Intellectual property for (not so) dummies

[Head in the clouds]

Great stuff Tony, thanks.

 

I'm looking forward to the TM and design registration stuff too!

 

 

[2tonne]

Innovation patents

 

One thing I didn't mention in my post on the patenting process was the Australian Innovation patent. This might be of interest to some as it is a relatively cost effective and quick way in which to obtain IP rights over lower-level innovations that wouldn't necessarily pass the inventiveness threshold for a 'standard' patent, or for which a shorter 8 year term would be sufficient.

 

The main differences between an innovation patent and a standard AU patent are:

 

• an innovation patent has a shorter term of 8 years (compared to 20 years for a standard patent)
   
   
  
• an innovation patent can be granted without any examination (but would have to be examined ("certified") if you wanted to enforce it in Court)
   
   
  
• is subject to a lower patentability threshold of having an "innovative step" instead of an "inventive step". Basically, there needs to be some new feature that makes "a substantial contribution to the working of the invention", even if that feature would have been obvious to someone working in that field (cf. a standard patent where the new inventive feature must not have been obvious)
   
   
  

 

 

What these differences mean is that it can be relatively quick and cheap to obtain a granted innovation patent in Australia. It may even be possible to obtain a granted and certified patent for less than $10,000. Some other countries (e.g., Germany and China) have a similar patent referred to as a utility model patent.

 

Also, because the innovative threshold is low, it can be much more difficult for someone to invalidate your innovation patent.

 

One thing that is the same for both types of patents are the remedies available when a Court finds the patent has been infringed (e.g., injunction, account of profits, damages). Hence, if you have an invention you want to protect in Australia (and possibly a limited number of other countries), and an 8 year term would be sufficient, the innovation patent may be a good option to consider.

 

A note on China: - There have been stories over the last few years of foreign companies entering China to manufacture or sell a product only to find themselves blocked by an entrepreneurial local who has a Chinese utility patent in place for the foreign company's product (because they can get the utility patent quickly and cheaply). Usually, the Chinese individual or business that owns the utility patent will demand some kind of 'royalty' so that you can manufacture or sell your own product. This can of course result in unforseen delays and costs because the foreign company will have to go through mediation/ligitation to have the matter resolved (they hope in their favour). So, if considering selling or manufacturing in China, you may want to consider filing one or more Chinese utility (and/or standard) patents at an early stage to block the local Chinese entrepeneurs. You would, of course, want to get professional advice on this.

 

Designs and TM information to come.

 

 

[bexrbetter]

Usually, the Chinese individual or business that owns the utility patent will demand some kind of 'royalty' so that you can manufacture or sell your own product.

If provable that the only intention of the entrepreneur was to cheat the company then this would be easily argued and quickly defeated in a Chinese Court. Even if it was upheld by a bribed local Judge in a Lower Court, it wouldn't have a hope of getting past Middle Court Judges.

 

(China) You would, of course, want to get professional advice on this.

My door is always open.

 

Patents also should be smart, ie; Some of my current (Chinese) patents are based around not just the idea, but also production techniques to specifically stop others using those techniques - but only in China and India, I'm gambling on anywhere else in the world can do it but can not compete with me on costs.

 

 

[2tonne]

Hi Bex, you are right that if a local Chinese patentee tried to cover your product you would likely prevail in the end. However, it can still take some time and effort to knock out the Chinese utility patent. Last year I watched a presentation by an in-house lawyer from Clorox who had this happen to them.

 

Story is that Clorox had marketed a product outside of China from about 2002. This product was patented in the US and elsewhere, but not China. In 2008, they entered this product into the Chinese market and received a letter of demand for a yearly licence fee of US$13,000 from the Chinese owner of the utility model patent.

 

Knowing that the patent would have to be examined by the Patent Office before it could be enforced in Court, Clorox pre-emptively sought to invalidate the utility patent and use this action to convince the Chinese patentee to negotiate. Although Clorox had the earlier patents, there were some extra features the Chinese patentee had included in his patent that were in the product, but not specifically mentioned in Clorox's own patents. So not only would it cost thousands to translate them into Chinese, there was no guarantee they would knock out the Chinese utility patent with them.

 

So, Clorox had to rely on printed copies of advertisements from before 2008, which apparently were hard to find because most physical copies of ads had been destroyed. They couldn't rely on electronic evidence (eg a DVD of a tv commercial) because they would had to have had someone from the ad agency front up in China and give testimony - funnily enough no one was keen to do this. It took them 6 months to get enough evidence to go to a preliminary hearing.

 

The preliminary opinion they got at the hearing sounded like Clorox might succeed, but given it was not certain they accepted an offer from the Chinese patentee to a royalty-free license to the patent covering their own product. Took 17 months and cost around US$20,000 to get to that point - long story, but shows that it can be problematic dealing with utility patents in China.

 

And, if the utility patent had been upheld as valid and was used to threaten Clorox with infringement, there is no guarantee the matter would be end up being heard in Court. This is because Chinese judges have discretion on whether or not to hear any given case. It's my understanding that it is not uncommon for Chinese judges to force negotiations between parties in order to achieve a "win-win" situation in which both sides would be expected to compromise. This apparently avoids the courts having to issue decisions that might be viewed as unpopular with the locals.

 

The suggestion from the Clorox lawyer was to publish your product in print in China (at the right time so as not to prejudice your own IP) and file a utility patent application as well (or standard patent application if warranted).

 

Phew, that's a long post...but I have had a few trips to China learning about IP there and it is certainly an interesting place!

 

Cheers,

 

2tonne

 

 

[bexrbetter]

Re; China.

Cheers,

 

2tonne

Hi 2tonne,

 

I'll chat with the Missus over the next few days about some of your points but I can see myself there is a few typical mis-understandings on how things work here from Clorox's point of view.

 

Thanks for helping others, hope I can pay you in kind for China things and next time you come over spend a few days here and learn how things really work.

 

My Wife owns the largest Law Firm in town, is a Partner in Chengdu's largest Law Firm (Top Ten in China) and when you open the Beijing Law Assosiation's Law Manual, the entire section on Arbitration was written by my Wife.

 

 

[2tonne]

Hi Bex, obviously I am not a Chinese patent attorney, I have just been visiting and speaking with quite a lot of them over the last three years about issues with IP enforcement in China. I am a firm believer in the value of protecting your IP in China using the patent and TM systems, both judicial and administrative where possible.

 

As China's IP laws and practice develop and the judges become more experienced in patent cases, the outcomes will continue to become more consistent (and with all due respect, judges with limited understanding of technology and patents is by no means limited to China!). Already, foreign companies are having many successes before the Chinese courts and the Chinese government is drafting further revisions to the Patent law following submissions made by the US government, amongst others. These revisions are designed in part to address some of the issues, real or perceived, around utility patents and to strengthen patent enforcement, particularly administrative enforcement.

 

So, believe me, I am not knocking Chinese patent law at all - considering that the law was only drafted circa 1985, they have achieved an incredible amount in that time. Also, as the Chinese economy moves away from cheap manufacturer to an innovation based economy, the Chinese government knows that a strong and reliable IP system is critical. I always advise my clients that if China is an important market or manufacturer, then file patent applications there if you can.

 

I didn't mean to offend, just offering my comments based on the opinions of others.

 

I will happily take you up on the offer to visit and learn how things really work - always keen to be set straight:wave:

 

Cheers,

 

2tonne

 

 

[bexrbetter]

I didn't mean to offend, just offering my comments based on the opinions of others.

I will happily take you up on the offer to visit and learn how things really work - always keen to be set straight:wave:

Not my meaning, I took time to answer because you are taking time for others, very grateful for your community generosity and as I said, hope I can help you in kind from this end one day.

 

I even have no doubt your knowledge of the law here is beyond mine but as you realise, application of it to culture is a seperate issue altogether.