Common Inventors Myths #3

There are a range of myths associated with taking an invention from the idea stage to commercialisation. We have been exploring the top 3 myths, with some commentary on the reality from Andrew Fern at the Australian Institute for Commercialisation. This is the third.

Myth #3: “I have a provisional patent (or patent application) and I want to sell my intellectual property.”

Andrew says: “Firstly, with a provisional patent (or even a patent in application phase) you do not yet have any rights granted. A provisional is a registration of a date of your invention and the international version of this is a PCT.  We often are asked by people who want to sell their ideas and provisional patents (and applications) how they go about this.  The bad news is, you are probably almost as likely to be struck by lightning.  Relying on something this rare is a risky strategy.”

“Ok, I am going to register a ‘worldwide patent’.”

“No, you’re not … because there is not such thing. Possibly the least understood area of taking an idea to market is registration of intellectual property.  Firstly, there is no such thing as a worldwide patent.  It’s ultimately on a country by country basis, although you can register the date of your invention across multiple countries at once.  This is a provisional patent in Australia.  At some point though, each country must be applied for separately and each patent office will deal with it separately.  There is some leverage in Europe due to treaties, but ultimately even there each country must be paid separately if a patent is granted.  The European patent office does not include all of Europe.”

“Once I have my patent, nobody can produce this product.”

“This is true in theory, but many things can happen.  Firstly, someone could challenge your patent even after you have had it granted in a particular country.  Secondly, someone could just start producing the product and you would be forced to stop them via a case the courts. In the US, this can run into millions of dollars for a patent case.  Third, someone could sue you for infringement.  Same result, millions in court costs. Or, a large company could work out a way to produce your product without infringing you, in which case you have no recourse.”

“It will cost about $20,000 for a worldwide patent.”

“No, it will cost about that for a PCT which is a worldwide provisional and you will then need to deal with each country individually at a cost of $20,000 per country over a period of years. Patenting is a very expensive road to go down and should not be started unless you are clear about your costs.  Speak with your patent attorney about all the costs and time associated with patenting.

Be absolutely certain you want to go down the patenting path. A very common issue we see is that once patenting is commenced, you are locked into pre-defined timeframes according to the rules in various countries and also rules of the world body (WIPO) if you go down the PCT path. These pre-determined time frames mean that your costs keep coming in, even when the company is in limbo on the product side due to a lack of capital. Patent bills tend to be in the thousands, even small ones, due to the cost of having an IP lawyer administer your case. If you stop the process, your patent will lapse which could result in loss of your intellectual property position if it is already disclosed. Considering when to start patenting is important, and something you should discuss as part of your overall IP strategy with your IP lawyer.”

If you would like to chat to Andrew or others at the Australian Institute for Commercialisation about your invention, contact us at education@ausicom.com .

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