A patent can greatly add to the value of both a product and the business. It frustrates competitors. It gives the patent owner a stronger position when negotiating with customers and it is within the financial reach of almost every company.

Whilst our multinational clients are patent specialists our smaller and medium sized companies grossly underuse them. This is usually due to a lack of knowledge about what patents offer and how to apply for them or because they mistakenly assume that patents are prohibitively expensive.  Eureka! AgResearch has eight granted/pending patents. Our staff are inventors on another 12 owned by clients but this number should be over 50. About 80% of patentable ideas were never protected!

In this article I explain those aspects of patents that we have found to be most useful to our clients. Please note, we are not patent attorneys and can only speak in general terms so for your individual needs you must consult a patent attorney.

What is a patent?
A patent is a right to exclusively, commercially exploit something that is new, inventive and useful. This right is given on the condition that the applicant discloses to the public what their invention is and how it is useful. This, in turn, gives the rest of the industry an opportunity to improve on the invention and so technology advances faster.

Types of patents
Australia has two types of patents. The standard patent offers 20 years of protection and typically costs $480 in application fees. The innovation patent offers eight years protection and costs approximately $180 in application fees. After the patent has been applied for there are various other fees. These fees are not large. However, there are many sub-categories for fees that make estimates difficult and for any individual case you need to consult a patent attorney.

The two patent types differ significantly. For a standard patent the invention must be novel (new), it must involve at least one “inventive” step and be able to be made or used in industry. According to the Australian patent office an inventive step means that it must not be an obvious thing to do for, “someone with knowledge and experience in the field of the invention”. During the examination, the examiner will look at the “prior art” (published information) around the world for any evidence that your idea is not new. If the examiner doesn’t find something that describes your invention they will next assess obviousness. For this they review the prior art to determine whether ‘someone with knowledge and experience in the field’ could be expected to come up with the same solution as you with information that is commonly available to them. A standard patent application can be lodged in Australia but extended to cover just about any country in the world.

An innovation patent offers protection in Australia only and cannot be extended to other countries. It is a quick, inexpensive and relatively simple way to gain Australia wide protection. It surprises most people that innovation patent applications are granted by the patent office without first being examined. The catch is that they can only be enforced after they are examined. Examination can be requested by the applicant or any other party. The advantage of this system is that an applicant only needs to pay for examination when they need to stop someone from infringing their patent. If there are no infringements then the patent need never be examined and those costs are saved.

Similar to a standard patent, an innovation patent also has to be new and useful but only has to have an innovative step rather than an inventive step. According to the patent office an innovative step exists when, “the invention is different from what was known before and the difference makes a substantial contribution to the working of the invention”.  In our experience, an innovation patent is often about an incremental improvement rather than a new invention. This is substantially easier to achieve and well within the resources and capabilities of most small and medium sized companies.

What sets the priority date?
In Australia, the priority date of an invention is the date when a patent is lodged. This is the date that determines who was the first to disclose this invention and so has the sole rights to exploit it. Australia has a system that allows for a provisional application for a patent (often called a provisional patent). This is an incomplete application that defines the invention and sets the priority date. The detail and data supporting the invention (called the full specifications) must be submitted within a year of the provisional application in order to keep the same priority date.

Companies sometimes change their minds after lodging a provisional patent application. The good news is that you can withdraw your provisional application within the first year without your ideas being made public. Having withdrawn your application you can later resubmit it if you like. This resets the priority date but it can be a helpful way to defer patent costs.

Who owns the invention?
The question often comes up as to who owns an invention, the employee or the company? The answer lies in the reason why the person was employed? I remember a case where an individual was employed by a glass company to develop bullet proof glass but ended up greatly improving laminated glass. This glass could not stop a bullet but still had a lot of commercial applications such as for car windscreens. The glass company couldn’t see the potential and didn’t commercialise the idea.  The employee left the company and took his idea to a competitor. In the ensuing court case it was found that the original glass company was the rightful owner of the invention as the employee had been employed to develop new uses for glass. The fact that the company couldn’t see the commercial value in the invention in no way diminished its legal property rights.

In another case a janitor, working in an explosives factory, invented an anti-static material. Static electricity sparks were a big issue when cleaning in an explosives factory. In this case the company realised that the invention was valuable and claimed ownership. However, the court disagreed. It found that the janitor owned the invention as he was employed to clean and not to develop new materials. Therefore his invention was ‘outside’ of his employment contract even though it could be demonstrated that he used company time and company equipment to test the invention.

Accidental public disclosure
One aspect of patent law is particularly important in the agchem industry, how best to protect an idea when you have to contract others to do lab, pot or field trials. If you give details of your invention to a contractor or consultant it is deemed that you have released that information to the public domain and it is no longer yours! To avoid this, the idea’s owner must have the contractor sign a non-disclosure agreement (also called a confidentiality agreement or secrecy agreement) before they hand over any confidential information. This is very common practise and we have a whole filing cabinet devoted to these agreements.

We would love to see more of our inventions and those of our clients protected. However, the crafting of patents requires much expertise. If you can’t research the ‘prior art’ get a professional to do it for you.  Eureka! is regularly contracted to work around an existing patent. Our record supports the fact that we are masters at this. A good attorney will leave far fewer holes. There are many excellent patent attorneys in Australia and New Zealand, the good ones may cost more up front but saves time and money in the long run.

If you would like to work with us to protect an idea please contact Anthony Flynn