Understand the patent business from a baby chair

(source: http://www.bumbo.co.za/images/colors.jpg)

A patent number printed on a baby chair could tell you a lot about the patent business. In this article, I will use a baby chair example to explain about patent system and how to leverage a patent.

Introduction

Last week, my wife bought a baby chair for our baby. The baby chair is a marvelous invention from Bumbo. Unlike traditional baby chair, there is no strap and no roll-over worry. My wife told me that the sales lady informed her that the baby-chair is so revolutionary that got a patent on it. As an IP manager, my immediate instinct was to check out the bottom of the chair to see if there is a patent number.

No surprise, there was a series of number. It said "“World Patent number: PCT: ZA/ 1999/00030".

(Source: http://www.bumbo.co.za/images/baby_sitting_3.jpg)

Patent Sherlock Homes

For patent professionals, you can skip this paragraph. For others, I will explain how to discover information from a series of PCT patent number.

First, go to the PCT search webpage of World Intellectual Property Organization (WIPO) at http://www.wipo.int/pctdb/en. Enter "ZA/1999/00030" as the application number. The result will then appear.

Click on the linkand you will see the bibliographic data of this patent application. You can verify that the inventor is Buitendach, Johan, Nicolaas. The title of the invention is "baby chair". You can also read the abstract there. Now, click on the "National Phase" tab. You can see the "official code" column. There are AU, CA, CN, JP, US and ZA. They are the short forms of Australia, Canada, China, Japan, the US and South Africa respectively. This indicates that the same patent application was submitted to at least these six countries through the PCT system. We do not know whether the patent application was also submitted to any additional countries. The only way to find out for sure is to ask the owner of this IP.

Let's try to dig more information from the "National Phase" tab. The links for both US references number were not working. The other two from China and Canada were working fine. Interest readers could click on both links to check the status of the patent applications. A China invention patent was granted on July 21, 2004 with patent number 99816616.2. The Canada patent application is still under review.

What about the US patent applications? As the link was broken, we need to spend a bit more effort to find out the status. From my experience, using inventor's last name to find a patent or patent application is the quickest method. Let's go to United State Patent and Trademark Office (USPTO) patent search website at http://patft.uspto.gov/netahtml/PTO/search-adv.htm (please note that patent application website is http://appft1.uspto.gov/netahtml/PTO/search-adv.html). Enter "IN/BUITENDACH" to search for patents that have inventor called BUITENDACH. You should then see that there is only one result. The patent number is 6,626,487 and was granted on Sept 30, 2003.

We have just demonstrated how to use a PCT number to dig out information of this baby chair invention. Of course, this investigation is not complete yet. But it is enough for most readers to glimpse how IP professionals search for patent information and the link between different patent systems.

World patent does not exist - at least for now

What is PCT after all? PCT stands for Patent Cooperation Treaty. It is an international treaty signed by 137 states. By submitting a patent application to WIPO using PCT, a patent application owner could "seek patent protection for an invention simultaneously in each of a large number of countries". Also, there is an additional 18 months window for a patent application to decide which specific country he/she want to file the patent application with. As a result, the patent application owner has in total a period of 30 months to file the patent application in other countries.

The patent application owner still needs to deal with each patent office directly. The plan to file just one patent applications and has it to be enforced in all countries is still in its infancy. Government officials from different countries are still negotiating and working together on how to come up a "world patent". However, PCT is a major step to realize the future "world patent".

Sorry, Bumbo. There is no world patent yet. You should call it "International Patent Application Number".

Go after the copy-cat?

Let's go back to the baby chair itself. Amazed by this invention, I tried to find out how others feel about Bumbo baby chair (yes, my wife should do it before she bought the baby chair:).

A baby-chair from Prince Lionheart is remarkably similar to the Bumbo baby chair. As I have not seen the Prince Lionheart version, all my comments below are based on pictures I saw from the Internet and marketing brochures.

(Source: http://www.princelionheart.com/site/products/new_products/n_bc_7101_bg.jpg)

The Prince Lionheart version is remarkably similar to the design disclosed in Buitendach's patent. The only differences that I can find from the market brochure are: (1) the pommel (or knob) of the Price Lionheart version is much larger, and (2) the downward slope supporting a baby's leg. I believe Bumbo has a strong patent infringement case against Prince Lionheart.

Then I searched in Google using the keywords "Bumbo Prince Lionheart Patent" to check if Bumbo has filed a lawsuite against Prince Lionheart. There was only one article from a South Africa publication about Bumbo's reaction. I was surprised not to discover more articles about the IP dispute between these two companies.

Strategy

Unless both companies are negotiating behind the doors, I suspect Bumbo is taking a wait-and-see strategy because:

1. Bumbo is a small and startup company that tries to preserve its financial resources for marketing its product, rather than initiating an expensive patent war.
2. Buitendach's patent application is still under review in some countries, such as Canada. Bumbo cannot enforce its patent rights until a patent is granted. For sure, Bumbo can take legal action now at China, the US and South Africa.
3. Prince Lionheart only introduced their baby chair last year. There is still not much to ask for for revenue loss.
4. Bumbo can leverage Prince Lionheart marketing power to educate the public.

It is not always true that you need to go after the infringer immediately. The ideal situation is that (1) the infringer makes huge profit, (2) the infringer does not eat your market share, (3) and you can have the court to help you get all the retrospective royalty and damage payment. Of course, there are many risks if you wait too long for the ideal situation to occur. For example, you may lose market share or you does not file a lawsuit within a required period.

Bumbo could threaten retailers, who carry Prince Lionheart baby chair. This, however, would not be a wise move. These retailers are usually retailers of Bumbo baby chair. You do not want to file a law suit against your customer if they have been giving you a lot of business, right?

Conclusion

There are a lot to tell from a patent number. I have only discussed only the PCT system. There are also a lot to learn about Public-PAIR system provided by the USPTO. Leaders of companies that rely on IP (nowadays, which companies do not rely on IP?) should have a well-thought game plan the moment they have developed valuable IP.

Bumbo filed a patent in South Africa originally. Then file in other countries through PCT discriminatorily, i.e. only the largest markets. As it is still a small company, they should not rush to start a patent war against a potential copy-cat. I will be surprised if Bumbo will not take legal action against Prince Lionheart in the next three years. However, brining your competitor to the court is only of many legal actions. Turn your competitor into a royal licensee could be a more lucrative legal action.