For entrepreneurs with a unique idea, understanding the different types of intellectual property is the first step in making money from it. David Walker, founder of Grid Law, provides a comprehensive overview of patents, registered designs, trademarks and copyright.
Origins of intellectual property
The oldest form of intellectual property rights are thought to be patents and their origin can be traced back to the Statute of Monopolies 1624.
As commerce, science and technology evolved over time, new types of intellectual property rights were created to protect them.
I could easily fill a book on all the different forms of intellectual property that exist, but for most businesses, there are just four main types they should be aware of.
Some people think trade secrets are a form of intellectual property, but that’s not strictly correct. Trade secrets are protected by other laws so Im not going to cover them here.
If your business relies on trade secrets, you can find out how to protect them in my previous article Understanding the new rules for protecting trade secrets.
So, let’s take a look at the four main types of intellectual property and what they protect.
Patents protect how new inventions work.
In most cases, these inventions will be a new, innovative piece of technology. However, patents have a much wider application than that. In the right circumstances, patents can also protect software and methods of doing business.
Not all inventions are patentable. To qualify for patent protection, they must fulfil three criteria:
The invention must be new
There must be an inventive step
It must have an industrial or commercial application
So, what does this mean?
new? means that the way in which your invention works must not have be disclosed publicly anywhere before. If you’re already selling a product that uses the technology, if you’ve written articles about it, or you’ve displayed a prototype at an exhibition, there’s a good chance it’s been made public.
If it has, it’s no longer considered to be new and therefore you won’t be able to patent it.
Unfortunately, this requirement to be new means that you can’t go back through old ideas and retrospectively apply for patent protection for them (unless of course they have never been made public).
However, all is not lost.
If you can develop your ideas further, and create something new from them, you may be able to patent the upgraded technology.
This brings us to the next criteria there must be an inventive step.
An inventive step means that the advance in technology must be taken a significant step forward. It mustnt be an obvious development of existing technology.
Finally, there must be an industrial or commercial application? for your idea. Basically, this means that you must be able to sell it, or sell a product incorporating it.
Patents can be extremely valuable because once granted, they give you the exclusive right to use your invention for up to 20 years.
If a rival business copies your invention, or even creates their own technology that’s too similar to yours, they will be infringing your patent. You can then take legal action to stop them from selling it and claim compensation for the sales they have made.
As you can imagine, if your patent protects a key piece of technology with multiple applications, it will give you the opportunity to really dominate your market place.
Unfortunately, there are a couple of drawbacks to patents.
First, in exchange for this exclusivity, you must show the world how your technology works. In your patent application, you must describe what your invention is and how it works. it’s then published in database that anyone can search for free.
This means rival businesses can study your patent and try to find a way around it. Alternatively, it may give their R&D department a head start on developing the next technology that will eventually replace it.
Second, patents can be expensive. If you want to keep your patent live, you have to pay renewal fees every year from the fifth year after registration.
You therefore have to be confident that you will sell enough products to cover the cost of the patents and still make a profit.
After 20 years, your patent will expire and everyone will be free to use your technology.
A recent example of this is Amazon’s one-click? shopping patent. If you sell anything online, you can now use this technology without any fear that Amazon will try to sue you for patent infringement.
Registered designs protect the aesthetics of how a product looks.
For a design to be registerable, it must fulfil three criteria. It must:
Have individual character
Not be specifically excluded from protection
new? means that the design must not be identical to, or too similar to an existing design. But, unlike patents, you don’t have to register your design before making it public. Designers have a 12-month grace period from when their design is first disclosed until it has to be registered.
individual character? means that the design must give an overall different impression to other designs.
Some examples of designs that are excluded from protection include the surface design of a product, purely functional designs and designs that are dictated by the way the parts of a product fit together.
Registered designs can be used to protect either the whole or just part of a product. They can also protect 2D as well as 3D designs.
Good examples of registered designs are the shape of a TrunkI (the children’s suitcase) and many of the icons for the apps on your mobile phone.
In my opinion, registered designs are one of the least understood and most underutilised forms of intellectual property. This is a real shame because they can offer smaller businesses a really good level of protection for their products and the protection lasts for 25 years.
Registered designs are also much cheaper to register than patents because the application process is much simpler. You can expect to pay a few hundred pounds to register a design, rather than a few thousand pounds to register a patent.
David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry, advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.
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