Insights from Bluedot Innovation’s Filip Eldic, and Madderns Electronics and ICT specialist Bill McFarlane.
Research and Development firm Bluedot Innovation delivers precise and easy to use location services technology to the world’s most exciting companies.
Emil Davityan (L) and Filip Eldic (R) of Bluedot Innovation
Madderns has worked with Bluedot throughout their rapid and meteoric rise, from a two-man tech startup in early 2013 to a successful software business now running offices in Melbourne, Australia and San Francisco, USA.
“Our Bluedot Point Software Develop Kit product enables mobile apps to trigger any action — like opening websites, sending messages and playing video — when users walk or drive through precise locations set anywhere in the world,” says Filip Eldic, Bluedot Co-Founder and Executive Director.
“Amongst many recent examples, the largest client contract we’ve signed to date is an AU$24 million, 14 market deal.”
But in the early days, all Filip and co-founder Emil Davityan had was an idea, drawn as a flow chart on paper. That was enough to get started on protecting their intellectual property (IP).
“Even before we had built the technology, I had a conversation with Bill McFarlane at Madderns to confirm it was protectable. We’ve worked together ever since,” Filip explains.
“Protecting our IP right from the beginning has been instrumental in allowing us to develop our products and to raise capital at strong valuations.”
Bluedot is now in the position to tap into a global location services market that is expected to grow to US$39 billion by 2019.
Protecting IP key to success
Bluedot co-founders Filip Eldic and Emil Davityan prioritised protection of their IP as a core component of their commercial strategy.
“Right from the outset, we decided to consciously invest in protecting our IP,” explains Filip.
This has paid dividends not just in ensuring peace of mind to limit copycat activity, but also from a growth perspective.
“When originally raising investment, we had no physical product so we needed to provide solidity and assurance for investors,” says Filip.
“Having a patent already filed at such an early stage gave us a significant ability to raise money at a good evaluation.”
Bluedot has attracted approximately AU$4 million in funding since the very early days of their operations, and are now working with top tier investors in Australia and the US to raise a substantial round for the next stage of the company’s growth.
“If we didn’t generate quality IP, underpinned through a comprehensive IP strategy, these capital raises would have taken place at much lower evaluations and we wouldn’t be able to provide clear assurances to clients around ownership and access to IP,” Filip says.
Working in partnership with Madderns
Bluedot co-founder Filip Eldic explains that Madderns have been a crucial part of their success.
“When we first met with Bill McFarlane, he realised we had a unique and valuable idea that could transform mobile location services,” says Filip.
“Since then, Madderns have been an incredibly good partner for us.”
He says Madderns have been strategic and flexible, and worked with Bluedot to manage budgets as their startup was growing and cost-conscious.
“Without that flexibility we wouldn’t have been able to work in this space,” explains Filip.
“No other firm came close to Madderns in terms of expertise, approach, and flexibility.”
Expert guidance for patenting technical innovation
Part of both the Electronics and ICT teams at Madderns, Bill McFarlane worked with Bluedot to develop, file and progress patent applications to ensure IP protection in selected countries across the world.
Bluedot owns patent applications that protect the highly unique and commercially valuable aspects of their software capability. This includes the application of geofences to trigger actions, and reduced phone battery drainage associated with use of the mobile device as it pinpoints locations anywhere in the world.
Bill explains the steps in protecting technological inventions through patenting.
“In Australia, the first step in the process is to file a provisional patent application, a figurative flag in the sand that places a ‘first to file’ date on the intellectual property,” says Bill.
The provisional application does not provide any rights to enforcement, and is effective for 12 months. The client can use that time to file further provisional applications as the idea develops, and importantly to decide whether to file complete patent applications in Australia or another country.
The filing of a complete application can be achieved through filing an International (PCT) application.
“The PCT application acts like a global reservation system,” Bill explains.
“You file a single complete application, and that delivers you the right to file in 148 countries around the world.”
The 148 countries are signatories to the Patent Cooperation Treaty, and include Australia, China, Japan, Indonesia, India, USA, Canada, much of Europe, some South American countries, parts of Africa and several Arab States. The PCT application is administered by the World Intellectual Property Organization.
Filing a PCT application provides the applicant with another 18 months of protection, during which time they can assess individual markets and decide which countries in which to submit the patent applications.
“Once you’ve reached this point and made your assessment of the patent coverage that best suits your commercial strategies, you enter the national phase of the PCT application system. Bluedot are currently at this point, selecting chosen countries with two of their patent applications,” says Bill.
Bill also provides Bluedot with strategic trademarks advice and filing services, another important aspect of IP protection for tech startups.
Bill McFarlane and his colleagues in the Electronics and ICT teams at Madderns have also worked with many other companies for IP protection related to technical inventions and products, including:
Contact Bill at Bill.McFarlane@madderns.com.au
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The case of Target Australia Pty Ltd v Catchoftheday.com.au Pty Ltd
When online retail sales company Catchoftheday.com.au Pty Ltd applied to register two logos incorporating TAR JAY as trade marks in 2013 (depicted below), Target opposed registration. Target claimed that use of the logos would be likely to deceive or confuse customers, arguing that it had a reputation in the name ‘Tarjay’ (or ‘Targét’) because Australian consumers have long recognised this as an endearing alternative name for Target stores. Several examples of third parties using this name in printed media and online were cited in evidence.
The Delegate of the Registrar of Trade Marks assessing the opposition found that ‘Tarjay’ (or ‘Targét’) is ‘strongly associated in the mind of the public with [Target]’ and that ‘the evidence strongly supports such a conclusion and, indeed, suggests that the expression has entered language’. Significantly, the Delegate considered that prior use of a trade mark was not determinative in assessing reputation in a trade mark. In this case, Target had not used ‘Tarjay’ as a trade mark, however, this nickname was associated with Target through use by third parties.
The Delegate concluded that use of the TAR JAY logos by Catchoftheday would be misleading or deceptive and the applications were refused. In reaching this conclusion, the Delegate rejected Catchoftheday’s proposition that customers would view the logos simply as parody or satire. Instead, according to the Delegate, a customer who sees the logos while shopping on Catchoftheday’s website ‘will be misled into believing that it is either shopping on [Target’s] website, or on a website operating under the auspices of [Target], or with its sanction or license, or that there is a link between [Catchoftheday] and [Target].’ Target has also now filed an application to register TAR-JEY as a trade mark.
Nicknames associated with a business/product can be valuable marketing assets. Consequently, if a nickname becomes associated with a particular business or product, it may be worth considering filing applications to register the nickname as a trade mark, in addition to registering your traditional brand names.
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Lower Cost Alternative to Challenging Australian Patents
In April 2013, the provisions available for challenging an Australian patent via requesting re-examination were significantly expanded. Notably, since April 2013 re-examination has provided a multi-prong and lower cost “first shot” alternative to seeking revocation of a patent through Federal Court proceedings.
Expanded Grounds for Attack
The expanded provisions provide that novelty, obviousness, subject matter, utility, and sufficiency type grounds may be pursued when requesting re-examination. Prior to April 2013, only the more limited grounds of novelty and obviousness were available. Importantly, the introduction of the additional grounds has substantially increased the potential lethality of a re-examination type attack.
The expanded provisions also mean that, in some circumstances, requesting re-examination as an initial step in challenging granted patents rights could avoid the substantial cost and timing uncertainty associated with revocation proceedings.
In the case of subject matter type grounds, re-examination may present a significant invalidation risk to patents in fields where patent eligibility requirements have shifted to the extent that developments in those fields (such as in the field of pure business methods) are currently considered as non-patentable subject matter. Similarly, the ability to invalidate a patent on utility grounds is significant since this ground was not available for consideration during examination of patent applications where a request for examination was made prior to April 2013.
What is Re-examination?
Re-examination involves requesting the Australian Patent Office to reconsider the claims of an Australian patent. A request for re-examination may be accompanied by prior art documents, and potentially submissions (including expert evidence), which the requestor considers relevant to the validity of the claims of the patent. The prior art and submissions are then considered by a patent examiner and result in the issue of a re-examination report.
If an adverse re-examination report is issued setting out objections to the validity of the patent, the onus is then placed on the patentee to address the objections raised. In some cases, a re-examination report may raise irresolvable issues which will inevitably lead to revocation of the patent. This may be the case, for example, for subject matter type issues. Alternatively, the re-examination report may raise issues which may necessitate a claim amendment.
Unlike a patent opposition to a patent application (which is conducted before the Patent Office) or a revocation procedure (which is conducted before the Federal Court of Australia), a re-examination procedure is conducted ex-partes, meaning that once a request for re-examination has been filed, the requestor has no further involvement in the procedure other than receiving a copy of the re-examination report.
The Balance of Probabilities
In addition to the expanded provisions available for re-examination, a further potential difficulty for patentees is that the standard of proof which applies during re-examination has changed. Whereas prior to April 2013 the Commissioner had the ability to revoke a patent in circumstances where the Commissioner was practically certain any granted patent was invalid, since April 2013 this ability has changed such that the Commissioner only now need be satisfied on the balance of probabilities that a patent would be or is invalid.
New Zealand Position
Since September 2014, New Zealand has adopted a similar approach for re-examination of accepted patent applications or granted patents using a similar process to that available in Australia.
The expanded grounds and more stringent validity considerations which have applied to re-examination since April 2013 mean that re-examination now presents a useful and relatively inexpensive approach to launch an initial invalidity attack on an Australian Patent. In circumstances where the grounds for requesting re-examination involve a clear anticipation or subject matter type issue, re-examination could provide a lower cost, shorter time frame, option for revoking an Australian patent. In the event that a request for re-examination was unsuccessful, a revocation procedure would still be an available option via the Federal Court.
Stephen O’Brien is a Senior Associate in our ICT Team and a member of our Oppositions, Re-Examination and Revocation Group.
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