By Dennis Fernandez and Neal Sainani -
1. Too late to start filing patent applications.
Unfortunately for many good technology companies, it may be too late to file for patent protection. The current Canadian rule provides applicants with a one-year grace period during which a patent application must be filed after certain public or private disclosure of the invention. Such disclosure may arise, for example, from a mere "offer for sale" of the technology, even if the product has not yet been built or prototyped.
The US offers a similar period. Patents are also given to the first inventor to file an application, regardless of which party conceived the invention.
In comparison, the foreign rule--which applies to many industrialized jurisdictions, such as Japan and various European countries--do not give applicants the benefit of any grace period after a public disclosure has occurred. Thus, it is legally compelling for applicants to consider filing for patent protection sooner than later.
Although in some situations there may be some special exception which still allows for late filings, it is not advisable for applicants to count on those exceptions.
2. Too narrow legal scope of claiming patentable inventions.
Many issued patents are not commercially valuable because the scope of their submitted claims are particularly narrow, and can be relatively easily avoided by determined competitors. Thus when submitting new patent claim language, applicants should broadly define novel concepts that include potential design-arounds by other parties.
Although this legal blocking strategy sounds easy enough to state as an objective, in fact, the serious exercise of analyzing future competitive and industry directions can be an extremely difficult task--particularly because the analysis often requires sophisticated market understanding, as well as technical and engineering vision.
3. Filing a patent too soon.
Sometimes, patents are filed too soon for fear of disclosing the invention before it is protected. It is important to file the patent once the invention has been fully developed or is close to completion.
Filing for a patent during the development stage may lead to the exclusion of features that can become critical to the invention. If this happens, the filed patent is no longer protecting the completed invention. This also leaves an opening for other inventors to create a similar invention without infringing the original patent.
Another factor to consider is the additional costs associated with having to reapply for a patent if the original was filed too soon.
4. Relying solely on copyrights for software protection.
Copyright protection in Canada and many other countries arises instantly and at virtually no cost to protect software technologies, such as computer programs, electronic databases, and graphical display screens and related media. In fact, copyright protection is often quite a suitable means to secure much digital media such as video and audio creative works, often even without compliance with copyright registration and notice requirements.
Copyright protection, however, is legally vulnerable to reverse-engineering efforts by competitors, during which no copyright infringement may arise when the reverse-engineering results does not result in literal copying of the original code, but merely an understanding of the underlying ideas and functions.
In this vulnerable scenario, perhaps patent protection may be more appropriate to secure any novel algorithm, methods and computing apparatus.
5. Inadvertently tainting intellectual property rights with third party co-ownership rights.
During the course typically of joint-development engineering projects, ideas may originate from many sources, such as advisors, consultant, employees and even customers. This collaborative scenario sets the stage for creating intellectual property rights that may be co-owned by multiple parties.
Unless the rights of such joint owners are specified up front, for example by contract terms, then there is a problematic possibility that certain parties later may assert not just their partial ownership interest, but actually endeavor to offer licensing rights to other third parties or even competitors.
6. Communication with non-lawyer agents.
A mistake occasionally made is assuming information shared with non-lawyer agents is confidential and is protected similar to communication between clients and attorneys. In some countries, this privilege exists for non-lawyer agents and their clients.
However, in Canada, any information shared between clients and non-lawyer agents, whether written or verbal, is not protected. Furthermore, should litigation arise, this information may be admissible in court.
For this reason, it is imperative that any information shared with a non-lawyer agent is protected with a non-disclosure agreement (NDA).
7. Underestimating the importance of trade secrets and confidentiality.
Since patent protection may not arise for many years until after filing patent applications, and copyright protection may not be applicable to protect functional aspects of various technologies, trade secret protection may serve realistically as a solid backstop against competitive piracy or other misappropriation of company know-how.
Again, the importance of diligent use of NDAs and in-house policies and systems to secure confidential and proprietary information rises to a more significant level of management priority.
Additionally early disclosures, for example through customer marketing presentations, may irreparably hurt company rights to file domestic or international patent applications.
8. Overlooking legitimate opportunity to set up offshore licensing tax shelters.
Often neglected by early-stage start-up companies and entrepreneurs are offshore strategies for mitigating federal tax exposure. Such international tax strategies are especially relevant when foreign licensees of intellectual property rights are contemplated possibly in the company business plan.
In many cases it is particularly beneficial to deploy one or more corporate entities offshore much sooner, rather than after licensees are identified, in order to minimize certain taxable valuation exposure associated with transferring such licensed rights.
9. Responding slowly to CIPO actions.
Because the Canadian Intellectual Property Office (CIPO) rules now provide 20 years of enforcement patent protection after the Canadian filing date, it is important to expedite the claim amendment and application prosecution process, otherwise the applicant's enforcement period is effectively eroded by unnecessary delays in the process.
Accordingly, applicants should endeavor to respond in timely fashion, expediting all office action responses and facilitating communications with patent counsel whenever possible.
10. Over/under-spending on legal fees to prosecute patent applications.
In the realistic context of the current economic recession, start-up companies and entrepreneurs who are strapped for cash may negotiate for substantial fee discounts from patent counsel to prepare and file patent applications.
However, patent applicants should be careful to ensure that the most-qualified legal counsel in terms of technical and business experience are selected and engaged to work on critical company inventions... perhaps with bottom-line pricing being just one of a number of significant factors to consider.
Dennis Fernandez is a managing partner at Fernandez & Associates LLP, www.iploft.com. Neal Sainani is a patent intern at the same firm.
Source: Silicon Valley North
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