Whether you design dresses or tech gadgets, both tangible and intangible assets need to be protected. So how does a business manage the intellectual property of a new product? Using a fictional product, tracked throughout its product development cycle, here is a step-by-step guide
Imagine a solar-powered, portable coaster that can chill drinks in an instant. It employs a new, and thus far, secret technology, and is characterised by its heptagonal shape and unusual glacial colour.
1. Is your idea definitely new?
As you embark on your journey of innovation, you first need to do your research. “You may believe your idea is truly original, but if someone else has already created a similar invention, design or brand, you may find that the time and effort you have invested is wasted because your concept would impinge on the rights of others,” says Kate Swaine, partner at law firm Gowling WLG.
It’s possible to use a specialist search firm for this research. But, to reduce costs, a trawl through the internet, including the European Patent Office’s ESPACENET patent database, may be sufficient.
2. Protecting the idea as it develops
Assuming your drinks cooler is indeed a completely new idea, you continue your research and development journey. “Documenting every stage of the process is the best start, from deciding the temperature the cooler will work at, to the specific size and dimensions of the product, and locking down any freelancers or employees into suitable contractual terms which transfer the IP rights into what they create for the business,” says Steve Kuncewicz, intellectual property (IP) specialist and partner at lawyers BLM.
Laura Trapnell, partner and head of IP at Paris Smith solicitors in Southampton, adds: “All employees should be working under binding employment contracts that include watertight obligations of confidentiality.” If you involve third parties, such as external designers or potential suppliers, they should also sign confidentiality or non-disclosure agreements.
At this stage, you could also speak to an accountant who specialises in research and development tax credits to figure out whether you are eligible for tax relief.
3. Filing a patent application
Your cooler has cutting-edge technology that needs to be protected before it goes public. “It’s a good idea to file a GB patent application as early as possible, but not before the idea is fully formed,” says Rachel Oxley, partner and patent attorney at Mewburn Ellis. No prototype is needed at this stage, but the patent application must explain in detail how it works.
People often don’t realise they only gain full protection once their patent is granted and this can take up to three or four years in the UK, according to Oxley. So, once you’ve filed your patent application, you’ve staked your claim to the invention, but you can’t enforce your IP yet. But that doesn’t preclude you from entering the market provided you are certain you won’t infringe anyone else’s IP rights. A clearance search, which is best done by a specialist search firm, is your best option, says Oxley.
“Think about protecting your IP in other countries sooner rather than later,” she says. After filing your GB patent application, you need to file your patent application in other countries within 12 months.
Oxley recommends ensuring you have financial backing, as drafting patent applications can be expensive, ranging from several to many thousands of pounds, depending on how complicated the technology is. Costs escalate if foreign protection is needed.
4. Filing your design registration
Some elements, such as instruction manuals and labelling, will be protected by copyright. “It’s an automatically arising right and does not require registration,” says Megan Jefferies, partner at Thrings, commercial litigator and IP specialist. But copyright only offers limited protection on its own.
Your drinks cooler has an unusual look, so you register a design to protect it further. This can cover a part or the whole cooler and can even include its packaging.
One of the cooler’s features is its glacial colour. But when you register your design, you should go for the broadest way of illustrating how it looks, notes Oxley. So, if somebody uses a different colour for your design, you would still be protected. You would typically submit black and white line drawings of its heptagonal shape and profile, and pictures.
5. Applying for a trademark
Next you’re going to register a trademark to protect your brand, including your product name, company name and logo. But first you once again need to ensure your brand is original by looking at existing trademarks. You should also explore whether your brand name has an undesirable meaning in a foreign language in case you take it abroad.
“If you’re seeking a trademark, then remember these only apply in the jurisdictions in which they are obtained. Make sure you apply for one in every territory you’ll need it for, upon launch or as your drinks cooler business heats up,” says Jefferies.
You also need to consider the running costs of protecting your cooler. This means ensuring transparency on the lifetime protection costs, says Trapnell. Patents have annual renewal fees in most countries; trademarks need to be renewed every ten years.
Your cooler has hit production lines. “It is important that tooling is owned by the business, otherwise the manufacturer will own the moulds and, in the event of a dispute further down the line, you may have difficulty getting them back,” says Trapnell.
“Manufacturing agreements need to be very clear on the IP ownership position. Manufacturers should only be granted sufficient rights to enable them to manufacture the products, for a defined product, for a defined time and for a defined number.”
At last your cooler is on the market. “Time to celebrate with a nice cool drink,” says Jefferies. “However, the work to protect it is not over; it’s important to be vigilant and ensure you enforce your rights to ensure a competitor doesn’t try to muscle in on the market you’ve worked so hard to establish.”
But if you find someone has copied your cooler, you should exercise constraint and not threaten them with infringement, says Oxley. Otherwise you risk being sued for unjustified threats.
“If you do get wind of a threat, speak to a solicitor immediately. If you’re properly protected, often it only takes one firm letter to stop an infringement,” says Jefferies. There are also insurance products that cover IP disputes.
Throughout the product’s journey, your IP and wider business strategies need to go hand in hand. “Otherwise the product you’re looking to develop may never realise its full commercial potential,” says Kuncewicz.
Trapnell concludes: “IP rights not only put your company above your competitors, but also considerably increase your value multiplier when you come to sell the company or seek investment.”