Intellectual Property Represents Commercial Advantage

By Brad Murphy

The term intellectual property is open to many interpretations. From a manufacturing standpoint, the term can mean anything from a product being produced to the technical know-how and methods/technologies utilised in its production, from the name of a company to the branding it employs in marking its products. Regardless of what form it takes, intellectual property represents a commercial advantage and is arguably a company’s most valuable asset.

For innovative manufacturers in New Zealand, the subject of intellectual property protection can be somewhat of a double-edged sword. Research and development budgets are usually thin at best, and the prospect of protecting a new product or technology which has yet to prove itself in the marketplace can be daunting. However, without adequate protection, a company who has invested in R & D can soon find that investment slipping away if competitors are able to legally produce the same or a similar product or technology minus the investment in R & D. This scenario often pushes manufacturers to seek protection for their investment.

Protecting Intellectual Property:

The current system of intellectual property protection and registration was developed to encourage and recognise the value of innovation by rewarding a company or individual with an exclusive right to exclude others from the manufacture, sale and/or use of the innovative products, technologies and/or brands which they have developed.

The primary advantage of registering intellectual property is that once granted, a monopoly right provides the basis for legal action against individuals or companies who use that property without consent.

There are disadvantages to registration. The application process can be lengthy, tedious and expensive. Once granted, most monopoly rights run for a fixed term. Once they expire, they are open for anyone to use. Finally, and with justification, it has been said registering intellectual property is only worthwhile if a company or individual has the available finances to take legal action when infringement occurs.

There are alternative means of protecting intellectual property. Trade secrets can be effective in maintaining commercial advantage. The formula for the COCA-COLA™ soft drink is an example of an effective trade secret. However, relying on keeping intellectual property a secret can be just as tedious and expensive as registration, and the ability for competitors to reverse engineer must always be taken into consideration. Finally, although the formula for the COCA-COLA™ soft drink is unregistered, the COCA-COLA™ brand is a registered trade mark and is arguably one of the most recognised, valuable trade marks in the world.

Patent Attorneys:

As mentioned, obtaining monopoly rights can be a tedious process. For this reason, most companies employ patent attorneys to handle applications on their behalf. Patent attorneys typically have a background in both technical and legal areas. An experienced patent attorney is able to grasp most technical innovations, understand the associated legal implications and advise accordingly. In most cases, patent attorneys are utilised at the end of the development process to prepare an application and see it through to acceptance. However an experienced patent attorney can be a valuable team member throughout the entire development process.

Once the goal of a project has been determined, a patent attorney can provide assistance with regards to previously published material which may affect the development process. Avoiding infringement can be just as valuable as obtaining protection, and a patent attorney can provide invaluable advice at the outset of a project so that the rights of others are not affected by the outcome. Conversely, existing material can be useful starting points for innovation. By understanding the technical and legal aspects of this material, a patent attorney can also add to the creative development of any project.

When engaging the services of a patent attorney, it is valuable to have a general understanding of the system of intellectual property protection and how it works. For this reason, a series of articles will follow in future issues dealing with specific areas of intellectual property protection including patents, PCT or Patent Cooperation Treaty, trade marks, registered designs and copyright.

Brad Murphy is the General Manager of Pipers Patent and Trade Mark Attorneys

Published in NZ Manufacturer, 5 April 1999