This second of a two-part series on the value of clearance studies for SMEs provides real-world insight into how this strategy can be integrated into the product development cycle as well as offering some tips and tricks for maximizing the value while minimizing the cost of clearance studies. Part I focused on dispelling and overcoming the many misconceptions that SME leaders may have about clearance studies and is available here.

Clearance Studies: A Vital Strategy for Small and Mid-sized Enterprises to Streamline Product Development, Part II

Starting a business and launching a new product is hard work, time consuming, and stressful. Often, it seems there is no time to sleep, let alone time to purposefully slow the product development process! Or is there? Integrating the clearance study process into the product development cycle can be seamless if done with foresight; an important part of having an IP focused approach to building your business.

Developing a product requires countless hours of market research. Amongst many facets, understanding who your competitors are, the products they market, and where your product or business will fall amongst your competitors are key aspects of market research. Guess what? The market research process has already covered many of the initial steps of a clearance study! Clearance studies require identifying competitors and the products they market that may cause legal issues for the product you are developing.

Once your competitors and their products are identified, significant time is spent on understanding how the competitor’s product works and ways in which you can improve upon them. Believe it or not, this step in the market research/product development process closely corresponds to the clearance study process of identifying components of your competitor’s products that are protected by IP, whether it be utility patents, design patents, trademarks, etc.

As you may realize, early on there is much overlap among the product development cycle and clearance studies. In this way, the work being done for product development can be utilized in the clearance study, helping to minimize cost and minimize the impact on the product development timeline of integrating clearance studies into the product development process. As you can imagine, performing much of the searching on your own avoids costs in having an IP practitioner or team of IP practitioners do the searching for you. It is also significantly easier to bring an IP practitioner up to speed if you have built a file on not only your product but your competitors as well.

Where the processes diverge somewhat is the amount of time devoted to studying the IP of competitors. This sounds expensive! Fear not, bringing on an IP practitioner at this point in the process can save you and your company a significant amount of time, money, and trouble in the future. Specifically, by identifying troublesome IP, the IP practitioner can help shape the design of the product to avoid exposing your company to liability, requiring costly royalties, costly litigation, costly redesigns after launch of the product, amongst other unpleasant scenarios.

In this regard, the IP practitioner becomes an active participant in the product design process. The IP practitioner reviews the relevant IP uncovered during the previous searches, and if necessary, updates the search using his/her experience or newly uncovered information. (Imagine if the IP practitioner had to start this process from scratch. Now, perhaps, you’re starting to see the value of an IP focused approach to building your business.) The IP practitioner analyzes the IP uncovered during the search and identifies areas of your product design that may infringe upon the IP of your competitors.

Using a collaborative approach, the IP practitioner will discuss with you and your team (engineers, business leaders, product development directors, marketing specialists, etc.) to clearly understand the relevant portions of your design and determine whether the identified IP is not a problem (i.e., not likely to infringe) or is a problem (i.e., likely to infringe). At this point, the IP practitioner works with you and your team to determine whether there is an easy redesign of the component to avoid any potential infringement, whether an opinion should be put in place if a well-reasoned approach can be taken to explain non-infringement, or if a license agreement should be established if a redesign or opinion is not a viable option.

If it sounds like clearance studies are reserved for the utilitarian aspect of your product (i.e., mechanical, electrical, software, and/or chemical workings), you are sorely mistaken. Clearance studies apply with equal value to the ornamental design of your product, the name of your product, your product’s packaging design, etc. Intellectual property isn’t a one trick pony and therefore clearance searches should be considered for each area of your product that is protectable by intellectual property laws.

For example, you have worked hard to come up with a unique and catchy name for your product; the “Widgetizer 3000.” It sounds unique and no one else can possibly be using it in the market to refer to their own product, right? Countless businesses have had to endure the pain of having to rebrand due to a trademark dispute that could have been avoided with a clearance study before launch. The good news is that the process described earlier in this article applies with equal vigor to trademarks; much of the work is covered by market research.

Further, consider the time and effort spent to come up with the unique shape of your product; handles with flair, sleek panels, and a color scheme that is emblematic to your brand. Well wouldn’t you know it, design patents cover each of those aspects of the design of your product (yes, even color! See, e.g., Apple’s infamous color design patent U.S. D604305). If these seem inconsequential to you, consider the long running lawsuits between Apple and Samsung regarding the design of Apple’s iPhone, iPad, and iPod line of products and Samsung’s Galaxy line of phones and tablets, where Samsung was found to have infringed Apple’s design patents and was liable for over $500 million! The lesson here is that design patents are powerful tools in the intellectual property arsenal and should be strongly considered during the clearance study process. The good news is that as with the utility and trademark concerns, much of the work for a design patent clearance study can be done during the market research process.

So, what is the takeaway here? What value do clearance studies provide and are they as time consuming and cost intensive as they seem? As mentioned in part I of this series, clearance studies can be as expensive and time consuming as you want to make them. However, as outlined over these two articles, the clearance study process can be incorporated into the market research and product design process to reduce cost, reduce the amount of attorney time required for a clearance study, and avoid costly product redesigns, re-branding, litigation, royalty payments, and the like after product launch.

Why avoid clearance studies and leave them only to the Fortune 500®? If it isn’t clear already, clearance studies have significant value and can provide immeasurable guidance during the product development process. Have an IP focused mindset when developing your business and products and recognize the immense value IP holds. Integrating clearance studies into the product development process is part of an IP focused approached to business, recognizing that your business’s intellectual property has significant value that should be leveraged. Not only will clearance studies help to avoid future liability, but they will help avoid costly rebranding, redesigns, and will help springboard the IP mining process and developing a robust IP portfolio. Use the tools available to you and work with your IP practitioner to help integrate an IP focused mindset into your business development plans.

William Valet

Image Credits: Photo by ThisisEngineering on Unsplash

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.