It is surprisingly common with startups to not know how to incorporate patenting in their company’s business strategy. Our patent specialist Jorma Selin blogs about important aspects for you to consider.
Digital transformation puts IP in the spotlight – case Hydroline
In the past, we used to think of software and machines as two distinct elements. Today we are experiencing the integration of these two elements, as machines are more and more equipped with smart technology. For traditional smokestack companies digital transformation creates also new opportunities and challenges in the protection of Intellectual Property, or IP.
Hydroline Oy specializes in the manufacture of heavy-duty hydraulic cylinders. The family-owned company from Siilinjärvi, Finland, was founded in 1962, and serves customers such as Agco, Bronto Skylift, Cargotec, John Deere, Rocla, and Sandvik.
Now Hydroline is expanding its operations to a predictive cylinder maintenance technology, which is planned to be put on the market next year. In the new technology, hydraulic cylinders are equipped with sensors that measure the pressures, movements, and operation of the cylinders. The measurements provide information to the machine operator, indicating expected machine failures. Based on this information, the operator is able to predict when machine parts need to be replaced.
Hydroline is a good example of a traditional machine shop that previously focused on manufacturing tailored products for customers, but inspired by digitalization has now started to create its own products. As Hydroline has put considerable effort into product development, it is crucial to retain the rights to these innovations.
– Digitalization has transformed our business. For the first time in the history of this company we are offering products that are our own design, and protecting the rights to these products has become a top priority, says Manu Leinonen, VP Design and R&D from Hydroline.
Why is it important to protect IP?
Hydroline’s smart technology inventions incorporate sensors and other electronic components that as such could be available at any webstore. What makes these inventions unique is the way the components are assembled in the machine to give a special functionality.
– Hydroline’s core expertise is to combine machines and smart technology. The role of intellectual property, like patents, is to prevent competitors from combining their components in the same way. Also, without IP the customers could buy the same technology from someone else at a cheaper price. IP is a tool to stay ahead of the game, explains Timo Kuosmanen, European Patent Attorney from Papula-Nevinpat, who has been working with Hydroline from the first steps of their IP journey.
– If we hadn’t protected our IP as we have, there is no doubt our competitors would have registered the same rights before us, and all the money and effort we had put into product development would have gone to waste, says Leinonen.
– Our employees are motivated by the possibility to file for a patent. The product developers play a key role at Hydroline, as they are identifying the problems our customers are facing, and look for solutions to these problems. And sometimes they find a solution no-one else has come to think of before.
IP is also a fundamental part of brand building. As large companies expect their suppliers to show a high level of design competence, patent applications are proof that the R&D department is able to handle projects that go beyond the basics. In addition, a good patent portfolio attracts also investors.
How to use IP to keep up with the global competition?
Hydroline is growing fast, and is planning to enter the international market. Because you have to file for a separate patent in each country and pay separate fees for each of these patents, it is worth spending some time to clearly define where you are going to operate in the future, in other words, where to apply for IP protection. Some of the things you want to consider may be what your key market areas are, where your competitors are operating, and which countries are likely to give the best profit. These are also subjects Timo Kuosmanen has brought up at Hydroline.
Hydroline’s products will be marketed globally, also in countries where copying is commonplace and production costs are lower. Especially in these areas, IP registrations are an efficient deterrent to copying.
In addition, Hydroline has conducted a competitor analysis, answering questions such as:
• What rights have been registered by competitors?
• What are the main business areas you should keep an eye on?
• Are there any geographical gaps where you could focus your business and register rights?
International operation means there will be a greater number of competitors, and you have to watch what they are doing. To take these aspects into consideration, Papula-Nevinpat offers competitor monitoring and analysis services, which can give you useful information as you are refining your strategy.
Cooperation is a means to success in manufacturing industry
As most component manufacturers may not have sufficient in-house resources to develop intelligent systems, partnerships with universities, research centers and others could be instrumental to their success. The thing to remember when dealing with partners is to make sure you have a properly drafted agreement, outlining all partnership details, such as who owns the rights to inventions.
Set the patent bar low, your ideas are worth it!
Many of us tend to think of patents as groundbreaking inventions no-one has seen before. In reality, patented inventions are many times simply improvements or modifications to an old but commercially valuable product or application. Usually, patents relate to a specific way of doing something, which is the case with Hydroline’s patents, too. Others may also integrate hydraulic cylinders with smart technology and measure their operations, just not in the same way.
When you’re dealing with patents, modesty is not a virtue.
– Don’t set the bar too high, even if you want to patent smart technology. If you just combine some existing smart technologies in a new way, that may well be enough.
Manage your IP responsibly
If you should know one thing about IP rights, that would be that it is your responsibility to make sure you are not violating anyone else’s rights. Ignorance is no excuse.
Clients usually expect their suppliers to have ensured that their components, devices or systems don’t infringe others’ intellectual property rights.
– The least you can do is to contact an expert if you have a new product or if you’re planning to move to a new market area. By finding out if there are any prior rights you can avoid disputes and costs at a later time.
If you’re developing a new product, Papula-Nevinpat’s experts evaluate whether you’re dealing with an innovation that could be protected. You will get an honest opinion, and concrete suggestions on how to proceed.
What are IP rights?
Intellectual Property rights encompass industrial property rights as well as copyrights.
Industrial Property rights are exclusive rights to inventions, signs for identifying goods and services, or the design of an article. Industrial property includes patents, utility models, registered designs, trademarks, company names, and some other, more rarely used types of protection.
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