The most important intellectual property rights that may result from a company’s technological development efforts are trademarks, industrial designs, utility models and patents.
By means of these rights a company will ensure that investments into technological development pay dividends. These rights will furthermore help to prevent potential competitors from copying new products.
The strongest types of IP rights are trademarks and patents. It is generally recommendable to take advantage of both.
A patent covers the technical side of an invention, whereas a trademark contributes to product branding.
In the following we will take a closer look at different patent strategies.
Some companies decide not to patent their technology. This implies the risk of competitors benefiting from its ideas and taking over a considerable share of the market.
A company running such a passive strategy furthermore deprives itself of its options for legal action against others practicing its invention.
Marketing and technological development are costly. These costs may imply that a new product cannot be offered at a competitive price. In contrast, competitors may be able to do so, since the invention has not been protected by, for example, applying for a patent. Competitors may then copy and sell these products at dumping prices, wherever they like.
Patent legislation imposes a duty on producers to be informed about potential infringements. This may often be difficult to accomplish, since a patent application is not published before 18 months from filing.
It is therefore a necessary element of the passive patent strategy to continuously gather this information, and to make a qualified assessment of whether an infringement can be excluded.
Gathering of this information will typically require database searches at regular intervals. In case of patents that are relevant to the own technology, the status and the patent family (the geographic scope) need to be investigated. An assessment of relevance may encompass a technical evaluation of the content of the patent or the patent application. This information is then viewed in the context of potential infringements. A product’s future will then often be assessed on the background of this type of evaluation.
In case of the passive company’s product infringing an existent patent right the company may choose to either completely stop the production, or to produce and sell only in the countries in which no patent protection exists.
The passive company may alternatively opt for modifying its product in a way that an infringement is avoided. This may turn out to be tricky, especially when compromising essential technical features. In addition, it may be the special patented features that made the product attractive in the first place.
The evaluation may also result in a recommendation to try to achieve revocation or amendment of one or more existing patent rights. The means for this could be filing of an opposition or initiating national revocation proceedings, if different temporal and geographic criteria are met. If these options do not exist other legal action may be possible.
The passive strategy is not recommendable for products that are sophisticated and/or result from considerable and lengthy development efforts. The passive strategy is predominantly used by companies producing various simple and cheap products with a comparatively short shelf life.
The higher the profit margin of a product the less recommendable is the passive strategy.
The active company wishes to ”stake a claim” with respect to its innovations and developments, thereby protecting its investments in the long run.
The active company aims at IP rights protecting the whole range of its technological developments, thus retaining their right to take legal action against potential infringers.
In addition, the active company may sometimes choose to file strategic patent applications, that is to say, patent applications that may not be of immediate relevance to the company, or that may even stand only slim chances of being granted a patent.
This strategy may anticipate and impede competitors’ further developments of the described product, in that it will impair the product’s future patentability.
Furthermore, a strategic patent application may temporarily prevent competitors from copying a given product. While the patent application is pending, the applicant may safeguard and increase his market share. Even though the patent application may never result in a granted patent, the time up to its abandonment may work to the applicants advantage. In addition, the publication of a patent application prevents others from obtaining a patent on the same subject matter.
Other types of publication may be used to this end, for example journal articles or sales. However, these publications may turn out less useful than patent applications, when used in opposition or revocation procedures.
An active patent strategy furthermore encompasses geographic considerations. Based on national or global market analyses, the applicant may choose to use his priority right to access a number of preferred countries by means of subsequent filings.
The obtained IP rights are maintained as long as the product can be profitably sold, or as long as the active company wishes to prevent others from selling corresponding products in a given country.
The active company will regularly monitor patent activities of its competitors as well as being cautious not to infringe existing rights of others. This type of monitoring is also used as inspiration for new inventions and for identifying consumers’ needs of tomorrow.
Four times a year is a typical time interval in which the active company will conduct an analysis of its technology with respect to the above-described aspects.
The active company develops new products. These may result from think tanks, brainstorming, and analyses of the state-of-the-art or the market demand. Bonus programs rewarding the ideas of creative employees may help in this process.
Whether a company’s new product already exists on the market, or by way of an IP right, will typically be investigated prior to a potential patent-, design- or trademark-application.
The active company will strive to protect its technological developments as early as possible. Thereupon, first generation flaws may be detected and rectified in a subsequent patent application within the priority year.
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