In the U.S., importers and trading companies are employing Intentional Invention patent strategies to hold their market position against direct source alternatives and combat parity issues at retail. By patenting designs and functions, they are free to source the product from any manufacturer they choose. They can also protect their position with retailers so that an item cannot be second sourced or bid out. As a manufacturer, clear business goals that include a patent strategy can be a competitive advantage for selling to the U.S. market. The more complex issue is deciding what to patent, how to develop the patent, and in which country or countries to apply for that patent to maximize those business benefits.
When designing and manufacturing products for the U.S. market, patent due diligence is a critical requirement. Even if you are not interested in using patents as a competitive business strategy, you must still avoid patent, trademark, trade dress or copyright infringement to ensure retailers see you as a reliable and valued manufacturer. Retailers may ask you to quote on manufacturing a specific item, create an item similar – but not identical – to one already available, or, you may see an item in a magazine or on a web site that looks promising for your next trade show. For any and all of these, researching the design ownership and patent status can make the difference between products that actually make it into U.S. stores, and products that are confiscated at the border or lead to legal entanglements. Adequate permissions are imperative.
Confirming the patent status of an item with your customer in advance of providing a quote will save you money and embarrassment. Does the customer own the patent, or do they have permission to use the patent? Even if the customer says there is no patent, you may want to confirm this for yourself to avoid future problems. Google Patents and Patent Search App by Sunyu Infotech, can make the search process easier. They enable the user to search existing published patents and applications in many different countries quickly, including the U.S. and China. Because information is available only for the given moment, it is not an absolute guarantee, but it can guide how deep your research needs to go.
We regularly monitor patent applications and issuance through this method and through the USPTO and court systems directly. That way, we stay abreast of the latest changes and conflicts among our clients’ competitors and product categories. As a result, we can quickly advise product design modifications to limit our clients’ liability exposure if something potentially conflicting appears.
Use Business Goals to Drive Patent Strategy
Your company’s business goals can help direct development of a comprehensive patent strategy. Is your goal to deter competitors? Do you want to increase or maintain margins? Or is your primary focus on protecting development investments? Answering these and other questions will help you weigh the costs of patenting against the business opportunity.
For example, if your business goal is to compete by offering the lowest price, then patents only add to that cost and may not be important. For manufacturers that invest heavily to develop new designs or functions for products, a patent will help keep your competitors from copying you. It can also allow you to raise or maintain your margins because the customer cannot get the same design from a competitor.
Without patents to protect your products, you will be forced to compete primarily on price. Likewise, if you have made a significant investment in tooling, equipment or materials to make a certain product, then filing a patent can help prevent customers from bidding out your design to other factories.
Deciding Where to Patent
Deciding where to patent relies heavily on your business model. After experiencing patent disputes in both China and in the U.S., we have come to the conclusion that there are clear business cases for protecting intellectual property in either or both countries. New changes to design patent laws make it easier and less expensive to apply and have your design patent granted in other countries.
If you simply need to protect the design of a furniture item, then a China patent will likely meet all your needs because it can be used to stop infringing products from leaving the factory in China. A new functional feature or mechanism might be better protected in both China and other countries to which you expect to ship large volumes of product. Because U.S. patents can be used to stop infringing products from entering the country, securing a U.S. patent makes sense if you expect to export large quantities to the American market.
Because intellectual property protections have become such a prevalent business tactic in the United States and other areas of the globe, in addition to an intentional invention-based design process, ensuring you have adequate legal capacity to research, secure and protect patents – no matter where they are issued – can help you succeed in today’s global economy.