Author: Richard Clement

Most inventors realise that they shouldn't show their ideas to too many people before they have applied for patent protection. But it can come as a shock to learn just how easy it is to make a mistake which will severely reduce your options for protecting that great new idea.

A recent US patent infringement case has highlighted how careful inventors and patent applicants must be to make sure that they do not inadvertently destroy their chances of obtaining valid patent protection.  In the case of Hamilton Beach Brands Inc v Sunbeam Products Inc the patentee, Hamilton Beach, sued Sunbeam over its alleged infringement of a patent relating to a portable slow cooker.  However, during the proceedings Hamilton Beach revealed that more than a year before filing its patent application it had made arrangements with a supplier to have the cookers manufactured under contract.  In a critical email, the supplier wrote to Hamilton Beach confirming that it was ready to begin production of the cookers for Hamilton Beach on receipt of its "release".

The court held that this email was an offer by the supplier to sell the cookers to Hamilton Beach.  Because this offer was made more than 12 months before Hamilton Beach filed its patent application, it could not rely on the grace period provisions in force in the US at the time, and the relevant claims of the patent were held to be invalid.

While the exact rules around novelty differ from country to country, if this set of circumstances occurred in New Zealand today then the result would probably be the same, regardless of any agreement between the parties to keep the supplier's offer confidential.  An offer by any party to sell an invention will invalidate a patent application filed at a later date.  In fact, in New Zealand the supplier's offer would have invalidated a New Zealand patent even if received only the day before the patent application was filed. 

It appears that this strict rule may be relaxed when New Zealand's new Patent Act, the Patents Act 2013, comes into force some time in the next 12 months.  Under the new Act, the novelty of an invention claimed by a patent is assessed against "all matter (whether a product, a process, information about a product or process, or anything else) that has at any time before the priority date of that claim been made available to the public (whether in New Zealand or elsewhere) by written or oral description, by use, or in any other way".  This language mirrors the current UK Patents Act, and moves away from a strict prohibition on "use", to dealing with use which makes "matter...available to the public".  In the UK, the use of an invention before a patent application is filed only destroys novelty in the patent application if it enables a suitably qualified member of the public to reproduce the invention. 

It remains to be seen whether the courts in New Zealand will adopt the UK interpretation of the novelty rule when the new Act comes into force.  In the meantime, the Hamilton Beach case holds an important lesson for patent applicants in New Zealand, particularly those who intend outsourcing manufacture of their new product, or those who simply want to lock in a buyer before committing to the costs associated with filing a patent application.  There is no way around it; you must file your patent application first.

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