What not to do: the top 10 patenting mistakes

You've run your experiments, got your results, and you've been mentally spending -- or at least licensing -- the proceeds of your bulging IP portfolio. But that may have been the easy part, writes Renate Krelle. Before you go any further, here's a checklist of some of the most common patenting pitfalls.

1. Publishing and perishing

"This is going to print in Nature next week -- can you file me a patent application?"

That's not a request most patent attorneys enjoy hearing. However, it is better than the alternative -- for a scientist to jeopardise his or her bid for to secure a patent by describing an invention publicly before it has patent protection.

One of the drivers of scientific sector is publication, and whetting the appetite or your colleagues for that cunning new technique of yours may be very tempting. But in the majority of countries revealing details of an invention -- be it in an abstract, an article in a newspaper, a letter to the editor or an oral presentation -- is considered 'publishing'. Once this is done, the subject of the patent is no longer considered 'novel'.

"Hinting about what's coming up -- even without the full information -- can cause sufficient damage for the whole IP to lose all its worth," warns Ivan Rajkovic, a partner at patent attorney firm Baldwin Shelston Waters.

And although Australian patent legislation was recently amended to include a grace period -- under which researchers have a year from the first publication to file a complete patent application -- other countries are not as lenient.

"Europe doesn't have a grace period and disclosure would prevent obtaining patent protection for that invention in EU if you didn't file before you published," explains Trevor Davies of Allens Arthur Robinson. "Another problem is that if you disclose that invention, third parties can use that information to make an improvement on your invention."

2. Jumping the gun

That said, the temptation to rush out and patent as quickly as possible should be resisted. If you disclose your invention in a patent application without fleshing out the detail of how the invention is applied, and how it works you can actually queer your own pitch.

Bernard O'Shea, a partner at Deacons, says an inferior patent application can pre-empt your ability to get a much better patent later on. But doesn't this trap scientists between needing to patent before publishing and the need for a watertight patent application?

"It's a high-stakes poker game, requiring a lot of strategy and thinking," says O'Shea. "Of course [in taking the time to file a well-defined patent] you also take a risk that somebody is going to jump you in the queue."

"You should file when you believe it's a correct time when you have initial support," says AAR's Trevor Davies. "Typically, people file a provisional patent application -- that gives them a priority date for the invention and you have 12 months within which to file applications for the invention. If you have published during that 12-month period, you are then committed to the patenting route -- you can't refile and get another priority date."

3. Not protecting improvements

"The first patent that you file is not necessarily the one that you will need to protect your product -- you need protection of incremental improvements," says Ivan Rajkovic.

Trevor Davies agrees. "One of the good reasons [to file patents on improvements] is that you're actually prolonging the life of your patents for your invention," he says. "Three or four years down the track you don't want competitors to patent improvements to your invention - then. you couldn't work your invention without licensing to third parties. It's rare that you can protect your particular area with one patent."

4. Relying on one patent

Monocultures are vulnerable. This is something the weekend gardener knows just as well as a broadacre farmer. A number of intellectual property species are needed for a vigorous portfolio. The canniest companies are the ones that plan in advance to bundle together a patent portfolio which includes basic intellectual property, as well as IP for different uses of the technology, and trademarks and designs for branding.

This strategy is particularly important if a company is trying to commercialise IP alone -- rather than a product -- as many Australian biotechs are doing, says Ivan Rajkovic. A comprehensive portfolio can be a royal flush when negotiations become cut-throat. "Unless you link these all together, you are likely to fail," he says. "Companies have to gather intelligence on the markets out there so they can tweak their portfolio."

Life science companies, he says, need to ask: "Where is my market, who is in that space, and how can we make ourselves really valuable?"

5. Maintaining IP which is no longer required

At the same time, a portfolio should be weeded as business strategy change or is refined. "You should not be wed to keeping applications or patents if they are of no value to the company," says AAR's Davies. "As the company matures, you're filing more and more patent applications, protecting all your innovation. If the commercial direction changes or the marketplace changes, [you should] sell patents, license them or let them lapse."

6. Letting important IP lapse

But there are right ways and wrong ways to let IP lapse. Davies relates a gloomy tale of labours lost. "I have seen one particular situation where the patent application covering off the core technology was allowed to lapse due to lack of funds," he says. "Several years later they came up with some improvements and formed a company on the improvements. But they lost their umbrella protection -- which would have covered hundreds of products."

7. Trusting co-ownership

"If at all possible try to stay away for co-ownership," says Karen Sinclair, a principal at Watermark Patent and Trade Mark Attorneys.

Co-ownership may be convenient -- especially in the life sciences, where collaborative relationships are common. It may avoid early conflict, and may meet the status requirements of an academic institution in the short term. But Sinclair explains that one of the few golden rules of patent law is that co-ownership is often fraught, and rarely a long-term solution for holding intellectual property.

"The pitfalls with co-ownership are that while each party can exploit the technology if they have the capacity, if they want to assign their rights they have to get the permission of the co-owner," Sinclair says. "In the situation where one party -- such as a corporate -- has more commercial power than the other -- perhaps a university -- it make it far more difficult for the party with less commercial power to exploit their technology.

"While everyone sets out to have a cosy relationship which never goes awry, the fact is that personnel change, rationales change - and the success of the product can lead to a fall-out, in the worst case scenario."

The only way to deal with a dispute between co-owners is to take the matter to the commissioner of patents, which, Sinclair warns, is costly. "And the outcome is by no means certain." Instead, parties should set up a separate company which owns the intellectual property. Alternatively, one person should own the patent and license a share of the proceeds to the other person.

8. Handing over IP to a company exclusively

The point of a patent is to get the invention out to the market, but an exclusive assignment of your IP may not be the best way to do this. "Look into whether exclusivity is appropriate or not," says Diane Nicol of the University of Melbourne's Law Gene Centre. "For some inventions -- particularly public sector inventions -- it may be far more appropriate to non-exclusively license to a number of industry participants.

"If you want to give exclusive rights to a company, [make sure you] have performance clauses to ensure that what they say they intend to do actually gets done. The classic example [of a non-exclusive license] was non-recombinant DNA technology, which came out of Stanford University in the 1970s. The Cohen-Boyer patent was widely licensed, and was very lucrative."

9. Not knowing if your scientific patch is clear

Scientists are looking to create something new and reading the literature should give a reflection of what is already 'prior art'. But to find out whether or not a likely scientific patch is crowded by ghosts of patents past, a solid freedom-to-operate analysis is needed. This can cost around $40- $50,000.

"Big pharma wouldn't step into a space without having a fulsome idea of what the patent landscape is," says Bernard O'Shea of Deacons. "You owe it to your investors to find out whether there will be a pot of gold at the end of the rainbow or whether existing patents will block you out. It is important to have this in mind. You might well do some work in an area, where you know you need to have a license to commercialise what you're doing, but at least you know about that up-front."

10. Not being aware of employment agreements

Where intellectual property is created by a member of staff in the course of their employment the institution will generally own the rights to that property. Any exceptions to this status quo are likely to be set out in either university statutes or in employment agreements.

"In a simple employment context that is relatively straightforward, but it is becoming increasingly common to find [unusual] employment mixes. You start to run into problems of under which hat was the relevant invention made," says Bernard O'Shea.

Watermark's Karen Sinclair notes that if the university IP policy states that in certain circumstances where there is no external funding, then the academic owns the IP. Undergraduates working on a project are also an exception, as they are not actually employed by the university, explains Sinclair. "I had a recent situation with another university, where a very bright young man did his honours thesis at a government institution rather than a university. He quite possibly was the owner as well as the inventor of his IP, but there was no acknowledgement from the university or the government institution."

Agreements between employees and employers should be explicit, says O'Shea. They should cover who owns the intellectual property, who can grant licenses, whether one party has to account to the other, who will bear the cost and expenses of patenting, and who has the right to patent.