Intellectual property: why timing can be everything

Here, Peter Finnie, managing partner of Gill Jennings & Every, tells us why the timing of a patent application can mean everything to your intellectual property.

So, you’ve had a great idea, invented a new product, and want to start a business to commercialise it. You’ve seen BBC’s Dragons Den and remember that the Dragons always ask the entrepreneurs pitching whether they have a patent to protect their invention. You’ve never filed a patent application before, but you suspect it will be expensive.

Hopefully, and before you go off telling all your friends about your idea, you will end up in front of a patent attorney who can advise you on the patentability of your invention.

Part of that initial advice should cover the question of if and when to file a patent application – which is not as straightforward as it might seem. This article discusses some of the factors that influence the answer to this question, and the inherent tensions they can create.

Timing is everything

I’m often asked the question, ‘When should I file a patent application?’ My answer is always simple: ‘Before you tell anyone about your invention.

If you disclose your invention to someone without having a confidentiality agreement in place to cover the discussions, then any subsequent patent you acquire is likely to be invalid. The law is pretty strict about this. Another critical factor is that the disclosure in the patent application has to be ‘enabling’.

‘Enabling’ means that the description of the invention must be sufficiently detailed for someone to go away and make the invention themselves. This might sound contradictory, but it’s the way the patent system works.

You acquire a strong monopoly right over an idea when you get a granted a patent, but the quid pro quo is that your invention has to be sufficiently disclosed in the first place.

Confidentiality agreements

Many of the inventors I meet have a good grasp of what we call the ‘inventive concept’, but don’t necessarily know how to make the invention, or what it might eventually look like. They need to talk to manufacturers, possibly in China, to resolve some of these issues.

There is an immediate tension here, as they’re not in a position to file a valid patent application without talking to someone else first.

Is a confidentiality agreement sufficient to cover the discussions when the only remedy for breach of the agreement is to sue for unquantifiable damages? You might have to take a risk, but you definitely need a confidentiality agreement in place before you hold the discussions.

The cost of securing investment

Similarly, at this early stage money is often an issue. It can cost several thousand pounds to file a patent application, and you really want to get some funding first to pay for that. The trouble is that some investors will only talk to you if you have already filed a patent application and had some indication that it will be granted in due course.

It is possible to get a low-cost novelty search carried out before filing a patent application, and that is one way of providing some assurance that the invention can be protected without having to file a patent application first.

A question of ‘ownership’

Another situation that can affect timing is when it is clear that there is going to be some substantial development work over the coming months. Ideally, you would hold off filing a patent application so that those developments can be described in the application.

Where you need to work with someone else to do the development, another tension arises – who will own the resulting solutions? You will need an agreement to cover this.

There may be no clear answer as to when to time the filing of a patent application, but a thorough discussion of the issues up front will reveal a strategy for this and how to mitigate against the various risks.

I’ve seen a number of businesses whose valuations have been slashed – sometimes by as much as 70 per cent – at both investment and exit stages because the business hadn’t protected its IP in a proper and timely fashion. Jumping straight in with both feet could be a disaster, but leaving it too late could be too.

Written by Peter Finnie, managing partner of Gill Jennings & Every.

Further reading on intellectual property

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