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Companies worldwide thrive when they can continuously offer unique products and innovative services. However, the risk of patent infringement heightens when digitalization simplifies data sharing and global distribution.
Such risk may increase when adopting business process outsourcing (BPO). Although this approach offers cost-effective and scalable solutions, it may lead to the accidental exposure of trade secrets when critical patent rules are ignored.
Fortunately, BPO companies recognize the importance of understanding and adhering to patent laws. This article details how they navigate these regulations while working with client organizations.
Common patent issues in the BPO sector
Strategic outsourcing brings significant advantages to your business. These include reduced costs, improved productivity, and more focused growth. However, the remote nature of BPO can make your confidential data more prone to cyberattacks and intellectual property risks.
Without robust security measures, malicious actors might access and use your sensitive enterprise information for their financial gains. For instance, a hacker stole approximately 160 gigabytes of private files used by Taiwanese electronics company Acer’s technicians in March 2023. The cybercriminal sold the data for Monero cryptocurrency.
Besides possible cyberattacks, working with a third-party service provider may introduce the following challenges if not properly addressed:
- Unclear intellectual property ownership
- Unspecified patentable innovations
- Cross-border patent issues
- Technology transfer challenges
- Intellectual property monitoring difficulties
- Competing interests
Basics of patent laws and their relevance to outsourcing
BPO companies study and comply with patent laws as the first step to mitigating and avoiding the above issues. While provisions vary depending on jurisdictions, service providers must know the following national and international regulations to ensure smooth operations.
Patent Act (Title 35 of the U.S. Code)
This U.S. patent law outlines conditions an invention must meet to gain patent protection for a period, typically 20 years from the filing date. The criteria include the requirements of novelty, non-obviousness, and utility. BPO firms involved in developing unique technologies and processes must be aware of these important protocols for the various types of patents:
- Establish intellectual property ownership terms.
- Help file patent applications to the United States Patent and Trademark Office (USPTO).
- Understand and implement USPTO-defined mechanisms for patent rights.
- Perform thorough research for prior art and novelty considerations.
- Be familiar with the Leahy-Smith America Invents Act (AIA) post-grant proceedings.
- Note the doctrine of patent exhaustion that limits an owner’s control over legitimately sold or transferred patented products.
- Adhere to antitrust and patent misuse protocols.
European Patent Convention (EPC)
The EPC is what BPO companies operating across European countries must abide by regarding the different types of intellectual property. The unified system lets service providers pursue a single patent application through the European Patent Office. This process increases cost efficiency for both BPO firms and client organizations.
Furthermore, the EPC fosters the harmonization of intellectual property laws across its member states. This consistency gives BPO companies a standardized legal framework to seek and preserve patent rights while serving European customers.
Intellectual Property Code of the Philippines
The Intellectual Property Code of the Philippines (IPOPHL), or the Republic Act No. 8293, establishes comprehensive legal standards for enforcing intellectual property rights. BPO providers and clients must coordinate with this patent law for patent registration, maintenance, and infringement reporting.
The code aligns its provisions with global intellectual property rules and treaties. Thus, it strengthens the protection of trade secrets and confidential business data. It creates a safe and legally compliant environment for companies acquiring front- and back-office offshoring services.
India’s Patents Act, 1970
This Indian law defines technologies and approaches that can be considered patentable subject matter. BPO companies supporting technological innovations and unique processes must understand the criteria for patentability: novelty, inventive step, and industrial applicability.
Providers must cooperate with the Indian Patent Office for patent filing, examination, maintenance, and issue reporting. Because India is a member of the Patent Cooperation Treaty (PCT), BPO vendors may leverage this opportunity to facilitate the international processing of patent applications.
Mexican Federal Law for Protection of Industrial Property
Enacted in November 2020, this relatively new law replaces the Mexican Industrial Property Law. It allows a third party to use patent data before expiration for research, testing, and experimental production purposes.
The legislation increases the protection period for utility models from 10 years to 15 years. It also removes the requirement to register export licenses to be effective before third parties. However, it has now banned double patenting of the same invention.
Ways BPO firms ensure compliance with patent laws
According to the 2023 American Intellectual Property Law Association (AIPLA) survey, patent infringement litigation fees range from $600,000 to $3.6 million. The amount depends on the severity of violations.
BPO companies can avoid wasting considerable amounts of money by studying and adhering to the patent laws discussed. In addition, they perform the strategies below to ensure compliance with the rules and regulations:
- Consult with legal professionals specializing in patent requirements and policies.
- Clarify intellectual property guidelines in BPO contract terms and conditions.
- Develop and implement clear intellectual property standards that match the clients’.
- Host frequent employee training on patent laws and intellectual property rights.
- Perform regular intellectual property audits and compliance strategy updates.
- Establish a system for assessing the patentability of innovations with clients.
- Conduct regular patent searches to identify existing patents that may impact operations.
- Create and execute a patent filing strategy that meets the BPO agreement’s goals.
The bottom line
BPO involves the complex interplay of innovations, global operations, and patent laws. The practice requires proactive measures to protect unique products, services, technologies, and processes.
Successfully navigating the outsourcing landscape involves a commitment to understanding and complying with domestic and international patent rules. Clear contractual agreements, robust patent guidelines, and ongoing employee awareness initiatives help maximize BPO benefits.
Let’s connect if you seek a third-party service provider that values the confidentiality and integrity of your sensitive trade secrets and business data. Unity Communications has a knowledge base detailing critical rules surrounding the outsourcing industry. The BPO provider also houses well-trained professionals who understand the need to follow patent regulations.
