New technology: What can we do today to avoid regrets tomorrow?
New technology: what can we do today to avoid regrets tomorrow?
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
Conditions: No special conditions.
Advantages: No action to carry out, no delay and no cost.
Disadvantages: The risks of being copied without recourse are high, especially if the technology has an economic value. This strategy requires continuous innovation in order to be ahead of the competition. A third party could file a patent application for a similar technology and, in the absence of written, dated and public documents, public disclosure of the innovation may not be sufficient to protest against the grant of a patent.
Conditions: No special conditions.
Advantages: Allows for the creation of published and dated prior art that can easily be used to protest against the grant of a patent to a third party who has developed a similar technology and filed a patent application after the date of defensive publication, or to challenge the validity of a patent once it has been granted. Inexpensive. Can be drafted and published very quickly.
Disadvantages: Does not constitute a means of protection and therefore has no deterrent effect on third parties who would like to copy the technology. Cannot be monetized. Public disclosure of the technology, which may facilitate the creation of competing technologies.
Conditions: Information about the technology can and should be kept confidential. It should not be deducible by examining the marketed product, for example by reverse engineering.
Advantages: Free protection as such, since no official action needs to be taken. Indirect expenses related to trade secret may nevertheless have to be incurred to ensure that confidentiality is maintained (confidentiality agreements, for example with subcontractors or business partners, employee awareness of the importance of confidentiality, physical and/or computer protection devices, etc.). Protection valid as long as the technology is not made public. Could be monetized as part of a technology transfer.
Disadvantages: Unless theft or fraud gives rise to a civil or criminal remedy, copying will be permitted if the trade secret is disclosed or if the technology is independently developed by a third party. If a third party independently develops the technology that is the subject of the trade secret, they could file a patent application, be granted a patent and ultimately prevent the company, at least partially, from carrying out its process or using its apparatus that is the subject of the trade secret. Moreover, the secret cannot be used to protest against the grant of a patent for a technology independently developed by a third party, as it does not constitute a prior public disclosure of the technology.
Conditions: The technology must be potentially patentable, i.e. new and inventive; otherwise, the patent application will simply constitute a defensive publication. In most jurisdictions, patent applications must be filed before any public disclosure of the invention.
Advantages: A patent resulting from the application constitutes an exclusive right of exploitation, in a given jurisdiction, prohibiting third parties from exploiting the technology which is the subject of the patent and thus makes it possible to strengthen the competitive position of the company. A patent is a property right that can be easily monetized, by being sold, licensed, or litigated. A patent increases the value of a business. Is a deterrent against infringement by using appropriate marking on the commercialized technology medium. Since a patent for a given invention is granted to the first applicant, the patent application may constitute a defensive publication to protest against the grant of a patent to a third party.
Disadvantages: Relatively expensive, limited in time and valid only in selected jurisdictions. Requires a detailed description of the invention and the description is made public, usually 18 months after the filing of the application. The examination of the application leading to the grant of a patent can take several years. If no patent is granted at the end of the examination process, the technology remains in the public domain without any exclusive rights having been granted. The filing of the patent application will then simply have had the effect of a defensive publication.
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.
 Dominique Pomerleau is a Lawyer, Engineer, Patent Agent and Partner for ROBIC, LLP, a firm of Lawyers, Patent and Trademark Agents.
 Julien Fleurance is a Patent Agent and European Patent Specialist for ROBIC, LLP, a firm of Lawyers, Patent and Trademark Agents.