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Intellectual Property in Product Commercialization

Your company is evaluating a new product to commercialize. The market analysis is favorable. The product fits in well with your current line and your distribution system can easily handle it. Even in these favorable conditions, companies should also consider two primary steps related to intellectual property (IP) in the launch of every new product: clearance and protection.

Clearance: Unless your new product is a commodity, the product should be analyzed to ensure it will not infringe third-party IP, particularly third-party patents. The claims of a patent delineate the patentee’s ownership. A patent allows one to prevent others from making, using, selling, offering for sale and importing the claimed subject matter. As a result, one should compare the new product to the claims of every relevant patent owned by another party.

This can be a legally complicated analysis and should be performed by an intellectual property attorney. Greater complexity can mean greater cost, but it is still far less than the seven-figure cost of a typical infringement lawsuit. To increase confidence and reduce costs, clearance studies can be performed on at least a preliminary basis very early in the product cycle. For example, it is better to identify potential IP roadblocks during the design phase rather than once the product is ready for market.

Protection: In addition to clearing your new product in view of others’ IP, you should also protect your product with your own IP. The new product should be examined for patentable subject matter. Even if the product as a whole is not patentable, a particular feature or improvement that gives your product an edge over others might be. Getting a patent on your product will allow you to block others from copying your patented subject matter for 20 years from the date you file your application. To be patentable, your innovation must be new and non-obvious in view of every patent, document, product and publicly available information from any country, in any language and at any time, among other requirements.

It should be noted, however, that a patent can take two to five years to be granted. If the patent application was not filed early in the product cycle, the product can go to market without patent coverage; other forms of IP are available to fill the gap. Branding the product using your trademark will prevent others from riding on your reputation. Trade secrets are confidential knowledge and ideas that give you a competitive edge, such as your cost structure, your product design and marketing processes, your supply and distribution systems and any other factors that have value because your competitors do not know them. Depending on the product, there can be copyright, trade dress, geographical indications and other protections as well.

Because of the complex nature of intellectual property, it is usually advantageous to consult your intellectual property attorney when evaluating a new product to commercialize. Your attorney can guide you through both clearance and protection.