It can happen just like that - you have had a machine running in your factory for years that makes a product based on a particular formula or recipe. A chemical composition or a particular type of food; a product that is the result of a mixture of ingredients that you have never shared with the outside world. Then, all of a sudden, you find out that competitor X is doing the exact same thing. What's more, competitor X has a patent on it. You have been making this product for the past 20 years, but neither of you knew that you were doing the exact same thing. Does this mean you are guilty of infringement if you continue to use this method?
Officially perhaps, but in this case it does not necessarily have to have any implications. This is because, as a party without a patent, you can invoke a right of prior use. This will allow both you, and competitor X, to continue production, subject to a number of requirements.
Prior use in the event of a secret recipe or formula
Before going into this in more detail, let's take a look at how it is possible for a party to be granted a patent on a method that is not novel.
This type of situation is mainly found in the chemical and food sectors, where a lot of formulas and recipes are used. In the example, you decided to keep your recipe or formula secret, whilst competitor X decided to opt for a patent. It was possible for your competitor to obtain one because your method was not publicly known. As a result X's recipe or formula would appear to be novel - after all, it is not publicly known - and inventive and therefore suitable for a patent. Consequently, no laws were broken, and you were both able to make the same thing.
Three tips for prior use
Fortunately, you can both continue to do so, as long as you invoke the right of prior use in accordance with the rules. For this it is important that you, as a party without a patent, have properly documented your method. You will need to demonstrate that you have actually used it all these years. It is therefore a good idea to contact a patent attorney at an early stage if you decide to keep a method, formula or recipe secret. He or she can help you arrange the documentation in such a way that you will not have any problems later with respect to the right of prior use and have a strong legal case. When doing so, we pay attention to three things.
- We document what you make
- We document since when you have been making it
- We document how you make it
Please note: in the case of a right of prior use, you are only allowed to use this specific method in your current company. You cannot sell, license, transfer or expand on the method too much. The only way to pass on a right of prior use is by selling your business, in which case it will go to the new owner.
Work with a patent attorney
I talk to many entrepreneurs who are familiar with the concept of prior use, but who do not know how and when they can claim this right. They run a risk when a competitor patents a particular method. In the worst-case scenario, the entrepreneur who has been keeping the method secret will no longer be allowed to use it. That is why if your organisation decides to keep recipes or formulas secret, you should work with a patent attorney. You can prevent future problems by ensuring you have proper documentation.