An IP right, in the form of a registered patent, trade mark, or design can be used to establish an absolute market monopoly around new innovations important for your business growth and development.
Many local businesses now use the IP rights regime in Australia and overseas but are those businesses getting the most effective use out their IP rights?
What many businesses don't realise is their rights don't need to be at the heavy end of a contentious and expensive infringement action – their rights can be working quietly in the background 24/7, pre-emptively protecting market position.
This passive protection role can be achieved through simple and effective marking practices, to convey details of the IP rights to the public and competitors in particular.
Rights can prevent infringement
Many business owners may not be aware, but from an IP practitioner’s perspective, the passive force of IP rights is very evident.
We regularly see clients who seek non-infringement advice before initiating a business plan, even before they enter a market, concerned that there are no relevant IP rights to interfere with their freedom to operate.
If IP rights are found, such clients will often elect not to proceed with a particular project, adopt an alternative product, or possibly enter negotiations for a licence.
So the trick is to make your competitors aware of your rights. Often this is done after the event, when instances of infringement become apparent and the matter can be resolved with a simple 'cease and desist' letter.
But there is a risk that, by that stage, your competitor is too financially committed to stop the infringement, and will then seek to defend their position.
If your competitors are not aware of your rights there is also a chance they might innocently infringe your IP rights. Innocent infringement provides an infringer with a defence that will allow them to escape paying financial penalties, even if infringement is established in Court.
As such, it again comes down providing effective notification to competitors of the existence of any relevant IP rights, to act as a pre-emptive deterrent and to remove access to the innocent infringer defence.
Conventional marking
Traditionally, relevant notification has been provided by marking products directly with product specific registration numbers or wording. Many people would be aware of the "Patent Pending", "Patent Applied For" or "Registered Design" wording.
This practice still has relevance for products with few associated IP rights. However, today, any one company can have a multitude of IP rights across multiple jurisdictions. A single product such as a computer tablet may, for example, have rights relating to individual components, a manufacturing technique, a method of use, various registered designs or the like, or a combination of all of those forms of protection.
Those various forms of protection may also apply across an entire range of products and business divisions. The scope of the IP rights may also differ across different jurisdictions.
With different products, and different types of IP rights and jurisdictions, traditional marking practices can become unmanageable and, in some case, impractical.
The distance between a competitor being aware of your product and them being able to clearly identify the relevant IP rights needs to be a short as possible for your IP rights to work in their pre-emptive capacity.
So how is it possible to accurately convey to competitors the particular IP rights they should be aware of, where multiple rights exist?
Virtual marking
Like many other modern day business practices, traditional marking techniques are migrating online. "Virtual marking" is a new and growing trend for IP rights marking practices.
Virtual marking allows all information relating to IP rights to be easily and readily stored online.
So instead of having to mark all goods independently with individual numbers and details, only a single website address or URL needs to be identified, with all relevant rights details then stored online.
Imagine the comparative ease with which a competitor can now be taken to a menu list where the relevant rights can be located by company name, product name or brand name. Background IP rights that may not be readily apparent from the product itself can also be readily identified, such as patents directed to manufacturing techniques and the like.
Not only does this improve the efficiency and effectiveness of information transfer, to satisfy conventional marking requirements, virtual marking also provides the rights holder with a tool to keep track of their own IP rights and portfolios.
Virtual marking has potentially significant cost advantages too. Only a single address or URL is needed for an entire product range, so multiple and individual printing and tooling is not required for each product.
The ultimate cost saving, however, comes from your IP rights being allowed to fulfill their passive role in protecting market share by notifying competitors of those rights.
It should be noted that virtual marking is a relatively recent development. In the USA, the America Invents Act recently introduced new patent laws and officially sanctioned the use of virtual marking as a legitimate means of providing patent rights information.
However at this point, Australia has not yet officially recognised the practice, and there has been no judicial comment on the role of virtual marking in removing an innocent infringer defence.
Damon Henshaw is lead partner of the Parramatta office of Davies Collison Cave. Email: dhenshaw@davies.com.au.
