Thinking again and challenging assumptions: intellectual property for retail goods

A significant proportion of retail products and consumer goods progress from research and design to market in under a year, and consumers expect innovators to move very quickly from one product to the next.

By contrast, of the registerable rights commonly available to protect intellectual property, patents are sometimes perceived as slow to mature (and expensive to maintain).

Yet, retail product undertakings that dismiss patents out of hand may miss out on various advantages of a patent portfolio. It is also important to realise that valuable patent protection can be obtained surprisingly quickly and at reasonable cost.

The way your product works is equally important to if not more important than the way it looks.

We sometimes hear asked: why not rely on registered (or even unregistered) design rights to protect the appearance of a retail product; is protecting its function as well (by means of a patent) really that important? And why contemplate patent protection for specific product lines, if overall branding is protected by trade marks?

It is always helpful to look at specific examples in response to these questions. By way of a representative illustration, let’s consider high-street sports equipment, such as a cycling helmet having a shape that optimises chin strap forces in the event of an accident if the helmet is formed from a particular foam material.

For some entities, under some circumstances, in some jurisdictions, unregistered design rights may provide automatic protection for the appearance of the helmet for a short time. However, these cannot protect the underlying idea (synergy between shape and foam) or provide long term protection. Unregistered design rights also tend to be weak in that evidence of direct copying is required for a finding of infringement. This protects against small-time counterfeiters but may not stop more well-resourced competitors racing to independently devise similar products. Even a registered design, while providing longer lasting monopoly rights, is limited in scope will not protect the underlying idea of synergy between the shape and the foam, nor the foam composition as such (if that is novel and inventive in its own right) or how the helmet is manufactured. A registered trade mark may protect logos on the helmet, but again it is unlikely to be able to protect its shape, and will certainly not protect the underlying idea, nor the process of manufacturing the helmet.

By contrast, a patent could well protect the underlying idea for a range of shapes and a range of foams, as well as associated manufacturing processes. Thus, several applications could be filed, for the shape, the foam, the combination of the shape and foam, and so on; depending on exactly which subject matter is novel and inventive. A well-orchestrated patent portfolio could keep competitors not only at arms’ length but out of the market entirely for products relying on a given idea.

Patent protection for novel and inventive subject matter can be obtained more quickly than you may think.

It is true that in some sectors, the better option may be to deliberately prosecute a patent application to grant as slowly as possible. For example, in the pharmaceutical world, a patent may be filed at an early stage in clinical trials before it is known which form of a medicament is to be used, or even which condition (e.g. which specific types of blood cancer) are treatable. Prolonging prosecution of corresponding patent applications may be worthwhile so that claims are eventually granted in a form amended for conformity with where the true value of the invention lies. There are various techniques for slowing prosecution to help with that.

On the other hand, patent prosecution does not always have to be slow. It may surprise prospective patent applicants how readily prosecution can be accelerated, for example to keep in step with the fast pace of retail goods innovation, to achieve protection more quickly without compromising on a very high standard of patent application drafting. We discuss exemplary tactics here.

Keeping the priority application “alive”

One option to bear in mind from the outset is to prosecute a “priority” patent application through to grant. Briefly, a “priority” application is typically filed inexpensively in a single location to establish an “effective date” for a later (and optionally further refined) application or applications across the world. The priority application is often discarded once it has served the purpose of establishing that date. The later application or applications are then prosecuted to grant in jurisdictions of interest across the world. This tactic comes with several advantages, such as deferring costs and keeping all doors open for longer, when it comes to where to seek protection.

However, applicants seeking protection quickly may consider keeping the priority application alive (in parallel to the later application(s)) and taking steps to expedite its grant. This can lead to unusually early grant of a patent in a key territory of interest.

Requesting accelerated prosecution

The major patent offices also offer acceleration programmes during search and/or examination of a patent application.

Securing allowance in one jurisdiction can be used to initiate a domino effect leading to allowance internationally. Where a patent application is part of an international portfolio of corresponding applications, the applicant should consider the Patent Prosecution Highway, which provides for bilateral and multilateral collaboration between patent offices in different jurisdictions.

The Patent Prosecution Highway (PPH) enables applicants to obtain accelerated examination of their patent application at a given patent office, if a corresponding application (having the same filing/priority date) has already been examined and one or more claims deemed acceptable by another office, with which a PPH partner agreement is in place. The “office of later examination” (OLE) is asked under PPH to use the work product of the “office of earlier examination” (OEE)) in examining the application. The IP5 PPH programme exists between the European Patent Office and the national patent offices of China, Japan, Korea and the US. In addition to the IP5 PPH programme, many patent offices participate in the Global PPH programme and have bilateral PPH agreements with other offices.

Another way of expediting prosecution worldwide is to make use of International Preliminary Examination of an International (PCT) filing. Traditionally, International patent applications are used to defer costs and buy time before having to make a decision regarding which countries to seek protection in. However, the international phase of an application need not be dead time. Using International Preliminary Examination can advance prosecution of the application and, if a positive International Preliminary Report on Patentability (IPRP) is obtained, it will often be taken into account as a matter of normal practice by national patent offices. In many countries, a positive IPRP can be used as the basis for a PPH request. Whichever way, this can lead to rapid grant once individual countries are selected.

Many national and regional offices also have their own accelerated search and/or examination procedures.

Requests for the accelerated examination of a European patent application under the PACE scheme at the European Patent Office (EPO) can be made without giving a reason, free of charge, and without being made public. This is an inexpensive way of speeding up prosecution without competitors being aware that the applicant is prioritising the patent application in question.

Some acceleration schemes are underused and not well known but can be a very effective in securing rapid grant. An example is the U.K. Green Channel, available for environmentally friendly inventions which can be applicable to any innovation with a benefit such as reducing waste in the production, or facilitating the recycling, of a retail product. The strategy of seeking rapid allowance of a U.K. priority filing, which can be achieved in a matter of months, can thus be leveraged to secure rapid allowance in key commercial markets early in the lifecycle of retail products.

Utility models and short term patents

As well as standard patents, some countries grant utility models or equivalent rights providing short term protection, typically from 6 to 10 years. While not as robust or long lasting as standard patents, these rights can be very useful for retail products and/or consumer goods as they are typically granted very rapidly with minimal examination and thus can provide enforceable protection for products right from launch.

Early publication and the value of a pending application

Another strategy to consider is requesting early publication of a patent application. Before an application is published, its deterrent value is low as third parties are not aware of the contents. However, a published patent application can be brought to competitors’ attention to put them on notice of the scope of protection being sought. Although a patent cannot be enforced against infringers until grant, in many jurisdictions damages can be back-dated to publication of the patent application, and thus publication of the application provides provisional protection.

More simply, having a published pending patent application may be of value in its own right. By way of example, even a pending application may be used as a bargaining chip in cross-licensing negotiations.

During the time a patent application is pending, it creates uncertainty for competitors over the monopoly that will eventually be afforded if a patent is granted, since the claims of a pending application may not correspond in scope to those eventually granted. This may be useful for applicants seeking to keep competitors at more than arms’ length. Although the various tactics outlined above may be adopted to accelerate prosecution, applicants – even in the fast-paced retail products sector – may likewise find themselves benefitting from the pendency of a patent application.

Careful thought should be given to the timing of publication and advice sought for the specific situation, since once an application is published, it cannot be retracted from the public domain; for example, it may become relevant prior art citeable against the applicant’s own later applications.

Hybrid strategies

A one-size-fits-all patent filing strategy many not always be the best approach. A patent filing strategy can be tailored to fit commercial needs. For example, securing rapid allowance of a narrowly focused patent directed to the expected commercial product using a UK priority filing could inform the scope of a utility model filing in Germany and China and be used to accelerate a US patent under the PPH programme. Such rapidly obtained narrow rights could provide initial protection in key markets and be enforced against counterfeiters. An International (PCT) patent application could then be processed more leisurely, with broader claims that create uncertainty for competitors and deter them from developing me-too products.

Patent protection can be surprisingly cost effective.

Careful thought should be given to how to structure a family of patent applications covering related but distinct inventions. For example, a family of applications may provide complementary cover for a single area of technology, such as a particular genre of textile or foam. Judiciously filed complementary applications should provide the best level of protection without merely duplicating costs.

It is also important to avoid newly-filed applications becoming redundant when research and design moves at pace. The drafting of patent applications requires foresight and a careful collaboration between inventors and attorneys to thoroughly and meticulously capture all features of an invention followed by a constant dialogue to ensure that current and future modifications are taken into account.

There are many additional ways to streamline the costs of a patent portfolio. One way to minimise costs before grant is to use the Patent Prosecution Highway (see above) to reduce the costs of examination of applications in several countries at once, by the “shortcut” of reference to successful examination of the corresponding application in a first country.

Another important factor in this regard is having procedures in place for a regular and considered review of granted patents in a portfolio, including an assessment of for how long it is worth paying renewal fees, or whether it is worth licensing patents no longer of key commercial interest to other parties in return for royalties compensating for or outweighing renewal fees.

Even where a patent remains of commercial interest, revenue streams may be accessed by negotiating licenses with businesses that could use the technology but are not direct competitors. For example, the proprietor of a patent for foam compositions, but which manufactures only sporting apparel and equipment, may be able to license one or more patents in their portfolio to car seat manufacturers.

For some companies, The Patent Box may be worth considering to provide tax relief on profits attributable to products or processes that are covered by a patent. Lower rates or corporation tax on profits relating the patent products are offered by a number of European countries including the U.K. and the Netherlands. The Patent Box scheme may help applicants and proprietors recoup the costs of patent prosecution and maintenance after grant, or even provide relief exceeding those costs. Whilst anti-avoidance rules exist, updating your patent filing strategy is a legitimate response to The Patent Box scheme.

Time to think again?

It is evidently well worth seeking monopoly protection for both products and processes in fast moving retail products fields, through a carefully crafted patent filing strategy. It is always important to tailor such a strategy to the needs of a particular business. While a worldwide portfolio reaping the benefits of the Patent Prosecution Highway may be appropriate for some, a smaller-scale operation (perhaps focussing on the The Patent Box) may be appropriate for others.

If you wish to discuss your intellectual property strategy, please do get in touch.