SR&ED and Software Patents: A Competitive Edge (Pt. 1 of 3 – Definitions and Scope)

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What work falls under the umbrella of patent protection?

SREDable work doesn’t start and end with SR&ED claims – the work performed should be sufficiently patented in order to ensure that the innovative work is protected. That’s why SR&ED Education and Resources has teamed up with David French LLB BEng PEng, an intellectual property lawyer turned patenting/IP educator with 35 years of professional experience.

This post focuses on a general overview of patenting and copyrighting, with a special emphasis on software code. Stay tuned in the coming weeks for a series of patent and copyright-related guest posts that could help solidify the stability of your SR&ED eligible projects. Anyone in the software development business hopes that one day they will be struck with a patent-worthy idea. After all, stringent Microsoft patents were what lead to Bill Gates’ riches, right? Well, not quite. While Microsoft and all other software producers certainly do have Intellectual Property rights that include patents, their rights primarily reside in the code that they generate. Protection for software code falls under the umbrella of copyright law, which offers both advantages and limitations.

What do software patents and copyright have to do with SR&ED?

It’s not enough to build a great software product; you also need to employ business savvy. This means using all the tools at your disposal to achieve success. Sometimes, this may come in the form of protecting your asset through software copyright/patents, while other times it may mean being first to market or simply a superior product. While the SR&ED program can help subsidize new or improved products and processes, it cannot protect them. This is why many organizations choose to reinvest their SR&ED refund into obtaining the protection they require to keep a competitive edge.

Timing on applications for patents is critical and varies by country, so take the time to speak with intellectual property (IP) professionals and ask the right questions to ensure that you don’t just end up with a patent, but a useful patent. Read on for more information about the scope of patents and how they can safeguard your SR&ED work.

Copyright Protection

Software is automatically protected by copyright, meaning that no formalities or legal processes are required in order to “activate” copyright. The right comes into existence upon creation of the “literary work” constituted by the code once it is written. The only requirement is that the string of code be “original” i.e. not copied. The intent of copyright is to prevent direct copying. However, if the software carries out some function that the developer wishes to have control over, this requires a patent.

Copyright does not protect how something works. This distinction becomes incredibly important when the same result can be achieved using a variety of approaches. Copyright prevents direct copying and is therefore limited to a single approach. Patents, when properly drafted, can cover a wide range of methods for achieving a useful result. But given the legal, technical, and linguistic intricacies involved, drafting an effective patent is an art unto itself.

Scope of Patent Protection

Many patents, and arguably the majority of all patents granted, are used to restrain competitors from duplicating the invention as it was originally conceived by the inventor.  In a straightforward drafted patent, the inventor’s arrangement can be patented as such. However, this sort of straightforward draft will produce patents with a rather narrow scope. A more effective and skillfully crafted patent can address and control a principle that is merely implicit in the invention, as per inventor’s initial conceptualization. This principle can be used as the focal point of the protection provided by the patent. A patent that focuses on a principle is of much broader scope. The object in obtaining a patent is to prevent competitors from marketing products whose characteristics are too similar to each others’. If there are other ways to achieve the useful result and a patent fails to sufficiently account for them, then the patent is essentially rendered useless.

While insufficient patents may still possess some “nuisance value” in that it poses the threat of litigation, a determined defendant can change its product design and adopt an alternate method for achieving the desired result that the patent fails to cover. This is often described as a patent having a “loophole”. Sometimes, it is possible to see an overarching principle in an inventor’s method of problem solving. Take a graphic user’s interface, for example. Although the interface was traditionally designed to operate through use of a mouse, if a patent were issued that negated the necessity of using a mouse, then the patent would not cover a graphic user’s interface based on a touch-sensitive screen. It is a challenge for a patent draftsman to see an invention in its higher, more abstract, essence.

Patenting Done Wright

Although it is not a simple task to approach patents from an abstract position, it is certainly not impossible, as indicated by the success of the Wright Brothers in patenting their aircraft wing technology. The Wright Brothers achieved lateral roll control in an aircraft by warping the soft, flexible, outer ends of their wings. However, their patent agent managed to draft a patent that identified a principle implicit in this configuration. Patent claims based on this principle eventually allowed the Wright Brothers to assert their patent against the use of stiff, hinged, ailerons (which are hinged flight control surfaces attached to the trailing edge of the wing of a fixed-wing aircraft). All aircraft now incorporate ailerons and wing warping is a feature of the past; this was a triumph of patent drafting.

Bottom Line: Get the Competitive Edge

Will patenting your software always be beneficial? Not necessarily. SR&ED eligible work can take many shapes–everything from applied research to experimental development (read more about SR&ED eligible work in this article).

Depending on the scope of your work, having a patent or copyrighting your software may either be useful or an unecessary resource drain. Ultimately, the best way to protect the weeks, months, or even years of dedicated work you have put into your project is to ensure that you always discuss the benefits and drawbacks of patenting and copyrighting your work with your IP lawyer.

Getting a second opinion is also an excellent idea, as not all patents are created equal. Some organizations such can provide an impartial review of your patent or simply just give you an honest opinion as to whether it is worth your time, effort, and money to invest in patenting your work.

The bottom line is that you should never sell your work short when it comes to patenting and copyrighting. Take time to do the research, seek advice from an IP lawyer, and get a second opinion. It could be the difference between undermining all your hard work and having a soaring, Wright Brothers success story.

Next week’s article will focus on the novelty requirement in patenting. This article is presented only for informational purposes and does not constitute legal advice. You should retain legal counsel if you require legal advice regarding your individual situation.

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About David: David French is a senior Canadian patent attorney with 35 years of experience. David is a graduate of McMaster University in Engineering Physics (1965) and of the University of Toronto Law School (1969). Having worked with Gordon Henderson after qualifying as a lawyer in 1971, David spent six years with the Canadian government working on law reform and international patent issues. Thereafter he has been practicing Intellectual Property law, eventually with the firm MiltonsIP in Ottawa, Canada. On January 1, 2010 David retired from regular practice at this firm to continue with his business. During his career, David has helped numerous firms and inventors obtain patent rights, trademark and design registrations, providing guidance on not only understanding Intellectual Property but appreciating how to make IP work effectively to serve a business’s interests.

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