Product development – from F&E to success via the Patent Office

  • Posted by Gerhard Pramhas
  • On 12. April 2018

Patentamt-Karten-Pramhas-Forschung-Entwicklung

If you follow my blog, you will know that my motto goes like this: New innovations drive proprietary technology and therefore also companies forwards. This time, I would like to address the process of development and the steps that follow thereafter. How does the patenting process run? What should you pay attention to during the development phase? What risks should you be aware of during both of these steps? Today, I wish to answer this question, as well as some others.

The patenting of your invention

Patent applications in Austria usually run in the following way:

  1. You fill in the patent form of the Austrian Patent Office.
  2. Specialists check your application (for formal issues) and your invention (factual). The outcome of this test is communicated to you, and you can comment on this verdict. If your invention cannot be patented, your application will be rejected.
  3. 18 months after the submission date, your application will be published together with the research report of the experts. Now third parties have the opportunity to notify the Patent Office of any reservations they may have in relation to your invention. These contesting views are forwarded to you, and you have the opportunity to comment on them.
  4. The patent is issued following clarification of all contesting views. Patent protection commences with registration of the patent, and its publication in the Austrian Patent Journal. The text of your patent is made available on the publication server, and a patent certificate is issued. From this date, patent cover applies for a maximum of 20 years from the submission date.

You can find further information about the patent application here.

In the time remaining after market entry for ‘free pricing’, i.e. About 18 – 19 years (depending on how long the patent was awarded for), you should have amortised your development costs because, when the patent cover ends, the level of prices usually drops sharply as copies appear on the market. Nor should you forget where patent cover applies. While a purely Austrian patent protects you against competitors patenting your idea in other counties, it does not cover you from it being copied abroad.

Risks in development

Let us assume that you are developing a very costly product such as a pharmaceutical. Your development costs are enormous, and the development lead time can extend over several years. Your development fails but you have already placed other products on the market successfully. The consequence of a failure: New revenues are absent from your planning. And it is not just that: for future financing of research and development, you are now short of the break-event amounts.

Additional capital for future research and development is then presumably financed by external capital and by enormous cost savings in the company, e.g. de-manning. Or you go down the path of least resistance and cut down on research and development. If it has  not already happened, this is where the downwards spiral commences.

Never put all of your eggs in one basket

There are ways to avoid this downwards spiral. Simply answer the following question for yourself: How high are the amounts of money that are invested in R&D in your sector in relation to annual sales revenues?

After a flop, if you are no longer able to invest in R&D without external capital, you should not put all of your eggs in one basket. Several small development projects are more advisable in such a case than one large one, even if that one project is a potentially prestigious one. You must take this decision, as almost always in the technology sector, at the start of the research activities.

You have decision-making difficulties and need advice in relation to R&D? If so, then I am exactly the right person to speak to. Simply use by contact form or call me on +43 (0)676/9560164. You are also welcome to send me a message to gerhard@pramhas.eu. Often, a joint meeting or discussion can help to get your company back on track.

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