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Common Misconceptions About Intellectual Property

Intellectual property (IP) is a product of the mind and can manifest in many different forms such as a table, a carton, or a car, and methods of producing these products. IP rights such as patents, registered designs, trade marks and trade secrets can be powerful tools to propel your business and provide an advantage over your competitors. However, there are common misconceptions about IP rights which have adversely impacted on the IP owner’s ability to fully exploit their IP. Some of these misconceptions are described below.

Intellectual property should only be considered when a product is fully developed.

It is not necessary to wait until your product is in its final commercial form before securing your IP. Instead, it is recommended that an IP strategy be established during the research and development (R&D) phase once you have proof of concept. This would provide a framework to guide your commercial and research activities and allow you to determine (i) the ability to commercialise your product and whether modifications need to be made to your product (e.g. by performing an infringement search, also known as a Freedom-to-Operate search), and (ii) the best way to protect your product (e.g. via patents, designs, or trade secrets).

IP need to be registered in order to be protected

There are two main groups of IP rights – registerable IP rights and non-registrable IP rights.

Non-registrable IP rights in Australia include copyright, common law trade marks, and trade secrets. Copyright protects original artistic and creative works, common law trade marks protect your brand and trade secrets protect your confidential information and “know-how” about your invention or product. These IP rights are automatically granted and do not require the IP owner to undergo a formal registration process.

Registrable IP rights in Australia include patents, designs, trade marks and plant breeder’s rights. Patents protect the function of an invention, registered designs protect the visual appearance of a product, and trade marks protect your brand. These rights are not automatically granted and require the IP owner to apply for their rights at a governmental organisation. In Australia, this organisation is IP Australia.

Both types of IP rights can be used individually or in combination to protect different aspects of your IP.

Trade secrets provide easy and complete protection

A trade secret is an unregistered IP right that protects confidential information and “know-how” about your invention or product. There are a number of advantages of protecting your IP using a trade secret including:

(i)            not requiring the IP owner to publicly disclose details of their IP compared to a patent or registered design; and

(ii)           potentially providing an indefinite term of protection.

However, trade secrets suffer from a number of disadvantages including:

(i)            a lack of protection against independent development of the same invention or product;

(ii)           loss of rights once the trade secret is made public, and

(iii)          reverse engineering of the product embodied by the trade secret.

Contractual measures, for example non-disclosure/confidentiality agreements can be used to protect the confidential nature of the trade secret if it needs to be shared with third parties.

Granted patents last forever

Patents are a contractual agreement between the IP owner and the government. In exchange for disclosing their invention, the government provides a fixed term in which the IP owner has exclusive rights to exploit their invention in the specific jurisdiction.

Most jurisdictions around the world provide a single tiered patent system which typically affords a maximum patent term of 20 years. Some jurisdictions including China and Germany, provide a two-tiered patent system with the second tier patent typically being easier to obtain (e.g. because of lower patentability requirements but having a shorter term of protection, typically 8-10 years).

No patent system in the world provides an indefinite term of protection.

An International patent application grants global patent protection

A patent is a national right. Individual patent applications have to be applied for and comply with each jurisdiction’s unique patent laws before patent protection can be granted to the IP owner.

Whilst there are regional patent applications such as in Europe, ARIPO, OAPI, Eurasia which may provide regional patent protection, there isn’t a World patent that provides global patent protection.

There is a patent application known as an International patent application (also known as a PCT application). However, it does not result in an International patent. Instead, it provides a mechanism to defer or delay the deadline for filing individual patent applications in the jurisdictions of interest.

The delaying mechanism provided by an international patent application to 30/31 months from the earliest filing date buys the patent applicant more time to complete a number of activities including (i) assessing the commercial viability of the invention, (iii) assessing market receptivity to the invention, (iv) identifying the jurisdictions to protect and (v) assessing manufacturing facilities and capabilities of the jurisdictions of interest.

We hope that this article has dispelled some of the misconceptions about IP and provided some food for thought about incorporating IP into your business’ commercial strategy.

If you would like to discuss any IP matters, contact:       

Yasra Saeed, Trainee Patent Attorney, Griffith Hack (03) 9243 8324

Jing Fung Tan, Principal, Griffith Hack (03) 9243 8217


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