Attention startup founders!

Kavinna and Jeremy have been working with The Ministry of Awesome, The Centre for Entrepreneurship at the University of Canterbury, and Entre to help startup founders navigate the world of intellectual property. During their presentations and conversations, founders have asked them numerous questions relating to patents, registered designs, and trade marks.

In this insight, Kavinna and Jeremy share answers to some of these questions so that startups from all around New Zealand can learn from them. This insight is updated whenever Kavinna and Jeremy post an answer to another question on LinkedIn. Make sure to go and follow them on LinkedIn for the updates!

Index

Patents and designs

• I don't have any experience with patents, can you give me a quick 101?
• How do I know if I have invented something that I should considering patenting?
• What is the process from idea to granted patent?
• When is the right time to file a patent application?
• I don't have any experience with registered designs, can you give me a quick 101?

Trade marks

• I don't have any experience with trade marks, can you give me a quick 101?

Patents: I don't have any experience with patents, can you give me a quick 101?

A patent is an intellectual property asset that gives its owner an exclusive right to a technological feature in a specific country. As a startup, it is important to consider both the opportunities and risks of patents within your technology area. If you have invented a new feature, you have the opportunity to file a patent for it to protect any commercial advantage that you might gain from it. Conversely, if a competitor owns a patent relating to a feature you are intending to use, their patent may represent a business risk for you or an opportunity to collaborate.

Opportunity - Filing a patent

When thinking about opportunities for filing a patent, begin by considering the features that could give your product a commercial advantage. What are the features within your product that might cause a consumer to choose it over a product from a more established competitor? Once you have identified these features, consider whether any of them are novel. Do any of these features represent a technological advancement over the current state of the art?

If you can identify a feature that is novel and has the potential to give your product a commercial advantage, consider engaging a patent attorney to discuss filing a patent. Filing a patent for this feature would give you an opportunity to gain an exclusive right to manufacture, market, and sell products incorporating it. This exclusive right could be a valuable tool to help you gain a foothold in the market.

We will explain how to determine whether a technological feature is novel and will expand on the process for filing patent applications in different countries.

Risk - Patents owned by others

If you are a startup aiming to enter and disrupt an established market, there is a risk that competitors within that market may try and use their patents to protect their market share. If you were to manufacture, market, or sell a product with a feature protected by a competitor's patent, they could choose to bring an infringement proceeding against you. This could result in you being forced to pay a financial penalty and to stop selling your product.

To mitigate your patent risk, start by educating yourself about the patents that exist in your technology area. You can begin educating yourself about the patents that exist in your technology area by considering.

• Who will your competitors be when you release your product?
• Do any of them hold patents in your space? You can search for their patents on Google Patents.
• Are any of these patents in countries that you are interested in manufacturing or selling in?

Later on, we will expand on the process for analysing and mitigating patent risk (known as freedom to operate) and how this process can also help to identify potential collaboration opportunities.

Patents: How do I know if I have invented something that I should considering patenting?

If you have been working on a new product or process and want to know if it includes anything you should consider patenting, try breaking it down into its functional features. List out the features that are required for the product or process to work. These features could be, for example,

• mechanical (e.g. a coupling that allows two parts to move relative to each other),
• algorithmic (e.g. a step that a processor takes when analysing data), or
• compositional (e.g. a specific ratio of chemicals in a composition).

Commercial advantage

Once you have identified the functional features, consider which of these features could give you a commercial advantage. To do this, it can be helpful to imagine that you are in front of a potential customer and are trying to make a sale. What are the features that you would want to highlight? For example,

• my product is easier to use than any competing products because of Feature A,
• Feature B means that my product is more precise than any competing products, or
• because of Feature C, my process is the most energy efficient.

Patent value

Once you have identified the functional features which could give your product or process a commercial advantage, consider how valuable a monopoly on each of these features would be for your business (remember that a granted patent for a feature gives you an exclusive right to manufacture, market, and sell something incorporating it).

For example, would a monopoly on one or more of these features help you to build market share and income in an established market? What would the value of that market share be?

Novelty

If you think that you have developed one or more features that could give your product or process a valuable commercial advantage, the next step is to determine whether any of these features (alone or in combination) are novel.

Novel is another word for new. Do you know of any existing products or processes that include any of the above features? Have you seen any documents that disclose them?

To get a thorough understanding of your novelty position, consider engaging a patent attorney to conduct a search of existing patents (known as a patentability search).

Inventiveness

To be worthy of a patent, a feature (or combination of features) must be novel and inventive. Inventiveness can be a difficult concept to grasp and is assessed differently in different jurisdictions.

As a rule of thumb, if you can identify a difference between your feature and similar existing features, can ascribe a benefit to that difference, and can describe why that difference is not simply an obvious variation, you likely have a good argument for inventiveness.

Next step

If you think you have developed one or more features that,

• could give your product or process a valuable commercial advantage,
• are novel over what has been done before, and,
• are inventive in light of similar existing features,

then you should certainly consider patenting.

Patents: What is the process from idea to granted patent?

There are a number of different 'routes' that you can take from having an idea to securing a granted patent in each of your target markets.

The PCT is an international agreement that makes it easier for an applicant to file the same patent application into multiple countries.

Below we have provided an overview of the main steps of the PCT route. We also will provide details on each of these steps.

Patentability search

We almost always recommend starting with a patentability search.

Previously, we explained that an idea (in the form of a feature or combination of features) must be both novel and inventive to be worthy of a patent. Instructing a patent attorney to conduct a patentability search (a search of existing relevant patents) is an effective way to assess the likelihood that a patent examiner will consider your idea to be novel and inventive.

Once they have conducted the search, a good patent attorney will provide an opinion on the possible novel and inventive aspects of your idea.

Claim drafting

If your patent attorney's opinion suggests that your idea includes aspects that may be novel and inventive, and you wish to proceed, the next step is for your patent attorney to draft a set of claims.

The claims are the most important section of a patent specification as they define the scope of protection that the patent will give you.

A good patent attorney will do their best to draft claims that capture your idea as broadly as possible while still being arguably novel and inventive over the results in the patentability search.

Full draft

If you are happy with the scope of the claims, and you wish to proceed, the next step is for your patent attorney to prepare a full draft of the patent specification. This will include a background section, a summary section, a detailed description, figures, and the claims.

For a patent to be valid, it should contain sufficient detail to enable someone to copy what is claimed once the 20 year patent term is over. Make sure you review the draft thoroughly to ensure that all of the details are technically correct and accurately capture your idea.

Filing the provisional application

Once you and your patent attorney are happy with the full draft, the next step is to file what is called a provisional application.

Filing the provisional application gives you a priority date. The priority date is considered to be the date that you staked your claim to the invention described in the specification. If someone else tried to file an application for the same idea after your priority date, their application would be invalid.

After your priority date, you can share what is disclosed in the specification.

Filing the PCT application

Filing the provisional application starts a clock ticking. From your priority date, you have 12 months during which you can add additional details to your specification (with some limitations). At the end of this 12 months, you must file what is known as a 'complete' or 'PCT' application. Once you have filed the PCT application, you cannot add any additional details.

In the lead up to the 12-month PCT deadline, your patent attorney will work with you to ensure that all relevant details relating to your idea have been added to the specification.

Filing the national phase applications

After filing your PCT application, you have 18 months to complete what is known as the national phase. To complete the national phase, you must file the PCT application into each of the countries in which you want to pursue a granted patent.

Overall, you have 30 months from your priority date to complete the national phase. Therefore, you have 30 months to determine the countries in which patent protection is going to be most valuable to you. This is one of the key benefits of the PCT route. It gives you time to assess the market and make informed filing decisions.

Prosecuting the national phase applications

Once you have filed each of your national phase applications, each one will be examined by a local patent examiner. Each of the patent examiners will likely raise objections that must be overcome before they will grant you a patent in their country. Your patent attorney can help you to interpret and overcome these objections.

Sometimes the process from national phase application to grant (known as patent prosecution) can take months or even years, but the end result can be a granted patent that provides valuable IP rights.

We are here to help

The patent process can be daunting, especially if it is your first time filing. We are here to help. We are experts in all aspects of the process and can help you get the most value possible from your IP budget.

Patents: When is the right time to file a patent application?

There are two main factors to consider when deciding when to file a patent application:

1. impending disclosure of the feature (or combination or features) to be patented and
2. whether you have developed sufficient detail.

The below describes the importance of these factors and provide some helpful tips to get the timing right.

(1) Impending disclosure

It is important that you file your patent application before you publicly disclose the details of the feature (or combination of features) you want to protect.

Earlier we outlined the novelty requirement. That is, the feature(s) that a patent application seeks to protect must be new at the time of filing the application.

If you disclose the feature(s) that you want to protect before you file your patent application, a patent examiner may raise a novelty objection. This may make it difficult to obtain a granted patent.

(2) Sufficient detail

It is best to have a thorough understanding of the details of the feature(s) that you wish to protect before you file your patent application.

Earlier we outlined the sufficiency requirement. That is, for a patent to be valid, it should contain sufficient detail to enable someone to copy what is claimed once the 20-year patent term is over.

If you file your patent application too soon in your development process (before you have a thorough understanding of how your invention works), a patent examiner may raise an insufficiency objection. This may make it difficult to obtain a granted patent.

The struggle between factors (1) and (2)

Startup founders sometimes struggle to avoid disclosing details of the feature(s) they want to protect before they have developed sufficient detail to file a patent application.

This struggle is understandable given that some disclosure during a development process is often required in order to obtain the resources needed to complete that development process.

So how can you overcome this struggle and time your patent filing appropriately?

Manage your disclosures to give yourself time to develop sufficient detail

If you need to talk to outside parties about the feature(s) you are working on before you have developed sufficient detail to file a patent application, we recommend focussing your talking points on the problem you are addressing instead of the solution.

Managing your disclosures in this way will give you time to develop the details you need for a sufficient and novel patent application.

Outside parties like investors understand that you may be developing patentable ideas and that it is in their best interest that you do not jeopardise your novelty.

If you are unsure about the types of disclosure that could jeopardise your novelty, ask your patent attorney for advice.

Pro tip

Keep your patent attorney informed!

To ensure that you do not publicly disclose your idea before filing your patent application, and that you only file when you have sufficient detail, keep your patent attorney updated throughout the development process. If they know where you are in the process and what upcoming deadlines might require disclosure, they can help you ensure that a quality patent application is filed at the right time.

Finally, if you have publicly disclosed your idea and have not yet filed a patent application, don't panic. Contact your patent attorney as there may still be some options open to you.

Patents: I don't have any experience with registered designs, can you give me a quick 101?

A registered design (sometimes called a design patent) is an intellectual property asset that gives its owner an exclusive right to the visual appearance of a product in a specific country. If a patent protects the ways something functions, a registered design protects the way something looks. The following paragraphs provide an overview of registered designs along with some examples of well-known registered designs.

The value of a registered design

Customers often consider the way something looks when making a purchasing decision. No doubt you will be able to think of a time you chose to purchase one product because you felt it looked better than a competing product.

If you have dedicated time and effort to develop a design that you think customers will be attracted to, having the exclusive right to manufacture and sell a product with that design may be commercially valuable for you.

To better understand the value of registered designs, consider the following instantly recognisable designs.

• The Lego man
• The Apple watch
• The Fender Stratocaster
• The Eames chair
• The Porsche 911
• Air Jordans
• The Blunt umbrella
• The Bialetti coffee pot
• The Dyson Bagless vacuum
• Ray-Ban Wayfarers

A design must be new to be registerable

As with patent applications, examiners at intellectual property offices assess design applications for novelty (i.e. newness).

To do this, they search for any existing designs that are the same or similar. If a design application is not sufficiently novel over existing designs, it may be rejected.

Before you file a design application you can ask a patent attorney to conduct a novelty search in which they will look for any designs that are the same or similar to yours. The results of this search may indicate the likelihood that your application will become an enforceable right and can help you decide whether it is worth filing.

Filing designs internationally

If you want to purse registration of the same design in multiple countries, you must submit an application into each country. An international agreement called the Paris Convention can make this process easier.

If you file your design into one participating country such as New Zealand, the Paris Convention allows you six months from that first filing to file the same design into any other participating countries. This provides additional time for you to decide which countries are most important commercially and means that a large proportion of the total filing costs can be delayed.

Maximum term of a registered design

The maximum term of a registered design varies from country to country, for example,

• New Zealand - 15 years
• Australia - 10 years
• Europe - 25 years
• The US - 15 years
• Japan - 25 years
• China - 10 years

All of these terms are calculated from the filing date of the application except for the US term which is calculated from the grant (i.e. registration) date.

Renewal fees must be paid to maintain each registration for its maximum term.

Trade marks: I don't have any experience with trade marks, can you give me a quick 101?

Why are trade marks important?

A trade mark is a part of your brand's identity. It helps distinguish your products or services from competitors, especially in crowded markets like food and beverage, software or fashion. As your business grows, your trade mark will become one of your most valuable assets as it becomes a sign your customers rely on to recognise your products or services.

Registering your trade mark gives you exclusive rights to use your mark and the ability to stop unauthorised use of your mark, which can damage your reputation.

Picking a strong trade mark

Choosing a strong trade mark is important for an effective brand. A trade mark should be distinctive. It has to be able to distinguish your products or services from others in the market. It is not distinctive if it is commonly used in your industry. Also avoid trade marks that are descriptive of your products or services. Your mark should be unique and memorable so as to set your brand apart from others in the market.

Think ahead to the future product lines or services in your business plan. Choosing a trade mark that is too limiting can create challenges later if the business expands.

Is your mark available to use and register?

Make sure your mark is available to use and register before you set your heart on it. A clearance search of the Trade Marks Register and online marketplace can identify potential risks to use or registrability. If a search reveals material issues, you can change your mark early on and save yourself a lot of time and money. Without a search, you risk infringing earlier marks and may face challenges later.

You don't have to register your trade mark to use it, but registration provides stronger legal protection and makes it easier to enforce your rights if someone tries to copy your brand.

What are your key markets?

Trade mark rights are territorial and registering your mark in NZ doesn't give you rights overseas. You should search and register your mark in each country where you want to use it. It is best to plan ahead, as the path to registration is long in some countries. If you leave it too late, you may find someone registers your mark in a key export country and you can't enter that market.

NZ trade mark application process

Here's how the process works in New Zealand:

• Application: You need to decide on the type of mark you want to register and select the appropriate classes. There are 45 classes of goods and services.
• Examination: Once submitted, IPONZ will examine your application to see if your mark is:
  • Distinctive enough
  • Complies with NZ trade mark law
  • Too similar to other earlier marks
• Publication and opposition: If your application passes examination, it will be accepted and published for opposition for three months.
• Registration: If your application is not opposed, it will be registered. Trade marks can last forever and need to be renewed every 10 years by paying renewal fees.
• Timeframe: The registration process takes at least six months, if no objections are raised at the examination stage.

This insight will be updated when Jeremy and Kavinna post a new section onto their LinkedIn, be sure to go and follow them on there!