Clever thinking about future revenue streams can lead to smarter design choices and complementary intellectual property (IP) strategies.

Take home printers for example. We buy them because they have lots of clever technical features and they are cheap. Because they are cheap, the main revenue stream to the manufacturer comes not from the printer purchase, but from consumables - like ink cartridges.

A printer is something most people use, so it's a good example to focus on conceptually when we talk about the design of a consumable. But there are many examples which are equally applicable.

If you have designed a product where an ongoing revenue stream could be a consumable, then care needs to be taken to secure that value. There is no point in creating a market for someone else.

How do you secure value?

Firstly, have something about your base product that will attract a consumer to purchase it - whether brand, features or look. Lock that in with appropriate trade mark, patent or design protection.

Next look at what you can do to make your consumable unique to you.

In the case of ink cartridges, it may be the delivery mechanism, or the interface between the cartridge and the printer. If unique, then find the appropriate form of protection.
For example, the physical shape of something like the latch mechanism on the cartridge can be protected with a design registration - in countries that allow registration of purely functional designs.

If there is functionally something different, say the chambering, then a patent is an option.

The consumable itself (such as the ink) could be altered - say by including an additive. If so, the printer could be designed to check for that additive in the ink before it prints - thus ensuring exclusivity in the supply of ink. Various IP strategies could be employed here.

Some strategies include:

  • Keeping the ink formulation a trade secret (if difficult to analyse) or patent it if inventiveness can be illustrated.
  • Keep the control algorithm of the printer a trade secret as above, or patent if appropriate.
  • Patent the sensor if unique - although practically you may not want to design that as well.

It should be appreciated, there are many integrated design and IP strategies which can be employed to maximise returns from innovation. But it requires thinking about possible revenue streams early on. The start of the process is to demand "Show me the Money".

This article was written by Kate Wilson, a Partner in the Hamilton office. To contact Kate, please email her on katew@jaws.co.nz or phone 07 957 5660.

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.