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Patent

Patent

A patent is an exclusive right granted for an invention. In other words, a patent is an exclusive right to a product or a process that generally provides a new way of doing something, or offers a new technical solution to a problem. To get a patent, technical information about the invention must be disclosed to the public in a patent application.

The patent owner may give permission to, or license, other parties to use the invention on mutually agreed terms. The owner may also sell the right to the invention to someone else, who will then become the new owner of the patent. Once a patent expires, the protection ends, and an invention enters the public domain; that is, anyone can commercially exploit the invention without infringing the patent.

Patent types:

Design patents

Anyone who creates a new design for a product can apply for a design patent. Examples include beverage bottles (think of the shape of the Coca-Cola container) or furniture (such as the kneeling chair).

Plant patents

Botanists involved in grafting and creating new hybrid plant forms can apply for a plant patent. Examples include the Smooth Angel rose or drought-tolerant corn.

Utility patents

Anyone who invents or discovers “any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof” can apply for a utility patent. Examples include the little green drink stopper Starbucks gives out with its cups or the hover board type of skateboard.

What rights does a patent provide?

A patent owner has the right to decide who may – or may not – use the patented invention for the period in which the invention is protected. In other words, patent protection means that the invention cannot be commercially made, used, distributed, imported, or sold by others without the patent owner’s consent.

What kinds of inventions can be protected?

Patents may be granted for inventions in any field of technology, from an everyday kitchen utensil to a nanotechnology chip. An invention can be a product – such as a chemical compound, or a process, for example – or a process for producing a specific chemical compound. Many products in fact contain a number of inventions. For example, a laptop computer can involve hundreds of inventions, working together.

How long does patent protection last?

Patent protection is granted for a limited period, generally 20 years from the filing date of the application.

Is a patent valid in every country?

Patents are territorial rights. In general, the exclusive rights are only applicable in the country or region in which a patent has been filed and granted, in accordance with the law of that country or region.

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How are patent rights enforced?

Patent rights are usually enforced in a court on the initiative of the right owner. In most systems a court of law has the authority to stop patent infringement. However the main responsibility for monitoring, identifying, and taking action against infringers of a patent lies with the patent owner.

What does it mean to “license a patent” and why is it done?

Licensing a patent simply means that the patent owner grants permission to another individual/organization to make, use, sell etc. his/her patented invention. This takes place according to agreed terms and conditions (for example, defining the amount and type of payment to be made by the licensee to the licensor), for a defined purpose, in a defined territory, and for an agreed period of time.

A patent owner may grant a license to a third party for many reasons. The patent owner may not have the necessary manufacturing facilities, for example, and therefore opts to allow others to make and sell his/her patented invention in return for “royalty” payments. Alternatively, a patent owner may have manufacturing facilities, but they may not be large enough to cover market demand. In this case, he/she may be interested in licensing the patent to another manufacturer in order to benefit from another income stream. Another possible situation is one in which the patent owner wishes to concentrate on one geographic market; therefore the patent owner may choose to grant a license to another individual/organization, with interests in other geographical markets. Entering into a licensing agreement can help to build a mutually-beneficial business relationship.

Unlike selling or transferring a patent to another party, the licensor continue to have property rights over the patented invention.

Why are patents useful (to society, business, individuals etc.)?

Patented inventions have, in fact, pervaded every aspect of human life, from electric lighting (patents held by Edison and Swan) and plastic (patents held by Baekeland), to ballpoint pens (patents held by Biro), and microprocessors (patents held by Intel, for example).

Patents provide incentives to and protection for individuals by offering them recognition for their creativity and the possibility of material reward for their inventions. At the same time, the obligatory publication of patents and patent applications facilitates the mutually-beneficial spread of new knowledge and accelerates innovation activities by, for example, avoiding the necessity to “re-invent the wheel”.

Once knowledge is publicly available, by its nature, it can be used simultaneously by an unlimited number of persons. While this is, without doubt, perfectly acceptable for public information, it causes a dilemma for the commercialization of technical knowledge. In the absence of protection of such knowledge, “free-riders” could easily use technical knowledge embedded in inventions without any recognition of the creativity of the inventor or contribution to the investments made by the inventor. As a consequence, inventors would naturally be discouraged to bring new inventions to the market, and tend to keep their commercially valuable inventions secret. A patent system intends to correct such under-provision of innovative activities by providing innovators with limited exclusive rights, thereby giving the innovators the possibility to receive appropriate returns on their innovative activities.

In a wider sense, the public disclosure of the technical knowledge in the patent, and the exclusive right granted by the patent, provide incentives for competitors to search for alternative solutions and to “invent around” the first invention. These incentives and the dissemination of knowledge about new inventions encourage further innovation, which assures that the quality of human life and the well-being of society is continuously enhanced.

Patents and business

How are patents relevant to my business?

While it is certainly true that not all enterprises develop patentable inventions, it is a wrong to believe that patents only apply to complex physical or chemical processes and products or that they are only useful to large corporations. Patents can be obtained for any area of technology from paper clips to computers.

Moreover, when people think of patents, what usually comes to mind are major scientific breakthroughs such as Edison’s first electric lamp, or large corporations investing in research and development. But, in fact, most patents aren’t granted for groundbreaking scientific breakthroughs, but rather for inventions that make improvements to existing inventions. For example the second or third generation of a product or a process, that works in a more cost-effective or efficient manner.

Certain countries also have specific legal provisions for protecting incremental innovations. These are called utility models and they tend to have a shorter duration than patents and are generally easier to obtain.

Why should I consider patenting my inventions?

  • Exclusive rights: Patents provide you with an exclusive right to prevent or stop others from commercially exploiting an invention for twenty years from the date of filing of the patent application.
  • Return on investments: Having invested a considerable amount of money and time in developing innovative products, through exclusive patent rights, you may be able to establish yourself in the market as the pre-eminent player and to obtain higher returns on investments.
  • Opportunity to license or sell the invention: If you choose not to exploit the patent yourself, you may sell it or license the commercialization of the patented invention to another enterprise, which could then be a source of income for your company.
  • Increase in negotiating power: If your company is in the process of acquiring the rights to use the patents of another enterprise through a licensing contract, your patent portfolio will enhance your bargaining power. That is to say, your patents may prove to be of considerable interest to the enterprise with which you are negotiating, and you could enter into a cross-licensing arrangement where, simply put, your enterprise and the other agree to license respective patents to each other.
  • Positive image for your enterprise: Business partners, investors and shareholders may perceive patent portfolios as a demonstration of the high level of expertise, specialization, and technological capacity within your company. This may prove useful for raising funds, finding business partners and raising your company’s market value.

What happens if I don’t patent my inventions?

If you don’t patent your invention, competitors may well take advantage of it. If the product is successful, many other competitor firms will be tempted to make the same product by using your invention without needing to ask for your permission. Larger enterprises may take advantage of economies of scale to produce the product more cheaply and compete at a more favorable market price. This may considerably reduce your company’s market share for that product. Even small competing enterprises may be able to produce the same product, and often sell it at a lower price as they would not have to recoup the original research and development costs incurred by your company.

But that’s not all. The possibilities to license, sell or transfer technology will be severely hindered if you don’t patent your invention; indeed, without intellectual property (patent) rights, transfers of technology would be difficult if not impossible. The transfer of technology assumes that one or more parties have legal ownership of a technology and this can only be effectively obtained through appropriate intellectual property (IP) protection. Without IP protection for the technology in question, all sides tend to be suspicious of disclosing their inventions during technology transfer talks, fearing that the other side may “run away with the invention”.

Finally, you have to consider the possibility that someone else may patent your invention first. The first person or enterprise to file a patent for an invention will have the right to the patent. This may in fact mean that, if you do not patent your inventions or inventions made the employees of your company, somebody else – who may have developed the same or an equivalent invention later – may do so. Thus they could legitimately exclude your enterprise from the market, limit your activities to the continuation of prior use (where the patent legislation provides for such an exception), or ask your company to pay a licensing fee for using the invention.

However, to ensure that no one is able to patent your invention, instead of filing a patent application, you may disclose the invention to the public so that it becomes prior art for any patent application that will be filed after your publication, thereby placing it in the public domain (commonly known as defensive publication). Because of the existence of such prior art, later filed patent applications containing the same or similar invention will be refused by a patent office on the grounds of the lack of novelty or inventive step. At the same time, if you disclose your invention before filing a patent application, you will severely limit your possibility of obtaining patent protection on that invention.

How do I go about licensing my patent to a 3rd party?

Each situation is unique, so there is no one “correct” way to go about licensing a patent. In some countries, a patent applicant’s intention to grant a license to third parties can be published in the official gazette. To find out more, get in touch with your national IP office.

In general however, it is possible to say that if you intend to license your patent, what is important is diligent preparation. Before starting negotiation with a potential licensee, you should be informed of the current situation and future prospects of the relevant market and technology. Moreover, you should find out about the commercial state of a potential licensee and the associated financial value of your patent, etc. You should reflect on your own business objectives and carefully consider how entering into a licensing agreement fits into your short- and long-term business strategies.

Are utility models and trade secrets alternatives to patent protection?

In many cases, where an enterprise has merely improved an existing product and the said improvement is not sufficiently inventive to be deemed patentable, utility models may represent a good alternative, if available in the country in question. On occasions, it may be advisable for your company to keep its innovations as trade secrets which requires, in particular, that sufficient measures are taken to keep the information confidential.

Another alternative strategy could be to ensure that no one is able to patent your invention by disclosing it (commonly known as defensive publication), thereby assuring its place in the public domain. However, you should carefully reflect on using this strategy, since if you disclose your invention before filing a patent application, you will severely limit your possibility to obtain patent protection.

WIPO and patents

What role does WIPO play with regards to patents?

WIPO works to develop a balanced and effective international intellectual property (IP) system, a key part of which is dedicated to patents. WIPO’s member states collaborate in various areas, including on agreeing the treaties and conventions that underpin the international IP system and that make the global exchange of creativity and innovation possible. The IP services that WIPO offers, such as the facilitation of international patent protection under the PCT System, complement services available at the national and/or regional level. It’s important to remember that WIPO does not actually grant patents per se; the grant or refusal of a patent still rests with the relevant national or regional patent office.