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Understanding IP: Some Common Misconceptions

By Henry Hunt-Grubbe
Understanding IP: Some Common Misconceptions

There is a growing awareness of IP in our society, and the potential value of an IP portfolio is gaining more and more attention. However, misconceptions abound. Let's debunk five common misunderstandings:

  1. "We have a patent, so we have the right to exploit our invention." Unfortunately, this is not the case. In fact, IP only provides the right to stop others from doing something - it does not provide the right to do something yourself. Before you exploit your invention, you need to check to see if there are patents owned by third parties that might cover what you plan to do (so-called freedom to operate searching).
  2. "We have worldwide patent protection for our idea." Whilst it is possible to apply for a patent application via an international treaty (the Patent Cooperation Treaty), this does not lead to a "worldwide patent", but needs to be converted into separate national or regional patents in the countries of interest. In fact, the cost of filing and maintaining a patent family in a large number of countries can be prohibitively expensive and is normally only an option for multi-national companies with large IP budgets. However, this does not mean that small companies with relatively small IP budgets are unable to obtain appropriate patent coverage. With an effective IP strategy in place, small companies can ensure useful protection by only proceeding with patent protection in a few key states.
  3. "Our patent provides us with a monopoly for our company's product" Whether this is the case or not will depend on the exact wording of the patent. A careful analysis of the claims of the patent will be needed to determine if the scope of protection is appropriate for preventing competitors from designing round the patent. This may need to be done country by country as the scope of protection provided by patents in different countries in a patent family may vary. Care also needs to be taken to look at what a patent ultimately protects once it is granted. It is all too easy for companies to lose sight of IP when changes are made to product design during development: it may be that a patent does not actually cover the product it was intended to protect. Regular review of the IP portfolio against changing business plans can avoid this issue.
  4. "We have not applied for any patents because it is not possible to obtain a patent for a computer program" - Many opportunities are lost because of this misconception. The European Patent Office alone grants thousands patents a year for computer programs.
  5. "Now we have a patent, it will be easy for us to keep our competitors off the market" - Enforcing IP rights is often a complex business. There are significant costs and risks associated with litigation. Settling a dispute, via licensing or other agreements, is normally the preferred option, with suing a competitor for infringement of an IP right being a last resort.

Some of these misconceptions can mean that an IP portfolio does not provide the protection its owners think it does. A quick healthcheck on your IP might help to understand what you have, and how you can use it to maximise your company value.