The pitfalls of patents and the upside of protecting your idea

Many businesses have great ideas… some even bring them to life. But when it comes to protecting these ideas, that’s a whole new ball game.

For most businesses, the idea of engaging a patent attorney can seem out of reach and only something the “big end of town”.

So, it can be quite daunting for a small business to consider a patent on its invention, but if the idea is unique, it’s virtually essential.

Simply, a patent grants a monopoly to make or sell something for a period of 15-20 years.

One Melbourne small business who has found a cost-effective way around the patent minefield is Garry Holloway, a leading Melbourne jeweller who has managed the patenting of a dozen international inventions.

Garry explains that patents aren’t written in human language – patent specialists have unique but exceptionally precise terminology – so understanding how the game is played is vital.

Garry’s first foray into patents occurred in 2000. He invented and took a US patent out on the world’s first diamond cut quality or beauty system, Holloway Cut Advisor (HCA), a system that is used online about one million times a year.

“My system preceded the largest diamond grading lab, the Gemmological Institute America (GIA) system by five years, so I was staggered when the GIA was granted its own patent for a system identical to mine.

“I had no idea how costly a patent war defending my copied invention could be. $200,000 later, I gave up fighting an organisation with $500 million in diamond grading fees annually, who were backed by top-shelf lawyers,” Garry explains.

His cautionary advice for other SMEs?

“Beware if your small business is challenged by a much larger business, especially those in America. Australians are considered aliens by the USPTO, so an Australian attorney must work through a US attorney – doubling or tripling costs,” says Garry.

Since his patent “blindside”, Garry has worked with Aussie, US and European patent attorneys in big companies, and realises with the benefit of experience, that he doesn’t need to engage such high-end patent attorneys to get the same job done. He recently turned to to patent his latest invention.

“With a bit more experience, I use a freelancer with a full-time job in a big US legal company, who moonlights after hours, and as a result, charges about a quarter of the big corporates fees,” he says.

He explains that attorneys specialise in specific industries. He suggests finding someone who understands your field.

Garry’s new patent, “Looks Like”, that has been added to his HCA patent, (operating online as HCA LL), cost about $2000 to lodge with his Upwork attorney, and effectively extends the 20 or so years granted in his initial US patent if granted.

“I expect there will be several bureaucratic questions back and forward, and another $1000 before the final granting of the patent.

“This is a ‘utility patent’ which requires thoughtful consideration, and the attorney walked me through a description before finally landing on a set of around 20 ‘claims’ that form the patent,” Garry says.

Garry explains that there is a simpler type of patent called a “design patent” which can be a simple black and white sketch or image. However, he warns that these patents are very specific and any small variation can invalidate the monopoly.

As Garry outlines, businesses can lodge an Australian “provisional” patent which gives them international priority, and then lodge the final patent with updates and improvements up to a year later. International agreements make it possible for businesses to select individual or groups of nations (e.g. EU) with lodgments (with fees) in many or almost all other nations.

Garry stresses he is no patent specialist, but having been through the process numerous times, wanted to give other Aussie SMEs the benefit of his experience.

Kate Engler, Founder, The Publicity Princes and Meet The Press Masterclass