How-To: Protect your Technology, R&D and Innovation

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With the current drive globally across the mining and METS sectors for technological advancement, collaboration, more investment into R&D and cross...

With the current drive globally across the mining and METS sectors for technological advancement, collaboration, more investment into R&D and cross-border engagement, many miners and METS companies are putting themselves at risk from an IP standpoint - or being so risk averse on this front that they don't contribute to the sector at all. Striking a balance can be tough.

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To get a better understanding of exactly what the risks, opportunities and best practices for technology and IP protection are, Austmine caught up with Charles Berman, patent attorney and a partner of intellectual property firm FB Rice. Charles has been in practice for over 25 years and has experience in a diverse range of technology fields including mining equipment and machinery, mechanical and electro-mechanical devices, construction systems and equipment, and business methods.

In your opinion, will 2015 see an increase in the number of mining strategies, technologies and innovations being created and introduced? Should it, considering the current mining economy?

Our experience is that in an economic downturn there is an increasing focus by companies in extracting greater value from their assets.  As a result, we have, in the past, noted that there is a tendency for companies more readily to protect those assets by way of applying for appropriate intellectual property (IP) protection.  Such an approach enables those companies that do protect their IP to maintain a commercial advantage over their competitors.

There have been a number of articles in the press recently about the need for companies in the mining field to be working more efficiently and more cost effectively in the light of the substantial falls in the prices of various commodities.  No doubt this will lead to a number of innovations which would be worthy of IP protection.  It should also be borne in mind that IP protection doesn't only protect articles and equipment but new methods could also be protected such as, for example, methods of extracting or treating ores, etc.

Australian METS are very much seen as the world leaders in terms of innovation and technology advancement. Are companies here giving away too much technology? Is there a significant risk of reducing our competitive advantage?

We agree that Australian METS are seen as world leaders in terms of innovation and technology advancement particularly in areas such as mine automation.  Great innovative advances have been made in these areas.  It is concerning that a large number of companies either do not believe in protecting the technologies or are unaware what protection for their technologies is available.  We are of the view that companies are often giving away too much technology to their competitors both locally and overseas.  Quite simply, if a company does not protect its innovative technology, it is, in effect, giving that technology away for free and losing all the benefits which protecting that technology could provide.  In addition, such a company is giving a free ride to its competitors who are able to springboard off that technology to say nothing of the research and development costs which the company is unable to recoup.

Something which we think a number of companies lose sight of is the fact that protected IP technology can, in some cases, provide a source of revenue for a company.  As an example, if a company develops a piece of technology and protects that technology, the company can license others to use the technology subject to payment of royalties for the rights to use that technology.  Licence agreements can be worded so that they protect specific uses of the technology, use of the technology in particular geographical areas only, etc. A good example of a company generating revenue from its IP is IBM which earns billions of dollars annually from licensing its IP for use by others.

There’s been a lot of discussion in the industry over the last year about the serious need for more collaboration in the mining industry, between miners and METS. Is it possible to balance increased transparency and cooperation with being careful about IP protection?

The short answer to this question is yes it is possible to balance increased transparency and cooperation while being careful about IP protection.  Collaborative organizations have been working together for years, sometimes using vehicles such as Cooperative Research Centres (CRCs), joint ventures, etc. By way of regulating the relationships between these parties, it is possible to regulate who owns the IP and have the appropriate party protect that IP, possibly with that party granting rights to other collaborators to use the IP.  Particularly with CRCs, collaborative ventures have in the past been set up on the basis of a contractual agreement which identifies IP rights that exist prior to signing the agreement (often referred to as "background IP").  The agreement then also clearly specifies which entity owns any IP arising from the collaboration itself.

It may happen that some IP which is developed becomes the standard applied by a standards setting organization.  Such IP may then become subject to a licensing obligation known as FRAND – fair, reasonable, and non-discriminatory terms.  These licensing obligations apply to the IP and require the owner of the IP to grant licences to others to use the technology subject to the FRAND in order to reduce the likelihood of licensing abuse occurring as a result of the IP rights being incorporated in the standard.

An extreme example which received a lot of publicity in the past year is the case of Tesla Motors, the manufacturer of electric motor vehicles, whose CEO announced that the company would not initiate patent lawsuits against anyone who, in good faith, wanted to use the company's technology.  This is, in effect, the granting of a royalty free licence to all of Tesla Motors' competitors and is an exceedingly altruistic action to take.  It appears to be motivated by the company's desire for increase momentum in the development of electric vehicles.  We are not for a moment suggesting that Australian METS companies follow suit!

What is the biggest risk from an IP perspective when developing a new technology for mining operations? Are there any particular technologies or fields that tend to be more or less risk averse than others?

Like all big projects, the development of any new technology has risks associated with it.  Possibly one of the biggest risks is that a company incurs major expenses in developing a new piece of technology only to find that it is prevented from exploiting that technology due to the prior existence of IP rights owned by others.  Companies can mitigate this risk by conducting due diligence such as having one or more IP searches conducted prior to embarking on the project or prior to incurring major capital costs in developing the technology.

Another risk of which companies need to be cognizant where their technology is protected by IP is that the technology which ends up being developed falls outside the scope of protection afforded by the IP rights.  It is important for companies developing technology which, for example, is the subject of patent protection to ensure that, if they do make changes to that technology during the development phase of a project, such technology is still covered by the patent.  The risk is that, if the technology is not protected by the patent, 3rd parties would be free to use it without paying compensation.

While it is not possible to say if there are technologies or fields that are risk averse, our experience is that, within fields and technologies, some companies value IP protection more than others.

How can METS companies use IP protection to actually improve business opportunities for new technology development and advancement?

As mentioned in answer to question one, protecting IP provides a commercial advantage to the owner of that IP by providing a statutory monopoly right for a period of time.  This enables the owner of such IP to win business opportunities using their improved, protected technology.

IP protection is a lot more flexible than most people think.  There are various forms of protection such as registered designs which protect the appearance of articles, patents which protect new articles, apparatus, equipment, etc. and how they operate and methods such as, for example, methods of mining or extracting or treating ores and trademarks which protect trade names etc. 

In addition, for patent protection there does not need to be a huge leap forward in the development of what has been done before.  Small, but inventive improvements, can be protected. 

Also, Australia has a two tier patent system with standard patents for novel and inventive inventions and innovations patents for novel inventions having a lower threshold of inventiveness but which exhibit what is known as an "innovative step".  Innovation patents are an exceptionally valuable tool, particularly for inventions made in rapidly changing technological environments.  Innovation patents only have a life of eight years as opposed to 20 years for a standard patent but an innovation patent is able to be granted quickly resulting in a rapidly obtained enforceable right.  Because of the lower level of inventiveness required for obtaining innovation patent protection, it is very difficult to invalidate an innovation patent, once certified.  This makes an innovation patent an extremely strong form of protection.

IP protection can also be used as a defensive tool.  For example, by analyzing a competitor's technologies, a company may be able to develop improvements relating to those competitive technologies which that company can then protect, whether by a standard patent or an innovation patent as the case may be.  In so doing, the company may be able to obtain a commercial advantage over its competitors or at least have a mechanism whereby the competitor's technology can be licensed in return for a cross-licence from the company owning the improvements.

A lot of people also do not realize that a grace period applies in Australian Patent Law.  While the normal requirement is that there must have been no public disclosure of an invention prior to the filing of a patent application. However, the grace period provisions provide that, if there has been public disclosure by the inventor, a patent application can still be filed within 12 months of such public disclosure without the validity of such patent application being adversely affected.

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