How HR Protects Intellectual Property Before the Patent Process Starts

How HR Protects Intellectual Property Before the Patent Process Starts

This article was updated on August 29, 2018.

Innovation has always been a key driver of the global economy. The patent process gives businesses the legal right to exclude others from making, using, selling or importing into the United States a patented innovation for a stipulated time period. [Note: a patent does not give the patentee the right to make the invention, which may be curtailed by a blocking patent; rather, a patent grants the right to exclude others from using the patented invention.]

Although a patent is generally secured at the end of the innovation process, the need to protect intellectual property begins long before, in the research and development (R&D) phase. Organizations are often most vulnerable to "losing" ideas to competitors in the window between idea development and the start of the patent process.

HR leaders can help protect patents by clearly communicating with people inside the organization about how the patent process works, to both help ensure compliance with regulations and maintain internal best practices.

Safeguarding Trade Secrets

The best innovators are curious people by nature, which is why your HR team recruited them in the first place. They love discussing and developing new ideas, which may later be patented. Moreover, innovation is almost always a highly collaborative process involving cross-disciplinary teams from multiple areas of an organization.

While the energy and openness of this "innovation dialogue" may be the catalyst that spurs competitive advantage and patents, it can also represent risk. Put simply, you don't want potentially revenue-driving innovations spilling out or leaking from the organization, whether by accident or through malicious intent. Clear communication of policies by HR leaders can help to prevent problems before they start.

Completing the Patent Process

It can take years to develop an idea before it's ready to be patented, but it can also take years to finish a patent application and get final approval. The patent process, as described by the U.S. Patent and Trademark Office (U.S. PTO), is complex, both technically and legally.

Businesses have legally protected rights once they submit a patent application to the U.S. PTO, which then enables them to use the designation "patent pending." At this point, if another business begins to use the idea without permission, the "patent pending" business can then proceed to get the patent issued and bring litigation against the other business for patent infringement.

The "infringed" business may obtain an injunction, forcing the other business to stop using or selling the idea for which a patent has issued and may also be able to recover a royalty or lost profits for the period during which the infringing business used the patented technology.

Protecting Yourself Before the Patent Application

How does a business that encourages the sharing of ideas protect trade secrets from leaking out before it has patent protection? It can be a tricky balancing act, one involving IT systems, carefully considered policies, legal restrictions and solid compliance communication.

Here's how HR leaders can do it well:

1. Retain and Engage Innovators

When your top talent walks out the door, perhaps to join your competitors, so does your best source of innovation. Keeping that top talent may be the single best way to prevent "leaked" ideas. As Forbes explains, "the best protection is to have highly motivated employees who want a long-term career with the company and to align their futures with it. Of course, it is impossible to stop an employee walking out the door to work for another competitor, but a well thought-out retention policy can help."

2. Employ Non-Disclosure Agreements

Non-disclosure agreements (NDAs) are legal documents that restrict employees from discussing topics covered by the NDA, such as R&D projects that could be patented. These agreements are perhaps the most common way to prevent R&D leaks prior to the patent application. Anyone involved in developing the idea, or anyone with access to the idea (whether internally or externally), should be asked to sign an NDA.

3. Restrict Access to Relevant IT Systems

You will obviously need to communicate internally about R&D, and will thus have computer systems where R&D data is stored and shared. Access to this data should be restricted with firewalls, encryption, password-controls and other forms of cybersecurity before the patent application gets filed.

4. Educate About Protecting Intellectual Property

You can have great IT protection, NDAs and top talent, but it only takes one overexcited, enthusiastic employee — perhaps after a few drinks at a trade show party — to give away your best ideas to a competitor. Educate your employees about risky behaviors that might lead to leaked ideas, such as writing passwords on sticky notes, leaving documents on their desk or over sharing at parties. Train employees about your policies for managing confidential, proprietary information — especially employees who work with strategic information every day.

Innovation is increasingly crucial for business success. Businesses must balance the transparency that encourages sharing ideas against the risks of leaking important information outside the organization. Getting the balance right requires solid policies and HR communication, reliable IT systems, strict adherence to legal regulations and consistent training to engage talent in the process.