Issues relating to Intellectual Property
This is a large topic by itself, but we can make some relevant comments on the topic.
Secrecy & Non-Disclosure
It is not unusual for a business to approach for a quotation on a project which has elements that they do not wish to publicly expose. Certainly, if they have a patent application in the pipeline they will receive legal advice telling them not to tell anyone about their project unless a Non-Disclosure agreement is signed by all parties.
Alternately, a business may be reluctant to disclose too much about their concept to a design company for fear that they may take it for their own use. At Alian Electronics we have no problem in signing confidentiality documents and have no interest in developing the intellectual property of any person or business without their permission. In our 20 years of design work, this has never been an issue with any client.
Is the project Patentable?
This topic does crop up from time to time. It's fine to come up with a new idea, but before it can be patented there is a rigorous process to ensure that the idea itself is new and has never before been used or exposed in the public domain. A fine example of what can go wrong was a man in the 1960's who tried to obtain a Dutch patent for raising sunken ships by filling them with ping pong balls. His application was denied because the idea had been expressed in a Donald Duck comic fifteen years earlier. This is called 'Prior Art'. A Patent needs to express some new aspect, a feature or method that has not been done before. Simply putting a clock into a coffee table would not be defined as something new unless this combination creates a unique effect or usage that did not previously exist.
Even if the idea is patentable, you can expect a delay of at least a couple of years to work completely through this process in Australia. It is not cheap. For a patent making a single claim it will cost around $18,000 in patent fees over the 20 year life of the patent. (This does not include fees by a patent attorney for the preparation of these documents. ) You want to make sure that you really will get some financial gain out of the exercise before going down this path.
It is worth noting that even when you are granted a patent, it simply provides a document which proves that you thought of it first. If another manufacturer begins to churn out your product, the act of prosecuting that transgression will be an expensive process costing typically in tens of thousands of dollars to pursue, often much more. Perhaps you would be successful, in this litigation or perhaps not. The most important aspect of a patent is that it declares the ownership of the idea to a person or business entity. It then becomes a tangible item that can be sold or used for leverage for royalty payments. This is the best reason of all to pursue the Patent process. It is therefore important to examine the idea and assess the likelihood that there would be a future demand or competition for the concept. If the answer is 'no' then time and money may be better spent on marketing or further product development.
What about getting a patent in China?
This is something different to consider. China has made large efforts in tidying up their patent processes. You must go through a Chinese patent attorney in order to file one. It is not as expensive as an Australian patent, but oddly they ask a lot of questions about construction method and not just design concept. There will also be translation fees involved. Be aware that to lodge any patent is also the act of putting your design details in the open for all to see.
Perhaps a business may think, well I'm not going to sell my product in China, so it does not matter. Well it could matter if you ever want to manufacture your product there. There have been cases where somebody sees a product being manufactured up the road in a Chinese city. They gather a lot of technical info about the product, find that it is unprotected in China, then quietly go and get a patent for this idea in their own name. Once granted, they can then approach that factory and shut them down unless compensation and ongoing royalties are paid. This has happened many times. Getting a patent in China may not stop others from copying your design, but it can indirectly protect your own manufacturing processes. This situation also exists in a few other countries.
As with other countries, there are two distinct classes of patent in China. There is the 'Full' patent which requires a detailed submission that must be legally tested, then there is the 'Utility Patent' which provides less protection for a shorter period of time at a lower cost. The burden of proof needed to confirm the concept being protected is less arduous. Some may regard the Utility Patent as a waste of time, but it does at least have the advantage of destroying the 'newness' of the design, which can prevent others from patenting your idea. Sometimes that is all that is required.
Other methods of protection
Most of the projects and products produced by Alian Electronics involve a microprocessor which requires a program to make it run. Some of the programs are quite complex. It would be a lot of work and perhaps impossible, for another party to rewrite the same functions from scratch. This situation works to the advantage of our customers. When microprocessors are programmed they can also be 'locked' so that they cannot be copied. Even if a pirate duplicated the circuit board and all of the parts on it, they still would not be able to make their version of your product work because they cannot copy the brain of the equipment..
There is a good case to keep design details quiet and out of the public domain. Keep the software in the microprocessor locked. Then the focus is on getting a quality product to market asap for maximum return. Spend the 'patent money' on quality advertising and marketing and establish solid sales before another party has a chance to compete with you. Of course this is a generalisation and the answer depends upon available funding and the nature of the product. If someone invented anti-gravity tomorrow, then pursuing the patent path would still be merited.
If the product does not meet the rigid criteria of an 'invention', then it is still possible to formally register a design or physical aspect. This type of protection is less about ideas and more about the look and feel of a product. There is a lot of information about the process of Registered Designs on the IP Australia web site.
Who owns a design that has been commissioned?
The short answer to this is: the person or business that paid for the development of that design.
If an approach is made to Alian Electronics to design a product to a specification, then when the development is complete and paid for, the client owns the design. This means that copies of circuit diagrams, circuit boards, and software within the product are supplied to the client upon request to do what they will with it. Should the client choose to pass this content onto a third party for manufacture or re-work then it is certainly their prerogative to do so.
Conversely, Alian Electronics is not at liberty to sell a product to anyone other than the client who had commissioned and paid for the design. (or at least, not without their express permission.) This does not mean that there may be aspects of the design that would not appear in other, unrelated products. For example, say a new type of tennis ball propelling machine with an LCD display in it has just been designed for a client. This does not mean that Alian Electronics would not use an LCD display in a different product for a different client.
Summary
All of this information is general in nature. Where doubt exists there is always room to negotiate for special terms and conditions to help a client to preserve the inherent uniqueness of their design.
Click here to return to CREATING A NEW PRODUCT
This is a large topic by itself, but we can make some relevant comments on the topic.
Secrecy & Non-Disclosure
It is not unusual for a business to approach for a quotation on a project which has elements that they do not wish to publicly expose. Certainly, if they have a patent application in the pipeline they will receive legal advice telling them not to tell anyone about their project unless a Non-Disclosure agreement is signed by all parties.
Alternately, a business may be reluctant to disclose too much about their concept to a design company for fear that they may take it for their own use. At Alian Electronics we have no problem in signing confidentiality documents and have no interest in developing the intellectual property of any person or business without their permission. In our 20 years of design work, this has never been an issue with any client.
Is the project Patentable?
This topic does crop up from time to time. It's fine to come up with a new idea, but before it can be patented there is a rigorous process to ensure that the idea itself is new and has never before been used or exposed in the public domain. A fine example of what can go wrong was a man in the 1960's who tried to obtain a Dutch patent for raising sunken ships by filling them with ping pong balls. His application was denied because the idea had been expressed in a Donald Duck comic fifteen years earlier. This is called 'Prior Art'. A Patent needs to express some new aspect, a feature or method that has not been done before. Simply putting a clock into a coffee table would not be defined as something new unless this combination creates a unique effect or usage that did not previously exist.
Even if the idea is patentable, you can expect a delay of at least a couple of years to work completely through this process in Australia. It is not cheap. For a patent making a single claim it will cost around $18,000 in patent fees over the 20 year life of the patent. (This does not include fees by a patent attorney for the preparation of these documents. ) You want to make sure that you really will get some financial gain out of the exercise before going down this path.
It is worth noting that even when you are granted a patent, it simply provides a document which proves that you thought of it first. If another manufacturer begins to churn out your product, the act of prosecuting that transgression will be an expensive process costing typically in tens of thousands of dollars to pursue, often much more. Perhaps you would be successful, in this litigation or perhaps not. The most important aspect of a patent is that it declares the ownership of the idea to a person or business entity. It then becomes a tangible item that can be sold or used for leverage for royalty payments. This is the best reason of all to pursue the Patent process. It is therefore important to examine the idea and assess the likelihood that there would be a future demand or competition for the concept. If the answer is 'no' then time and money may be better spent on marketing or further product development.
What about getting a patent in China?
This is something different to consider. China has made large efforts in tidying up their patent processes. You must go through a Chinese patent attorney in order to file one. It is not as expensive as an Australian patent, but oddly they ask a lot of questions about construction method and not just design concept. There will also be translation fees involved. Be aware that to lodge any patent is also the act of putting your design details in the open for all to see.
Perhaps a business may think, well I'm not going to sell my product in China, so it does not matter. Well it could matter if you ever want to manufacture your product there. There have been cases where somebody sees a product being manufactured up the road in a Chinese city. They gather a lot of technical info about the product, find that it is unprotected in China, then quietly go and get a patent for this idea in their own name. Once granted, they can then approach that factory and shut them down unless compensation and ongoing royalties are paid. This has happened many times. Getting a patent in China may not stop others from copying your design, but it can indirectly protect your own manufacturing processes. This situation also exists in a few other countries.
As with other countries, there are two distinct classes of patent in China. There is the 'Full' patent which requires a detailed submission that must be legally tested, then there is the 'Utility Patent' which provides less protection for a shorter period of time at a lower cost. The burden of proof needed to confirm the concept being protected is less arduous. Some may regard the Utility Patent as a waste of time, but it does at least have the advantage of destroying the 'newness' of the design, which can prevent others from patenting your idea. Sometimes that is all that is required.
Other methods of protection
Most of the projects and products produced by Alian Electronics involve a microprocessor which requires a program to make it run. Some of the programs are quite complex. It would be a lot of work and perhaps impossible, for another party to rewrite the same functions from scratch. This situation works to the advantage of our customers. When microprocessors are programmed they can also be 'locked' so that they cannot be copied. Even if a pirate duplicated the circuit board and all of the parts on it, they still would not be able to make their version of your product work because they cannot copy the brain of the equipment..
There is a good case to keep design details quiet and out of the public domain. Keep the software in the microprocessor locked. Then the focus is on getting a quality product to market asap for maximum return. Spend the 'patent money' on quality advertising and marketing and establish solid sales before another party has a chance to compete with you. Of course this is a generalisation and the answer depends upon available funding and the nature of the product. If someone invented anti-gravity tomorrow, then pursuing the patent path would still be merited.
If the product does not meet the rigid criteria of an 'invention', then it is still possible to formally register a design or physical aspect. This type of protection is less about ideas and more about the look and feel of a product. There is a lot of information about the process of Registered Designs on the IP Australia web site.
Who owns a design that has been commissioned?
The short answer to this is: the person or business that paid for the development of that design.
If an approach is made to Alian Electronics to design a product to a specification, then when the development is complete and paid for, the client owns the design. This means that copies of circuit diagrams, circuit boards, and software within the product are supplied to the client upon request to do what they will with it. Should the client choose to pass this content onto a third party for manufacture or re-work then it is certainly their prerogative to do so.
Conversely, Alian Electronics is not at liberty to sell a product to anyone other than the client who had commissioned and paid for the design. (or at least, not without their express permission.) This does not mean that there may be aspects of the design that would not appear in other, unrelated products. For example, say a new type of tennis ball propelling machine with an LCD display in it has just been designed for a client. This does not mean that Alian Electronics would not use an LCD display in a different product for a different client.
Summary
All of this information is general in nature. Where doubt exists there is always room to negotiate for special terms and conditions to help a client to preserve the inherent uniqueness of their design.
Click here to return to CREATING A NEW PRODUCT
