Should I worry about competitors’ intellectual property?


There are two categories of intellectual property (IP) rights: yours and everyone else’s. Both need to be taken seriously.

We are now going to concentrate on the latter: IP rights owned by people external to your business, for example a competitor. These might be referred to as third party IP rights.

Why should you care about other people’s IP?

Because if you don’t you might get some nasty surprises that could stop you doing what you want to do with your business. Whether you are starting a new business or looking at a new direction for your existing business, whenever you launch something new you need to check you are not stepping on someone else’s toes.

Philip Soo, Patent Counsel at one of the world’s most innovative companies, 3M, perfectly summarises why other people’s IP matters:

“Understanding the IP of competitors is important for several reasons. First, such information helps us recognize crowded IP areas and white space opportunities, and thus can help inform the research and business strategies of 3M. Second, this understanding helps us avoid infringing the valid and enforceable IP rights of others, which is 3M’s policy. Third, an understanding of the prior art enables us to assess the patentability of our own inventions.” Philip Soo, Patent Counsel, 3M.

We’ll consider each of these points in turn, starting with looking at third party IP to avoid the risks, and then looking at the opportunities it also presents.

How do you go about looking at other companies’ IP?

You may be aware of a big name in the field, and therefore one option could be to look to see what granted IP rights that competitor has. It’s a good idea to look at the website of the competitor company to see if there are any other names the company may be using to register their IP rights.

You can search for most IP rights yourself. See the useful links in the resources section for searching for IP rights. However, a more robust option is to contact a patent or trade mark attorney to arrange a professional search for problematic IP rights. This may identify relevant rights that you are unable to find.

However, there are risks of looking at other people’s IP. Michael Hsu, Patent Counsel at Adobe, points out that in the US, “it’s probably not a good idea for you to take a look at other people’s patents, the competitive landscape, because then you might find out that you have been put on notice for treble damages”.

Basically, in the US if you knowingly infringe a patent, then you could be sued for much more money.

As such, some companies take the policy of not looking at competitors’ patents because they’d rather only risk actual damages, rather than triple damages.

If you operate at all in the US, as most companies do, then this is worth taking into account. However, as long as you avoid any relevant IP rights that you do find then you shouldn’t risk the treble damages issue in the US.

I’ve found a third party IP right, what do I do?

You need to determine whether or not this IP right gets in the way of you doing what you want to do. It’s always best to get a professional’s opinion on this because registered IP rights can be complex legal documents.

It is often the case that certain rights are more or less relevant to your activities than it would seem on the surface. Furthermore, it is worth remembering that just because a company has a registered IP right, it doesn’t necessarily mean that it is a valid right.

If the third party IP right is a patent application, monitoring the progress of the patent application is recommended. Often, what a patent application covers changes before it is granted. It may well be the case that the granted patent therefore covers less than the original patent application.

If the third party IP right is a granted patent or registered design, there are the following options:

Design around – it may be possible to design around the protection provided by the granted patent or registered design. For trade marks, you might want to come up with an alternative name, or at least change the way it is represented. If this option is taken, seek confirmation from an expert that the proposed design around would get around the protection.

Seek a license – the owner of the IP right may be willing to offer you a licence to use whatever is covered by the IP right. It may help the deal if you have your own registered IP rights to licence in return.

Attack the IP right – if it can be shown that the right should not have been granted, then it will be revoked and would no longer be a problem. This is generally an expensive option.

Buy the IP right – if you buy it then it is not going to be a problem. This depends on your resources and the goals of the third party!

Join forces – the owner of the IP right may be willing to join forces with you to develop and/or market the product.

Opportunities with IP searching

Searching for IP and understanding the landscape of third party IP can help to identify areas where there is little research, or perhaps lots of research, but few patents. This information can help guide your IP protection strategy, perhaps even your R&D strategy.

For patents, understanding the patent landscape can also guide what you try to protect, and what you try to keep as a trade secret. If there are a lot of patents out there in a specific field, then it might be difficult to get patent protection yourself, in which case keeping it secret might be best.

Answer last updated: 17 Jan 2018