Legal Definitions - CIP

The acronym CIP has two distinct meanings in legal and commercial contexts:

• 1. Continuation-in-Part (Patent Law)
• 2. Carriage and Insurance Paid To (International Trade)

1. Continuation-in-Part (CIP)

In patent law, a Continuation-in-Part (CIP) application is a type of patent application that claims priority to an earlier non-provisional patent application, but also introduces new subject matter not disclosed in the original application. It allows an inventor to add improvements, new features, or additional aspects to an invention while still retaining the benefit of the earlier filing date for the material that was common to both applications.

Examples:

• Example 1 (Software Development): A software company initially files a patent application for a novel data encryption algorithm. A few months later, their engineers develop a new, more efficient method for key distribution and also integrate a user-friendly interface for managing encrypted files, neither of which were described in the original application. To protect these new developments while maintaining the original filing date for the core encryption algorithm, the company files a Continuation-in-Part application. This allows them to claim the earlier date for the encryption algorithm and a later date for the new key distribution method and interface.

• Example 2 (Medical Device Innovation): An inventor files a patent for a unique surgical instrument designed for minimally invasive procedures. After the initial filing, they discover a new biocompatible material that significantly reduces the instrument's weight and improves its flexibility, and they also design a slightly modified tip for enhanced precision. They decide to file a Continuation-in-Part application to include these material and design improvements. This strategy ensures that the original aspects of the instrument retain their priority date, while the new enhancements are also protected.

• Example 3 (Manufacturing Process Improvement): A manufacturing firm patents a new process for creating durable composite materials. Subsequently, their research team develops an innovative post-curing technique that dramatically increases the material's heat resistance and reduces production time, which was not part of the initial patent disclosure. To secure protection for this advanced technique while linking it to the original composite material process, the firm files a Continuation-in-Part application. This allows them to claim the benefit of the earlier filing date for the original process and a later date for the newly developed post-curing technique.

2. Carriage and Insurance Paid To (CIP)

In international trade, Carriage and Insurance Paid To (CIP) is an Incoterm (International Commercial Term) that specifies the responsibilities of the buyer and seller for the delivery of goods. Under CIP terms, the seller pays for the carriage (freight) and insurance to a named destination. However, the risk of loss or damage to the goods transfers from the seller to the buyer when the goods are delivered to the first carrier, not at the final destination. This means the seller covers the cost of transport and insurance, but the buyer bears the risk once the goods are handed over to the initial transporter.

Examples:

• Example 1 (Electronics Export): A Japanese electronics manufacturer sells a large shipment of high-definition televisions to a retailer in Canada. The contract specifies "CIP Vancouver Port." This means the Japanese seller is responsible for arranging and paying for the shipping and insurance of the televisions from their factory in Japan all the way to the port in Vancouver. However, the moment the televisions are loaded onto the first vessel or truck in Japan, the risk of any damage or loss during transit shifts from the Japanese manufacturer to the Canadian retailer, even though the seller paid for the insurance.

• Example 2 (Pharmaceutical Import): A pharmaceutical distributor in the United Kingdom orders a specialized raw material from a supplier in India, with the terms "CIP London Heathrow Airport." The Indian supplier pays for the freight and insurance to transport the raw material from their facility to London Heathrow. If the goods are damaged while being loaded onto the airplane in India, the risk of that damage is borne by the UK distributor, as the risk transferred when the goods were delivered to the first carrier (the airline), even though the Indian supplier paid for the insurance coverage up to London.

• Example 3 (Industrial Machinery): A German company purchases heavy industrial machinery from a manufacturer in China, agreeing to "CIP Hamburg Warehouse." The Chinese manufacturer arranges and pays for the entire journey, including insurance, to deliver the machinery to the specified warehouse in Hamburg, Germany. However, the responsibility for any damage or loss to the machinery during transit, such as during the sea voyage or overland transport within China, transfers to the German buyer as soon as the machinery is handed over to the initial shipping company in China.