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Patent
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A patent is a set of exclusive rights granted by a state to an inventor or his assignee for a limited period of time in exchange for a disclosure of an invention.
The procedure for granting patents, the requirements placed on the patentee and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims defining the invention which must be new, inventive, and useful or industrially applicable.
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Timeline
Quotations
A country without a patent office and good patent laws is just a crab and can't travel any way but sideways and backwards.
Mark Twain, A Connecticut Yankee in King Arthur's Court (1889)
Encyclopedia
A patent is a set of exclusive rights granted by a state to an inventor or his assignee for a limited period of time in exchange for a disclosure of an invention.
The procedure for granting patents, the requirements placed on the patentee and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims defining the invention which must be new, inventive, and useful or industrially applicable. In many countries, certain subject areas are excluded from patents, such as business methods and mental acts. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission.
Definition
The term patent usually refers to a right granted to 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. The additional qualification utility patents is used in the United States to distinguish them from other types of patents but should not be confused with utility models granted by other countries. Examples of particular species of patents for inventions include biological patents, business method patents, chemical patents and software patents.
Some other types of intellectual property rights are referred to as patents in some jurisdictions: industrial design rights are called design patents in some jurisdictions (they protect the visual design of objects that are not purely utilitarian), plant breeders' rights are sometimes called plant patents, and utility models or Gebrauchsmuster are sometimes called petty patents or innovation patents. This article relates primarily to the patent for an invention, although so-called petty patents and utility models may also be granted for inventions.
Certain grants made by the monarch in pursuance of the royal prerogative were sometimes called letters patent, which was a government notice to the public of a grant of an exclusive right to ownership and possession. These were often grants of a patent-like monopoly and predate the modern British origins of the patent system. For other uses of the term patent see Land patents, which were land grants by early state governments in the USA. This reflects the original meaning of letters patent that had a broader scope than current usage.
Etymology
The word patent originates from the Latin patere, which means "to lay open" (i.e., to make available for public inspection), and more directly as a shortened version of the term letters patent, which originally denoted an open for public reading royal decree granting exclusive rights to a person.
Law
Effects
A patent is not a right to practice or use the invention. Rather, a patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention for the term of the patent, which is usually 20 years from the filing date subject to the payment of maintenance fees. A patent is, in effect, a limited property right that the government offers to inventors in exchange for their agreement to share the details of their inventions with the public. Like any other property right, it may be sold, licensed, mortgaged, assigned or transferred, given away, or simply abandoned.
The rights conveyed by a patent vary country-by-country. For example, in the United States, a patent covers research, except "purely philosophical" inquiry. A U.S. patent is infringed by any "making" of the invention, even a making that goes toward development of a new invention — which may itself become subject of a patent.
A patent being an exclusionary right does not, however, necessarily give the owner of the patent the right to exploit the patent. For example, many inventions are improvements of prior inventions which may still be covered by someone else's patent. If an inventor takes an existing, patented mouse trap design, adds a new feature to make an improved mouse trap, and obtains a patent on the improvement, he or she can only legally build his or her improved mouse trap with permission from the patent holder of the original mouse trap, assuming the original patent is still in force. On the other hand, the owner of the improved mouse trap can exclude the original patent owner from using the improvement.
Some countries have "working provisions" which require that the invention be exploited in the jurisdiction it covers. Consequences of not working an invention vary from one country to another, ranging from revocation of the patent rights to the awarding of a compulsory license awarded by the courts to a party wishing to exploit a patented invention. The patentee has the opportunity to challenge the revocation or license, but is usually required to provide evidence that the reasonable requirements of the public have been met by the working of invention.
Enforcement
Patents can generally only be enforced through civil lawsuits (for example, for a U.S. patent, by an action for patent infringement in a United States federal court), although some countries (such as France and Austria) have criminal penalties for wanton infringement. Typically, the patent owner will seek monetary compensation for past infringement, and will seek an injunction prohibiting the defendant from engaging in future acts of infringement. In order to prove infringement, the patent owner must establish that the accused infringer practices all of the requirements of at least one of the claims of the patent (noting that in many jurisdictions the scope of the patent may not be limited to what is literally stated in the claims, for example due to the "doctrine of equivalents").
An important limitation on the ability of a patent owner to successfully assert the patent in civil litigation is the accused infringer's right to challenge the validity of that patent. Civil courts hearing patent cases can and often do declare patents invalid. The grounds on which a patent can be found invalid are set out in the relevant patent legislation and vary between countries. Often, the grounds are a sub-set of the requirements for patentability in the relevant country. Whilst an infringer is generally free to rely on any available ground of invalidity (such as a prior publication, for example), some countries have sanctions to prevent the same validity questions being relitigated. An example is the UK Certificate of contested validity.
The vast majority of patent rights, however, are not determined through litigation, but are resolved privately through patent licensing. Patent licensing agreements are effectively contracts in which the patent owner (the licensor) agrees not to sue the licensee for infringement of the licensor's patent rights, usually in return for a royalty or other payment. It is common for companies engaged in complex technical fields to enter into dozens of license agreements associated with the production of a single product. Moreover, it is equally common for competitors in such fields to license patents to each other under cross-licensing agreements in order to gain access to each other's patents.
The United Nations Statistics Division reports that the United States was the top market for patents in force in 2000 closely followed by the EU and Japan.
Ownership
In most countries, both natural persons and corporate entities may apply for a patent. In the United States, however, only the inventor(s) may apply for a patent although it may be assigned to a corporate entity subsequently and inventors may be required to assign inventions to their employers under the contract of employment. In most European countries, ownership of an invention may pass from the inventor to their employer by rule of law if the invention was made in the course of the inventor's normal employment duties.
The inventors, their successors or their assignees become the proprietors of the patent when and if it is granted.
If a patent is granted to more than one proprietor, the laws of the country in question and any agreement between the proprietors may affect the extent to which each proprietor can exploit the patent. For example, in some countries, each proprietor may freely license or assign their rights in the patent to another person while the law in other countries prohibits such actions without the permission of the other proprietor(s).
The ability to assign ownership rights increases the liquidity of a patent as property. Inventors can obtain patents and then sell them to third parties. The third parties then own the patents and have the same rights to prevent others from exploiting the claimed inventions, as if they had originally made the inventions themselves.
Governing laws
The grant and enforcement of patents are governed by national laws, and also by international treaties, where those treaties have been given effect in national laws. Patents are, therefore, territorial in nature.
Commonly, a nation forms a patent office with responsibility for operating that nation's patent system, within the relevant patent laws. The patent office generally has responsibility for the grant of patents, with infringement being the remit of national courts.
There is a trend towards global harmonization of patent laws, with the World Trade Organization (WTO) being particularly active in this area. The TRIPs Agreement has been largely successful in providing a forum for nations to agree on an aligned set of patent laws. Conformity with the TRIPs agreement is a requirement of admission to the WTO and so compliance is seen by many nations as important. This has also led to many developing nations, which may historically have developed different laws to aid their development, enforcing patents laws in line with global practice.
A key international convention relating to patents is the Paris Convention for the Protection of Industrial Property, initially signed in 1883. The Paris Convention sets out a range of basic rules relating to patents, and although the convention does not have direct legal effect in all national jurisdictions, the principles of the convention are incorporated into all notable current patent systems. The most significant aspect of the convention is the provision of the right to claim priority: filing an application in any one member state of the Paris Convention preserves the right for one year to file in any other member state, and receive the benefit of the original filing date. Because the right to a patent is intensely date-driven, this right is fundamental to modern patent usage.
The authority for patent statutes in different countries varies. In the United States, the Constitution empowers Congress to make laws to "promote the Progress of Science and useful Arts..." The laws Congress passed are codified in Title 35 of the United States Code and created the United States Patent and Trademark Office. In the UK, substantive patent law is contained in the Patents Act 1977 as amended.
In addition, there are international treaty procedures, such as the procedures under the European Patent Convention (EPC) [administered by the European Patent Organisation (EPOrg)], and the Patent Cooperation Treaty (PCT) (administered by WIPO and covering 137 countries), that centralise some portion of the filing and examination procedure. Similar arrangements exist among the member states of ARIPO, OAPI, the analogous treaties among African countries.
Application and prosecution
A patent is requested by filing a written application at the relevant patent office. The application contains a description of how to make and use the invention that must provide sufficient detail for a person skilled in the art (i.e., the relevant area of technology) to make and use the invention. In some countries there are requirements for providing specific information such as the usefulness of the invention, the best mode of performing the invention known to the inventor, or the technical problem or problems solved by the invention. Drawings illustrating the invention may also be provided.
The application also includes one or more claims, although it is not always a requirement to submit these when first filing the application. The claims set out what the applicant is seeking to protect in that they define what the patent owner has a right to exclude others from making, using, or selling, as the case may be. In other words, the claims define what a patent covers or the "scope of protection".
For a patent to be granted, that is to take legal effect in a particular country, the patent application must meet the patentability requirements of that country. Most patent offices examine the application for compliance with these requirements. If the application does not comply, objections are communicated to the applicant or their patent agent or attorney and one or more opportunties to respond to the objections to bring the application into compliance are usually provided.
Once granted the patent is subject in most countries to renewal fees to keep the patent in force. These fees are generally payable on a yearly basis, although the US is a notable exception.
Economics
Rationale
There are four primary incentives embodied in the patent system: to invent in the first place; to disclose the invention once made; to invest the sums necessary to experiment, produce and market the invention; and to design around and improve upon earlier patents.
- Patents provide incentives for economically efficient research and development (R&D). Many large modern corporations have annual R&D budgets of hundreds of millions or even billions of dollars. Without patents, R&D spending would be significantly less or eliminated altogether, limiting the possibility of technological advances or breakthroughs. Corporations would be much more conservative about the R&D investments they made, as third parties would be free to exploit any developments. This second justification is closely related to the basic ideas underlying traditional property rights.
- In accordance with the original definition of the term "patent," patents facilitate and encourage disclosure of innovations into the public domain for the common good. If inventors did not have the legal protection of patents, in many cases, they would prefer or tend to keep their inventions secret. Awarding patents generally makes the details of new technology publicly available, for exploitation by anyone after the patent expires, or for further improvement by other inventors. Furthermore, when a patent's term has expired, the public record ensures that the patentee's idea is not lost to humanity.
- In many industries (especially those with high fixed costs and either low marginal costs or low reverse engineering costs — computer processors, software, and pharmaceuticals for example), once an invention exists, the cost of commercialization (testing, tooling up a factory, developing a market, etc.) is far more than the initial conception cost. (For example, the internal "rule of thumb" at several computer companies in the 1980s was that post-R&D costs were 7-to-1). Unless there is some way to prevent copies from competing at the marginal cost of production, companies will not make that productization investment.
One effect of modern patent usage is that a small-time inventor can use the exclusive right status to become a licensor. This allows the inventor to accumulate capital from licensing the invention and may allow innovation to occur because he or she may choose to not manage a manufacturing buildup for the invention. Thus the inventor's time and energy can be spent on pure innovation, allowing others to concentrate on manufacturability.
Costs
The costs of preparing and filing a patent application, prosecuting it until grant and maintaining the patent vary from one jurisdiction to another, and may also be dependent upon the type and complexity of the invention, and on the type of patent.
The European Patent Office estimated in 2005 that the average cost of obtaining a European patent (via a Euro-direct application, i.e. not based on a PCT application) and maintaining the patent for a 10 year term was around 32 000 Euro. Since the London Agreement entered into force on May 1, 2008, this estimation is however no longer up-to-date, since fewer translations are required.
Criticism
Patents have been criticized for being granted on already known inventions. In 1938, for example, R. Buckminster Fuller, inventor of the geodesic dome wrote:
- "At present (1938), the (US patent) files, are so extraordinarily complex and the items so multitudinous that a veritable army of governmental servants is required to attend them and sort them into some order of distinguishable categories to which reference may be made when corresponding with patent applicants for the purposes of examiner citation of "prior art" disclosure. This complexity makes it inevitable that the human-equation involved in government servants relative to carelessness or mechanical limitations should occasion the granting of multitudes of "probably" invalid patent claims."
Patents have also been criticized for conferring a "negative right" upon a patent owner, permitting them to exclude competitors from using or exploiting the invention, even if the competitor subsequently develops the same invention independently. This may be subsequent to the date of invention, or to the priority date, depending upon the relevant patent law (see First to file and first to invent).
Patents may hinder innovation as well in the case of "troll" entities. A holding company, pejoratively known as a "patent troll", owns a portfolio of patents, and sues others for infringement of these patents while doing little to develop the technology itself.
Another theoretical problem with patent rights was proposed by law professors Michael Heller and Rebecca Sue Eisenberg in a 1998 Science article. Building from Heller's theory of the tragedy of the anticommons, the professors postulated that intellectual property rights may become so fragmented that, effectively, no one can take advantage of them as to do so would require an agreement between the owners of all of the fragments.
In regards to pharmaceutical patents, the preservation of exclusivity rights on medications prevents generic alternatives to enter the market and thus maintains a high price of drug treatments. This can have significant effects in the developing world as those who are most in need of basic essential medicines are unable to afford such high priced pharmaceuticals. Another criticism of pharmaceutical patenting relates the rationale of exclusivity rights and subsequent high drug prices as required to make back the vast investment needed to further research and development. Critics have investigated pharmaceutical budget allocations to address this price justification and revealed that marketing expenditures of new drugs have often doubled the amount that was allocated for required research and development.
In response to these criticisms against pharmaceutical patents it has been pointed out that less than 5% of medicines on the WHO’s essential drugs list are subject to patent protection and that countries who believe that intellectual property is impeding health care may not be aware that the medicines in question, particularly for HIV/AIDS related drugs, are not patented in their country. Also, the pharmaceutical industry has contributed US$2 billion in healthcare efforts in developing countries, providing HIV/AIDS drugs at lower cost or even free of charge in certain countries and has used differential pricing and parallel imports as a means to provide medication to the
poor. Other groups are investigating ways in which social inclusion and equitable distribution of research and development findings can be obtained within the existing intellectual property framework, although these efforts have received less exposure.
History
In 500 BC, in the Greek city of Sybaris (located in what is now southern Italy), "encouragement was held out to all who should discover any new refinement in luxury, the profits arising from which were secured to the inventor by patent for the space of a year."
Patents in the modern sense originated in 1474, when the Republic of Venice enacted a decree by which new and inventive devices, once they had been put into practice, had to be communicated to the Republic in order to obtain the right to prevent others from using them.
England followed with the Statute of Monopolies in 1623 under King James I, which declared that patents could only be granted for "projects of new invention." During the reign of Queen Anne (1702–1714), the lawyers of the English Court developed the requirement that a written description of the invention must be submitted. These developments, which were in place during the Colonial period, formed the basis for modern English and United States patent law.
In the United States, during the colonial period and Articles of Confederation years (1778–1789), several states adopted patent systems of their own. The first Congress adopted a Patent Act, in 1790, and the first patent was issued under this Act on (to Samuel Hopkins of Vermont for a potash production technique).
See also
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