<strong>Intellectual</strong> <strong>Property</strong> <strong>in</strong> Bus<strong>in</strong>ess: IP basics, IP management, IP strategy 24
<strong>Intellectual</strong> <strong>Property</strong> <strong>in</strong> Bus<strong>in</strong>ess: IP basics, IP management, IP strategy IP Management dur<strong>in</strong>g Growth (cont<strong>in</strong>ued) 10 How do you decide about new IP rights? Decisions about new IP rights (especially regard<strong>in</strong>g registerable rights) should be seen <strong>in</strong> strategic terms. You must see the bigger picture of the company’s overall <strong>in</strong>tangible assets (knowledge management) and understand that the different forms of protection can serve your asset portfolio – you might want to diversify and spread your risk. 24 When should a company go for registrable IP rights and when are trade secrets sufficient? These questions are quite common and, <strong>in</strong> most cases, relate to decid<strong>in</strong>g between patent and trade secret protection. Table 7 highlights the key characteristics of the two types of IP. It is important to remember that any <strong>in</strong>novative idea should be kept secret at the beg<strong>in</strong>n<strong>in</strong>g. Table 7 : Patents vs trade secrets Criterion Patent Trade secret Patentability An idea meets all patentability requirements. An idea does not meet the patentability requirements or does not qualify as patentable subject matter. Costs/time The process is expensive and time- Trade secret protection (TS protection) does not consum<strong>in</strong>g. <strong>in</strong>volve any application process. However, this does not mean ‘zero costs’. Patent prosecution – i.e., patent draft<strong>in</strong>g, fil<strong>in</strong>g and ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g a patent – requires The reasonable steps to ma<strong>in</strong>ta<strong>in</strong> the secrecy professional <strong>in</strong>volvement at all levels. (as one of the trade secret requirements) can <strong>in</strong>volve substantial expenses <strong>in</strong> the network <strong>in</strong>frastructure and <strong>in</strong> security measures <strong>in</strong> the facility. Term Generally 20 years from the date of the Indef<strong>in</strong>ite period of protection, i.e., as long as the patent application (‘fil<strong>in</strong>g’ or ‘priority’ date), secret is withheld from the public, the company subject to payment of regular renewal fees. cont<strong>in</strong>ues to benefit from it without any report<strong>in</strong>g obligations. Protection Considered a strong type of protection. Protects only from unlawful breaches – applies It offers an exclusive right to prevent others world-wide. from mak<strong>in</strong>g, us<strong>in</strong>g or offer<strong>in</strong>g for sale, sell<strong>in</strong>g or import<strong>in</strong>g a product under patent It does not prevent other parties from legitimate protection, without the authorisation of the reproduction efforts such as reverse eng<strong>in</strong>eer<strong>in</strong>g, or patent owner (i.e., without a licence from a from develop<strong>in</strong>g their own versions of the product patent owner). <strong>in</strong>dependently. 25 Applies <strong>in</strong> countries for which the patent was granted (territoriality). Risks A patent application is published 18 months A company must cont<strong>in</strong>uously keep an eye on the from the fil<strong>in</strong>g date. If the search reports from applied protective measures, their implementation the patent office(s), delivered after the and effectiveness. A high turnover of staff and an publication, <strong>in</strong>dicate low chances of a patent extensive network of partners and suppliers can grant, a company loses its chance to convert become challeng<strong>in</strong>g even for the most the application <strong>in</strong>to a trade secret. If you sophisticated protection. 26 receive a negative search report prior to publication, you might consider withdraw<strong>in</strong>g A rival company could file a patent for the process the application. and claim exclusive right to it. 27 Because the application process is public, i.e., official correspondence is publicly available, the patent application and modifications to it, the public can oppose an application for a patent and a granted patent, with<strong>in</strong> specific timel<strong>in</strong>es. An <strong>in</strong>validation claim can come any time. The same applies to an <strong>in</strong>fr<strong>in</strong>gement lawsuit. A company should also monitor the ‘state of the knowledge’ publicly available. Some trade secrets become obsolete over time, which affects their competitive value 24 Lobel (n 7). 25 ‘Trade Secrets vs Patents: Which Approach is Right for You?’ (Morn<strong>in</strong>gside, 18 February 2021) accessed 2 December 2022. 26 Lobel (n 7). 27 (n 25). 25