Print | Email

The Basics of Disclosure in Intellectual Property

The process of taking your invention from an idea to a fully operational business venture can be quite challenging. During this time, you may be inclined to share your idea with potential investors to evaluate its profitability, or advertise it through other channels to showcase your ingenuity or check the market potential. However, if you are eventually hoping to protect your rights with a patent or industrial design registration, you may be endangering your rights by revealing your invention or design to others before you apply for protection.

Under Canadian law, you have one year (twelve months) from the time of the initial (or earliest) public disclosure to file for a patent or industrial design registration; if that seems stringent, consider that Canada has one of the longest grace periods for disclosure across the world.

Most countries, with many industrialized countries in Europe and Asia included, demand absolute novelty as a requirement for patentability; that is, any evidence of public disclosure may prevent your innovation or new design from obtaining patent or design protection.

This article covers the basics of what constitutes public disclosure, as well as some tips for avoiding unintentional disclosure and choosing the best protection strategy for your patent. It is not an exhaustive list of recommendations; please consult an intellectual property lawyer if you require help determining whether something constitutes a public disclosure in Canada or another jurisdiction.

What is disclosure?

In order to be patentable, an invention in Canada must meet the novelty requirement; that is, an application must be new to the public as of the date it was filed. Because Canada operates on a first-to-file system, rather than a first-to-invent system, it does not matter if someone already came up with the invention you want to patent, provided that they did not publicly disclose it or file an application in Canada at any time before you. This invention does not need to be entirely new, and can be, for example, an improvement to a previously known item, or a novel method of use of an old product.

However, the novelty of your invention is only maintained as long as it is not disseminated publicly. Any public disclosure of the invention that provides information sufficient for an individual skilled in the relevant industry to reproduce the invention nulls the novelty requirement of patentability.

Any instance of public sharing of the invention – for example, an oral presentation on the product, a written release, a sale of the product or a pitch for crowdfunding – would likely be considered a public disclosure. Patent publication in another country, publication of the invention in a technical journal and showcasing your invention in professional circles (i.e. at a trade show or exhibit) would also be considered public disclosure. It is therefore necessary to consider novelty searches that cover the world, rather than just in your home jurisdiction, to meet the novelty requirement.

As a result of public disclosure, your invention will lose its novelty and may no longer be eligible for patent or industrial design protection subject to any grace periods which are available only in some countries (for example, Canada and the United States, but not Europe or China) during which you are still allowed to obtain a valid patent.

It should be noted that not all instances of telling someone about your invention count as public disclosure for the purposes of the novelty requirement. Sharing your invention with others confidentially to further your business purposes, such as your employees or partners within your business, is not considered to be public, as it is not known in wider circles where information regarding your industry is discussed. If you succeed in keeping your invention confidential, it should comply with the novelty requirements set out by patentability laws.

How is disclosure relevant to patent filings?

In Canada and the United States, guidelines on disclosure of patentable inventions are quite lenient when compared to most other countries. You are given a grace period of twelve months from your initial public disclosure of your invention to file a patent or industrial design application. In Canada, you have to file a full patent application by the end of the twelve-month period – a provisional patent application is not sufficient to protect you in cases of an already existing disclosure.

However, filing an application even within the twelve-month grace period does not protect you from a third party disclosure that could inhibit the registration of your patent. If third-party disclosure occurs, even subsequent to when you have originally publicly released the information, it could put your patent or industrial design application in jeopardy.

It is in your best interest to avoid disclosing information about your invention until after you apply for a patent. Patent are granted on the basis of a first-to-file system, which means a third party that has learned of your invention through your disclosure might also file a patent application in the twelve-month grace period afterward. If they do so before you, you may lose your rights to the patent or be put into a costly litigation battle over ownership of the invention where the onus is on you to prove that you were the original inventor.

Although the twelve-month grace period provision also exists in the United States, the rules surrounding disclosure of inventions are somewhat different, including whether the product or service has been offered for sale or sold prior to filing. However, your public disclosure could act as a defense mechanism against someone who tries to obtain a patent for your invention in another country or in the United States.

In many other jurisdictions, the requirements for novelty, and, as such, for avoidance of prior disclosure, are much more stringent. In many countries in Europe and Asia, the requirement for patentability is absolute novelty, which means that any sort of public disclosure acts a complete bar to patentability. You can find more information on specific laws of each country on the World Intellectual Property Organization (WIPO) website.

Accordingly, it is generally not advisable to publicly disclose your invention before filing a patent application in any jurisdiction. It violates the novelty requirement in some states, which could inhibit you if you ever plan on globalizing your invention, and it puts you at risk of other individuals trying to claim your invention as their own. Although the grace period is a good provision if you were under circumstances where you could have gained from disclosure or where disclosure was inevitable or inadvertent, it is by no means a guarantee that no other complications will arise.

Tips for preventing unintentional disclosure

Although you are never fully protected from either accidental or unintentional disclosure of your invention, there are certain steps you can take to minimize the risk whether you intend on filing a patent for your invention or if you would prefer to keep it as a trade secret for commercial purposes. Below is a non-exhaustive list of such strategies that may help prevent unintentional disclosure of your invention:

  1. Familiarize yourself with the requirements for patentability, including the novelty requirement, and make sure that you and everyone on your team understand what information needs to be kept confidential, and what, if any, can be revealed in order for you to continue being eligible for a future patent. Employment agreements should include disclosure and confidentiality provisions to discourage potential actions by disgruntled or terminated employees as well.
  2. When disclosing information about your invention is necessary (i.e. to a potential investor or licensee), ask them to sign a non-disclosure agreement (sometimes referred to as an NDA) that binds the individual you are telling to not reveal information about your invention to others or use it for their own gain.
  3. Once the agreement is signed, make sure all written information you send on the subject is marked as confidential so it is clear that it falls under the terms of the non-disclosure agreement.
  4. Do not wait to see if your invention is profitable and viable in the market before filing a patent application. Disclosing your product to the market will eliminate your rights to patentability in some jurisdictions. You can always file an initial provisional patent application at a reduced cost to get your invention into the patent system and avoid that consequence.
  5. Do not disclose any more information than necessary: begin any potential negotiation with the basics of your invention and only expand further upon the signing of an NDA and an indication of clear interest in respect of working with you on your invention. Even with that, disclosure or sharing of information is best kept to a minimum until a patent application is filed.

Can disclosure hurt me if I don’t plan to file for patent protection?

Unfortunately, disclosure of your product can be an issue even if you do not plan on filing for patent or industrial design protection. In Canada, another way to derive protection for your invention without filing for a patent is to keep your invention as a trade secret between those involved in producing and financing it. This route is often taken by those who want to avoid disclosing their invention at all, because obtaining a patent or industrial design requires full disclosure of the invention and eventually rescinding your rights to exclusivity when the patent expires. Although protection of a trade secret is an informal procedure not requiring application with any legal body in our country, it is still subject to several regulations. Namely, the information must be secret and not readily known by professionals in your industry outside of those involved with your product, it must be used for commercial value and the owner of the information must have taken reasonable steps to keep it secret. A recipe for a popular food or beverage, like KFC or Coca-Cola, would be an example of a trade secret.

However, if this information is disclosed at any time, whether intentionally or unintentionally, you have virtually no recourse against the potential damage your business can take. Because you are not recorded as the owner, it may be difficult to prove ownership or prevent others from recreating your invention. Furthermore, once trade secret protection is lost by revealing the information, in most circumstances it cannot be regained.  As such, if you choose to consider your invention as a trade secret, it is advisable to take strong measures to prevent public disclosure.

Are there disclosure requirements for other types of intellectual property?

For creative works subject to copyright protection, you are automatically considered an author upon creation and fixation of the work, and are entitled to federal registration of your copyright in Canada provided that it meets the conditions outlined in the Copyright Act. No disclosure requirements are attached to obtaining a copyright registration as even unpublished works can be protected. You are allowed to publish and disseminate your work, contingent on providing the publication date to the Copyright Office if you apply for a copyright registration.

Disclosing your trademark to others through commercial use is a requirement for trademark registration in Canada and at common law, the more use of the trademark the better to help you reach the threshold for a protectable reputation in the trademark. Prior third party use of your trademark or a trademark with which your trademark is confusingly similar can be a barrier to registrability of your mark and, more significantly, your continued use of the trademark in Canada.

Steps forward

Disclosure of your invention to others is often necessary to obtain funding, to arrange help with manufacturing, or to sell or license your invention. However, disclosing your invention without the appropriate safeguards in place such as non-disclosure agreements can prevent you for obtaining valuable patent or design protection altogether.

As such, it is best to apply for patent or design protection before revealing anything about your invention or new design to others. The next best option is to only disseminate such information after the recipient signs a suitable non-disclosure agreement. If a potential public disclosure has already occurred, you should consult with an intellectual property lawyer about whether it meets the threshold of being a bar to obtaining rights in some or all jurisdictions.