With the rise of consumerism in an ever-developing modern world, there is a continuous need to innovate new products and processes to satisfy demand. Unfortunately, with the invention of new products and processes comes more opportunity to produce counterfeit goods. The global trade in counterfeit goods is estimated to be worth $461 billion annually[1].
Counterfeiting can cause an immense amount of harm to businesses and consumers alike. Individuals who have fallen victim to counterfeit goods have lost money on an inauthentic purchase and businesses lose the trust and revenue from well-intentioned consumers. A sombre statistic shows that 1 million deaths are caused annually from counterfeit drugs[2]. However, it isn’t just the pharmaceutical industry that is impacted by counterfeiting, the fashion industry loses $30 billion annually due to it [3].
It is therefore important for the inventors of new and innovative goods to put measures in place to protect their idea, their brand, and their customers. One of the keyways to protect yourself from a legal standpoint is to register for a patent.
Intellectual Property, and in particular patents, would not be in many people’s top 10 list of how best to stay ahead of the counterfeiter but they are one of the key fundamental building blocks of any innovation cycle.
The importance of patents in business
According to a report written by the US Patent and Trademark Office, approximately $1.7 trillion to $4.5 trillion [4] of counterfeit goods are sold each year. To put this into perspective, if the counterfeiting trade was a country, it would rank in the top 10 richest economies by GDP worldwide. This shows just how prolific and damaging counterfeiting is for the brands being exploited, the consumers being misled, and the entire global economy.
The historical growth of patents
From De La Rue’s own research into patent filings and growth dynamics we can see the rise in patents from the start of the year 2000. This epitomises the importance of patents, but what really are they?
A patent is one type of intellectual property. Unlike the other types of intellectual property such as copyright, designs and trademarks, it is focused on technical matters and protects the way something is made or works. Patents are often seen as complex documents which are difficult to understand but in simple terms, they are an agreement between an inventor and the government of a country, in which the inventor agrees to publish their invention, and in return, the government agrees to give the inventor exclusivity on the use of the invention for a limited time. To get granted this exclusivity the technical idea behind the patent must be new and must not have been disclosed to the public anywhere in the world. The idea must also be inventive and not just a simple modification of a known idea.
[4] https://www.uspto.gov/sites/default/files/documents/USPTO-Counterfeit.pdf
What is Intellectual Property Crime?
Intellectual Property Crime refers to the unauthorised use, distribution, or manufacture of counterfeit or pirated goods. These can include patents, trademarks, industrial designs, or literary and artistic works. Essentially, it’s when someone tries to profit from someone else’s creative or innovative ideas without permission.
| Intellectual Property Rights (IPR) | Intellectual Property Crime |
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The importance of understanding patent law and patent rights
Although there are plenty of IP crimes, we’ve highlighted the ones concerning patents. Understanding patent law and rights is critical for anyone involved in innovation, from inventors themselves to businesses that rely on intellectual property (IP) or anyone keen to safeguard their ideas. Here's why it's so important:
Firstly, patent law grants inventor’s exclusive rights over their creations. This means you control how your invention is used, manufactured, and sold for a set period. This exclusivity is vital. Imagine investing time and resources into developing a groundbreaking product, only to have competitors copy it and reap the rewards. Patents prevent this, allowing you to profit from your hard work and potentially gain a competitive edge in the market. You can license your invention to others for a fee, creating a new income stream, or use it to establish your brand as a leader in innovation.
Furthermore, an awareness of patents fosters a healthy environment for creativity. By guaranteeing inventors ownership of their ideas, patent law incentivises continued innovation. Inventors are more likely to invest in research and development if they know their efforts will be protected. This, in turn, fuels technological progress and benefits society. New products and processes constantly emerge, improving our lives and pushing the boundaries of what's possible. Understanding patent law empowers you to navigate this innovative landscape, whether you're seeking to protect your own ideas or stay informed about the latest advancements in your field.
Owning a patent essentially grants you control over your invention, securing a competitive edge. It goes even further, attracting investors and boosting profits through increased margins and strategic use.
The 5 key benefits of a patent to a business
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Investor Validation: The rigorous examination process acts as an independent verification of your invention's novelty and inventiveness. This validation becomes a valuable selling point when attracting investors seeking ground-breaking ideas.
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Competitive Intelligence Tool: Patent applications reveal valuable insights into competitor strategies. By analysing these documents, you can understand their focus and potential future directions, giving you an edge in the marketplace.
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Standing Out to Partners: A strong patent portfolio showcases your expertise and innovation to potential collaborators. Companies looking for partners will view these established rights as a sign of your credibility and commitment to development.
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Government Procurement Advantage: Many government tenders favour solutions protected by patents. Having a patent demonstrates your technology is unique and prevents competitors from infringing on your rights during the bidding process.
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Monetisation Opportunities: Even if you don't commercially exploit your invention, others might be willing to pay for it. Licensing your patent to competitors or companies in different markets allows you to generate revenue streams from your intellectual property.
Through the granting of a limited monopoly period the patent system rewards companies who invest in R&D and strive to create new products and processes. Once a company has a patent protecting its technology it has control over how that technology is exploited in the market. The granted monopoly allows companies to stop competitors from making/selling/using their protected technology. Alternatively, the company can grant licenses to allow its competitors to use the technology in exchange for a license fee. Ultimately patents are valuable commercial assets which protect a company’s investment in innovation and increase its competitive advantage.
The true importance of acquiring a patent
The role of patents in innovation
Put simply, patents underpin innovation and this is particularly the case in the Banknote and Secure Document Authentication Industry. Central banks, and other end users of secure documents, quite rightly want continuous improvement in new and improved security features to ensure public confidence. This is achieved when companies have the confidence to invest in R&D and patents provide the foundation for this confidence.
The role of patents in maximising exploitation and opportunities
From the customer’s point of view, patents enable maximisation (not constriction) of exploitation of innovation and open opportunities through licensing and knowledge transfer and importantly place know-how in the public domain for general use after the patents expire.
The role of patents for smaller issuing authorities
While the traditional path to cutting-edge technology often involves hefty investments in dedicated research and development (R&D) departments, a significant hurdle for smaller issuing authorities, the patent system offers a compelling solution by making state-of-the-art technology accessible even to those who cannot afford to establish their own R&D infrastructure.
The role of patents in enforcement and control
Patent enforcement acts as a crucial safeguard within the secure document industry. By vigilantly monitoring and preventing unauthorized use of these technologies, patent enforcement helps to ensure that these innovations are only employed for their intended purposes. This is critical because unauthorised use could potentially become a source of material for counterfeiting, jeopardising the integrity and security of vital documents.
What happens if patent protection is removed?
The flow chart below illustrates the potential consequence of features with patent protection being eliminated from a banknote specification. On first appraisal, this may appear to be a positive step as patents are often seen as being barriers to competition. However, as can be seen from the graphic below the likely outcome is a significant reduction in research on security features and the widespread use of low-value commodity features. Ultimately counterfeits will increase, and the security of the national currency will be compromised.
De La Rue Patented Features
De La Rue is committed to innovation, reflected in its extensive patent portfolio – with over 1,000 patents having been granted to date. Among the key technology areas, holography stands out. De La Rue focuses on two holographic methods: direct-write lithography, which enables precise control of grating structures, and a highly evolved form of Benton (H1-H2) holography, often referred to as ‘classical’ holography.
Since the 1980s, De La Rue has been filing patent applications related to classical holography. More recently, they’ve combined classical and direct-write origination methods to create innovative security features. Direct-write holography, with its precise grating control, produces strong, interactive kinetic effects and complex image switches. De La Rue has applied for multiple patents in this area, safeguarding both the fundamental characteristics of digital pixels and the striking public effects seen in features like Spotlight™ and PureImage™. These patent applications ensure the protection of De La Rue’s direct-write holographic technology for stakeholders well into the late 2030s.
Learn More About Holography
Explore De La Rue’s holography solutions, which are trusted and versatile security features. Our extensive portfolio includes over 1,500 different holograms designed to protect ID documents, brands, and currencies worldwide. Discover how our optical scientists create highly secure holograms with vivid colours, depth, parallax, kinetic animation, and stereograms.
De La Rue's security features are built on a strong foundation of innovation. Patents safeguard the underlying technology, and often multiple patents protect a single security element. This robust patent portfolio fuels De La Rue's impressive track record in secure document solutions.
The benefits are two-fold:
- Long-lasting protection: Our patents provide security for De La Rue and its stakeholders for the next two decades.
- Confidence to invest: This secure foundation allows De La Rue to confidently invest in future research and development, ensuring a steady stream of innovative and impactful security features for our customers.
To learn more about De La Rue's security features and commitment to innovation, read more of our Thought Leadership articles or learn a little more about our authentication services.
