obviously, once you take a an oyster out of the ocean, it can be quite hard to tell where it’s from, so some companies laser etch their logo on the product so people know where it’s come from.
There are quite a few technical issues that need to be addressed to make the laser etching happen, and to make it happen efficiently at scale, and we filed some IP protection around that process.
So what that patent application has allowed them to do is to give them access to funding, and allow their product to be marketed as patent pending. The patent application was filed to ultimately protect their technology and keep their competitors at bay, but there are these other commercial advantages too.