This is the first in a series of articles on the topic of intellectual property (IP) for small business.
IP is often misunderstood, so let’s start with two basic questions: IP – what is it, and why is it of interest to small business?
What is IP?
A property right is the ability to exclude others from something. In real estate, it’s the right to exclude others from a particular area of land. In IP, it’s the right to exclude others from a particular intangible.
There are different types of IP rights covering different intangibles.
Patents cover inventions. They can be used to stop others making, using, selling and/or importing (etc) certain products and/or processes. Patents include ‘claims’ that define the products and/or processes from which others are excluded, in much the same way that mining claims define an area of land from which others are excluded.
Design registrations cover the appearances of products. They can be used to stop others making, using, selling and/or importing (etc) products which are identical or ‘substantially similar in overall [visual] impression’ to the registered design.
Trademark registrations cover the signs used by traders to distinguish their goods and/or services from those of other traders. Trademark registrations can be used to stop others using your trademark (or deceptively similar trademarks) in relation to goods and/or services that are the same and/or sufficiently similar to your goods and/or services.
Patent, design and trademark protection can be pursued in parallel. This is often recommended.
Copyright provides protection for a wide range of ‘works’ including literary and artistic works. However, generally speaking, copyright does not protect 3-D products once in production. Copyright is automatic – there is no need to apply for protection.
Keeping information secret – trade secrets – is one way to stop competitors taking advantage of it. That said, if a competitor legally obtains the information, you have no recourse to stop them using it. By way of example, a competitor might legally obtain the information by copying your product and/or independently developing the information. Also, if the secret gets out, you may have no effective recourse. For example, if a low-level employee reveals the secret information, your only recourse might be against the low-level employee.
Why is IP of interest to small business?
There are two reasons:
1. Can others exclude you from certain things? For example, are you allowed to use your proposed trademark or sell your proposed product?
2. Can you exclude others from certain things? For example, can you stop others using your proposed trademark or selling a copy of your proposed product?
Both questions warrant consideration. It would be tragic to mortgage your house to get started with a new product and then find:
- that you can’t sell the product because that would infringe someone else’s IP rights, or
- that you can’t recoup your start-up costs, let alone make a profit, because copies of your product quickly flood the market.
Reasons 1 and 2 above are essentially separate issues. In fact, it is commonplace to have overlapping rights. By way of example, if:
a. Sarah has a patent for a product, and
b. Joe has a patent for an improved version of the same product,
nobody is allowed to make the improved version of the product unless Sarah and Joe cooperate.
- If Sarah made the improved product without Joe’s permission, that would infringe Joe’s patent.
- If Joe made the improved product without Sarah’s permission, that would infringe Sarah’s patent – so Joe has a patent for a product that he is not allowed to make!
The following articles in this series will expand on the topics outlined above and explain how to avoid the pitfalls and reap the benefits of the IP system.
Ben Mott, Principal, Mechanical Engineer and Patent Attorney
WADESON
