Clients typically ask us how they should protect their Intellectual Property (IP). To give a complete answer, we created this comprehensive article with tips and links to example documents.
Our advice in short:
- Do not publish your work to the public and use a Non-Disclosure Agreement (NDA) before you share information.
- Document the development and external communications.
- In contracts, make sure you will become the owner of the created IP.
- Register your trademark and design internationally.
- Postpone filing for a utility patent to the latest possible moment.
- For China, use an NNN agreement and refile your trademark and design in China.
What are Intellectual Property Rights?
Intellectual property is the result of creativity: creations of the mind, such as inventions; literary and artistic works; designs; symbols, names and images used in commerce. This IP is protected by law through, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. You can buy, sell, and license IP. Intellectual Property Rights can enable their owner to act under civil law to stop others from replicating, using, importing or selling their creation.
IF YOU DO NOTHING, YOU ALREADY HAVE RIGHTS
In Europe and America there are automatic rights which come into being as soon as a qualifying work is created. As such, there is no formal registration and no fees to pay. The downside is that these rights are hard to enforce. In the other areas of the world IP rights are not always treated in the same way. The free rights you automatically have are:
Copyright gives its owner the right to exclusively control and exploit their creative works. It protects literature, art, music, dramatic works, sound recordings, photographs, software, databases, films and radio and television broadcasts. Copyright protects the expression of, not the idea behind a work. For example, the text and illustrations in a manual are protected, but not the ideas expressed in it.
Copyright grants the owner exclusive rights to authorise or prohibit certain uses of their works. This includes; copying the work, distributing copies to the public, adapting the work, communicating the work to the public (for example, by broadcasting it or putting it on the internet), renting/lending copies to the public, and performing the work in public.
Unregistered design and trademark right
You get automatic design and trademark rights in Europe (Unregistered Community Designs). However, you must prove intentional misuse and damage and they offer limited protection and can be difficult to enforce. They also have a much shorter duration.
WHAT CAN I DO TO BETTER PROTECT MY INTELLECTUAL PROPERTY?
Do not publish / show it to the public
Patent rights can only be claimed if they are not known to the general public so file for a design or Utility patent before you put it on your website or show it on a fair. You can protect your rights by using contracts. First, you can document and use an NDA (non-disclosure agreement) in your contracts with external potential partners. The other way is making sure no-one has all the information to reproduce your product.
Before you share information, ask your potential partner to sign a Non-Disclosure Agreement. This prohibits them from sharing your intellectual property or using it to manufacture it for themselves. find NDA examples here.
Note: Trade secrets might also be an important part of your business. The law of confidentiality protects trade secrets. To keep trade secrets protected, you must establish that the information is confidential, and ensure that anyone you tell about it signs an NDA. If they then tell anyone about it, this is a breach of confidence and you can take legal action against them.
The downside of NDA’s is that people in big companies are not allowed to sign them. They are too risky for them, because other departments might be working on the same topic.
Document the development and external communication
When it comes to a dispute, proof is key, so it makes sense to document the development. Make sure to date and archive the 3D files, documents and prototypes. After an important meeting send an email with the minutes of the meeting.
With all the contracts you sign with your personnel, contractors, design agencies and production partners, make sure to enforce the NDA again. Be sure to arrange clearly who will own the intellectual property rights from the work you paid them to do.
When you deal with production partners, make sure that you know if they will use their own or somebody else’s IP. This often happens when production partners also help develop your product. If this is the case you will be forced to produce the product with them, and you cannot produce it anywhere else. This kind of lock-in could allow them to increase the prices.
In software development, code is often reused from previous projects and the use of open source code is common. The software partner might be willing to give you free and unlimited licence of the code they created for you, but they may also ask for a fee if they cannot use this code and knowledge again.
Dealing with China
The Chinese law system is different to the western world and you need to take this into account. An NDA has little value in China, and it is important to use the NNN (non-disclosure, non-use, non-circumvention) format that a Chinese court will recognise. Have it written in Chinese, under Chinese jurisdiction. Find a paid example of an NNN here.
Chinese trademark; It is important to register your trademark (name and logo) in China because a copycat can do this as well (and the first applicant gets it). If your production partner does this as a security measure, they can create big problems.
A Chinese design patent helps to fight copycats, as the international design patent does not apply there. You file these through agents like these.
Another common way is to ensure nobody has all the information, and produce the different components by different partners, so you are the only one that has all the information.
OTHER WAYS TO PROTECT THE INTELLECTUAL PROPERTY
1. Design patent / registration
A design patent protects the appearance or ‘look’ of a product, provided that it is new and has a unique character. The design must have a special shape, configuration, pattern or ornamentation to be registered. Design patents protect the visual appearance of a product whereas a technical patent protects a technical product and how it functions. Registering your design prevents others from using it without your permission. Your application needs to contain an image of the product or the packaging you wish to protect. There are fees for registering a design, and the process takes around four weeks provided your design meets the above criteria. You can register them online here and you can find an explanation on how to do it here. To register one design in the European Union, the total cost will be +/- 500 euro.
2. Trademark registration
A trademark can be a word, phrase or logo and can be registered for a fee by the Intellectual Property Office. It will help to take legal action against anyone who uses your trademark without your permission. Registered trademarks can be identified by the ® symbol. Owning the domain name does not give you more rights, but this will help to protect it. You can register them online here. The total cost of registering a trademark for one class of goods, without colour elements in the European Union, will be +/- 1380 euro.
3. Utility Patent
A utility patent protects your invention and lets you take legal action against anyone who makes, uses, sells or imports your invention without your permission. A patent doesn’t keep your invention secret. In return for the legal protection you get, you share how to create or replicate your invention with the public. When your patent expires, other people can then make and sell your invention. You can only apply for a patent if you have created something that is inventive, new and useful. A patent can protect innovations like mechanical products, machines, industrial processes, pharmaceuticals and their production methods, computer hardware, electrical appliances and biological products and processes. You can’t patent, for example, literary, dramatic, musical or artistic works, anything that’s an idea, a way of thinking, or a scientific or mathematical discovery.
You can find more information here. Costs for European patents are around 15.000 Euro to write and apply, and between 500-1500 euro a year. When your new technology is very promising you can start a utility patent application, but you must rush to make it a success, because the relatively high cost only makes sense if this technology is already making money.
Most important for a patent:
Do not show or publish the invention to the public and Do not share the information without an NDA before you apply for the patent.
You probably still can get a patent when you already have done this but it there is a big chance that the patent will be dismissed in court.
A lot of patents have no value
Just because you have created something new, does not mean it has value. Only when the result is much better (or cheaper) than the existing method, and this cannot be achieved in a different way, will the patent give you an advantage that can make money. High level innovations like basic principles (like an efficient engine) are more valuable than low level (like a new way to apply grease to a washer). The challenge is to claim as wide as possible, but the downside is that it is harder to defend in court.
A patent attorney will investigate if the invention is new. He will search in the patent archive in a few categories. But they cannot see patents filed in the last 18 month and they cannot search through all information in the public domain. Therefore, they always have a provision for this in their contract.
It’s generally your responsibility to enforce your patent and ensure it is properly protected, meaning that any legal action against another party will be started, and funded, by you. To win this you need expensive specialized lawyers. Big companies like Apple know this, so they do not care. A court case is very complex and costly, and the outcome is uncertain. Many of these disputes are settled before they go to court. But the opponent needs to think you are willing to take it that far.
When a dispute is taken to court; the opposition will try to prove that the invention was not new. They will search deep into publications and try to find somebody that was not bound by an NDA. If they can find the same in the public domain before your patent date, your patent claim is not granted, and it is worthless. You have played the expensive fees all those years for nothing and you are also forced to pay the court fees.
If your patent rights are granted, they will try to prove that their solution does not fall under your patent rights. Anything that will strengthen your story will help. While working for Dyson we were asked to keep all our notes and sketches in one sketch book and date every page.
Provisional patent / Patent pending – Important for start-ups
With start-ups, just the patent itself is important to attract investors. These patents are very hard to understand and you need detailed knowledge to judge them, so a lot of investors do not bother reading them. Filing for a provisional patent in a local country is relatively cheap. After one year it needs to be transferred to Europe and/or other countries. In this time the patent can be rewritten to cover the invention better. The translation and the fees are expensive, and you will only do this when it will be clear that you can afford these costs and the product is a success.
For the US more information here and if you need help you can use these ($199 US Dollar).
For the EU you can apply for 80,- euro in your local country. But it is complex, time consuming, and you can wonder if it has any value.
Twelve months may seem like a long time before you need to pay large sums of money, but it takes a lot of effort to fully develop the invention and make it a success. We advise you to wait as long as possible and use NDA’s in the meantime. A meeting with investors, product launch or an important publication is a good reason to apply and set the patent date.
When SLIMDESIGN creates designs and innovations for our clients, we encounter the same challenges regarding IP. SLIMDESIGN guarantees that the work we do is created by us and we do not copy anybody. However, we cannot guarantee that we are the only one with this idea. If needed, we can involve a patent expert with the specific expertise needed to check the prior art, but even they can’t access the recent ideas. This being said, we have not had a problem with this in the 25 years we have been designing products.
There are a lot of best practices you should use to protect your Intellectual Property. A provisional patent can help attract investors, but you should wait until the last moment to apply. Upgrading it to a real utility patent is only useful if it blocks others from using the invention that makes real money.
If you are thinking about bringing your idea to life, don’t hesitate to contact us. You can find more information on developing your electronic product here; We also offer a free Skype consultation to discuss how we can support you in the best way that suits your needs.
Please, if you have comments, tips, or questions, please send an email to email@example.com.
Written by Wouter Konings
Product Design Director | SLIMDESIGN
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If you are thinking to develop an (Internet of things) product we would be happy to support you in this process. We have good contacts in eastern Europe and Asia and travel their frequently. Our expertise We offer a free skype consultation to discuss the best approach for your company.