Protecting your intellectual property – patents

Bryan Santone, H Two Consulting Inc., Toronto, ON

In our previous blog post, Elliot Gold (a patent and trademark lawyer and intellectual property (IP) expert), and I provided an overview of trademarks and some initial considerations to protecting your IP. In this article we focus on patents, the patent process, and why patents are important.

Many companies utilize technology as a cornerstone of their business and success. Before this technology is launched and/or disclosed to the public, a company must decide how it wishes to protect its technology. It is strongly advisable to make decisions on patenting or protecting otherwise (i.e. as a trade secret) while the invention is still confidential. If you do not take action while the technology is confidential, you may lose your ability to protect it. Below is a discussion on key points related to patents.

What is a patent?

A patent is a legal instrument that represents a bargain between the patent owner and the country which granted the patent. The country grants to the patent owner an exclusive right to manufacture, use, sell or offer for sale the subject matter of an invention as defined by the claims of the patent. In exchange, the inventor provides the population of that country, with a full technical teaching and description of the invention. That technical disclosure must be complete and include a full explanation of the invention sufficient for others skilled in the area to practice and reproduce the invention. A patent is only effective in the territory in which it is granted. Subject to payment of required fees, a patent in Canada is valid for 20 years.

What can be the subject of a patent application?

In Canada, an invention is considered to be new if it has not been available to the public anywhere in the world, prior to the filing of the application in Canada or prior to the filing date of a first patent application for the subject matter. The subject matter may be made available to the public by way of a prior patent, a written publication or a demonstration of a product or otherwise. In Canada and the United States, there is an exception that allows an inventor to file a patent application within one year of the inventor having disclosed the invention to the public.  It is strongly recommended to file for patent protection in advance of any public disclosures.

In Canada, the subject matter of a patent must not have been obvious to a person skilled in the art to which the subject matter relates at the time the application was filed. In other words, the invention must represent more than a workshop improvement in the area.

From a business perspective, why file a patent application? 

• To protect your company’s market share and deter competitors from producing a product that infringes your patent;
• Build a patent portfolio to support an offensive or defensive strategy. If you end up suing a competitor for patent infringement, having multiple patents provides a more effective attack.  If a competitor sues you for patent infringement, having an arsenal of patents could provide a good defensive position in the form of being able to counterclaim for infringement or to engage in a settlement in the form of a cross-license arrangement (whereby each party lets the other use their patents);
• To make it easier to exploit technology. A patent provides the means by which you may license the use of your technology or outright sell the technology. Without a patent in place others are free to make your products (assuming you have no other protection);
• Get your company “investor ready.” Investors in small business tend to put significant value on patents as they act to ensure that the target company has a tool to maintain its competitive advantage and maintain its market share during the life of the patent. Without the patent, competitors are free to use the subject technology.

Trade secret or patent?

If it would be virtually impossible—or very unlikely—that someone could reverse-engineer your invention, a patent may not be the best choice. Trade secret protection, which also has the advantage of running in perpetuity, may be a better choice. As a rule of thumb, a product should be protected by a patent, while a manufacturing process or your “special sauce” that can be kept confidential may be better protected as a trade secret.

We hope these posts have been informative. They are meant to serve as an introduction to protecting your IP. If you have additional questions, Elliot can be reached at EGold@ridoutmaybee.com.