Intellectual property in the construction industry

At parties, I am often asked what I do for a living. After explaining that I am a registered patent attorney (and then in many cases explaining what that is) the question I am most frequently asked is which of my clients' inventions have made the most money/been the most successful.

People want to know about sole inventors who have made a fortune by selling or licensing a patent to something which they created in their workshop or garage. While such people exist, they are far and away exceptions to the rule.

The Reid RockBolt from Reid Construction Systems – by pursuing patent applications before disclosing or commercialising it, Reid has the potential to monopolise this product for up to 20 years in New Zealand

On the whole, the most financially successful patents relate to some aspect of an existing business, and are used to ring-fence either an emerging technology or a refinement of existing technology which provides a competitive advantage.

One of my more savvy clients when it comes to intellectual property is Reid Construction Systems. It recently obtained patent protection for two products – the Orbiplate and the Reid RockBolt.

Both are improvements on known technology. The Orbiplate resolves the issue of providing multi-directional tolerance in complex fixing applications, and the Reid RockBolt provides the mining industry with a rock bolt with sufficient mechanical set to enable the use of a slow-setting grout.

This makes the Reid RockBolt particularly advantageous in coal-mining applications where fastsetting grout can result in heat buildup and subsequent combustion of the surrounding coal.

Novel and inventive

The important point is neither product is green field, but each is a novel and inventive refinement on an existing technology which provides a number of benefits to the user and therefore a commercial advantage.

By pursuing patent applications before disclosing or commercialising the products, Reid has the potential to monopolise these two products for up to 20 years in New Zealand (and overseas, if corresponding applications are filed in its foreign markets).

Reid will be able to use its existing customer base and marketing materials to promote the products and, in the case of the Reid Rock- Bolt, has the potential to dominate the market.

Another product familiar to many in the construction industry is the Zeus flanged support system, which was patented by another client, Stahlton Engineered Concrete.

Had Stahlton and Reid not pursued patent applications, their only protection in New Zealand would be under copyright law which simply stops competitors copying the look of its products – not the way they work.

Copyright vs patent law

Copyright law does have its use in New Zealand. Several years ago, I represented Tidd Ross Todd (TRT) in an action against Steelbro Manufacturing in respect of a side-loader container trailer which TRT alleged Steelbro had copied.

TRT's trailer could handle one 12 m shipping container or two 6 m containers. This individual handling of the 6 m containers was achieved by a third crane sandwiched in the middle of the trailer below twist-lock height – an idea which was revolutionary and probably patentable.

Unfortunately, TRT did not register a patent for the concept before it disclosed it and needed to rely on its copyright rights. Because copyright protects the way something looks, not the way it works (there is no copyright in ideas), and there were cosmetic differences in the design of the Steelbro trailer, TRT's case wasn't a sure-fire win.

Fortunately, it was revealed in court that Steelbro had inspected TRT's trailer on several occasions during the course of developing its own product. This ultimately swung the judgment in TRT's favour.

Nonetheless, the hearing (and subsequent appeal) was very expensive, and TRT remained in a position of uncertainty regarding its rights in the design until Steelbro's appeal was exhausted (several years after the complaint first arose).

Worth protecting

The case would have been much more straightforward if TRT had a patent. Bear in mind that most of New Zealand's foreign trading partners do not recognise copyright in industrial design – TRT may not have had a case if the trailers were made in Australia, for example.

The image of a chap in his garden shed coming up with a stunning invention which brings untold wealth is a nice dream. But the reality is most valuable patents are refinements to existing technology which arise during the course of an existing business.

If a development overcomes a problem in the industry, or provides a significant commercial advantage, or achieves an unexpected result, then it may well be patentable (provided the originator has kept the details confidential and hasn't offered to sell it).

Most patent attorneys will – for the cost of their time – give a preliminary opinion as to whether something is worth protecting. It's a few hundred dollars well spent.

Genuinely revolutionary

An investment in a patent will usually provide a return in the first one or two years. And if, like the Reid Rock- Bolt, the product is genuinely revolutionary, the overall costs of securing patent protection in New Zealand and overseas will be inconsequential – particularly compared to the potential loss of market and opportunity if a patent isn't secured.

I am passionate about growing New Zealand through the identification, protection and exploitation of intellectual property. The building industry is among those which can help New Zealand prosper by moving beyond the concept of putting more cows in the field.

Innovators in the building industry should focus on putting more ideas onto the global stage in return for a royalty on the use of those ideas. This requires investment in intellectual property.

Ian Finch is an Aucklandbased partner at James & Wells Intellectual Property; for further information, visit www.jaws.co.nz