Patents and trade secrets to enhance innovation in advanced manufacturing

by Nicolas Sacchetti

In Canada, intellectual property rights are awarded to the first person to file a patent application. It takes more than being the inventor.

The panel led by Elicia Maine of the Composites Knowledge Network raises the issues surrounding the decision to patent in the advanced manufacturing sector. The event took place during the webinar on Strengthening the Advanced Manufacturing Innovation Ecosystem in Canada.

For a product that can be easily reverse engineered, i.e., starting with the final product, analyzing the technology and the process of making it, a patent is necessary. Rondha O'Keefe, VP Intellectual Property and Contracts for Next Generation Manufacturing Canada (NGen) adds that it may be less necessary to protect intellectual property on a product that is extremely difficult to analyze.

NGen is the NPO behind most of Canada's advanced manufacturing and processing projects. O'Keefe explains that a patented technology has an 18-month period of exclusive use by the patent holder before competitors can patent a similar innovation. Now, since Obama, all jurisdictions have implemented this procedure.

Business Strategies

Some companies want a patent for every product they market. Others prefer trade secrets. When a company manufactures its products abroad, in China for example, it may be difficult to protect its innovation secrets. In this case, a patent is desirable.

On the other hand, when the manufacturing remains domestic and you can manage the operations locally, the protection surrounding the innovation is more present and the patent may be less necessary, if you are able to keep your trade secret.

According to IP lawyer Christopher Heer (not on the panel), "Most countries, including many industrialized countries in Europe and Asia, require absolute novelty as a condition of patentability; in other words, any evidence of public disclosure may prevent your innovation or new model from obtaining patent protection." He also explains that in Canada, the novelty requirement includes an improvement on an already-known article or a new method of using an old product.                                       

The Canadian Intellectual Property Office says that the high cost and long-time required to obtain a patent are obstacles that lead inventors to choose trade secret protection for their intellectual property. This strategy is also preferred when the life of the invention is short or when reverse engineering is difficult.

Provisional Patent

That's what Stewart Cramer, director of production for NGen, favors: "We file a provisional patent application for everything. It gives us a year of protection at a very low cost, about $1,000, and time to make an informed decision about whether patenting is the right long-term strategy."                                                                  

Very Small Company, Big Expense

Anoush Poursartip is a professor of materials engineering at the University of British Columbia. He argues that the economic issue depends on the size of the company. Very small companies with less than 10 employees are the most innovative. At the same time, they are the least financially comfortable, compared to large companies. The long-term cost of a patent takes a larger part of a small budget. Trade secrecy is therefore preferred to protect their intellectual property. Moreover, according to Poursartip, despite their desire to protect their intellectual property, SMEs have more pressing issues to address, such as immediate survival and business growth.

Shayan Fahimi, a PhD candidate at the Composites Research Network (CRN) at the University of British Columbia, echoes Poursartip's comments by referring to the results of surveys of advanced manufacturing companies in the composition of their intellectual property portfolio:

"In our survey, the majority of patents are used by large and medium-sized companies. Only 5% of very small companies use patents. In the literature, the cause is related to the skills of small and very small companies to protect their work through secrecy. We did not ask companies why they did not apply for a patent. We'll have to dig deeper into that and see why very small businesses are much more interested in trade secrets."

Intellectual Property Background

Cramer: "Our process proposal is a way of doing things to innovate properly." Focusing on creating opportunities and developing new products is a need for startups to strengthen the manufacturing sector at the cutting edge.

Smaller companies don't have in-house staff, such as an intellectual property lawyer, to help them with intellectual property issues. When NGen works on a project, O'Keefe explains to companies what is being framed and its limitations. For example, problem solving is not a protected element.

It is also necessary to establish the company's intentions with the intellectual property according to their business plan. Knowing its scope on manufactured product lines and possible new market openings. Differentiating between trade secret, confidential information and patent is also a necessary training element according to O'Keefe.

"We train companies so they can make an informed decision to protect their invention between patent or trade secret for themselves and their partners," O'Keefe says. She adds that a business-to-business project must have a collaborative agreement that ultimately determines the intellectual property.  

Striving for Excellence

Poursartip shares that in the composites sector CKN/CRN focuses on helping companies take the best of what is available in the field and adapt it to a small business. Then, it helps them assess their distinct competitive positioning before connecting them with people who can take them further.

"In CRN's meetings (Composites Research Network), senior engineers from Boeing, Raytheon and other companies can interact, get the big picture and thus position themselves in the ecosystem."

Initiatives to Strengthen Innovation

For Poursartip, a better consideration of the real cost of intellectual property protection is needed. He also points to the need for continuity of programs like NGen to establish that this resource exists.

Cramer adds that programs need to involve academia and industry: "Statistics show that we have the most educated workforce in the world and that is a valuable part of Canada. We need to keep that knowledge in Canada. He advocates the need for new models to reconcile knowledge and workforce development.

For O'Keefe, advising companies on intellectual property is essential to generating wealth, attracting investors to the country and growing Canadian companies.

This content has been updated on 2022-05-26 at 21 h 41 min.