Friday, January 23, 2009

Patent Protection: Canadian Style

Patent Protection: Canadian Style

While C begins producing a copied verison of B's product which is without protection, C may then simply march up to the patent office and make a patent application on the product within the terms of "first to file" priority. It would then be in B's own interests to either stamp all products "patent pending" through "first to file" priority by making a request for patent assessment prior to production to prevent C from taking control of the invention. Then B might face infringement claims despite being the first to invent the product.

Inventing a patentable subject matter in itself does not require patent protection unless the inventor seeks to maximize profits on that product and to extend its life cycle to redeem its value through manufacturing, selling or distributing it over a long period of time. As B has chosen not to pursue patent protection he or she may have his or her own reasons to redeem profits immediately through early production or first entrant in the particular product category. However conditions may quickly change when and if competitors produce a similar product possibly based on that invention when B may in hindsight regret production without patent protection.

While research and design phases of product development can be costly both in capital and investment of time the advantages of going to market first over competitors could be to extract a premium price for that product over the short term as its uniqueness and novelty will perhaps confirm that lack of patent protection is the best option. It may also be challenging to replicate it by competitors depending upon its design complexity, individual components, production methods and/or quality performance.

The processes of seeking patent protection for a unique product might be more time consuming and costly than the value of its total production and sales profits. While under Canadian patent protection laws B may prevent others from using, making or selling the invention for a period of up to twenty years the component products themselves making up the invention may also be subject to patent protection covenants which will be costly to clear through royalties. After that time B's patented product will enter the public domain and be free of use to anyone. It is therefore a race against time to extract maximum value from the invented product prior to competitors.

Canada's patent process follows a "first to file priority" thus if B seeks to protect itself from copy-cat competitors who might quickly reverse engineer the invention, map out its essential components and design or re-design a similar facsimile then B must file for patent protection first to benefit from patent pending or patent infringement regulations. In addition B might be eligible for deferred patent application seven years following production with the time intervening as assessment of saleability. However B would have had to make application for that patent assessment seven years prior.

At no time does B ever legally deserve patent protection unless it has been requested. C would then be completely free to copy its design and take control of its use, sale and production rights. While this might appear unfair it is the reason patent protections exist. It is B's responsibility to explore the patent protection system to determine its suitable application to product or intellectual property rights.

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