INTELLECTUAL PROPERTY MANAGEMENT. A Guide For Exporters. Intellectual Property (IP) is often one of the most under-utilised assets owned by companies.

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1 INTELLECTUAL PROPERTY MANAGEMENT A Guide For Exporters Intellectual Property (IP) is often one of the most under-utilised assets owned by companies. Guiding the reader through the process of identifying their IP, and integrating its management into their business strategy, this book provides a comprehensive insight into the many forms of IP protection that are available to managers, and demonstrates that an IP strategy is as important for SMEs as it is for large multinationals. The first ever guide on IP written specifically for Irish exporters, this comprehensive management guide examines how you can protect your Intellectual Property, turning an otherwise intangible resource into an independently tradable asset. This handbook explores how export-managers can use their IP as strategic competitive tool for: Gaining market position Opening new business opportunities Generating return on investment Increasing stakeholder value Attracting investors & business partners Irish Exporters Association 28 Merrion Square Dublin 2 Tel: Fax: iea@irishexporters.ie Tomkins & Co. Patent & Trademark Attorneys 5 Dartmouth Road Dublin 6 Tel: Fax: ip@tomkins.com Enterprise Ireland Glasnevin Dublin 9 Tel: Fax: michael.sharp@enterprise-ireland.com

2 INTELLECTUAL PROPERTY MANAGEMENT A Guide For Exporters

3 INTELLECTUAL PROPERTY MANAGEMENT A Guide For Exporters

4 INTELLECTUAL PROPERTY MANAGEMENT A Guide For Exporters Disclaimer The material and information contained in this publication is provided for general information purposes only and does not constitute legal or other professional advice. While every care has been taken in the preparation of the material and information in this publication, readers are advised to seek specific legal advice in relation to any decision or course of action. This publication is provided without any representations, warranties or undertakings of any kind, either express or implied, in relation to the information, material or content in this publication, or in any other publication or website referred to or otherwise in this publication. The Irish Exporters Association, Tomkins & Co., Enterprise Ireland, or any connected parties, will not be liable for loss or damage arising out of or in connection with use of the materials, information or content in this publication, or information, materials, content, facilities or services referred to or accessed through this publication. Copyright 2004 Irish Exporters Association and Tomkins & Co. All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying recording or otherwise without the permission of the Irish Exporters Association or Tomkins & Co. published by in association with supported by Irish Exporters Association 28 Merrion Square Dublin 2 Tel: Fax: iea@irishexporters.ie Tomkins & Co. Patent & Trademark Attorneys 5, Dartmouth Road Dublin 6 Tel: Fax: ip@tomkins.com Enterprise Ireland Glasnevin Dublin 9 Tel: Fax: michael.sharp@enterprise-ireland.com Print Management by Clear Sky Media Designed by The Drawing Board

5 Table of contents Foreword by Minister Michael Ahern, TD ii Introduction iii Acknowledgements iv Chapter 1 How IP Can Enhance your Export Opportunities Chapter 2 Managing IP, Maximising Competitiveness Chapter 3 IP: Patents, Trademarks, Design and Copyright Chapter 4 IP: Management in Collaborative Agreements Chapter 5 IP: Management and e-commerce Chapter 6 Best Practice and Who Can Help Chapter 7 IP and Finance Chapter 8 Auditing you IP for Commercial Success Chapter 9 Definitions and Appendices Appendix 1: Definitions Appendix 2: Introduction to IP Audit Appendix 3: Provisional IP Audit Questionnaire Appendix 4: Specimen Non-Disclosure Agreement Appendix 5: Specimen Technology Licensing Agreement INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters i

6 Foreword by Michael Ahern TD, Minister for Trade and Commerce The reality of economic globalisation and the pace of technical change forces industry to strive constantly to innovate in order to remain competitive. Large corporations operating out of Ireland have developed this ability to very high standards. Medium and small companies have also come to realise the benefits of innovation. A key component of this strategy is the management and exploitation of a company s intellectual property. It is recognised that in the knowledge economy, knowledge is a key resource and that the most important property is now intellectual property, not physical property. My Government has signalled its firm commitment to the knowledge economy. The Irish National Development Plan for the period put in place the necessary foundations for this environment. Over the life of the programme, a total of 2.54 billion is being invested in research, technological development and innovation. The Irish Exporters Association s (IEA) timely publication of this Intellectual Property Management Guide for Exporters will, I am confident, lead to better understanding of the business benefits to be had from developing and exploiting what is undoubtedly a company s most valuable asset and assist in growing export sales. I am particularly pleased to see the partnership approach adopted in this venture with the IEA - the export industry body, Tomkins & Co - The Patent, Trademark and Design specialists, and Enterprise Ireland. This publication, in conjunction with the recently published National Code of Practice for the Management of Intellectual Property from Publicly Funded Research by the Irish Council for Science, Technology and Innovation (ICSTI) adds to the synthesis of initiatives supported by Government to drive the knowledge economy forward. Michael Ahern TD, Minister for Trade and Commerce ii INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

7 Introduction Companies all over Ireland may be sitting on a neglected asset their intellectual property. For many it is an intangible asset they have not fully come to grips with. However, in today s open international market place, a firm s competitiveness is more likely to be determined by its intellectual property than the traditional tangible assets such as stock, equipment etc. Identifying a firm s Intellectual Property (IP) and being able to protect it is crucial to future growth of Irish business internationally. Established players have put resources into developing and protecting IP. But SMEs need to review their position. Government s commitment to funding R&D is not enough to entice SMEs. If SMEs are going to engage they need to be able to protect their investment. However, there is a realisation that there is also a need to strengthen the link between R&D and commercialisation. Many IP assets remain dormant due to an inability of SMEs to commercialise their assets, often overlooking options to franchise, license or collaboratively develop. Dr Christina Gates, Managing Partner Tomkins & Co The Irish Exporters Association and Tomkins & Co. have collaborated to produce this comprehensive guide to Intellectual Property Management for those involved in the export industry, or planning entry to export markets. It provides an easy to read one-stop-shop approach to the topic and emphasises the need for a strong system of IP auditing. As we move more and more towards a knowledge economy, auditing your IP regularly can assist you in maximising competitiveness, streamlining procedures for IP protection and enforcement, reducing costs and attracting financiers, investors and business partners. Dr Christina Gates Managing Partner Tomkins & Co. Patent & Trademark Attorneys John Whelan Chief Executive Irish Exporters Association John Whelan Chief Executive Irish Exporters Association INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters iii

8 Acknowledgements This publication owes a great deal to the expertise, knowledge and dedication of a range of people of both Tomkins & Co and the Irish Exporters Association. In particular, we would like to thank Raymond Johnson; Richard Brown; Emily Miller; Sinead Dunne; Simon Gray; Michael Kiernan; Cathal Lane; Andrew Parkes; Orlaith Reedy; Niall Rooney; Peter Shortt, Bernard Doherty and Declan Kenny. Enterprise Ireland have also been very supportive of the whole project and we wish to acknowledge the assistance of Michael Sharp, John Finn, Tom Kelledy and John McGarr. Finally we would like to express our thanks to those who have given time to share their experiences of IP management with you, the reader. Their contribution to this publication is demonstrated through the quotations, case-studies, product shots and trademarks that are used throughout this book. Dr Christina Gates Managing Partner Tomkins & Co. Patent & Trademark Attorneys John Whelan Chief Executive Irish Exporters Association iv INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

9 Chapter We have trade marked our products to protect the investment in our brand name. The products can be copied but market share can be held through the brand identity Louise Grubb Managing Director NutriScience Ltd

10 Chapter HOW IPR CAN ENHANCE YOUR EXPORT OPPORTUNITIES The decision to export has its attendant risks and challenges, involving a considerable investment of financial, managerial, and production resources. Therefore, it requires careful planning and execution. As a key business objective, the decision to export is seen as a long-term business investment, rather than a short-term profit orientation. Before starting to export, it is prudent to develop a cogently written export plan for determining a product s readiness for export. A well-developed plan assists in: Assessing the potential of a product in international markets and facilitates application for financing. Finding local partners and channels of distribution. Adapting the product, its design, its brand or its packaging to the new market. Negotiating and signing contractual agreements with export sales representatives, distributors, local partners, local manufacturers, etc. Determining prices for different export markets, making transport arrangements for exports, advertising/marketing the product in the export markets, participating in trade shows or other events abroad. Deciding upon the most effective mode of entry into a specific new market either through direct exporting, by establishing a joint venture, by licensing IP rights to third parties, through e-commerce, etc. Searching for, and taking into consideration, any IP rights of third parties which might interfere with freedom to implement the export strategy If discussing Intellectual Property Rights (IPR), the typical export manager will probably wonder what benefit they are to his own business. In this guide we take a close look at the practical implications of IPR from the perspective of the exporter and analyse the possibilities offered by the IP system offers for protection, development and competitiveness in relation to export market opportunities What is Intellectual Property, and how do you protect it? Jameson Irish Whiskey - one of the brands successfully managed by Irish Distillers Group PLC In addition to an overall CTM and other international registrations, this Jameson Irish Whiskey label incorporates a number of features that are also individually registered Ben O'Beirne Irish Distillers Group PLC Intellectual Property (IP) is a term attributed to any product of the human intellect which will have some value in the market place, e.g. An Idea An Invention Unique Name Business Method Industrial Process Chemical Formula Computer Program IP is distinct from Intellectual Property Rights (IPR). I PR, as the name suggests are the legal rights one must own in order to protect IP. To many, IPR may seem a rather obscure legal concept however in simple terms they are legal systems which offer a facility whereby the original creator can create legal ownership of IP innovation and therefore allow the individual or enterprise to reap the benefits of investment resulting in IP creation. 2 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

11 While some very limited rights may exist if IP is unregistered, generally to secure full rights in IP, the IP must be registered under as registration system in the jurisdictions of interest to generate the appropriate IPR. Protection for innovation can be divided into four main classes: Patents: A registration system available in all major industrial countries designed to protect inventions such as new or improved products and processes which are capable of industrial application by conferring exclusive rights in the invention. Without registration generally no exclusive rights exist. Trademarks: Trademarks can be words, symbols, images, a logo, packaging, a smell, colour or sound which are capable of distinguishing one s goods and/or services from those of others. A registration system is also available for registration of trademarks and should be employed to create the strongest IPR possible. Some jurisdictions afford a much lower level of IPR for unregistered trademarks. Design: Design generally relates to the aesthetic features of an article. These may or may not necessarily impact on the use of the article, but are distinguishable as part of the look of the item. Again, while some level of IPR may be available in certain jurisdictions for unregistered rights, registration systems exist and should be utilised to maximise IPR. Copyright: Attached to all literary or artistic materials, music, film, sound recordings and broadcasts, including software and multimedia. It should be noted that copyright is an unregistered right, which exists, and comes into play as soon as a copyright work is created. In some jurisdictions (e.g. the US) registration of copyright works gives stronger IPR. Benefits of Registration and Intellectual Property Rights (IPR) Registration of IP imparts upon the creator IPR in the form of an exclusive legal right to prevent the use of their innovation by another party, without the permission of the creator. This gives the IP owner a powerful strategic tool, which facilitates the development of a strong competitive advantage within the marketplace. Ultimately dependant on how you choose to manage your IP the advantages to IP protection are almost limitless. However, the primary benefits are identified below: Obtain an exclusive property right Transpose knowledge/idea into a tangible asset capable of: - Transfer - Licensing - Security Mark off a niche area of technology. Protect and be rewarded for your investment of resources in research and development by preventing imitation by competitors without your permission. Generate revenue and provide a return on investment in R&D Generate royalty income from licensing Qualify for tax relief on royalty income and investment in patent rights Provides opportunity to cross-license with other innovators. Trademark can operate as a "badge of origin" for your goods/services thereby providing a guarantee of source and quality to customers/prospective customers Provide a tool for identification and differentiation within the marketplace We have trademarked our products to protect the investment in a brand name. The products can be copied but market share can be held through the brand identity Louise Grubb, Managing Director, NutriScience Ltd. INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters 3

12 Managing your IP and generation of IPR in a strategic way may enable your enterprise to access new export markets through licensing, franchising, the establishment of joint ventures or other contractual agreements with other companies. IP rights permit you to negotiate agreements with other organisations for the production, marketing, distribution or delivery of goods and services in foreign markets. It may also provide your company with greater bargaining power when seeking to license technology from other firms that may be interested in your proprietary technologies and their associated IPR, (patents designs, trademarks, copyright works, etc.) Intellectual Property and Export Strategy The inclusion of an IP Strategy in the development of an overall business plan is essential in order to ensure that the maximum benefit is derived from your organisation s IP. A successful IP strategy will incorporate plans or opportunities for research and development, growth and expansion, and will detail how the organisation will manage its IP portfolio. Megazyme International (Ire.) Ltd.'s diagnostic kits are patent protected Developing your organisation s IP strategy will involve thorough analysis of the organisation s current IP portfolio, together with the future objectives of the company. The core objective of your IP Strategy should be to ensure that your IP Portfolio is providing you with sufficient rights and exclusivity to enable continued growth and maximisation of market opportunities and benefits which IP can provide. What factors should one bear in mind when developing an IP Strate gy for export Registration of IP imparts upon the creator an exclusive legal right to prevent the use of their innovation by another party Some export products will face competition from similar or identical products (which maybe limited through IP protection) In raising funds, holding patents over the innovative aspects of your product is often useful for convincing investors, venture capitalists or banks of the commercial opportunities available to your product. The adaptation of the product, its design, its brand or its packaging for the export market(s) may require creative and/or inventive work that may be protected through the IP system thus guaranteeing a degree of exclusivity over the adaptations. In the negotiation of agreements with partners you will have to take into account issues relating to the ownership of IP rights, particularly if the product will be manufactured abroad or will be modified, packaged or distributed by foreign partners. The marketing of your product will rely strongly on your company s brand image, embodied primarily in its trademark, which, if unprotected, would be significantly more difficult to enforce in the event of copying or imitation by competitors. The timing of your participation in fairs and exhibitions may depend on whether you have already applied for protection for your inventions or designs, as early disclosure of your innovative work may result in loss of novelty and preclude you from applying for protection at a later stage (unless a "grace period" is available in certain specified circumstances in the country concerned). In addition, there may be confidential business information relating to most, if not all, of the items listed above. Such information will benefit from trade secret protection or 4 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

13 protection against unfair competition provided it is disclosed on a "need to know" basis only, and only after a confidentiality or non-disclosure agreement (see sample agreement at appendix 4) has been signed. The export plan and strategy itself is a "trade secret" and companies will generally have an interest in making sure it remains confidential and is not disclosed to competitors. Another important reason for including IP issues in your business strategy is because it may help to strengthen your position in export markets. If your product is successful abroad, it is likely that competing organisations will, sooner or later, manufacture a similar or identical product that will compete with the product in question. Knowing in advance what to do in this situation can help you efficiently stop other companies from imitating or copying a work protected by a patent, trademark, design or copyright. In addition without adequate IPR, it may be difficult or impossible to stop imitators which may result in substantial loss of commercial value, competitive positioning and ultimately return on investment Common IP mistakes made by Exporters Believing that IP protection is universal. Many exporters believe that by applying for trademark, patent or industrial design protection in their own country they are automatically protected worldwide. However, IPR are territorial, and IP offices (generally government appointed) only grant protection for the relevant national (or regional) jurisdiction Assuming that laws and procedures for the protection of IP rights are the same worldwide. While there has been significant harmonization of laws and procedures for the protection of IP rights worldwide, there remain many areas in which there are significant differences between countries. One example is the US, where patents are granted on a first-to-invent basis (i.e. an applicant may not be granted a patent if somebody else can prove that he/she had made the same invention at an earlier date) while most other countries grant patents on a firstto-file basis (i.e. the patent is granted to the first person to file an application for patent protection for a given invention). Not checking whether IPR of others precludes use of some aspect of an exported product, for example a trademark is already registered or is being used by competitors in the export market. Using a trademark in a foreign country that is identical or similar to one that is registered or is already being used by a different company could be considered to be an infringement on the other company s trademark rights. Your company may be asked to cease using such a trademark or asked to pay damages for infringement, which may be a huge blow to the entire marketing and export strategy of your firm. A search for IPR of others should be considered carefully. Using a Trademark that is Inappropriate for the Market in Question - Although your brand may be suitable to use in the majority of countries, cultural or language differences may mean that a trademark may have negative or undesired connotations in a new market. There is also the possibility that a national IP office may refuse to register your trademark because the mark is More than 50% of those asked claim their IP portfolio assisted in extending their market share IEA Survey, 2004 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters 5

14 devoid of distinctive character or may be seen as descriptive of the product/service, as a result of national language or cultural understandings of the word/logo/image etc. It is advised that you fully research your market place prior to your launch in order to prevent problems of this nature occurring. When beginning to trade in a new country, it is particularly important to verify that your trademark/brand is appropriate for use in that country. Avoiding IP Pitfalls Failure to consider IPR issues may result in large or fatal losses if your products are considered to be infringing upon the IPR of others in the export market concerned. Even if an invention, design or trademark is not protected in your own country, this does not mean that someone else has not protected them in an export market. So, your product may have functional or aesthetic features or an associated trademark that are not protected in your home country but are protected as IPR of others in an export market. Patent-protected inflatable shelters for engine maintenance in the aviation industry are central to the commercial success of J.B. Roche (Mfg.) Ltd., in Cork In addition, it is important to bear in mind that companies which have signed a licensing agreement with another company, thereby obtaining a license to sell a given product in their domestic market, may not have the right to sell the product in export markets. The territorial exclusivity and scope of the license is specified in licensing contracts and it is important to bear this issue in mind while negotiating a licensing agreement. Exporters often realise the importance of protecting their IP once it is too late, i.e. once they are faced with imitators or counterfeiters or recognising the IPR of others after they have been accused of infringing the rights of others. While preparing the export plan and strategy, it is, therefore, important to understand the IP environment in the potential export market as much as it is understanding all other facets of the business environment in that market. 6 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

15 Chapter IP protection is very important to our business, without it return on our R&D investment would be greatly diluted Martin Crowley Financial Director Enfer Scientific Ltd.

16 Chapter MANAGING IP, MAXIMISING COMPETITIVENESS In this section we will highlight the areas of key importance for exporters when managing their IP. Awareness of these issues, and their incorporation into your export plan can assist in maximizing your competitiveness by allowing you to create a strong hold over your IP, and positioning your company in such a way that your IP can provide a real competitive advantage and return on investment. It is recommended that you engage the services of your IP advisor at the early stages of developing your export/ip strategies, as they can assist you in identifying the IP protection, transfer and management tools that are most appropriate to meet the requirements of your business. IP protection is territorial in nature which means that you need to register your rights individually in each of the countries where you require protection Intellectual Property Registration As IP protection is territorial in nature it means that you need to register your rights individually in each of the countries where you require IP protection. While most countries have their own national offices for IP registration, there are a number of additional offices where you can register your IP rights in more than one country depending on your requirements. Regional systems include the European Patent Office, the Community Trademark Office (OHIM), the Benelux Designs Office, the Benelux Trademark Office, the Eurasian Patent Office, African Regional Industrial Property Office, the Organisation Africaine de la Propriété Intellectuelle and the Patent Office of the Cooperation Council for the Arab States of the Gulf. The systems of international protection include: The Patent Cooperation Treaty (PCT) ( for Patents The Community Trademark (CTM) and the Madrid Sy s t e m ( for the international registration of trademarks. The Registered Community Design and The Hague Sy s t e m (h t t p :// w w w. w i p o. i n t / h a g ) u for e the international registration of industrial designs Registered trademark and internet domain name of CityJet Ltd., the Irish airline operating from Dublin Time Limits When Applying for IP Protection For some IP rights, such as patents and industrial design rights, you must apply for protection in export countries within a specified period of time from the date of application in the domestic market. The period is generally referred to as the "priority period", which is one year for patents and six months for industrial designs and trademarks. Failure to apply during the priority period would generally result in the impossibility to obtain protection in such countries, thus leaving room for other companies to copy your invention or design freely. The timing of your initial application is also paramount and seeking advice from your patent or trademark attorney at the earliest stage of the creative process is recommended. 8 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

17 Disclosing Information on Your Innovations Disclosing information on your latest product innovation or new design to potential trade partners, export agents, distributors or anybody else prior to applying for protection or without a written contract requiring confidentiality, could result in you losing the potential to secure rights over your invention or design. Your innovative product may, in fact, no longer be considered new and therefore, no longer patentable. In a worst case scenario somebody else may apply for patent protection thus excluding you from the use of your own invention. Similar considerations apply for industrial designs. It is worth noting that although it is recommended to register your trademark(s) before you begin trading, you can register them at any time. However, the earlier you register your mark(s) the easier it will be for you to prevent another party from imitating them and possibly damaging your brand s reputation or positioning. Infringing the IP rights of others? Exporting your products without checking whether the product is infringing the IP rights of others in the relevant foreign markets may prove a costly affair. For example, if you have licensed-in technology from other companies, you must make sure that you have a right to export the product bearing such technology in order to avoid infringing on the rights of the right-holder. If your products are thought to be infringing on the rights of others, they may be withheld at the border and their distribution impeded or stopped altogether. IP protection is very important to our business, without it return on our R&D investment would be greatly diluted Martin Crowley, Financial Director, Enfer Scientific Ltd. Similarly, prior to initiating your export operations, and preferably prior to selecting your trademark(s), it is crucial that you carry out a trademark search in the relevant export market to clear your brand for use in that market. If you fail to do this, you may inadvertently infringe the IP rights of another party. This may prove quite costly as you may be required to cease using your chosen mark, and completely rebrand. A list of on-line trademark databases for doing trademark searches is available at: Your IP advisor can assist you in carrying out these searches, and in addition can assist you in interpreting the results of your search and advise on the availability of a trademark/brand for use in each of your designated markets. Licensing Agreements and IP Protection Rather than exporting a product directly, you may grant licenses to other companies in exchange for a one-time fee or a recurring royalty. A licensing contract often includes the sharing of technological know-how as well as the authorization to manufacture and/or sell a product developed by the licensor. It is also essential that prior to the negotiation of a licensing agreement, that you make sure that the intellectual property rights related to the product being licensed have been, INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters 9

18 By registering our brand we protected it from use by others/competitors in overseas and domestic markets Hugh McGlynn, Financial Director, Toughline Manufacturing Ltd./Granning Axles or can be, adequately protected in the territories covered in the licensing agreement. Your licensing agreement should also clarify issues of ownership over such IP rights. Out-Sourcing Development & Design of Products Many companies outsource their research and development, and the creation or design of products to other organizations. There is a danger that businesses will forget to protect their IP rights in advance or to specify issues of ownership of designs, inventions, software, etc, in the contracts with the contracting party. This may result in misunderstandings about ownership of the IP rights between the company outsourcing the work and the firm contracted to do the work. There are great variations amongst national laws on the issue of ownership of right over contracted work and different rules generally apply to different IP rights. This is why it is important to understand national legislation in the relevant export market and to include specific clauses in the original contract between the two organisations clarifying issues of ownership of rights over any creative or inventive work that results from the agreement. The issues relating to licensing and collaborative agreements are examined in more detail in chapter four. 10 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

19 Chapter When a new product is at conceptual stage we conduct extensive research first through our trademark and patent advisers so that creative costs are not wasted by infringing another party s already established rights Joseph C. Lynch Managing Director First Ireland Spirits Company Ltd.

20 Chapter IP: PATENTS, TRADEMARKS, DESIGNS AND COPYRIGHT When a new product is at conceptual stage we conduct extensive research first, through our trademark and patent advisers, so that creative costs are not wasted by infringing another party s already established rights Joseph C. Lynch, Managing Director, First Ireland Spirits Company Ltd. Having explored the value of IP to your business, we will outline in this chapter, the intellectual properties rights conferred by registration of patents, trademarks, designs and copyright so as to enable you to understand the process of protecting and enforcing your IPR. Focus on Patents Anyone who is developing a new functional item such as a product, (e.g. a new machine) or a new process of manufacture should consider applying for a Patent. A Patent is a form of statutory protection for technical innovations. In return for disclosing his invention, the inventor (or his employer) receives a state monopoly in the use of the invention for a limited period, usually of 20 years. What can be Patented? In order to be patentable an invention must be new and not form part of the state of the art, it must be capable of use in industry or agriculture, and it must involve some form of inventive step representing a non-obvious advance in the art. While patentable inventions are made in advanced technology such as microelectronics or genetic engineering, improvements in such mundane things as clothes pegs may also receive patent protection. It is therefore advisable to contact your patent attorney to discuss the patentability of your innovation(s). An invention may involve a new manufacturing process, or an improvement in an existing process. However scientific discoveries, aesthetic creations, schemes for performing mental acts or for carrying on business, and surgical or therapeutic methods are not generally patentable in Europe. In the USA, business methods and surgical methods are patentable. To an increasing extent, computer software is being patented, despite former restrictions which existed. Very many inventions now require the use of software, but like any other invention, the steps performed by a programmed computer must be new and not obvious in order to be patentable. Copyright will also exist in any proprietary software. Novelty An invention must be new and not form part of the state of the art in question at the date of the application for a Patent. Novelty can be destroyed by the inventor himself if he makes the invention available to the public before his patent application has been lodged. It is absolutely vital therefore that action is taken to patent an invention before it is disclosed in any non-confidential way what-so-ever e.g. before it is used in public, a description of it is published, or before it is discussed in a non-confidential manner (see appendix 4 for specimen non-disclosure agreements). How to apply for a Patent An application for a Patent is lodged by filing a patent application at a Patents Office. A patent application must include a written description of the invention, known as a patent specification. It is strongly advised to use the services of a patent attorney in order to draft 12 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

21 the patent specification. Typically, Irish residents opt to initially file a patent application at the Irish Patents Office, although there is no requirement to first file in Ireland. There is a period of 12 months after the initial application during which corresponding patent applications can be lodged in other countries with the benefit of the date of the initial application. This gives the applicant an opportunity to find out whether his invention has commercial potential before he has to incur the expense of applying for further patents in other countries. Patent Applications As a patent is a national right, it is generally necessary to apply for patent protection in each individual country where patent protection is required. However there also exists an International Patent Application and a European Patent Application. Irish Patents Two kinds of Irish patents may be obtained. Full-term patents are granted for a period of 20 years while short-term patents are available for a period of 10 years. To obtain a full-term patent it is necessary to satisfy the Patents Office that the invention is novel and inventive. This may be achieved by either requesting an official search of prior patents or providing evidence that such a search was carried out by the Patent Office in certain other countries, including the British Patent Office and the European Patent Office (so called evidence of novelty ). It is not necessary to request a search or file evidence of novelty to obtain a shortterm patent. However before starting proceedings for infringement of a short-term patent it is necessary to request a search or provide evidence of novelty. European Patents A single patent application lodged at the European Patent Office can lead to the grant of national Patents in some, or all, of the member countries of the European Patent System, including most of the EU member states (see below). The procedure involves a search of relevant prior art, and the subsequent examination of the patentability of the invention based on the search results. Members of the European Patent Convention (EPC) are: Austria (AT)* Belgium (BE)* Cyprus (CY)* Croatia (HR) Denmark (DK)* Finland (FI)* France (FR)* Germany (DE)* Greece (GR)* Ireland (IE )* Italy (IT)* Liechtenstein (LI) Luxembourg (LU)* Monaco (MC) Netherlands (NL)* Poland (PL)* Portugal (PT)* Spain (ES)* Sweden (SE)* Switzerland (CH) United Kingdom (GB)* Turkey (TR) Republic of Bulgaria (BG) Czech Republic (CZ)* Republic of Estonia (EE)* Hungary (HU)* Republic of Romania (RO) Slovenia (SL)* and Slovak Republic (SK)* *Also a Member State of the European Union (EU). International Patent Applications (PCT) Over 120 countries, including Ireland, have become members of the Patent Cooperation Treaty (PCT). The PCT enables an International Patent Application to be filed designating any or all of the Member States. A comprehensive search is carried out by an International Searching Authority to see whether the invention is novel and inventive. The Applicant may also elect to have the application subjected to an International Preliminary Examination in which the applicant is given an opinion as to the patentability of his Such mundane things as clothes pegs may receive patent protection. It is therefore advisable to contact your patent attorney to discuss the patentability of your innovation(s) INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters 13

22 An overview of the process from invention to patent registration in Ireland and internationally invention. At the end of this International Phase the applicant must attend to requirements in those countries in which he wishes to obtain patents. An International Patent Application does not result in any International Patent, it only provides a more streamlined search and examination process, where some duplicated effort by Patent Offices around the world is avoided. The advantage of the PCT is that entry into the national phase, which is expensive, is deferred for up to 30 months, and the applicant has the advantage of a search and preliminary examination before the major expense is incurred. However, in the long run, it can be a more expensive route to obtaining Patents in different countries. A patent application will have a full description of how the invention works as well as details of who the inventors and applicant are Enforcing a Patent A patent application does not give its owner the right to go to Court and stop his invention being copied. Infringement can only be prevented after the Patent has been granted. A short-term patent can be granted in Ireland quite quickly. In addition many countries (including Ireland) now give the applicant the right to claim compensation from an infringer back to the date of first publication of the Patent Application, which is usually about 18 months after the initial application date. The filing of a Patent application entitles the owner to mark his product Patent applied for or Patent Pending. After the grant of a patent, the product should be marked with the Patent Number. What is Protected by a Patent? The scope of protection of a Patent is defined in words which appear as "CLAIMS" in the granted patent. A patent application will have a full description of how the invention works as well as details of who the inventors and applicant are. Any unauthorised person who makes, uses or sells the invention defined in these Claims will infringe the Patent. It is not necessary to prove that the infringer has actually copied the Patentee's idea. 14 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

23 Why is Patent information important? The information available on databases of existing patents is important because they constitute a valuable source of information for strategic business planning. Since patents are disclosed to the public when they are published (or if the law provides, when an application is made) you will be able to learn about current research and innovations long before the innovative products appear on the market. Technical information contained in patent documents can provide you with important insights that can enable you to: Avoid expenses in researching what is already known Identify and evaluate technology for licensing and technology transfer Identify alternative technologies Keep abreast with the latest technologies Find ready-made solutions to technical problems From the export strategy standpoint it will assist you to: Locate business partners Locate suppliers and materials Monitor activities of real and potential competitors Identify niche markets Maintenance of Patents In most countries, renewal fees must be paid to the Patent Office each year (usually commencing with the 3rd year) in order to keep the Patent in force. Focus on Trademarks A Trademark distinguishes the goods or services of one trader from those of others. A Trademark is usually a word(s), letter(s), a symbol, a logo, or a combination of these. A label, product get up, product packaging or even product shape may also be Trademarks. Protection of Trademarks There are two ways of protecting a Trademark. The first arises under the Common Law by use of the mark over a number of years. The second arises under statute, namely registration of the mark as a Registered Trademark. Registering your names and brands as Trademarks is recommended as it can take years of use to build up user rights through common law. In addition, for exporters, while it can be somewhat difficult to identify and enforce user rights in familiar countries like Ireland and the UK, it can be even more difficult in other countries abroad. Why Register your Trademarks? The best way to protect a start-up product or a new brand name Grants a legal property right Grants exclusivity in your name or brand in your product field Renewable every 10 years Can be licensed, transferred or used as security A return on your financial investment in creating the brand Could become your most vital and valuable asset Registered Trademark of Flair International Ltd., leading manufacturers of high quality shower enclosures and bath screens INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters 15

24 What Marks can be Registered? For a mark to be registered it must be distinctive. It must not be directly descriptive of the goods or services in relation to which it will be used. Generic words in the particular product field cannot be registered. An invented word(s), or a dictionary word(s) having no meaning in the context of the particular product field make good trademarks. In some cases a slightly or covertly descriptive mark might be registrable. Adding a symbol or other figurative element will assist in weak cases. Registration Procedure Trademark registration is carried out for goods and/or services in relation to which the mark is used or is intended to be used. This defines the scope of the exclusive rights of the registration. There are 45 classes of goods and services under which registration can take place. In most countries, an application for registration can cover goods and/or services in more than one class. After filing the application at the relevant Trademark Office, it is examined under the applicable law. Criteria vary from country to country, although in the EU countries it is largely harmonized. Some countries may raise objections based on earlier rights, namely earlier trademark applications or registrations which conflict. The application will be published, and there is usually a period during which the application may be opposed by third parties. Assuming no opposition arises within the relevant period, the application proceeds to registration. In Ireland, as in most countries, Trademarks are registered for an initial period of 10 years and are renewable for subsequent periods of 10 years. Proof of use is required in some countries to support renewal, although not in Ireland. Kerrygold is a Registered Trademark of the Irish Dair y Board, and one of Ireland's best known food brands, both in Ireland and abroad Marking of Registered Trademarks On registration, the owner may refer to the mark as a Registered Trademark and use the symbol. However, while the application is still pending, or while the mark is unregistered, it is an offence to use the word Registered or the symbol. In this case, the bare phrase Trademark or the symbol TM may be safely used. What Rights are Granted on Registration? On registration, the owner gains strong exclusive rights in the Trademark in the country (or countries) covered by the registration. The owner has the right to prevent use or registration of a later trademark that is: identical to the registered trademark, and is used (or to be registered) for identical or similar goods or services confusingly similar to the registered trademark, and is used (or to be registered) for identical or similar goods or services The consequences of infringement of a Registered Trademark can be severe. Remedies which may be granted include an injunction, payment of money damages, delivery up and destruction of goods, and an account of profits. Not knowing that a conflicting registration exists is not a defence. 16 INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters

25 Clearance and Searching Because of the strong rights granted to Registered Trademark owners, it is good practice to carry out a trademark search before adopting a new name or brand, otherwise you run the risk of an objection or even litigation with a trademark owner. Clearance searches of Trademark registers should be undertaken in the countries where the mark is going to be used. Also in use searches in the marketplaces of interest are also advisable as there may be user rights in existence in the countries of interest. Searching the world wide web or domain names registers are useful components of an overall in use search, but they are no substitute for proper trademark register searches and proper marketplace searches. Where to Register? Ideally, a Trademark should be protected by registration in each of the countries where the Trademark is going to be used. In many countries, including in the EU, it is possible to file an application in advance of commencing trade there or even before concrete plans have been finalised. Typically, where there are multiple countries of interest, this means filing separate national Trademark applications and obtaining separate national Trademark registrations. There are two main exceptions to this. These are (European) Community Trademarks and International Registrations under the Madrid Protocol. (European) Community Trademarks The Community Trademark (CTM) is a unitary registration for the 25 Member States of the European Union. While [the] application is still pending, or while the mark is unregistered, it is an offence to use the word Registered or the symbol The CTM application is filed in one procedure. Opposition may arise from the owner of a prior conflicting right owned by another party in one or more EU Member States. If this cannot be overcome, the CTM application may be converted into national applications in the remaining Member States without loss of filing date. The CTM system is highly recommended for businesses trading within the European Union, as it is an efficient and cost-effective system. For more general information on the CTM system see: International Registrations under the Madrid Protocol The Madrid Protocol is an international trademark agreement administered by the World Intellectual Property Organisation (WIPO). In one procedure, a company based in a member country of the Madrid Protocol can obtain an International Trademark Registration effective in multiple countries which are members of the Madrid Protocol. Currently there are over 60 member countries including Ireland. Unlike the unitary CTM system, an International Registration is a bundle of separate national rights. However from autumn 2004 it will be possible to use the Madrid Protocol procedure to obtain CTM rights. An invented word(s), or a dictionary word(s) having no meaning in the context of the particular product field make good trademarks INTELLECTUAL PROPERTY MANAGEMENT: A Guide For Exporters 17