Australia: The role of IP in innovation

Last Updated: 11 June 2018
Article by Michael Zammit

Innovation is generally understood as the process of bringing valuable new products (and services) to market, and has been highlighted as one of the key factors that determines the future success of an organisation. Intellectual property (IP), and the management of the IP throughout the new product development process is a critical factor in successfully commercialising products and services, for example by providing a monopoly to the IP owner, and barriers to entry for competition. The purpose of this article is to briefly outline what forms of IP protection may be required at each stage of the product development process, and how overall management of the IP may lead to overall improved revenues and profitability.

What is Innovation?

Innovation is generally understood as the process of commercialising new ideas. Through innovation, a business will endeavor to deliver new value to its customers to generate improved revenues/profitability by:

  1. offering new commercially viable products/services, which generally result from "radical innovations", and/or
  2. offering more efficient ways of doing things, which generally result from "improvement innovations".

In the latter case, an improvement innovation tends to produce an improved product over its ancestor eg. improvements in, say, raw material use, or the application of new/better production processes that allow old/new products to be made faster, better, or more cheaply.

The cycle of innovation can be broken down into several stages. For the purposes of this article, it is convenient to consider 4 stages of innovation, comprising:

  • conception of innovative ideas,
  • the research and development (R&D) stage,
  • commercialisation of product or services, and
  • the marketing of those products or services.

As the activities undertaken at each stage are different, it follows that the IP considerations are different at each stage, too. The process may also include iterative aspects, and if often cyclical in order to continually produce new product and service offerings to the market.

As commercialisation of products and services is complex and requires input from a multitude of disciplines (e.g., technical experts in R&D, marketing, external consultants, suppliers, outsourced component manufacturers/service providers, etc), it is important to consider the use of different IP tools throughout the process, as highlighted below.

What IP considerations are relevant during conception of innovative ideas?

Prior art searching and analysis is a critically important part of this stage, especially searching and analysis of the patent literature, which contains a vast amount of information not available elsewhere. By reviewing the prior literature, it is possible to ascertain whether an idea is new and potentially inventive, whether there may be a commercial market for the idea and, therefore, whether or not to proceed with investment into the idea. A wealth of other useful information is also available, including information on potential competitors and technology trends. We have recently authored an article on prior art searching and analysis, which can be found here.

During this initial stage, it is imperative that innovative ideas are kept as trade secrets. Apart from not wanting to alert competitors, this is because not all commercially viable ideas can be, or will be, patented. To qualify as a trade secret the information must meet several key requirements, including that the information must be documented, access to it controlled and limited, and the information must be of value and of course kept secret. Examples of trade secrets include information such as: business plans, manufacturing processes, algorithms, software code, marketing information, and client data. Clearly, confidentiality agreements with those conceiving the innovative ideas (e.g., employees), or those who are being exposed to them (e.g., suppliers, collaborators, subcontractors, etc) are essential at the outset of this first stage of innovation.

There are disadvantages to trade secrets, however, including that there is no protection against independent creation and/or disclosure of a similar or identical innovation by a third party. Public disclosure can lead to the loss of your right to obtain a patent and, in a worst case scenario, the third party may patent the idea before you.. Keeping trade secrets is an increasingly difficult task in today's environment where employees change companies regularly. The decision on whether to protect an invention with a patent application or to retain it as a trade secret is an important one, and the choice can depend on a number of factors, which are best assessed by an IP professional.

What IP considerations are relevant during the R&D stage?

For the same reasons as mentioned above, keeping trade secrets continues to be relevant during this next stage of innovation, as is the continuing need to search and review prior literature. Relevant inventions should be protected by lodging patent applications during this stage, and multiple "layers" of patent protection should be considered too. A patent protects an "invention", which is defined as the generation of a new idea or knowledge which aims to solve a specific technical problem, and most commonly relates to an article of manufacture (e.g., light bulb), a composition of matter (e.g., compounds), a system (e.g., mobile phone), or a process (e.g., process of making or using).

Once a patent is filed, however, the "clock starts ticking", meaning that a sequence of strict deadlines must be met in order to keep the patent application "alive". Accordingly, there is some strategy around when to file the patent application(s) – if too early, there may not be time to generate the required enabling experimental data to support broad patent claims, and if too late, the risk is that a competitor will beat you to filing an application directed to the invention or the invention is superseded.

The R&D stage is also where investigations can be undertaken on the risk of infringement of third party rights, i.e. freedom to operate searching and analysis (see our article here). Further strategic decisions can be taken at this time on whether it is possible to avoid third party patents which are at risk of infringement, or whether those rights could/should be licensed or bought, or attacked and potentially removed from the patent register. Accordingly, this is the ideal time to make adjustments if necessary to avoid IP legal hurdles which might arise.

Depending on the innovation, another IP tool to consider is a design registration, which protects the appearance of a product such as its shape or pattern.

What IP considerations are relevant during the process of commercialising products or services?

The existence of IP surrounding the innovation, and clarity around the ownership of the IP can be critical to obtaining funding from third parties during the commercialisation process. Obtaining a valuation of the IP can be important in this respect, too. At this stage, there may be opportunities to seek and obtain commercialisation and export grants.

Furthermore, ownership of IP assets can assist in ensuring that the innovation is not "lost" during partnership with third parties who may be required to provide further technical development to make the innovation commercially viable. It may also become apparent during this stage of innovation that additional IP is required, in which case that IP should be identified and licensed, or potentially bought.

Further patent applications may be appropriate at this stage, especially to protect improvement innovations as discussed above.

What IP considerations are relevant during the process of marketing products or services?

Finally, during the marketing stage, other IP tools become relevant, especially trade marks and designs as they enable consumers to identify a product/service of a particular company and enable them to distinguish the product from other similar products/services.

IP rights require constant monitoring, which is the responsibility of the owner. It is best practice to monitor the market to identify any third party copying or imitation of the product, for example at trade fairs, or using the customs authorities to stop infringing goods from entering the market. Enforcement of IP rights may be important in protecting market share and revenues.

Finally, relevant material can be protected by copyright, such as software, product literature and images, website, drawings, plans, and manuals.


Innovative technologies stand a better chance of successfully reaching the marketplace if the 3 main tools of IP protection – patents, designs, and trade marks – are used strategically. As there will be some overlap of activities at each stage of the innovation cycle, the IP considerations will "evolve" over the process. Initially, and throughout the innovation process, it is imperative to retain trade secrets, and once into the R&D stage patents and design applications can be used to protect functional and aesthetic features, respectively. Consumer recognition of the product and brand can be protected via trade marks, which is important during the life of the patent, and especially after the patent has expired in order to retain market share as competitors enter the market. A strategic, planned, and holistic approach to the use of a combination of IP tools in the innovation process can allow an organisation to obtain a higher return on investment through maintaining a premium market position.

Closing comments

The involvement of an IP professional is critical at each stage of the innovation process, for example to provide advice on:

  • legal (confidentiality) agreements,
  • prior art searching and analysis (patentability, freedom to operate, competitor and landscape mapping),
  • trade mark and design registrations,
  • patent strategy, and for when a trade secrets vs patent protection is appropriate, and
  • enforcement matters.

Through collaboration with our colleagues in our affiliated intellectual asset advisory firm, Glasshouse Advisory, who come from legal, accounting and finance backgrounds, Shelston IP can offer additional assistance relating to:

  • IP strategy (e.g., IP analytics, monetisation),
  • IP economics (IP valuation, royalties and licensing, transfer pricing, etc), and
  • Funding opportunities (R&D tax, Export Market Development Grants, government grants, collaborative funding).

Outlined in this article is a description of the main stages of the innovation process and what main IP tools are relevant throughout. When an idea is an important commercial asset, it is wise to engage a qualified IP professional (patent or trade mark attorney) to assist in the generation of relevant intellectual rights that suitably protect that commercial asset. It is preferable to choose an IP professional who has genuine technical expertise in the relevant technology, and an excellent understanding of the practicalities of bringing products and services to market through real-world experience with the product development process. At Shelston IP, we have a number of highly experienced attorneys who can assist in navigating these complexities. Contact us to understand what IP tools are most appropriate for your innovation.

The content of this article is general in nature and must not be relied on in lieu of advice from a qualified professional in respect of your particular circumstances.

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.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Michael Zammit
Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions