Protect Your Idea Before You Share It

5. Protect Your Idea - And Yourself

If you don’t legally protect your intellectual property (IP) you can’t safely disclose it, profit from it or defend it. There are several forms of protection known as intellectual property rights (IPR). Some are free and others affordable, while a patent - the best known but least well understood - can be a highly expensive double-edged sword. Usually, the best way to protect an idea as it evolves is to use a strategic combination of the cheaper forms of IPR for as long as possible, and consider patenting only when it’s both commercially justifiable and unavoidable. This Project can help you plan your protection strategy. Be aware though that IPR is a complex area of law that holds many dangers for amateurs. A key aim of this Project is to help you make better use of patent attorneys, not do without them.

Project 5 - What is Involved

What you’re going to do

Learn something about the different ways of legally protecting IP.
Think how you can best use them strategically.
Understand the role and importance of patent attorneys.
Get patents in perspective.

Resources you may need

A patent attorney

Time, cost and risk

Potentially lots of each. The more you think and act strategically, the lower the cost and risk.

Project 5 Checklist

Protecting Your Idea

Let’s tackle something head on right here: protecting your idea doesn’t just mean getting a patent. We’ll deal with patents in due course but for now, hear this -

A patent is not the only form of legal protection for an idea.
Nor is it necessarily the most appropriate or the most commercially valuable form of IPR.
But it is, usually by a very long shot, the most expensive and complicated way of protecting an idea.

What we therefore want you to do in this Project is plan an effective intellectual property protection strategy that makes use of every appropriate form of protection. That may indeed have to include at least one patent, but because of the cost your strategy (unless you’re already wealthy) should be to delay patenting until (a) you’re confident you actually need one and (b) the time is right to file an application.

What is intellectual property (IP)? Broadly speaking, intellectual property or IP is anything that -

Arises from the thought processes of one or more named people, and
Can be recorded in some way (for example text, drawings, images, audio), and
Is distinctively different from anyone else’s work or IP.

Examples of IP include novels, poems, plays, movies, videos, TV programmes, ideas for TV programmes/movies/novels etc, music, paintings, photos, computer code, designs, technical drawings, rules of games, logos, trade marks, brand names - and inventions. The common denominator is that all IP starts with an original idea. IP exists whether or not there is any commercialisation, so unpublished novels, unperformed plays and unexploited inventions all still count as IP.

To convert your idea into the raw material of IP you should prepare a written technical description accompanied by the best visual representations you can manage - technical drawings, sketches, photographs, computer simulations or all of these.

Keep your prototypes if practical, especially if they show the evolution of your idea. To establish dates of origin, photograph or video them and date the images using copyright procedure (see later). It’s vital to do this if you can’t keep prototypes, otherwise who is to know they ever existed?

Dates of origin can matter enormously, so every item in your IP portfolio should carry a clear date and you should use copyright or design right (see later) routinely as you make significant changes to your idea.

The totality of your IP should explain exactly what your inventive step does and how it works. In theory your IP should enable someone familiar with that technology - in legal terminology, ‘skilled in the art’ - to understand your inventive step well enough to physically make it.

In practice your IP needn’t be so technically detailed that a factory could start turning out product straight away, but it does need to be as clear and complete as you can make it. Any woolliness or ambiguity may (a) make it hard for potential stakeholders to spot its commercial potential or (b) weaken the legal protection you get for it.

What Are Intellectual Property Rights (IPR)?

Once IP exists, the next logical step is to establish that someone owns it and has a right to be rewarded for its use. This is the concept of intellectual property rights or IPR. In the UK and all other significant trading countries, IP ownership is recognised in law.

In essence, IPR protects from the egg forwards rather than from the chicken backwards. The ability to protect ideas as well as the things made from them is essential in societies which progress by innovation, as without IPR there would be very little incentive for anyone to invent and develop anything.

There are several forms of IPR (detailed later) which enable IP to be protected in different ways to suit different purposes. Knowing the strengths and weaknesses of each, and when to use them, is the key to a sensible IP protection strategy.

Why Do You Need IPR?

Three main reasons.

So you can discuss your idea in relative safety with other people. Most ideas need a lot of development and support before they can be exploited, so a limited amount of disclosure is usually inevitable if you’re to make progress with your idea. Some of the free forms of IPR will protect you adequately if all you want to do is talk to people in confidence.
So you can profit from your idea. IPR can be bought, sold, hired or exchanged in the same way as physical property, so when you try to interest companies or stakeholders in your idea, IPR is the real commodity you’re offering. What you hope they’ll want is either a licence from you that permits them to use your IPR commercially, or a share in your own use of it if you commercialise it yourself.
So you can answer key questions should legal disputes arise (see below).

PATENT ATTORNEYS

Because even ‘simple’ forms of IPR can fuel expensive court cases, it’s always advisable to have a patent attorney as part of your team (Project 7). Despite the name, patent attorneys are experts in all forms of IPR. Though they’re not cheap, there will come a point in the development of a potentially valuable idea where it’s false economy not to use their help to protect both the inventive step and you. If you’re James Bond, a good patent attorney is M and Q rolled into one. He or she can -

Advise on an effective IPR strategy.
Greatly improve your chances of obtaining worthwhile IPR.
Guide you round holes you might otherwise fall down.
Just possibly pull you out of holes you’re already in.
Act for you when problems arise, such as disputes over alleged infringement.

But - no patent attorney can guarantee that your IPR will bring you any commercial or financial reward. That’s entirely down to your efforts, though a patent attorney can often assist at key points along the way.

Many patent attorneys may be happy to give you a purely personal opinion, perhaps based on experience of similar ideas known to have succeeded or failed, and this could be extremely useful information. What they can’t do though is offer this opinion as professional advice. One reason is that they have a defined area of expertise and predicting what will or won’t sell is outside it. Beyond the domain of IP law, your guess is as good as theirs. Another reason is that they operate in a similar way to solicitors and risk being sued if they’re judged to be negligent. For example: your patent attorney says, ‘I don’t think your idea will ever sell. If I were you I wouldn’t waste my money on a patent’. So you don’t. Then you later watch a very similar idea make a ton of money for someone else. You’d be a saint if you didn’t want to rip your patent attorney’s head off.

Also like solicitors, patent attorneys ultimately act on your instructions, so although they may advise on what they think those instructions should be, it’s your responsibility to consider the advice you’re given and make your own decisions.

To find local patent attorneys look in any business directory or contact the Chartered Institute of Patent Attorneys (www.cipa.org.uk). CIPA operates a scheme under which many of its members will give you 45 minutes of free advice. If you do your homework and prepare your questions you can cover a lot of ground in that time. Thereafter, you can discuss what you may need doing and what it’s likely to cost.

Final point: most patent attorneys’ clients are companies, so they’re used to two-way professionalism. While many are sympathetic to private inventors and will make due allowances for a lack of knowledge, the more professionally and efficiently you behave the better you’ll both get along and the more money you’ll save by not wasting their time. Often this boils down to very simple things like responding promptly to communications, making sure you don’t miss official deadlines and not assuming that your patent attorney can read your mind.

What Legal Disputes?

In a sense, the mere fact of trying to own IP is asking for trouble. It’s the equivalent of fencing in a piece of previously unowned land and sticking a sign on it saying: ‘Since such-and-such a date, everything inside this fence belongs to me’. If it turns out that there is oil on your land rather than just a few half-starved goats, it’s a fair bet that at least one neighbour will rush to court claiming that ‘your’ land actually belongs to him. This is what happens frequently in the world of IP. If your IP isn’t worth anything, no one will want it and you’ll have a quiet life. If it’s worth a fortune, everyone will want it and some will use every trick in the book to grab it from you.

Questions around which IP disputes revolve include -

1. How does the idea work?

An inventive step is hard to protect, defend and work commercially if it isn’t clear how it works. This is a particular danger for inventors who don’t use a patent attorney to handle their IPR. A full technical description of your inventive step, written in language that will stand up in court and preferably with specific reference to clear technical drawings, is essential if your IPR is to be worth anything.

2. Where does the idea start and finish?

Rather like the title deeds for property, your IPR needs to make clear the precise limits of what you claim to own. Getting those boundaries in place takes real skill because it can often be very difficult to be precise about where an inventive step begins and ends.

3. Is the idea really original?

4. Who owns the inventive step?

Not necessarily you. If you’re in a job where you might contractually or reasonably be expected to contribute new ideas, the IP may belong legally to your employer. And if you’re a student developing an idea as part of your coursework, your university may lay claim to a share of the IP on the grounds that you’ve benefited from the use of their resources. If there’s any doubt about where you stand with an employer or academic institution, discuss it with them before doing any significant work on your idea - but first take the precaution of protecting the inventive step in your own name and seeking the advice of a patent attorney.

5. Who invented first?

An independently recorded date of origin can be the clincher if one or more other inventors come up with very similar ideas to yours at roughly the same time. It’s therefore important to establish a date of origin and all other critical dates as you develop and improve your idea. Some of the free forms of IPR can do this better than the ‘paid for’ ones, especially in the USA. The earliest date on a patent, for example, is the date the application was received into the patent system. The inventive step itself may predate that by months or even years.

Your IPR Menu

We’ll now look briefly at each form of IPR. You can then decide which of them you want to use, and when. We give you some pointers under Strategic use at the end of each section. Bear in mind that an effective IPR strategy may need to span years of development and so may usefully involve several and perhaps all forms of IPR.

From the cost-conscious inventor’s point of view the different forms of IPR divide into the free ones (confidentiality, copyright, design right and know-how) and the ones that involve official fees and perhaps professional assistance (design registration, registered trade mark and patent).

Note this though: whatever forms of IPR you use, you alone are responsible for enforcing them. It’s a sore point with many inventors and smaller companies that while governments may take money off you to acquire and keep IPR, they won’t give you any help to enforce it and if you get stitched up by unscrupulous competitors who ignore your legal rights - tough.

Know-how

Know-how is unique knowledge or 'trade secrets' that you have acquired through experience but which you don’t need to disclose, or choose not to disclose, in other forms of IPR. In some cases - for example a software-based business method - it could form the entirety of your IPR if your idea isn’t easily protectable by other means and is unworkable without your knowledge.

Know-how can be enormously valuable. Take Coca-ColaTM for example. Its principal ingredients are well known. What is secret is the exact recipe: how much of what gives you a drink identical to Coca-Cola. That’s the Coke know- how, and its commercial value can only be guessed at. You may well have negotiable know-how if, for example, you know that you get a better product by using components from a particular supplier, or that you can significantly reduce costs by using conventional equipment in an unconventional way.

Some inventors argue that you can use know- how to keep crucial detail out of a patent. This is dangerous, as you run the risk of having the patent invalidated, especially in the USA, if it doesn’t describe the ‘best mode’ of working the invention. If you think there’s a case for using know-how this way, you must talk it through with a patent attorney first. In general, if it’s worth keeping out, it should go in!

A problem with know-how is that although your ownership of it can be recognised in law, there is no way of registering it and its theft - usually by employees or associates - can be hard to establish. It’s therefore up to you to ensure that your commercial secrets are both secure and documented in such a way that you are clearly identified as their owner. However, if it’s documented it’s not fully secure, so you need to give careful thought to how the documents are to be stored and retrieved.

Advantages

Know-how can be sold or licensed in its own right.
It can be a powerful bargaining tool, especially if a patent is less easily workable without it.
It can make you less vulnerable if negotiations break down after a lot of technical disclosure. When you walk away, you take with you the key to the effectiveness of the inventive step.

Limitations

Really valuable know-how is rare. By claiming know-how that turns out not to amount to much, you risk weakening rather than strengthening your bargaining position.
Once a potential stakeholder senses that you’re withholding key information, they’ll try to figure out what it is or prise it out of you. Often they’ll succeed. Beware liquid lunches, offers to let you and your team talk ‘in private’ (just you and a hidden microphone), bribery or browbeating of members of your team. It’s all been done. Sometimes it pays to be paranoid.
Too much dependence on know-how risks backfiring if your message to potential stakeholders is: ‘Without me you have nothing’. They may just regard nothing

Strategic use - If you know something valuable that you can afford to keep hidden without impairing other forms of IPR, consider doing it. It costs nothing and could make a big difference when it comes to the crunch. It’s unlikely though to have much strategic use until you’re involved in detailed discussions with a company. Even then, it needs to be used with subtlety. One tactic is to use what you know to get yourself an advantage when there appears to be none: for example, by accepting what seems a low offer for supplying a product because you know (but don’t let on) that you can supply it more cheaply than they think you can. Another tactic is to use your know-how as a problem-solver. For example, if a potential licensee frets about the difficulty of some aspect of manufacture you say, ‘Don’t worry. I can sort that out.’ You just don’t tell them how.

Non-disclosure agreement (NDA)

Also known as confidentiality agreement or confidential disclosure agreement (CDA). While not strictly speaking IPR, NDAs deserve a place of importance on your IPR menu because they have two powerful uses -

As sole protection for an idea that isn’t much more than a thought - for example, a new way to market an existing product, or an idea for a TV series.
To protect any discussions or dealings concerning any idea at any stage, irrespective of what other forms of IPR you may also be using.

If you want to sell such an idea to someone capable of exploiting it, get an NDA signed before disclosing anything. This is because an idea that can’t be given any kind of uniquely identifiable two- or three-dimensional form is one of the hardest things to protect. Even if you write it down, copyright (see later) may not be much use as it only protects the words you write from being copied and doesn’t protect the thinking that lies behind them. But if someone signs your NDA and then uses your idea without permission or payment, you may be able to sue for breach of confidence.

This is a good way - often the only way - to make progress with an idea in the early stages, when you’re still researching its potential and don’t yet know if more expensive protection is justified. Judicious use of NDAs can help to protect you at every stage - even long after your product is on the market.

In theory you can draft your own NDA for nothing, then discuss your idea in relative safety with anyone willing to sign it. (See Model non- disclosure agreement.) In practice it’s not easy to get companies to sign. Many large companies in particular won’t sign NDAs until there is, in their view, something confidential to talk about. That usually means after they know what your idea is. It’s actually a sensible attitude when you understand their reasoning.

First, few companies want the burden of storing and honouring for several years a multitude of non-beneficial NDAs. As a manager at one major company told us: ‘NDAs have a legitimate use, but not at a first meeting. I see a lot of inventors and usually know within seconds if an idea is going to be of any interest to us. Very few are, so there’s no point going through the rigmarole of an NDA if it’s all over a couple of minutes later. NDAs only start to make sense when we’re seriously interested in an idea.’ To get over this hump you need to learn how to communicate at first meetings the profit potential of your idea (the only thing that turns most companies on anyway) without disclosing your inventive step. That shouldn’t be any more difficult than describing the plot of a movie without giving away the ending.

Second, companies need to protect themselves. A big worry, justified by court cases, is that your inventive step may already be known to them, so they may want evidence of a patent application (the filing date and content of which are indisputable) to head off any risk that you might sue them later for using ‘your’ idea. They may refuse to discuss anything but a patent and may even insist on you signing a document stating that they won’t be bound to confidentiality.

Another of their worries is that they might find it difficult to discuss your idea without disclosing confidential information of their own, which without some precaution could result in industrial spies queuing at their door touting bogus inventions. Some companies may not only refuse to sign your NDA but will insist that you sign their NDA before any meeting. If this is acceptable, check their NDA carefully before you sign to make sure it doesn’t unreasonably restrict your own future activities. Ideally, get the opinion of a patent attorney or solicitor about the degree of risk you’ll be running.

NDAs are now a widely accepted tool for protecting information exchanges and business relationships so don’t be afraid to use them yourself. But despite their low cost and relative simplicity they’re still serious and long-lasting legal agreements, so don’t cheapen the currency by using them indiscriminately, especially for first meetings. Instead, train yourself to communicate skilfully without disclosing. That could well get you a lot further.

Advantages

NDAs are cheap, or free if you draft your own or adapt our Model non-disclosure agreement.
They’re quite powerful.
They’re well understood in the business world.
More than other forms of protection they can be tailored to specific circumstances.

Limitations

Many people and organisations - particularly large companies - will refuse to sign an NDA.
If your NDA is breached you may either never know, or be unable to do much about it.

Strategic use - Use NDAs to protect you at every stage of your idea’s development, no matter what other forms of IPR you may have. They can be particularly useful for delaying the need to file a patent application (see Patent > Strategic use later). Do use NDAs with restraint though, as the message they give out is ‘I don’t entirely trust you’ and that may not be the best way to win people over. NDAs are rarely acceptable or necessary for first contacts or meetings, or for dealings with professionals who observe confidentiality as a matter of course (ask if in doubt). Ideally, restrict them to situations where both parties recognise and accept the need for a formal confidentiality agreement.

Copyright

Competitors who want to copy your idea will most likely argue that it isn’t original and that your IPR - in such cases usually a patent - is invalid. If they can produce enough evidence to convince a court, you may lose some or all of your IPR. To have a defence you need to ensure that the key features of your idea are fully and clearly described in your IPR.

Copyright gives worthwhile protection against the unauthorised copying or adapting of drawn, written or photographic descriptions of your idea or inventive step.

It only protects the precise form of expression or description and not the idea itself, but in some cases - for example computer code - that may be adequate and may indeed be the only effective way of protecting what you’ve got.

As long as all the work is clearly your own and not copied from someone else, copyright arises automatically, so in theory you needn’t do anything special to get it. But it’s usually associated with published (and therefore disclosed) works such as novels and music, and in your case you may be a long way from public disclosure. You therefore need to carry out the following simple procedure to back up any claim of originality you may need to make. Even if you plan to use other forms of IPR, do it as early as possible and repeat it whenever you make a significant change to your idea. It’s risk-free and establishes an earlier date of origin than, for example, a patent application would give you. If a dispute ever arises about origin, this date could be invaluable.

Make sketches, drawings, photos or even a video of your idea, model or prototype. Write down any text that someone else would need to copy to make use of your idea - for example computer code, the stages of a process or the rules of a game. Then write your name and the date on each document. Additionally or alternatively, burn a CD of all your data. If your idea involves software, CAD etc, keep and burn to CD all back-ups.
Place all documents and CDs in an envelope sealed in a tamper-proof way. For example, cover the glued flaps at both ends of the envelope with strong parcel tape.
Then either get someone whose word is likely to carry weight in court (perhaps not a close relative) to certify on the envelope that it was sealed on the stated date when he or she examined it; and/or mail the envelope to yourself by registered post, and keep the clearly dated Royal Mail or post office receipt. Keep both envelope and receipt in a safe place and don’t ever open the envelope.
To keep track of what’s in your sealed envelopes - you may amass a collection of them over time - it may help to keep each sealed envelope and receipt in an unsealed envelope or file along with an identical set of documents.
The point of doing all this is to establish a date at which the copyright material was known to exist. That date may help a court to reach a decision if you ever need to defend your IPR.

Advantages

Copyright is recognised internationally, doesn’t need renewing and lasts (if this is of any interest to you) for up to 70 years after your death.
It’s free and there are no application formalities.
Anyone who without your permission copies or adapts your drawings or text, or handles such copies, infringes your copyright and can be taken to court.

Limitations

Copyright on its own gives you no protection if someone can use your idea without having to copy it.
It only protects against deliberate copying, and won’t necessarily protect you if someone else innocently comes up with a very similar idea.
There is no official copyright register and so no possibility of carrying out a search as you can with other forms of IPR.

Strategic use - Use copyright routinely to establish dates of origin, both of the idea itself and of every significant later modification or improvement. If you’re ever challenged about dates of origin those humble sealed envelopes could do more to save your bacon than any number of expensive patents.

For an idea with significant commercial potential you’ll almost certainly need other forms of IPR as well, but copyright on its own may be sufficient protection if the income to anyone from your idea is likely to be small. Reasoning: if your idea isn’t worth protecting more expensively, it probably isn’t worth copying.

Design right

Design right protects the design of three- dimensional articles. It applies to the non- commonplace design of any aspect of the shape or configuration of an article: internal or external, in whole or in part.

Design right gives you a right to prevent copying. It lasts for 10 years after articles made to the design are first marketed, subject to a maximum of 15 years’ protection from the date you created the design. But during the last five years anyone will be entitled to a licence from you, with or without your co-operation, to make and sell articles copying the design.

Excluded from design right are so-called ‘must fit’ and ‘must match’ features, where parts of one article are determined by the design of another. This mainly affects the design of components which physically connect or interface with something else, such as a power tool attachment (‘must fit’), and components which must conform to an overall design, such as vehicle body panels (‘must match’).

Design right operates in many ways like copyright. It arises automatically when the design is created, but you should follow the same ‘sealed envelope’ procedure as for copyright to provide yourself with evidence of a priority date. (In terms of the action you need to take, copyright and design right are identical so you can put everything in the same envelope.)

Advantages

It’s free, simple and lasts a decent length of time, so use it early and routinely.

Limitations

It covers you in fewer countries than copyright, so may be of limited use for a product with international potential.
As with copyright, there’s no official design right register so it’s difficult for others to know of your rights.

Strategic use - More or less the same as for copyright. Design right can help establish dates of origin so use it routinely for that purpose, but on its own it probably won’t be enough to protect a product with substantial market potential.

Design registration

Design registration protects the visual appearance of an object. It's administered by the Designs Registry at the Intellectual Property Office, to whom you apply. A single 'Community' application can cover you throughout the EU. The application process is straightforward, fast, and cheap. Protection is for up to 25 years and the initial fee covers the first five.

In law there are two features of design.

Shape and configuration (three-dimensional features).
Pattern and ornament (two-dimensional features).

The main official test is for function and morality rather than novelty. Drawings, known as representations, are central to the application. Adequate protection depends on giving your design the broadest possible definition, and on making separate applications for its different elements. An application for an important feature, such as the distinctive shape of a drinks bottle, is then less likely to be jeopardized by the non- originality of a less important feature such as a decoration on the bottle.

Advantages

You can take action against anyone who makes, sells, uses or imports articles which look the same as or similar to the design registered.
Design registration is relatively cheap and the application procedure is within the scope of careful DIY. (However, getting a really useful registration in all relevant countries takes skill, so you may need the input of a patent attorney.)

Limitations

If you’re in an industry, such as fashion, where illicit copying thrives globally, infringement may be hard to detect and even harder to prosecute.
Any protection may in practice be worthless if you can’t afford to take an infringer to court or pursue them for redress even if you win.

Strategic use - Design registration usually only makes sense if the outward appearance of your invention or product is going to be a strong selling feature. Even so, on its own it may be of little use against experienced commercial pirates. It is not a cheap substitute for a patent.

Trade mark

If you intend to market your own product you’ll need a trade mark: a word, device or combination of the two that distinguishes your product from others. Trade marks can be valid indefinitely if correctly used and maintained, so their potential value can be enormous. They don’t however protect ideas, inventive steps or products as such, for which you’ll need additional forms of IPR.

In the UK, trade marks are granted by the Trade Mark Registry at the Intellectual Property Office, to whom you apply. The cost is relatively modest.

For cover elsewhere, you can make a single application for either an International Trade Mark or a Community Trade Mark (for protection in the EU). For more details, see the Intellectual Property Office website. The more countries you want cover in, the more problems you're likely to run into so you’ll probably need input from a patent attorney, perhaps particularly one who is a member of the Institute of Trade Mark Attorneys.

Your chosen trade mark must meet statutory criteria and must be available for use in all relevant countries, but just because it’s deemed registrable doesn’t necessarily mean it will appeal to potential customers. Coming up with
an apt name and an apt image to go with it isn’t easy, so put plenty of thought and research effort into developing a trade mark and brand identity appropriate to your product, your business and your market.

Advantages

A well-known brand name can be a company’s most valuable asset, so registering a trade mark to protect your brand could be the best investment you ever make.
Even if your product flops, if your trade mark is a good one in its own right and can be applied elsewhere by you or someone else, it might still be valuable IP.

Limitations

The value of a trade mark depends on how well it sells the product, which registration can’t influence.
A trade mark doesn’t protect the product itself.

Strategic use - A trade mark probably isn’t relevant if you intend to license your IPR to a company. But if you want to market your own product it could be extremely good long-term value for not much money, especially if you see your business expanding beyond your original invention. It’s not a form of IPR that occurs readily to most inventors but if you want to be an entrepreneur as well you may need to give it top billing when considering an IPR strategy.

Patents

Trying to explain patents is like trying to explain cricket. Include every last detail and eyes fog over before you’re even half done. Reduce it to a few bullet points and out go the subtle, cunning bits that win or lose matches. We’ve tried to strike a useful balance here, but be aware that there is more to it than this.

By now you should have seen enough patents in your prior art searches to know roughly what makes a patent tick. Let’s just repeat what we hope you’ve already taken on board - that the engine of a patent is its claims. The rest is mainly bodywork. Commercially valuable patents have claims equivalent to a rocket motor; at the other end of the scale, there are millions of 50cc mopeds.

A patent is a form of legal monopoly - the right to say: ‘This is mine and you can’t use it without my permission’ - granted by governments in return for public disclosure of new technology. And that’s all. Whether that monopoly has any commercial value, or is even enforceable, is an entirely different bag of worms that patent authorities don’t take any responsibility for.

Patent systems exist in most countries and their common intention is to encourage the commercial exploitation of new ideas. In general, patents last for 20 years but only if annual renewal fees are paid.

Advantages of a patent

Applying for a patent (as opposed to getting one) gives you a freedom to disclose that can enable much faster development of your idea.
The ability to refile an application can be used tactically to extend your protection without incurring major costs, as long as you don't disclose your invention in the meantime and you’re prepared to accept the risk that you may lose your priority to others.
The combination of written descriptions, drawings and claims means that a patent can define your inventive step much more precisely - and thus more defensibly - than other forms of IPR.
A patent is usually essential for an idea likely to be valuable enough to attract predators. It can also have a ‘burglar alarm’ effect by persuading opportunists to look for easier pickings elsewhere.
Without a patent - and a strong one at that - it may be impossible to interest potential investors or licensees.
A patent can be a product in its own right. Many companies and individuals make a good living solely by licensing their patents and other associated IPR.
Rightly or wrongly, patents are regarded as A Good Thing by many stakeholders and funders, who see them as a form of insurance. (This runs counter to the view held by many companies. We know of one that considered letting its patents lapse because it didn’t really need them any more. Its bank said: ‘Your choice, but the day you scrap your patents is the day we’ll end all your borrowing facilities.’)

Limitations

By far the biggest drawback for most private inventors and small companies is the cost, which can greatly increase the risk of an already risky venture. You may eventually get it all back from licensing or trading profits, but you’ll probably have to bear at least the first few years’ costs yourself.
Multinational cover may present you with a serious chicken-and-egg problem. It’s so expensive that if there are no other stakeholders to help you out, you may only be able to consider it if cost recovery can be built into a licensing agreement - but you may need that multinational cover in the first place to interest companies, and it then typically takes years to reach a licensing agreement.
The rigid timescales of the patenting process introduce an element of urgency that you could well do without.
Because the whole process takes years, it’s difficult to predict how strong or commercially valuable your patent will be by the time you get it.
The official fees you pay don’t actually buy you any protection. You have to police your own patent and tackle infringers at your own expense. Even if you license your patent to a company, they may insist that you pay the costs of defending it.
A patent can be challenged by anyone at any time and will, if the challenge is successful, be at worst instantly void and at best reduced in value. And the more commercially valuable the patent, the more it will attract challenges.
Speculative and even trivial challenges to patents are rife, especially in the USA and especially when a wealthy company judges that a much poorer patentee can’t afford the court costs.

Strategic use - For reasons which we hope are now loud and clear, only consider a patent if there is strong objective evidence (not just your own wishful thinking) that your inventive step is likely to be worth a lot of money. In terms of when to file, take advice from a patent attorney. There’s a balance to be struck between filing early to establish priority over others, and filing as late as possible to delay the onset of major patenting costs. Resist temptation or pressure to file prematurely simply because that suits someone else. File only when you judge the time and circumstances to be right - and if you’re in any doubt whatsoever, get advice from a patent attorney.

Model of Non-Disclosure Agreement

The best way to persuade companies and individuals to sign your NDA is to draft one that doesn’t scare them off. There’s no set formula, so it’s quite acceptable to write your own. Whatever you include in it, remember that your main aim is to get people to sign it. A short, simple document may be user-friendly but full of danger for both parties if too much is left unspecified, while a long one bristling with restrictive clauses and legal jargon is unlikely to attract many signatures.

We think the following model - included for guidance only - is pitched at about the right level for a company that has already expressed some interest in your idea. It may need modifying if, for example, you’re only approaching someone for confidential advice and there’s unlikely to be any continuing collaboration.

NON-DISCLOSURE AGREEMENT

Parties to the agreement

[Other company/party name and address]

[Your name and address]

Basis of agreement.

The intellectual property to which this agreement relates is [name or brief descriptive title of idea/product].
On the understanding that the parties are interested in discussing possible collaboration in developments arising out of [your name]’s intellectual property it is agreed that the information, documents and material supplied in the course and as a result of such collaboration shall be treated as confidential.
The receiving party undertakes not to use the information for any purpose, other than for the purpose of considering the said collaboration, without obtaining the written agreement of the disclosing party.
This confidentiality applies to both technical and commercial information that may be supplied by either party or its associates.
Disclosure of confidential information by one party to the other does not confer any rights whatsoever to the other party.
Access to confidential information shall be restricted to responsible employees or professional advisers who need to have access for the purposes of our negotiations and obligations of confidentiality equivalent to those contained herein will be imposed upon such persons.
Excepted from this undertaking of confidentiality is any information in the public domain or which the receiving party can show was already in its possession lawfully prior to disclosure.
Any party to this agreement shall on request return any documents or items connected with the disclosure and shall not retain any unauthorised copies or likenesses.
Should any items supplied by the disclosing party in connection with the disclosure be lost or damaged while in the keeping of the receiving party, the receiving party shall return any remaining items irrespective of their condition and shall also pay the full cost of repairing or replacing such items.
After [five] years from the date hereof each party shall be relieved of all obligations under this agreement.

Signed

…………………………………………………………..

[Your name and date]

For [name of receiving company/party and date]

Whatever you draft, you need to plug as many predictable loopholes as possible without sliding into paranoia. For example -

Paragraph 3 ensures that the company or ‘receiving party’ can’t cheat by exploiting your idea in ways that don’t technically breach confidence - for example by just going ahead and making it without needing to tell anyone anything.
Paragraph 6 brings into the confidentiality fold all the other people who might have a legitimate need to know something about your idea.
Paragraph 9 is there to make the company accept responsibility for the wellbeing of your property - particularly a perhaps unique prototype. (We’ve heard of prototypes being deliberately damaged or 'mislaid' to prevent other companies from seeing them.)
Paragraph 10 puts a clear time limit on the agreement. We’ve used five years but in different cases a shorter or longer period may be appropriate.

You can soften your approach by including something like this in your covering letter -

‘As you will appreciate, it is important that all exchanges of information should from now on be in confidence. I therefore enclose a copy of a non-disclosure agreement which I have drafted and hope you will find acceptable. For my own part, I shall be happy to sign your own confidentiality agreement assuming its conditions are broadly similar to mine.’

What Can And Can’t Be Patented

An invention is patentable only if it is all of the following -

New and previously undisclosed.
Distinguished by an inventive step not obvious to someone ‘skilled in the art’.
Capable of industrial application - that is, it could actually be made or used and isn’t just a flight of fancy or a physical impossibility. (Though the European patent system now hedges its bets by including classifications such as HO2K53 ‘Alleged electro-dynamic perpetua mobilia’ for perpetual motion machines.)

Things that can’t be patented include scientific theories, literary works, music, offensive or anti-social devices. Computer software is more patentable in some systems than others, so you may need advice from a patent attorney about the current situation. Business methods may be patentable in the USA but not easily elsewhere. (See Patenting in the USA.)

Exploding myths about patents
For most first-time inventors a patent is The Big One. The only form of IPR that matters (or that they’ve heard of). The one that will make them rich. The one that they just go out one day and get, like a loaf. We wish we had a fiver for every time we’ve heard an inventor say, ‘I’ve just had this idea; I need to patent it straight away.’ No you don’t. You need to calm down first, then read what follows very carefully.

For most private inventors of average financial means, patenting is downright dangerous and needs to be approached with extreme caution. Yes, a patent may be commercially justifiable if your inventive step is to be properly exploited, but you should view it as a necessary evil and not something to be in a hurry to get. Patenting is by far the most expensive form of protection so if some other combination of IPR will do the job, let it. If you do decide to apply for a patent, you need to be absolutely sure you’re doing it at the right time and for the right reasons.

The reality of patenting includes these facts -

Getting a patent can take 3-4 years and is a complex, expensive process. If it costs more than any potential royalty income or trading profit, or sucks money and effort away from other vital aspects of developing or exploiting your idea, it will damage rather than improve your prospects.
A patent will not on its own make your idea commercially successful. Most patented inventions never become products, for one simple reason: no one wants them. That’s why early market research is vital.
A patent will not on its own make you rich. It will definitely cost you money but there’s no guarantee it will ever make you a penny.
A patent is supposed to protect your idea but it could have the opposite effect. Many companies routinely (and very sensibly) search published patents to alert them to potential competition. Once they’ve seen your patent it may be easy for them to re-work your inventive step in a way that doesn’t infringe your claims.
The granting of a patent isn’t an official seal of approval. All it signifies is that your idea seems for the time being to be original and to contain an inventive step. In commercial terms that could be meaningless.
A patent isn’t necessarily yours for keeps. It can be challenged by anyone at any time and if the dispute comes to court you have to defend it at your own cost, which will inevitably be large. If the challenge succeeds, you lose all or some (usually the best bits) of your patent and you may also have to pay the victor’s legal costs.
There is no such thing as a world patent except in the short term using the PCT system (see later). You ultimately have to pay for each country in which you want patent protection and that can soon become extremely expensive.
It's up to you to enforce your patent. No official body will fight or finance your legal battles, or even check whether anyone is infringing your patent.

Applying For A Patent - Twelve Essential Steps

In our view, effective patenting depends on three things above all others -

Commercial justification. Only consider a patent when you’re confident that there’s enough commercial potential in your inventive step to cover many times over the costs of patenting. This can range from a few hundred to several thousand pounds a year, depending on the number of countries in which you have cover, for up to 20 years. Otherwise, perhaps consider only a short-term, tactical use of patenting (for example, see Step 7).
Getting your timing right. Patenting too early is a common and often fatal mistake, so don’t be rushed into it. The official filing date triggers a merciless countdown to big bills and other potential problems, so it can be tactically smart to copy many large companies and delay filing for as long as possible.
A patent attorney. You can in theory write your own patent and handle everything yourself. In practice it isn’t at all easy to do well and most of the self-drafted applications we see are dire to the point of uselessness. In our view there’s no doubt that to stand any chance of a robust, commercially valuable patent, you need a patent attorney.

You don’t just go out and get a patent, any more than you just go out and buy a house.

Applying for a patent is a very strict, formal process governed by usually immovable deadlines. You therefore don’t rush into it. We advise that you plan carefully and well in advance, and take the following steps.

Complete!

Congratulations you have completed all of the steps successfully

Step 1

Ask yourself whether you need a patent at all. Just because your inventive step is patentable doesn’t necessarily mean you’ll gain anything from patenting it. Could one or more other forms of IPR protect you adequately at perhaps far less cost? Will prior art limit the claims you might be granted? Will your best opportunity for exploitation be over by the time you actually get your patent? (For this reason, many companies in high-tech markets with very short product life-cycles now question the point of patenting.)

Step 2

Work out the best time to file your application. Later is generally better than sooner. The patent system allows you a 12-month ‘free’ period - a kind of IP gap year - to help you exploit your idea before incurring major patenting costs, but few ideas can go from a standing start to licensing or product launch in that time (5-10 years is much more typical). While you can start preparing an application any time you like, it’ll probably be in your best interests to delay the date of official filing for as long as possible: maybe years. Many big companies routinely delay patent applications almost until the eve of product launch, on the grounds that early publication gives too much information away to competitors. In your case you may have to balance the risk of someone else filing first (though not necessarily inventing first - see Copyright) against the probably much greater risk of blowing all your development funds on patenting long before there’s any prospect of royalties or trading profits.

Step 3

Top up your prior art (patent and product) searches. You should be doing this routinely anyway to keep yourself up to date with developments in your target market, but it’s essential if you file your application some time after you first searched.

Step 4

Get application form 1/77 ‘Request for grant of a patent’ from the Intellectual Property Office (downloadable or by post or from a patent attorney). While you’re on the IPO website, avail yourself of all the free and excellent guidance you’ll find there about patenting in general and the application process in particular.

Step 5

You or your patent attorney (preferably the latter) must fill in the form and provide a patent specification (description, drawings, and preferably claims and an abstract). Make sure you do everything the way the IPO recommends. Send the form, patent specification and filing fee to the IPO. The filing receipt you get establishes an official priority date (though once again this isn’t the same as a date of invention). You can now in theory disclose your idea in relative safety, though in practice you should still exercise great caution and use NDAs where appropriate.

Step 6

The countdown clock now starts ticking. You have exactly 12 months from your priority date to decide whether to go ahead with a full application. Within that time you should in a perfect world reach a licensing agreement with a company which takes care of your future patenting costs. In the real world you’re extremely unlikely to get so far in such a short time unless you’ve cannily used other forms of IPR to manouvre yourself close to a licensing agreement before you file. To broaden your options, you might also consider using the year to set up your own business, a process over which you have much more control (Project 6).

Step 7

Within the same 12-month period you must also apply for any non-UK patents you think you need. Multi-country protection is essential for many ideas but will massively increase your costs, so it should only be done (a) on the back of very strong evidence of commercial potential and (b) with the advice of a patent attorney. A PCT (Patent Co-operation Treaty) application is often the most convenient option, as with one form you can apply in every country you’re likely to need. You’ll be able to use your UK priority date, so we recommend that you delay any PCT filing decision until near the end of the 12-month grace period.

Step 8

If within the 12-month period you don’t trigger the full application process by requesting a search (form 9A), your application lapses and won’t be published, so no one will ever see it. Alternatively you can withdraw it earlier and re-file the same application, as long as no one has seen it or your idea except in confidence. This may be a worthwhile strategic move if you haven’t made any exploitation progress in the first 12 months. You lose the priority of your first application but have a second (or third, or fourth...) 12-month ‘life’. Withdrawing and refiling gives you more time to get your invention closer to market but there are many pitfalls so you must seek professional advice if you want to get it right. The big risk is that if someone else files the same idea after your first priority date but before your later one(s), you lose out.

Step 9

If you do send in form 9A/77 the IPO will examine your application in depth, and you should receive their search report within six months. Eighteen months after your priority date, your patent application will be published. A couple of months later, it will appear on databases. (Publication does not mean, as many inventors believe, that your patent has been granted!) If the search report rubbishes your claims, you can either withdraw your application or get your patent attorney to help you challenge the official findings. This may involve amending your claims.

There may be some advantage in sending in form 9A early, so that you get your official search report as soon as possible. Knowing how official examiners rate your inventive step can help you and your patent attorney make decisions, particularly about filing in other countries (Step 6b).

Step 10

If you’ve filed a PCT application it enters what’s known as the national or regional phase 30 months or so after your priority date. Each selected country processes your application (as long as you’ve paid their fees and supplied, at your cost, any translations required) as though it were an individual application to that country.

This generates large amounts of paperwork and you need legal representation in each country (which your UK patent attorney can usually arrange). This is where costs unavoidably start to mount up.

Step 11

It could be a further 18 months or more (that is, 3-4 years after first filing) before a patent is granted - but the claims you’re allowed may quite possibly be fewer or far weaker than the ones you originally wanted. Yes, it’s a gamble.

Step 12

In due course you have to pay renewal fees to every country in which your patent is in force. In the UK that’s up to 16 payments over 20 years and fees rise with time, currently from £50 to £400. Renewal fees in some other countries can be much higher. You may not need to keep your patent for the full 20 years - short product or design life cycles make many patents redundant fairly quickly - but that may be little consolation when the bills roll in.

Project 5 Checklist

The following checklist is partly an action planner and partly a reminder of what matters. If you’re tempted to think ‘I don’t need to do all this stuff’, it may help to point out that we’ve modeled the checklist on questions professionals are very likely to ask if you want their advice, support or money. We therefore have to be stern and say that if you aim to be a respected and successful inventor, you can’t afford to duck any of it.

Protecting your idea generally

Who did you use (patent attorney, Intellectual Property Office etc)?
Summarise their findings.

Patenting

Justify any plan to apply for a patent.
Justify the timing of a patent application.
Have you sought a patent attorney’s advice? If so, what is that advice?
Who will draft the application - you or a patent attorney? (While it may be realistic to do some preparation yourself, if at all possible leave the final drafting to a patent attorney. It can be false economy to do otherwise.)
What will all your filings cost you over the next five years, including any patent attorney fees?

Remember

IPR doesn’t just mean a patent, and patenting brings with it expensive risks. Always seek advice and assistance from a patent attorney before committing yourself to patenting.

Next Project...

PROJECT 6

Exploitation routes

You have 3 choices: royalties from a company (licensing), or become an entrepreneur, or form a joint venture.

View Project 6

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