The Lawyers Weekly - May 7, 2010

Owners of new technology commonly have to choose between keeping an invention secret or seeking patent protection for it. The two options are mutually exclusive and a variety of factors will influence the choice of strategy.

Patents

Officers and directors of a company have a responsibility to properly manage and protect the company’s assets, including its intangible assets. When potentially patentable technology is developed, the options for protecting it should be considered as early as possible, because the laws of virtually all countries include time limitations for filing patent applications. If these limitations are missed, then all other considerations may become academic.

For instance, in most jurisdictions any non-confidential disclosure of the invention before a patent application is filed can completely preclude the issue of a valid patent. In a few jurisdictions (such as Canada and the U.S.) the law allows a limited grace period to file a patent application following the first disclosure of the invention, but that disclosure still establishes a hard deadline to file

EUAN
TAYLOR
“The options for
protecting [patent
technology] should be
considered as early as
possible because the
laws of virtually all
countries include time
limitations for filing
patent applications.
a formal patent application.
Patents are only available for
inventions that are novel, inventive
and have some utility. A patent
application must disclose the
claimed invention in sufficient
detail to enable those skilled in the
art to practice the invention with a
minimum of experimentation. In
addition, patent applications are
laid open to the public 18 months
after filing and the invention will
thus be publicly disclosed in full
and enabling detail. Patenting can
be expensive, aside from the costs
of preparing and filing the applica-
tion, prosecution can be costly, and
a range of official fees must be paid
to keep the rights in good standing.
In most jurisdictions patent rights
expire 20 years from the filing date.

Trade secrets

Trade secret protection does not require the payment of any official fees and in principle, a trade secret could last indefinitely. However, it may be difficult to keep an invention secret in the long term and, confidentiality agreements notwithstanding, it is often difficult to demonstrate the source of leaked information or to obtain adequate redress for a breach of confidentiality. And once a secret is out, there is no way to regain confidentiality. Secret use does not bar a patent application by other parties and thus a third party may be able to reverse engineer or may independently conceive the same invention. In some cases, a third party could potentially obtain its own patent for the technology.

Depending on the technology in
question and the nature of their
business, some inventors will
forego protection and will publish
their invention. Publishing details
of an invention, for instance in a
trade journal, provides prior art
that can be cited against any third
party trying to obtain a patent.

Making the choice

Some factors to consider in making a choice between secrecy and patenting include the following:

; If it is not possible to keep the invention secret (for example, where a new design feature will be immediately available to purchasers), then secrecy is clearly not going to be an option;

; If it will be easy for third parties to reverse engineer or independently develop the same technology, then it is inadvisable to rely on trade secret protection;

; If the technology is not novel and inventive, then it is not patentable;

; If a patent is potentially obtain-able, consider whether the scope of protection be commercially meaningful. While a broader patent is obviously the preference, a narrow patent over a critical piece of technology can be very valuable;

; Consider whether the potential benefits of patenting justify the costs;

; Secret use of an invention does not bar others from obtaining a patent on the same technology, but if details of the invention are published, then this can be cited as prior art against any third party applications;

; While a trade secret can be
licensed, it is often much easier
and safer to license out technology
that is already the subject of a
patent application. Most lawyers
will advise their clients to get a
suitable patent application on file
before entering negotiations to
license new technology;
; Potential investors who view the
technology as important will often
want the reassurance that suitable
patent protection has been sought
for important innovations;
; Patent applications can be valu-
able assets and can add to the book
value of a company. ;
Euan Taylor is the head of
Davis LLP’s Patent Practice Group
and is a registered Canadian
patent agent and a qualified arbi-
trator in Vancouver. The informa-
tion here is provided for general
informational purposes only.

Attitudes on impact of popularity in copyright law divide along generational lines

Popularity
Continued From Page 9

popular literary, dramatic, musical and artistic works should, in certain circumstances, enjoy narrower copyright protection, argues Michal Shur-Ofry of the Hebrew University of Jerusalem in an article published by the University of Toronto Law Journal. Shur-Ofry contends—as does Craig — that the more popular something is, the more it becomes a part of the public’s consciousness, the more it becomes part of society’s cultural environment. It follows then, so the argument goes, that once the work becomes a cultural artefact, then the “greater the rights the public should have to use, to engage with, to share and to transform that thing,” said Craig.

That is a position that Ariel Katz, the director of the Centre for Innovation Law and Policy at the University of Toronto, is sympathetic to. “It is a counterintuitive argument, but it makes sense,” said Katz, who practised competition law at the Israeli Antitrust Authority before coming to the University of Toronto.

“Many works are works that we
not only consume for enjoyment
but are also works that are cultur-
ally significant like the Down
Under song, and it is important to
allow people to use it for their own
works that may be equally import-
ant or popular,” added Katz, who
believes that there should be
greater protection for works in
their early stages, and weaker pro-
tection when works become hugely
popular.