New technology: What can we do today to avoid regrets tomorrow?


New technology: what can we do today to avoid regrets tomorrow?

Dominique Pomerleau [1] and Julien Fleurnace [2]
Lawyers, Patent and Trademark Agents

To survive, and even thrive,  during an economic downturn, companies have no choice but to reinvent themselves in order to adapt to market changes, to distinguish themselves from their competitors, and thereby take advantage of the recovery when it comes. Since one of the best ways of reinventing oneself is to innovate, many companies choose to invest in technological innovation. 

Since financial resources can be limited, it may be tempting to save on legal protection costs and directly exploit or commercialize a new technology without first protecting it. However, it is essential to make an informed decision prior to taking any action to avoid regretting choices made in reaction to a change in the economy.

There are four possible strategies when dealing with a new technology: public disclosure, defensive publication, trade secret and patent protection. Each of these strategies has advantages, disadvantages and, of course, costs.

I. Public Disclosure

Beginning the sale or use of a new technology publicly, without prior protection, is the first option available to a company that has developed an innovation. In the short term, this strategy may seem to be the most effective because it does not incur any costs and can be implemented without delay. However, if the technological innovation is promising, a competitor may immediately copy it and the company will then be left with nothing but biting its fingers. It will have to run a marathon to continually innovate and seek to maintain its lead over its competitors without being able to benefit exclusively from the fruits of its technological advances. Such a situation will continue for a significant period of time because the innovation will have fallen into the public domain as soon as it is disclosed.

It is even possible that an ill-intentioned competitor, or one who has independently developed an equivalent innovation, attempts to patent a similar invention. If there is no written and dated publication describing the company’s innovation, it may be difficult to prevent the grant of a patent to this competitor. Thus, at least temporarily, the company’s freedom to exploit its new technology may be limited and costs may have to be incurred to prevent the competitor from obtaining a patent for a similar invention.

II. Defensive Publication

Defensive publication may be a more prudent option than simply publicly disclosing the technology. This strategy involves making the new technology public in a published and dated document. This publication may be retrieved by an examiner or cited in a protest against the grant of a patent for a patent application filed by a third party, so as to prevent a competitor from obtaining protection for a similar technology.

This strategy should be considered in particular when the technology including the innovation is sold without being accompanied by a written publication. Indeed, although a sale constitutes a public disclosure, it can hardly be used as a protest against the grant of a patent for a patent application filed by a third party, since it does not constitute a written and dated publication accepted by patent offices during the examination procedure. In order to invalidate the subsequent patent using a prior sale, court action will have to be taken, which involves considerably large expenses for the company. 

Defensive publications may also be considered for technologies with a short life span, for which it would be difficult to meet the criteria for patentability, or for which the patent obtained would have a limited scope and for which a competitor could easily design around.

Certain jurisdictions, such as Canada and the United States, provide a grace period after the first public disclosure of the invention to file a valid patent application. Thus, in some countries, it is possible to change the protection strategy in the months following an initial public disclosure and seek patent protection, even though the innovation was initially the subject of a public disclosure or defensive publication.

Although it is not essential, it is recommended for a defensive publication to be done in the form of an informal or incomplete patent application so that it can be easily located by an examiner at the Patent Office in his search of prior art to evaluate the patentability of related inventions.

III. Trade Secret

Trade secrets, which may concern know-how, information or even equipment, consist in not making public information relating to the technology developed (ex. Coca-Cola protecting its soft drink recipe).

Trade secrets are particularly appropriate for a technology which does not have to be placed on the market directly during its exploitation, for example in the case of a manufacturing process which can be used confidentially within a company’s buildings, know-how used with customers subject to confidentiality obligations or a technology which cannot be determined by reverse engineering.

On the other hand, trade secrets do not constitute a means of opposition to the exploitation of similar or identical technology by a third party or a means of protesting against the grant of a patent to a third party. Thus, a third party could independently develop a similar or identical technology and file a patent application to protect it, thereby limiting, at least partially, your freedom to operate. Such a risk is particularly significant in areas where technological advances are fast and there are many players.

IV. Patent Protection

A patent for invention constitutes an exception to the principles of freedom of trade by granting its owner an exclusive right limited in time during which the invention may not be manufactured, sold, used or imported in a given territory without the owner’s consent. In general, this exclusive right, which may be obtained in a majority of technological fields, may not exceed 20 years from the filing date of the patent application. During this time period, the owner can exploit his invention and/or license his patent and thus reap the benefits of the investment of time and money he devoted to its development.

To be patentable, certain criteria must however be met: the invention must be new, not only in Canada, but throughout the world, and inventive, meaning that it must be more than a simple obvious modification that could easily have been made by a person working in the field concerned.

Every patent is the result of a patent application that must describe the invention in sufficient detail to allow the public to understand, reproduce and benefit from it freely once the exclusive right has expired. For a patent to be granted, the application must also be examined by an examiner from the patent office of the territory concerned in order to ascertain the novelty and inventiveness of the invention and to negotiate the scope of protection of the patent. Thus, since the filing of a patent application makes public the technology that one is seeking to protect, it is generally recommended to seek the knowledge and guidance of a patent agent, so that the protection obtained is as broad as possible and is not limited to the know-how or the equipment as commercialized.

Finally, the economic value of a patent also depends on how it is possible and easy identify potential infringements. For example, it may be difficult to determine whether a patent is infringed if the patented technology consists of a process implemented in a plant with limited access to outsiders.

V. Advantages and Disadvantages of the Various Strategies

VI. Conclusion

For any new technology, it is important to consider its marketing and protection strategy as soon as possible to avoid unintentional disclosure that could potentially have unfortunate consequences. The strategic choice depends both on criteria intrinsic to the innovation, such as the possibility for a third party to replicate the innovation by examining the commercialized product, and on extrinsic criteria, such as the extent to which the innovation differs from existing technologies, the available budget and the life cycle of the technology.

In addition, whatever strategy is chosen, it can be implemented as a complement to the protection of non-technical aspects of the innovation, for example by registering a trademark and/or an industrial design to protect the visual aspects. Such an overall strategy can contribute to strengthening the competitive position of the company. 

© CIPS, 2020.

[1] Dominique Pomerleau is a Lawyer, Engineer, Patent Agent and Partner for ROBIC, LLP, a firm of Lawyers, Patent and Trademark Agents.

[2] Julien Fleurance is a Patent Agent and European Patent Specialist for ROBIC, LLP, a firm of Lawyers, Patent and Trademark Agents.