The fate of Australia’s innovation patent has now been confirmed.  Last month, the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 received Royal Assent and finally set the timeline for the phasing out of the innovation patent in Australia.

What you need to know:

Before 26 August 2021:  No change to current system.  Innovation patents may be filed directly, or as divisional applications from pending Australian standard or innovation patent applications.

On or after 26 August 2021:  Innovation patent applications may only be filed as divisional applications from pending Australian standard applications or pending innovation patent applications for which the filing date of the parent is before 26 August 2021.

25 August 2029:  With the latest possible filing date for an innovation patent being 25 August 2021, the last day that any remaining innovation patents will expire is 25 August 2029.

A missed opportunity

The phasing out of the innovation patent marks the end for one of the strongest assets for offensive IP strategy.  The assessment of patentability against novelty and “innovative step” (a lower test than inventive step) made the innovation patent more straightforward to grant and very difficult to invalidate.  The ability for applicants to file innovation patents as divisional applications from a pending standard patent application made them perfect for directing at competitor products by including targeted claims.  Having all the same remedies available as a standard patent, the innovation patent was the weapon of choice for many patentees.

Surprisingly, the uptake on innovation patents has never been significant; something I have never quite understood, given the strength of these rights.  In 2018, the total number of innovation patent filings was only 7% of the total number of standard patents filed.  They were favored by Australian applicants: in 2018, AU residents filed around 51% of all innovation patents.  This compares with only 9% of standard patents being filed by applicants that are resident in Australia.   This huge differential suggest that international applicants do not appreciate the value of the innovation patent.  This is possibly a reflection of the more strategic conversations Australian attorneys have with their local clients.  In any case, it seems a missed opportunity for many international companies with IP interests in Australia.

So, what next?

The innovation patent was introduced in 2001 to provide an IP right for incremental inventions.  It was created to benefit SMEs by offering protection for a lower threshold of innovation, at a lower cost and greater speed to grant.  Recent reviews determined that it was not achieving its original policy objectives of encouraging innovation among Australian SMEs by offering protection for lesser inventions.

However, Government seems intent on helping small businesses gain access to the IP system.  One of the requirements of the Bill is that a statutory review be conducted of the accessibility of patents to SMEs, with a particular focus on the cost of applications and the processing times.

But is the answer to provide IP rights directed to assist one type of business or another?  I don’t think so.  The incremental invention was never only the realm of the SME, in fact many of the most impressive inventions we see come from our SME clients.  SMEs need to approach the IP conversation in the same way as larger more established businesses, benefiting from clear IP strategy which identifies their IP, understands how it produces value into the business and defines a plan for protecting and exploiting that value.  When patents are relevant they need access to the best protection available.

The demise of the innovation patent comes at a time when changes are being made to raise the bar for patentability of standard patents in Australia. Recently, support requirements were brought into line with European requirements and the Federal Government is considering recommendations to align inventive step requirements with Europe.  These changes are designed to improve the quality of patents granted in Australia.

It will now be more important for SMEs to find attorneys that have a considerable experience of the European patent system and a willingness to dive deep into understanding their business in order to support their IP requirements.

It will be interesting to see the results of the statutory review, but Government might better support SMEs by providing more accessible grant or incentive programmes to help them access the IP system, rather than by creating new rights.

Practice Note

So it is business as usual for the innovation patent for the next 18 months.  In the meantime, we recommend that applicants consider the innovation patent carefully as part of their IP strategy and the opportunities it presents.

If you have any questions about the innovation patent or if you would like to discuss any of your IP needs, please get in touch with our team.

Happy World IP Day!

In case we needed an excuse, World IP Day gives us a chance to remind all our clients and friends of the importance of IP to your business.  Take an action today to ask yourself whether you have identified your IP assets and are protecting and managing them in a way that drives value into your business.  If you are unsure, let us know, we can help.

This year’s theme is IP in Sports and looks at how patents, trade marks, designs, copyright support the global sports ecosystem.

The scale of sports as a global business is incredible with around 2% of global GDP generated by the sports sector.  All participants in the sector are becoming acutely aware of the value of their IP: whether it is the English Premier League selling its domestic and international TV rights for a whopping £2.8 Bn per season, Nike holding ground as one of the most valuable brands in the world with a brand value of around USD 30 Bn or the constant improvements in technology and design in sports equipment to support continued improvements in performance.

https://www.wipo.int/ip-outreach/en/ipday/

 

If you are planning to take your business through commercial transaction, whether investment or M&A, get ready to be scrutinised.  For a target business, due diligence is one of the most uncomfortable periods of the transaction.

We regularly support clients through commercial transactions, and we have seen the approach to intellectual property (IP) due diligence change significantly over the years.  The days of quietly providing a list of registered patents and trademarks in a data room, only for their status to be checked, are gone.  Questions around IP come up in almost every investor pitch I attend.  The value of intangible assets is starting to be better understood and a rigorous assessment of all IP assets, beyond registered rights, and their contribution to the business is becoming the norm in commercial transactions.

For any company looking to exit or attract investment, it is critical that you own the conversation around your IP during the transaction.  It is rare that no queries arise, but solid preparation for the IP discussion will put you on the front foot and drive confidence throughout the engagement for both sides, leading to a better outcome.

Here are our IP Top Tips to position you to own the IP conversation during due diligence.

1.  IP Audit – do it early

It is rare that we cannot improve your IP situation when working towards an exit/investment event.  Even the best executed IP strategy can often be optimised when a commercial transaction is being considered.

However, improving your position can take time.  Engage your patent attorney early to reduce stress and improve focus.  These plans tend to be better thought out when you are out of the spotlight.

Early consideration gives you time to update registers, chase signatures, update contracts, file new IP, extend your registered IP across additional jurisdictions and, in many cases, locate your IP!

2.  Identify your IP and tell your story

Correct identification of your IP is obviously critical to preparing for investor conversations.  It is more than a list of patents, designs and trademark registrations.  Understand where the IP value is in your business.  Look at your software products, your know how, your contractual relationships, your people, your data and your brand.  Identify it and retrieve it so it can be provided during the transaction.

How does this IP support your business model and provide differentiation?  You must be able to map your IP against your products and services and understand how that drives value legally and commercially.  Can you back it up quantitatively as well as qualitatively?  Can you demonstrate that competitors are having to design around your IP?  Have you exploited it in licensing deals?

It can be hard to attribute any value to IP which does not map against your business model.

3.  Ownership

Ownership is explored in even the highest-level due diligence investigation.  Do not ignore it.  Queries around ownership are one of the most common problems during IP due diligence and regularly cause panic.

If you cannot prove you own the IP there is immediate uncertainty as to whether you have the right to use it, raising a flag on the transaction.

For all IP, identify who created it, when, and in what circumstances.  What agreement was that individual working under when it was created, and does it assign any IP created to you?

Resolving ownership queries or disputes can be complicated.  Even retrieving signatures from ex-employees can take time and you can face extreme difficulties if the company previously owning the IP is no longer live.  The sooner you resolve these issues the better.

Once you have established a clean line of ownership ensure public records are updated.

4.  Is your IP valid?

You would be surprised at how many times registered IP rights listed on schedules have been allowed to lapse or are vulnerable.  Ensure all maintenance fees are up to date if you want to retain any credibility in the IP conversation.

In the months leading up to the transaction review the status of your IP.  Is the scope of protection consistent across different countries?  If not, why not?  Does it question the validity of the rights in certain jurisdictions?  If you have rights which are deep in examination is there value in trying to accelerate grant before due diligence?  Are your IP assets in a vulnerable time period, for example is the opposition period open?

There is a perception among some that a pending application can have more value since the new owner will have the freedom to control the scope.  But it also leaves uncertainty.  Perhaps a granted patent and a pending right would provide certainty and opportunity, hence greater value?

Finally, if you plan to attribute significant value to a registered right, the question will always arise of how defensible that right is.  Relying on patent office approval is a first step but a more robust validity analysis can provide more confidence and give you a chance to amend any patents before scrutiny if necessary.

5.  IP contamination of products and freedom to operate

Commercial dynamics around products change as the parent company grows.  Are you certain that you have an unencumbered right to use your products?  Any IP infringement or licence agreement might have different implications in the hands of a new owner.

Consider running a freedom to operate investigation around your product.  If you are operating under licence, check the licences are transferable?

6.  Preparation for engagement

Once you have completed the processes mentioned above you are ready to uncover your IP position for due diligence.  You should now be ready to handle the IP conversation confidently during investor pitches and commercial discussions, at least on a high level.  Be sure to keep your IP team engaged throughout the process and bring them in to cover any detailed questions.

 

Our expert patent attorneys at BOSH IP have considerable experience in leading our clients through investment rounds and M&A transactions.  Contact us for more information on how we can help you prepare your business for IP due diligence and position you to own the IP conversation.

 

 

As business owners, we are always learning from the leaders of the biggest brands in the world.  Recently I have been studying Jeff Bezos and Amazon.  Without any doubt my biggest lesson from Bezos is his complete obsession with the customer.

At meetings, Bezos famously leaves one chair at the table empty to remind everyone who is the most important person in the room, the customer.  Customer obsession is a core value at Amazon and has been central to its meteoric success.

So what does customer obsession look like in the IP sector?

Customer experience and customer satisfaction are central to our client engagement at BOSH IP.  But as IP advisors with a commercial perspective we aim to do more.  Our goal is to help our clients maximise the value from their IP.  We obsess about helping our clients use IP to drive value into their businesses.

For us, customer obsession means taking ownership of the IP conversation.  Taking responsibility for understanding our clients’ needs and identifying fit for purpose solutions.  We lead our clients through the IP discussion by exploring beyond their technology to understand the context around their innovation.  Using our IP expertise along with our understanding of our clients’ business, we identify how our clients can use IP to underpin their business model and drive real value to their business.

Often this results in presenting options and recommending actions different from those which the client expected.  We have clients which ask for patents for new innovations with a clear scope of protection in mind.  On reviewing the client’s situation, business model and technology we often find that an entirely different course of action is more appropriate for them.  For example, we may recommend proceeding with a patent with different scope, we might recommend proceeding with a competitor analysis to quantify the risk of market entry, or we may recommend not filing a patent but explore options around confidentiality.

When clients commit to an IP program they understand why they are taking the actions we have recommended and how it will help maximise value from their IP.

Taking ownership of the IP conversation and taking responsibility for finding fit for purpose solutions to drive value from IP is how we show customer obsession.  How do you demonstrate customer obsession?

If you would like to find out how we can help you use IP to drive your commercial advantage, please get in touch.

We often find ourselves in conversations with clients who have disclosed their products and ideas without considering the IP implications.  Typical examples include companies publishing press releases for upcoming products, researchers publishing papers and small businesses discussing projects with potential partners.

While it is certainly not best practice to think about IP protection after disclosure, depending on the circumstances it may still be possible to protect your IP and leverage value into your business.

Over the next few weeks we will be looking at how we help companies create value in their business when they thought they missed the boat on IP.  This week we are looking at the grace period provisions in Australia for filing patents.

Grace Periods

Unlike many jurisdictions, Australian patent law allows disclosures by the applicant before filing to be disregarded in the consideration of patentability in certain situations.  This is known as a ‘grace period’.

Grace periods are not unique to Australia.  The United States, Canada and Japan all have versions of grace periods.  However, in Australia there are several specific considerations which require the grace period provisions to be navigated carefully.

Here is a brief summary of the grace period provisions in Australia and our Top IP Practice Tips if you find yourself having to rely on them:

What does the law say?

Australian patent law allows that disclosures made:

• by the applicant;
• with the consent of the applicant; or,
• without the consent of the applicant when the information was obtained from the applicant;

are disregarded in the assessment of novelty, inventive step and innovative step for a complete application filed by the applicant within 12 months of the disclosure.

Some important points to remember:

1.  Disclosure date triggers the filing date for a complete application

The disclosure triggers the time period for filing a complete application.  For a PCT application entering Australia, the filing date is the filing date of the PCT application.  Therefore, if a priority filing is made soon after disclosure you will not be able to use the full 12-month convention term for filing the complete application from the priority filing since that complete application will then be filed more than 12 months from the disclosure date and so outside the grace period.

2.  The grace period does not establish a priority date

Importantly, independent third-party disclosures are not excluded from consideration.  Such disclosures will be available for novelty and inventive step consideration if disclosed before your filing date.  If you decide you want to file in Australia, do it quickly after your disclosure to avoid intervening publication by third parties.

3.  The circumstances around the disclosure are irrelevant

As long as the disclosure was made in line with the provisions above, the reason for the disclosure is irrelevant, for example whether it was intentional or unintentional.

4.  Grace periods do not apply for registered design rights in Australia

Grace periods apply to complete patents only.

Practice Tips

We do not recommend relying on the grace period provisions in Australia, reserve them for emergency cases only.  However, if you find yourself having to rely on grace period provisions here are our Top IP Practice Tips:

1. If you decide to use the grace period, file your patent application quickly after disclosure. Remember, your disclosure does not trigger a priority date and so independent third-party disclosures before your filing date are not excluded from consideration.  File before anyone else discloses.
2. Set up your reminders for filing the complete application from the disclosure date.
3. Create a detailed note of the circumstances of the disclosure as soon as possible. Include details of where and when the disclosure was made, by whom, as well as the content of the disclosure.  The patent office will not ask for this if they don’t discover the disclosure, but it may be useful in the future if the patent it is ever contested.

If you have disclosed your product and you are concerned you have missed the opportunity for IP protection get in touch and we’ll help you find opportunities to protect the value in your IP.

 

Intellectual Property (IP) is the most valuable asset of many businesses.  Follow these IP Top Tips to ensure you have your IP bases covered and to position yourself to drive value from your IP:

1.  Think about IP early

Resources and finances are always stretched in the early stages of any business.  But it is critical not to ignore management of your intellectual property.  Early errors in IP management, such as public disclosure, IP contamination and loss of control of your IP, can jeopardise your business model and business valuation.  Speak to a patent attorney at an early stage to help avoid these problems.

If you have any nagging concerns about your previous actions flag them to your patent attorney immediately.  It can be easier to navigate problems if they are addressed sooner rather than later.

2.  Develop an IP strategy before committing to IP assets

 It is important to develop an IP strategy before jumping in and spending cash on specific IP rights.  This gives you confidence in the actions you take and any investment you make in IP.

Work with your patent attorney to identify your business’ key intellectual assets and how they support your business.  You can then make decisions on how best to protect and leverage your assets in a way that underpins your business model and drives value in your business.

Remember, different IP approaches can achieve the same business objective.  So be realistic and choose an approach to IP that you are comfortable with.   Be clear about what you are doing and why.  This will give you confidence in your IP spend and any actions you take.

3.  Clearance check your brand

Being forced to re brand due to trade mark infringement can be a marketing disaster.  Run a freedom to operate search on your brand before launch.  We recommend extending your search internationally to reduce the risk of infringement when you expand overseas.  Once you are clear, register your domain name, trade mark and social media accounts.

4.  Fix IP ownership issues immediately

It is critical to be able to demonstrate a clean chain of ownership of your IP assets.  If you cannot prove that you own your IP assets, then it is difficult to attribute any business value to them.  The uncertainty also raises questions around who the rightful owner is and whether your business has the right to use the IP at all.  Uncertainty around IP ownership can be complicated to resolve and can terminate a deal.

You need to be able to identify:  What is the IP?  Who created it?  When, and in what circumstances?  Under what agreement?  And can you prove that the answers to each of these questions results in the IP being owned by your business?

Generally, the default position is that the creator owns the IP, so ensure that arrangements are in place to transfer IP ownership to your business, whether you are dealing with employees, contractors or anyone else.

It is essential to keep clear records against products and projects, have the IP assigned to the company in a formal agreement, and record the assignment of any registered rights (including trade marks, designs and patents) on the official registers.

5.  Beware of contamination of IP

Have you included contributions in your products from third party sources?  IP contamination can impact your ability to exploit your product and the cost of exploiting it.  Both of which can undermine your business model.

For example, open source software may appear to be a cost-effective solution for software developers but be vigilant of the associated licensing obligations.  If you must use open source software, record where it is used and the licence terms – you should expect to be asked for this information during any product due diligence.  Brainstorming with third parties is another dangerous avenue for IP contamination unless there are clear IP provisions governing those conversations.

If you must introduce third party contributions into your products ensure that you understand the implications and whether these fit your IP strategy and exploitation model.

6.  Be committed to IP management

Commitment to your IP strategy is key.  Remember, your strategy has been developed specifically to achieve your desired outcomes. When circumstances dictate that you need to deviate from your plan consult your patent attorneys immediately to understand the business implications and options for navigating any potential problems.

Our expert patent attorneys at BOSH IP have considerable experience of advising startup businesses and preparing them for investment.  Please contact us for more information on how we can help you cover your IP bases and position yourself to drive value from your IP.

 

IP strategy is a buzz word in our industry today.  It sounds nebulous, imprecise, fluffy.  So, what is it and why do you need one?

Intellectual property extends well beyond legal rights – it is the intellectual assets of your business.  It can be your technology, brand, designs, trade secrets, data, people, development processes, partnership agreements, customer relationships.  The list goes on.  These are all intellectual assets that contribute value to your business.

IP strategy is your plan for identifying, protecting, managing and leveraging your intellectual assets to deliver your business objectives.

Too often a so-called IP strategy is too limited in focus.  We find that many clients jump straight into filing a patent application without asking why, and without considering the boundaries within which that patent application delivers value.  Effective strategy is much more involved.

For example, for a company developing groundbreaking technology, an IP strategy is not “filing a patent application”.  Effective IP strategy is the process that allows you to identify that a patent application could be filed.  It enables you to decide whether to file (and publish) or whether to keep the information confidential.  It is the scope within which  the patent application is useful – including technology coverage, lifetime, geographic coverage, relevance to your products and partners – and, importantly, it defines the use of that patent application.

For a data company, an IP strategy is not “keeping data confidential”.  It is process for identifying the confidential data, and retaining and managing the data.

Once you move outside the boundaries of your strategy you risk failing to achieve your business objective.  It is time to review your strategy and update it if necessary.

Equivalent business outcomes can be achieved in different ways; for example, a company requiring exclusivity around a technology might achieve this by filing, having granted and enforcing a patent covering the relevant technology.  But equally, the same result might be achieved by keeping the workings of the technology trade secret, or by negotiating exclusive arrangements with suppliers, or by effective marketing campaigns, or by a combination of these and other factors.  Effective IP strategy planning identifies these options and selects an appropriate approach based on the risks and benefits of each one.

Commercial landscapes and intellectual assets are not always predictable. Products lose traction, market dynamics evolve, patent applications may be refused, and confidential information may be leaked.  These factors don’t mean that your business outcomes need to change, but they may require your strategy to change in order to achieve them.  Your IP strategy needs to be reviewed and updated over time to continue to fuel your business.

Effective management of intellectual assets drives value within a business while mismanagement can wipe away value by losing control of them.  Having a solid IP strategy and a commitment to its implementation ensures that you stay on track to realise the value of your intellectual assets.

If you would like to find out how we can help you develop your IP strategy to deliver your business objectives, please get in touch.

I am often surprised at how few patent attorneys seem to take a genuine interest in a client’s business.  I’m not suggesting that your intellectual property (IP) counsel should be analysing your P&L at the start of any engagement, but they should at least have a strong grasp of your business model and an insight into your market positioning.  It is only by understanding these factors that they can properly advise on your IP options.

Decisions on whether to file a patent application or how to proceed with an application are inherently linked to your business objectives.  IP can provide great business value when it supports your objectives, and potentially zero value when it doesn’t.

To gain true value from your IP you should be regularly assessing the relevance of your IP portfolio with your patent attorneys and making positive decisions to proceed in a way that provides continued value to your business.  Remember that a positive decision is often to do nothing, or to abandon or transition IP that provides no further value.

So, if you feel like your patent attorney is handling your IP in isolation it is unlikely you will be positioning yourself to get the best value from your IP.

If you would like to find out how we can help you use IP to drive your commercial advantage, please get in touch.