May 23, 2019
Has your company created something unique? It is important to protect your special know-how against competitors and copycats. Already a 45-minute charge-free discussion with an IP expert will help you understand the possibilities and options regarding protection, says Kolster’s IP expert.
Intellectual property rights concretise a company’s intellectual assets and secure the company a legal right to its own ideas and the results of its product development. IP issues are important, and an IP expert can offer you valuable insights.
As seasoned professionals in the field, we can provide your company with essential IP information already during the first exploratory meeting. The charge-free discussion that lasts less than an hour will give you a general idea of whether you can obtain exclusivity for your invention.
In addition, you will hear an expert’s view and recommendation on how the product development and protection process could be advanced in your company, what protection options are available and what kinds of financial investments these options require. You can proceed with things faster, and you will gain valuable insights to help you with your company’s strategic decisions.
Small companies are often unnecessarily afraid of the financial burden caused by protection, especially patenting. With good planning and timing, we can usually find ways to optimise the costs. A patent protects technical innovations, but this most obvious and most expensive protection option is not necessarily the best fit for every situation.
It is crucially important to consider the precise allocation of protection and to explore which form of protection or combination of protections would be ideal and most cost-effective in each situation. Even a small company can protect its core business in its main market areas with moderate initial IP investments.
If your company has a truly competitive product, IP protection helps you keep competitors at bay for up to tens of years. This is how an IP investment pays itself back.
Patents and utility models are both country-specific rights to ban, i.e. they must be registered in each country separately. A patent can be in force for 20 years and a utility model for 10 years. The costs of patenting are roughly 10,000 euros per country, and the costs of a utility model are around 4,000 to 6,000 euros. How many countries do you really need in order to gain business benefits from protection? You don’t need worldwide protection to ensure profitable business.
The protection of technology should be assessed on as wide a scale and as creatively as the protection of trademarks and designs. You can obtain a community design covering the entire EU area for 1,500 euros, including attorney work and official fees. The cost of an EU trademark is slightly higher and the protection period is 10 years at a time without a time limit. The community design protects the product’s appearance for 5 years at a time, for a maximum of 25 years.
By making smart use of the different forms of protection even a small company can obtain protection for its business with manageable costs.
A utility model is a useful form of protection for a small company. It also exceeds its reputation in terms of the protection it provides. The scope of protection of a utility model is strictly defined, so, in practice, it is more difficult to invalidate by competitors than a patent.
A utility model offers a right to ban and quick protection against copying and infringements. In Finland, a utility model’s registration comes into force in a minimum of three months, whereas it takes typically three to four years for a patent to become effective in Finland and five to seven years in Europe. The benefits of the utility model are attested by the fact that many large companies use it successfully both alongside a patent and as an option for it.
The utility model can be expanded into a patent application within 12 months of the filing of the utility model application. Correspondingly, a patent application can be turned into a utility model if it appears that the technical solution is not inventive enough to merit a patent. Not all countries offer the possibility to register a utility model for an invention, but around a hundred countries have this option – including China, where it is a very popular form of protection.
Timing is another important factor in protection and cost optimisation. Five years ago, we were planning an affordable protection strategy for a small company, and we started with a Finnish utility model. The invention was a lifting device for bulk sacks, and the entrepreneur was looking for a partner for its commercialisation and additional funding for international business.
Within a year of filing the utility model application, the entrepreneur found a partner for the business idea. Along the way, the idea of utilising the device in ports was honed. Prototypes of the invention were produced together with the partner, and a decision was made to expand the utility model registration into a European patent application.
Now, some 5 years after filing the original utility model application, a patent has been registered for the lifting device invention in most European countries with port activities. New financiers have also joined the operation. The small-scale entrepreneur was able to gain access to the European market at a relatively low risk and with an initial investment of around 5,000 euros – and, above all, gain valuable time to test its product idea and acquire funding before making considerable investments in the international protection of the invention.
It is also worth remembering that both a registered design right and a trademark provide a longer protection period than a utility model or a patent. The protection they offer should thus not be undermined, whether you use them alone or to strengthen other forms of protection.
I take my hat off, for example, to the small tyre business owner who contacted us in order to protect a self-created tread pattern with a design right and the name of the new product with a trademark. The entrepreneur had realised that even a small company can utilise IP protections, gain business advantages from them and operate in the same markets with large companies.
The tread pattern was clearly distinctive compared to the patterns of well-known tyre companies. With the design right, the company was able to obtain protection for the technical features of the tyre through the protection of its appearance. The product was most likely not inventive enough to merit a patent, but an EU-wide design right and an EU trademark together protected the new tyre business. The entrepreneur invested some three thousand euros in the protections.
The design right can also be allocated, for example, to the structure of a floor drain cover, the shape of a container or to the user interface of a machine or device. In such a case, a competitor’s product has to differ in these regards, possibly at the expense of the best technical features and resulting in a more complicated design process. At its best, a design right indirectly also protects the technical features, such as the strength of the container or the ergonomics and ease-of-use of a device.
If the product has a unique appearance, in addition to being a technical innovation, the combination of a utility model or patent and a design right offers effective protection. It is definitely worth considering when a technical feature of an invention is visible in the appearance of the product or when the design of the product itself is a clear sales benefit and a distinguishing factor.
When the technology field is crowded and many companies compete in developing novelties, it is important not to delay the filing of a patent application. The application must be filed at the earliest possible phase of product development, i.e. when the commercial product is far from finished. Supplementary patent applications must then be filed as the product is developed further, and the whole is constructed bit by bit.
It is my experience that in traditional heavy machinery the risk of someone else developing the exact same solution simultaneously is fairly small. It is a good idea to talk to a patent attorney to find out what kinds of risks there are in moving the start of the protection and thus also the costs closer to the launch of the commercial product.
You can also talk to your patent attorney about how long you can keep your invention a business secret through non-disclosure and non-competition agreements. Kolster lawyers will tailor you the necessary agreement templates that protect your business secrets and Intellectual property rights also when dealing with external partners. For the commercialisation of the invention, Kolster has licencing professionals. We are also experts in the complexities of employee inventions.
There is no one standard solution in patenting. Each case is different.
My colleagues have sometimes joked that I have killed many patent applications during my career as a patent attorney. However, the requirements for patenting are not always met, and in some cases, patenting would not benefit the business sufficiently.
If the requirements for a patent that would offer a good scope of protection are not met, sometimes the wisest course of action is to renounce the application before the invention is published. Further development may at a later stage generate a new more viable application and a more valuable patent.
On the other hand, if the patent application is important for your core business, it is worth fighting for. An extreme example is the application filed by a large domestic company with the European patent office which has now been pending for 19 years. The patent application has kept competitors on their toes and wondering if the solution will finally obtain a patent that will come into effect retroactively from the application filing date.
Another extreme case, and my own record, is obtaining a Finnish patent in 10 months. The invention was a memo board developed by a printing house for which no novelty bars were found. The patent office approved the patent in its first official action.
There is something worth protecting in almost every company. If your company strives for growth and wants to increase its value, you cannot disregard protection. Innovative technical solutions, unique designs and distinctive trade names are today the most valuable property of a company. Protecting and holding the reins on these are strategic questions for even a small company.
Unless the products are protected, the business will lose its foundation, especially in the international markets. Financiers also require IP protection. Protection should be viewed as an investment in the future. Relying solely on good luck is a big risk for a business.
Even if you knowingly do not protect the exclusivity of your special know-how, it is, however, important that you ensure your freedom to operate and that you do not, at least unknowingly, infringe upon others’ patents or other registered rights. An expert can also inform you in time if any of your competitors has a registered right that jeopardises your business.
Today, there is also public funding available for helping with the initial costs of protection. For example, the EUR 5,000 innovation voucher for SMEs provided by Business Finland offers an excellent start for protection. We are glad to help you with the application.
A protection strategy for the international market, acquiring intellectual property rights, novelty searches, patentability searches or ensuring one’s freedom to operate in a new market or business area are examples of measures that Kolster clients have applied and received funding for. The most important prerequisite for receiving funding is that the project relates to new business that has international growth potential.
Kolster is one of the most experienced IP specialists in Europe. We offer a one-stop-shop solution for all IP services for protecting, exploiting and defending your inventions, designs and brands.