To Patent or Not to Patent?

Innovation is crucial for Chile’s economic growth and competitiveness, but it must be protected. If new ideas or inventions can be easily stolen or counterfeited, inventors have little incentive to innovate. For Chilean companies increasingly focused on adding value to their products for export, patents are an important way to protect their intellectual property and ensure they recoup their investment.

Applying for patents can be a costly and time-consuming process, but today there are more tools available for AmCham members to obtain information and advice. On January 15, AmCham Chile President Kathleen Barclay signed an agreement with Maximiliano Santa Cruz, director of Chile’s National Industrial Property Institute (INAPI), to share information, provide training and promote joint activities.

In his comments, Santa Cruz said the agreement was the “beginning of a great friendship” between the Institute and AmCham.

Sandra Guazzotti, chair of AmCham’s Intellectual Property and Innovation Committee and country manager for Oracle, put the agreement in context, pointing out the importance of innovation as a driver of growth and competitiveness. She explained there is now a link on AmCham’s website (www.amchamchile.cl) where members can obtain information from INAPI about new technologies and patenting procedures.

In addition, INAPI will support the training of AmCham members regarding industrial property through the realization of workshops and other educational activities. AmCham will also help to organize training for INAPI staff in specific areas related to performance and increased efficiency. 

“This agreement will help us to build a culture of intellectual property and innovation in Chile with the aim of increasing the productivity and competitiveness of companies,” said Guazzotti.

The ceremony was followed by a workshop on patents with a focus on biotechnology. Guillermo Carey, AmCham Director and a partner at law firm Carey, gave a presentation on strategies for patenting new technology.

He identified three pillars companies should consider before deciding to seek a patent. The first is related to shareholder structure and the company’s internal policies. The second has to do with third parties, including confidentiality contracts, and the third is about how the company relates to the rest of society, including brands and existing patents.

Carey said that in a highly competitive world, patents can act as an “equalizer” to “level the playing field” for companies. “If you want to compete with Mike Tyson, you need a strategy,” he said.

He pointed to the firm Crystal Lagoons as an example of a Chilean company that has not only patented its technology, but also controls the use of this technology in projects around the world. Rather than giving clients information about how to use its system that keeps lagoons clean, the company controls the processes and chemical levels via the Internet.

But patents are not always the most cost-effective solution. Take PROES, a Chilean company that pioneered a new system for laying asphalt. Since its process cannot be reverse-engineered, it is impossible for competitors to copy. This means that, like Coca Cola, the company is able to keep its formula a secret without a patent.

Still, patents can be useful in protecting innovations that could be vulnerable to theft. Metro Santiago, for example, patented its pre-paid card system Multivia when it integrated with Transantiago and has sought five more patents in the last six months. “Innovation can come from unexpected places,” Carey said.

There are two ways for companies to apply for patents in foreign countries – one is through the Paris Convention, which requires a separate application for each country, and another is through the World Intellectual Property Organization’s Patent Cooperation Treaty (PCT), which Chile joined in 2009.

Henry Crew, head of the PCT department at INAPI, said that the decision about which system to use comes down to costs. Both systems have their advantages, the Paris system for example tends to be faster, but the PCT system allows companies to file a single application in multiple countries, thereby avoiding duplication of paperwork and costs, he said.

Between 2009 and 2013, INAPI received 354 patent applications through the PCT system, including a record 74 in 2013, which puts Chile third on the list of Latin American countries after Brazil and Mexico. About half of all applications were in the mechanical sector and, importantly, 21% of applications came from universities and research centers, pointed out Crew.

Ernesto Manríquez, head of the Patent Examination Department at INAPI, emphasized the importance of research prior to applying for a patent. Companies should be able to describe their invention from a technical standpoint and comply with the requirements, he said. Various public patent databases exist for companies to check if patents already exist in other countries, he added. These include Espacenet, PatentScope and the United States Patent and Trademark Office (USPTO.gov).

Finally, following a Q&A session, Guazzotti invited members to participate in the Committee’s working groups focused on areas such entertainment, software, biotechnology and energy.

For more information about AmCham’s Intellectual Property and Innovation Committee contact: patricia.gallardo@amchamchile.cl

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