Chris Baxter shares how to use IP to unlock startup valuation at the pre-traction stage in the first Part of the series Why Investors Always Ask About IP.
Patenting a new idea in Australia or internationally is a relatively straightforward process when working with an Australian patent attorney. The patent process is not one to be embarked on without the advice of a patent attorney as your patent application needs to establish a watertight foundation for the IP rights you are seeking.
Simplified Patent Process
Without a patent application, you cannot (normally) sell or licence your new idea as there is no reason why a third party would not just copy it without paying you any fee.
In most businesses, profits are very much tied to the margin created between the sale price of its products and the expenses associated with supplying them. A small difference in price point can lead to a large difference in profit margin. That is, if the cost to supply a product is $10 and it is sold for $11, there is a 10% profit margin, but if it were to be sold at $12, there is a 20% profit margin which equates to a 100% increase in profit.
If a patent is granted on your new idea, you will be able to stop a third party copying it. Where you are able to stop a third party copying your new idea, you will have a monopoly over the sale of the new idea and can therefore dictate the sale price. This is why products that are patented generally sell at much higher profit margins than products that are not patented.
Filing a patent application does not automatically result in any income. Businesses create income. The question therefore becomes, how can your business take advantage of (i.e. commercialise) your patent application once filed?
Patent applications are normally commercialised by:
We are the only patent attorney firm in Australia with a full service, in-house, patent commercialisation consultancy – Slipstream Commercialisation. This means that after filing an Australian provisional patent application, if you are unsure how to best progress, we can assist you further by connecting you with Slipstream Commercialisation.
There are 3 basic tests a patent application needs to meet in order to be successfully granted:
To get an idea of the answer to A & B, your patent attorney will normally request IP Australia to perform a patent search based on your provisional patent application. This patent search is called an International-Type Search and in our experience, is by far the best value-for-money patent search you can get done at an early stage in the patent process.
To answer question C, in Australia, there is very little that is excluded so far as what can be patented. For example, software patents and methods of medical treatment can generally be patented. All you need to do is provide your patent attorney with a clear and concise brief and they can advise you as to whether your idea is patentable subject matter in Australia.
You may be wondering, how you can trust your patent attorney with your idea? Australian Patent Attorneys have a legislated obligation under the Australian Patents Act 1990 (Federal Law Act) to maintain confidentiality of your idea.
We offer a free half hour consultation. During this consultation, we are normally able to advise whether your new idea includes patentable subject matter.
Click here to contact one of our experienced patent attorneys to find out more about whether your new idea includes patentable subject matter.
Whilst there are numerous types of patent applications that can be filed, the majority of new entrepreneurs start with a provisional patent application and then file a PCT International patent application. For completeness, there are 4 main types of patent application that can be filed in Australia:
Baxter IP provides fixed-fee or capped-fee quotations for preparing and filing patent applications. Typically, for a single idea:
The amount quoted will depend on technology, complexity, level of detail required and timeframe.
Click here to contact one of our experienced patent attorneys to find out more about how you can protect your idea and for a quote.
We’ve tried to make the patent application process as straightforward as possible – here’s what needs to be done:
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The entire patent process on how to patent an idea or a product can be expressed simply as 4 distinct stages. To learn more about each stage please click on one of the links below: