Patenting your invention in eight easy steps - step 2: assess the prior art

You’ve had your eureka moment. You have managed to keep it secret until you have had your initial discussion with your patent attorney. Now you need to know whether your invention is “new”. Why you ask? If you’ve invented it, then it must be new - right?

Well, not necessarily. One way to found out if your invention is really "new" is to search through published material. This material includes scientific literature, patent databases and the Internet. If your invention is already published in any existing material, then it can affect the scope of patent protection available for you. In fact, it might mean you can’t get patent protection at all. We recommend that you have searches conducted through published material to locate any relevant publications, called “prior art”, to gauge the novelty or patentability of your invention.

There is another important reason why you need to search patent databases. Even if you decide not to proceed with patent protection, there is a risk that someone else might have done so already. If you implement and market a product in a country in which there is already a patent then you might be in trouble. If a patentee successfully sues you for patent infringement the patentee might obtain an injunction preventing you from continuing to market your product in that country. The patentee might also get an award for serious damages which you will have to pay.

The difference between patentability and novelty is covered in more detail elsewhere in this issue.

Once you have located any relevant prior art you need to look at your invention carefully and assess the prior art. How does your invention differ from the prior art? If there are differences, are they minor differences? Is your invention better? Are there equivalent components of your invention in the prior art? If you have an invention that is a significant improvement over the prior art rather than a minor modification it is time to move to the next stage.

Watch out for the next issue of CHIP CHAT for Step 3 – is the invention yours?

Patentability and Freedom to Operate - a patent is not a licence to commercialise an invention

Often we advise clients that their new technology appears to be patentable - but at the same time we warn them that they are at risk of infringing existing patents by commercialising that new technology. Understandably, this can be confusing and apparently contradictory advice. However, patentability of an invention, and freedom to commercialise that invention (often termed “Freedom to Operate”) are two distinct issues that require separate consideration.

For example, Company A might invent and obtain patent protection for the wheel, namely a circular object that rotates on an axle. Shortly afterwards, Company B might invent a pneumatic tyre for use with the wheel. While it would be possible to obtain patent protection for the pneumatic tyre, using a pneumatic tyre on a wheel would infringe Company A’s original patent for the wheel. Therefore, Company B would need to obtain a licence from Company A to produce and sell a wheel with a pneumatic tyre. Of course, Company B could also license their pneumatic tyre technology to other companies on the basis of their patent.

This situation is common where a company makes an improvement on an existing technology. A competitor might have obtained a broad patent covering a general concept when the technological field was in its infancy. While improvements might be patentable, they could still fall within the broad existing patent. The situation can also occur where a new technology is a combination of various existing technologies, each of which might be covered by individual patents.

Providing a Freedom to Operate opinion requires different research to providing one on patentability. While there can be some overlap between a patentability search and an infringement search, the searches are conducted differently.

In a patentability search, the focus is on finding any disclosures relating to the feature or features that are considered new. In an infringement search, the focus is finding any live patents that cover any feature (old or new) of the technology being assessed. Further, as patents are territorial, the search is restricted to the live patents in the countries were commercialisation will take place.

Therefore, while a patentability search might return some results relevant in determining Freedom to Operate, the patentability search rarely covers enough ground to fully assess the matter. Returning to our example, while a patentability search might indicate that a pneumatic tyre is new, it would not necessarily locate the existing patent for the wheel, as this would not have been the focus of the search.

Therefore, patentability and infringement are two distinct issues that must be considered separately. Irrespective of whether or not your technology is patentable, you might not have the freedom to commercialise that technology.

Business advice or business assets – Government withdraws funding for innovative businesses

From 1 July 2006 New Zealand business will no longer be able to apply for funding under the product development category of the Enterprise Development Grant (EDG) for intellectual property protection and prototype development costs.

This surprise announcement came from MED following a review of industry funding programmes administered by NZTE. The EDG provided up to $20,000 per year as a contribution to the costs of early stage innovative businesses. The product development category was the most popular, receiving 35% of the funds granted.

The EDG review found that while there is significant value in providing grants for product development to New Zealand businesses, the cornerstone of the EDG was to “improve management capability” and this objective was not met by the product development grant. It was considered that providing assistance in obtaining intellectual property protection and assistance with prototype construction did not (typically) involve direct advice and did not result in gains in management capability or business performance. SMEs can still apply for EDG funding for strategic advice even though implementation is not covered.

The review of business assistance programmes announced in February, is expected to be completed by September 2006. The withdrawal of the product development category was considered an immediate change that ought not to be held up by the review process.

Bio of the month: Matt Adams

Matt is a partner in our Wellington office. He specialises in all aspects of patent practice for the computer and information communication technology fields. Matt is also a copyright specialist.
Matt advises corporations, start-up ventures and individuals throughout New Zealand and overseas.

Matt has been involved with a number of high profile cases, including obtaining international patent protection and licensing for medical imaging equipment and software based diagnostic systems developed in New Zealand. He has also assisted a number of large international computer companies to secure significant international patent portfolios and to protect ground breaking new business intelligence solutions.

Matt has made presentations at international intellectual property conferences. He is also a regular presenter at trade, export and computer conferences. A number of his articles and commentaries on software patents have been published in magazines and newspaper columns.