New Zealand: IP: the ultimate sustainability tool

Last Updated: 18 December 2011

In my experience of introducing sustainability principles into our firm, people often focus on the environmental aspects of sustainability and forget two critical pillars: maintaining sustainable profits and positively impacting people - including staff and the wider community.

If your business can't sustain its profits long term it will ultimately fail, having a negative effect on your community and removing any opportunity to impact positively on staff and the environment.

Intellectual property1 can protect various sources of competitive advantage. Used properly, it can turn competitive advantage into sustainable competitive advantage and will help maintain long term profitability.

A trade secret is unregistered intellectual property that relies on information remaining confidential.  As long as it's not generally known in the industry it may remain a source of competitive advantage, so it's important to introduce and maintain strict secrecy protocols to protect the trade secret. 

These protocols may include physically isolating the information, having a limited number of authorised personnel who can access the information, creating an access log, using confidentiality agreements, exit interviews and separating the information into parts so no one person has a complete copy.

However, if a competitor is able to reverse engineer the information, or independently develops the same knowledge, the competitive advantage will be lost.

A patent,2 on the other hand, provides exclusive rights to make, use and sell an invention3 or technology for 20 years. A patent can protect a product, system or technical process provided it is novel4 and not obvious5 in view of existing technology. 

The competitive advantage provided by the technology can be sustained for 20 years, assuming the technology is not superceded in this time. Patents also attract capital and can be licensed in return for royalty payments. The investment and increased bottom line will impact positively on the longevity of the business.

A registered trademark protects a brand's goodwill and reputation. It can protect almost any element of the brand, including words, slogans, logos, colours, three-dimensional shapes, sounds and smells. A good trade mark is an extremely valuable asset because it is an indication of origin. It is the reason people frequent your store or buy your products or services over others. If you can't effectively control who uses your brand, it's likely trade will be diverted away from your business.

Copyright and registered designs can protect the distinctive look of an industrial product, which is important to consider if the reason people purchase your product over others is its attractive shape (think of David Trubridge light fittings, for example). 

If intellectual property can be used to protect revenue streams or create new revenue streams through sale or licensing, then the company has a better chance of achieving longevity.

IP6 can also play a direct sustainability role by impacting positively on staff. Many companies with an integrated approach to IP include innovation incentives in remuneration packages. Some permit employee inventors to participate in the return generated by the innovations they create. This gives employees the chance to enjoy rewards many times larger than their usual salary and encourages them to be innovative for the benefit of the company.

IP indirectly helps promote sustainability throughout the business community. Registered certification trade marks, such as CarboNZero, can be used by businesses that comply with the certification scheme's regulations, to prove their commitment to the environment. As the sustainability movement grows and more consumers select goods or services that carry this mark, more businesses will be motivated to become sustainable.

The patent system encourages innovation by rewarding inventors with 20 years of exclusive rights for their invention, which can provide a return on the time and capital invested in research and development. Without this promise of exclusivity and time to recoup their investment, the research leading to technologies that lessen environmental impact might not occur. Patents also enable innovations to be licensed quickly and globally so that innovators can realise financial rewards from such innovations while enabling their rapid, widespread use and consequent environmental benefits to society.

So if you want to improve your sustainability, consider not only biking to work, switching off your computers and lights at night, recycling paper and waste, procuring from sustainable suppliers, but also filing a patent - preferably for an amazing cleantech invention!

Footenotes

1 Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

2 A proprietary right in an invention which provides the owner with an exclusive right for up to 20 years to make, sell, use or import the invention. In exchange for this monopoly the patent is published so that others can see how the invention works and build on that knowledge. The patented invention may also be used by the public once the patent lapses.

3 The product of the creative process of inventing. In intellectual property law "invention" is a legal term usually describing patentable subject matter. Under current New Zealand legislation that subject matter includes any manner of manufacture which is new and involves an inventive step. However, certain types of invention are excluded from patentability. They include inventions which are contrary to morality (for example weapons of mass destruction) and methods of medical treatment (on public policy grounds that such methods should be available for health practitioners to use to the benefit of all society).

4 One of the requirements for patentability and the first part of the test for inventive step. In patent law "novel" simply means new or not previously known. New Zealand currently has a "local novelty" requirement for patentability. This means that the subject invention will not be novel (and therefore will not be patentable) if it was known or used in New Zealand before the date on which the application for a patent was filed. There is a proposal to amend our legislation in late 2010 to move to an "absolute novelty" standard. This means that the subject matter must not be known or used anywhere in the world before the date of application in New Zealand. If the subject matter is known or used before the date of application, this is known as "anticipation".

5 For a New Zealand patent to be valid, it must not be obvious, and must involve an inventive step, over known technologies. See novelty, anticipation and inventive step for further details

6 Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James and Wells is the 2010 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.

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