Patents; an irrelevant cost or essential investment?

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Intellectual Property (IP) and Intellectual Property Rights (IPR) are complex. If you want professional advice on any aspect of idea protection you need to talk to the UKIPO or locate and consult a fully qualified and suitable patent attorney.

Basics

However, it is helpful to at least know the basics. If you are involved in business these days then some knowledge of intellectual property (IP) is useful and if you are involved in product development it is essential. You need to understand the different types of IP available, their use, cost and value and how and when to apply them effectively.

However, the UKIPO has reported that only 4% of businesses have an IP policy.  Research also suggests that 40% of businesses are developing products for which IP already exists ie they are potentially wasting money.

Patents

Of all the types of IP, patents are perhaps the most well-known. There are many misconceptions and much misunderstanding about them.

Some believe them to be inherently valuable and an essential element of any new product development process.  They seek to patent their ideas as early as they can. In fact their first thought is often to seek a patent and they frequently have many patents or ‘patents pending’ even though they may never have earned a penny from any of them.

There are others who believe that they need to patent an idea to be able to sell it and those who believe a patent will automatically result in revenue.

For clarification consider a patent:

• Is not the only form of protection that can be sought
• Is about function
• Requires the idea to fulfil a number of other criteria
• Can only be secured for a unique idea
• May not practically protect your idea if there are other ways of performing the same function
• Will make your idea public in around 18 months after the application
• Typically costs between £3k-£5k through a patent attorney and in the UK alone
• To protect the idea in other countries will cost significantly more
• Can take up to 3 years and there are no guarantees it will be granted
• Revenue is not guaranteed in fact 90%+ of all UK patents are for inventions that have never been commercialised

Patents can of course be valuable but only when used for the right reasons and in the right circumstances. They are central to some businesses, so much so that they focus on applying for a given number of patents over a period, patenting ideas or buying other IP for strategic reasons and future opportunity.

However, patents are costly and most of us are not in the financial position to apply for one unless it is essential.  We therefore need to carefully consider why, when and how to use patents if at all.

Why a patent?

If you talk to a patent attorney or the UKIPO about applying for a patent they will say that you should really only consider patenting something if it has commercial value. Presuming the idea does have commercial value, you need to know that a patent is the right type of protection to consider, if it is possible and that you can afford it. Remember applying for one is the first step in a process that can be very costly particularly should you have to fight any possible breaches.

When should I apply and how much will it cost?

If you agree that commercial value is the key, should you really consider patenting anything until this has been ascertained? Commercial value may be a subjective term and you may not want or need to make £millions but it is at least objectively questioning whether your invention has the potential to recovering your investment.

Proving commercial value is not easy and takes time. This will reduce your risk in terms of cost but the longer it takes to decide, the greater the risk that someone else beats you to it in the meantime. If commercial gain is not important to you and the aim is simply to try and protect the idea no matter what or to be able to say that you have a patent then a prompt application makes sense. This will minimise the risk of anyone beating you to it but does not minimise the cost.

If you apply for a patent too soon in the product development process you increase the risk that invention that may not have a commercial application. This can also restrict design freedom and could mean that even with potential commercial value, the final version may differ significantly from the original rendering any existing protection useless without amendment. Alternatively, you might scrap the original application, have it re-written or appended. There are some clever ways to keep costs down but every time a change is made, you incur cost.

Timing is therefore a personal equation balancing cost and risk and needs to be thought about carefully. This is where having a strong, professional and objective team of advisers will prove invaluable.

Whilst an invention might need to have commercial value to warrant a patent, a product need not have a patent to have commercial value. In fact most products don’t have patents, or at least patents you are aware of.  Furthermore and patents can often be circumvented if a competitor feels it is worth it.

Arguably the best protection is great design, a strong brand, a competitive price and a loyal customer base. This has commercial value by definition and is a lot more difficult for a competitor to replicate and challenge.

It is worth noting that there are those who minimise the cost by writing the patent application themselves. This is not to be recommended. As stated at the outset, IP is complex and specialist. A poorly written patent application, even if ultimately granted, is likely to easily circumvented rendering it largely useless. For reference, less than 5% of the 15k-20k patent applications that are written every year in the UK, are written by non-qualified individuals and granted.

Conclusion

So how can you get the balance right and ensure you don’t waste money on patent applications?

• Establish what you are aiming to achieve
• Challenge your invention testing whether anything like it exists and whether your target client would buy it in sufficient numbers
• Research IP - contact the UKIPO and ask them to send you a range of their excellent resources and guides, visit the British Library or use the Web
• Challenge your invention and ask yourself why you are applying for a patent, is it necessary and is there an alternative form or protection?
• Talk to a suitable patent attorney – most will give you 30mins to an hour for free
• Build a reliable and objective team of professionals to support you
• Decide on your personal preference in terms of balancing risk against cost
• Pursue protection when appropriate

In a nutshell, know what you want to achieve, challenge your idea, talk IP early but only protect when you are ready.