Patent

Patent

Overview
A patent is a form of intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

. It consists of a set of exclusive right
Exclusive right
In Anglo-Saxon law, an exclusive right is a de facto, non-tangible prerogative existing in law to perform an action or acquire a benefit and to permit or deny others the right to perform the same action or to acquire the same benefit. A "prerogative" is in effect an exclusive right...

s granted by a sovereign state
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention
Invention
An invention is a novel composition, device, or process. An invention may be derived from a pre-existing model or idea, or it could be independently conceived, in which case it may be a radical breakthrough. In addition, there is cultural invention, which is an innovative set of useful social...

.

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 claim
Claim (patent)
Patent claims are the part of a patent or patent application that defines the scope of protection granted by the patent. The claims define, in technical terms, the extent of the protection conferred by a patent, or the protection sought in a patent application...

s defining the invention which must meet the relevant patentability
Patentability
Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent...

 requirements such as novelty
Novelty (patent)
Novelty is a patentability requirement. An invention is not patentable if the claimed subject matter was disclosed before the date of filing, or before the date of priority if a priority is claimed, of the patent application....

 and non-obviousness
Inventive step and non-obviousness
The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive — i.e., non-obvious — in order to be patented....

.
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Timeline

1790   First U.S. patent is issued to inventor Samuel Hopkins for a potash process.

1794   Eli Whitney is granted a patent for the cotton gin.

1809   Mary Kies becomes the first woman awarded a U.S. patent, for a technique of weaving straw with silk and thread.

1824   Joseph Aspdin patents Portland cement.

1836   Samuel Colt is granted an United States patent for the Colt revolver.

1839   William Otis receives a patent for the steam shovel.

1844   Charles Goodyear receives a patent for vulcanization, a process to strengthen rubber.

1845   The rubber band is patented.

1873   Levi Strauss and Jacob Davis receive a U.S. patent for blue jeans with copper rivets.

1876   Alexander Graham Bell applies for a patent for the telephone, as does Elisha Gray.

 
Quotations

In the field of industrial patents in particular we shall have seriously to examine whether the award of a monopoly privilege is really the most appropriate and effective form of reward for the kind of risk bearing which investment in scientific research involves.

F.A. von Hayek, Individualism and Economic Order (1948)

Patents are the best and most effective means of controlling competition. They occasionally give absolute command of the market, enabling their owner to name the price without regard to the cost of production... Patents are the only legal form of absolute monopoly.

Edwin Prindle|Edwin J. Prindle, America By Design (1906)

The advancement of the arts, from year to year, taxes our credulity and seems to presage the arrival of that period when human improvement must end.

Henry L. Ellsworth, commissioner of the Patent Office, 1843 report to Congress (note that the context is the increasing workload at the patent office) .

If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today.

Bill Gates, Challenges and Strategy Memo. 16 May 1991

The good patent gives the world something it did not truly have before, whereas the bad patent has the effect of trying to take away from the world something which it effectively already had.

Giles Sutherland Rich, 1978 60 JPOS 271,288, cited in CIPA Guide to the Patents Act, page 83 and Gaster/Marlow, CRi 1/2009 pages 3-4

There is no patent. Could you patent the sun?

Jonas Salk, in response to the question regarding his Polio vaccine, "Who owns the patent on this vaccine?" by Edward R. Murrow, in a CBS Television interview, on See It Now|See It Now (12 April 1955); quoted in Shots in the Dark : The Wayward Search for an AIDS Vaccine (2001) by Jon Cohen|Jon Cohen
Encyclopedia
A patent is a form of intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

. It consists of a set of exclusive right
Exclusive right
In Anglo-Saxon law, an exclusive right is a de facto, non-tangible prerogative existing in law to perform an action or acquire a benefit and to permit or deny others the right to perform the same action or to acquire the same benefit. A "prerogative" is in effect an exclusive right...

s granted by a sovereign state
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention
Invention
An invention is a novel composition, device, or process. An invention may be derived from a pre-existing model or idea, or it could be independently conceived, in which case it may be a radical breakthrough. In addition, there is cultural invention, which is an innovative set of useful social...

.

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 claim
Claim (patent)
Patent claims are the part of a patent or patent application that defines the scope of protection granted by the patent. The claims define, in technical terms, the extent of the protection conferred by a patent, or the protection sought in a patent application...

s defining the invention which must meet the relevant patentability
Patentability
Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent...

 requirements such as novelty
Novelty (patent)
Novelty is a patentability requirement. An invention is not patentable if the claimed subject matter was disclosed before the date of filing, or before the date of priority if a priority is claimed, of the patent application....

 and non-obviousness
Inventive step and non-obviousness
The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive — i.e., non-obvious — in order to be patented....

. 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.

Under the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights
Agreement on Trade-Related Aspects of Intellectual Property Rights
The Agreement on Trade Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization that sets down minimum standards for many forms of intellectual property regulation as applied to nationals of other WTO Members...

, patents should be available in WTO member states for any inventions, in all fields of technology, and the term of protection
Term of patent
The term of a patent is the maximum period during which it can be maintained into force. It is usually expressed in number of years either starting from the filing date of the patent application or from the date of grant of the patent. In most patent laws, renewal annuities or maintenance fees have...

 available should be a minimum of twenty years. In many countries, certain subject areas
Patentable subject matter
Patentable, statutory or patent-eligible subject matter is subject matter which is susceptible of patent protection. The laws or patent practices of many countries suggest that certain subject matter is or is not something for which a patent should be granted.Together with novelty, inventive step...

 are excluded from patents, such as business methods
Business method patent
Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking, tax compliance etc. Business method patents are a relatively new species of patent and there have been several reviews investigating the...

 and computer programs
Software patent
Software patent does not have a universally accepted definition. One definition suggested by the Foundation for a Free Information Infrastructure is that a software patent is a "patent on any performance of a computer realised by means of a computer program".In 2005, the European Patent Office...

.

Definition


The term patent usually refers to an exclusive right granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof, and claims that right in a formal patent application. The additional qualification utility patent is used in the United States to distinguish it from other types of patents (e.g. design patent
Design patent
In the United States, a design patent is a patent granted on the ornamental design of a functional item. Design patents are a type of industrial design right. Ornamental designs of jewelry, furniture, beverage containers and computer icons are examples of objects that are covered by design...

s) but should not be confused with utility model
Utility model
A utility model is an intellectual property right to protect inventions. This right is available in a number of national statutes, as described below...

s granted by other countries. Examples of particular species of patents for inventions include biological patent
Biological patent
A biological patent is a patent relating to an invention or discovery in biology. It can be a composition of matter, a method for obtaining or using one or more thereof, or a product combining such things...

s, business method patent
Business method patent
Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking, tax compliance etc. Business method patents are a relatively new species of patent and there have been several reviews investigating the...

s, chemical patent
Chemical patent
A chemical patent or pharmaceutical patent is a patent for an invention in the chemical or pharmaceuticals industry. Strictly speaking, in most jurisdictions, there are essentially no differences between the legal requirements to obtain a patent for an invention in the chemical or pharmaceutical...

s and software patent
Software patent
Software patent does not have a universally accepted definition. One definition suggested by the Foundation for a Free Information Infrastructure is that a software patent is a "patent on any performance of a computer realised by means of a computer program".In 2005, the European Patent Office...

s.

Some other types of intellectual property rights are referred to as patents in some jurisdictions: industrial design rights
Industrial design rights
An industrial design right is an intellectual property right that protects the visual design of objects that are not purely utilitarian. An industrial design consists of the creation of a shape, configuration or composition of pattern or color, or combination of pattern and color in three...

 are called design patents in some jurisdictions (they protect the visual design of objects that are not purely utilitarian), plant breeders' rights
Plant breeders' rights
Plant breeders' rights , also known as plant variety rights , are rights granted to the breeder of a new variety of plant that give him exclusive control over the propagating material and harvested material of a new variety for a number of years.With these rights, the breeder can choose...

 are sometimes called plant patents, and utility models or Gebrauchsmuster
Gebrauchsmuster
In German and Austrian patent laws, the Gebrauchsmuster , also known as German utility model or Austrian utility model, is a patent-like, intellectual property right protecting inventions....

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
Letters patent
Letters patent are a type of legal instrument in the form of a published written order issued by a monarch or president, generally granting an office, right, monopoly, title, or status to a person or corporation...

, 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 origins of the patent system. For other uses of the term patent see notably land patent
Land patent
A land patent is a land grant made patent by the sovereign lord over the land in question. To make a such a grant “patent”, such a sovereign lord must document the land grant, securely sign and seal the document and openly publish the same to the public for all to see...

s, which were land grants by early state governments in the USA, and printing patent
Printing patent
The printing patent or printing privilege was a precursor of modern copyright. It was an exclusive right to print a work or a class work of works....

, a precursor of modern copyright. These meanings reflect the original meaning of letters patent that had a broader scope than current usage.

Etymology


The word patent originates from the Latin
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...

 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
Letters patent
Letters patent are a type of legal instrument in the form of a published written order issued by a monarch or president, generally granting an office, right, monopoly, title, or status to a person or corporation...

, which originally denoted an open for public reading royal decree granting exclusive rights to a person.

History


In 500 BC, in the Greek city of Sybaris
Sybaris
Sybaris was an ancient city in Magna Graecia on the western shore of the Gulf of Taranto. The wealth of the city during the 6th century BC was so great that the Sybarites became synonymous with pleasure and luxury...

 (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."

The Florentine architect Filippo Brunelleschi
Filippo Brunelleschi
Filippo Brunelleschi was one of the foremost architects and engineers of the Italian Renaissance. He is perhaps most famous for inventing linear perspective and designing the dome of the Florence Cathedral, but his accomplishments also included bronze artwork, architecture , mathematics,...

 received a three-year patent for a barge with hoisting
Hoist (device)
A hoist is a device used for lifting or lowering a load by means of a drum or lift-wheel around which rope or chain wraps. It may be manually operated, electrically or pneumatically driven and may use chain, fiber or wire rope as its lifting medium. The load is attached to the hoist by means of a...

 gear, that carried marble along the Arno River in 1421. In 1449, King Henry VI granted the first patent with a license of 20 years to John of Utynam
John of Utynam
John of Utynam is the recipient of the first known English patent.-Background:John was a master glass-maker from Flanders. He came to England to make the windows for Eton College.-Patent:The patent was granted in 1449 by King Henry VI of England...

 for introducing the making of colored glass to England.

Patents in the modern sense originated in 1474, when the Republic of Venice
Republic of Venice
The Republic of Venice or Venetian Republic was a state originating from the city of Venice in Northeastern Italy. It existed for over a millennium, from the late 7th century until 1797. It was formally known as the Most Serene Republic of Venice and is often referred to as La Serenissima, in...

 enacted a decree that new and inventive devices, once put into practice, had to be communicated to the Republic to obtain the right to prevent others from using them.

England followed with the Statute of Monopolies in 1624 under King James I
James I of England
James VI and I was King of Scots as James VI from 24 July 1567 and King of England and Ireland as James I from the union of the English and Scottish crowns on 24 March 1603...

, which declared that patents could only be granted for "projects of new invention." During the reign of Queen Anne
Anne of Great Britain
Anne ascended the thrones of England, Scotland and Ireland on 8 March 1702. On 1 May 1707, under the Act of Union, two of her realms, England and Scotland, were united as a single sovereign state, the Kingdom of Great Britain.Anne's Catholic father, James II and VII, was deposed during the...

 (1702–14), the lawyers of the English Court developed the requirement that a written description of the invention must be submitted. The patent system in many other countries, including Australia, is based on British law and can be traced back to the Statute of Monopolies.

In 1641, Samuel Winslow
Samuel Winslow (patentee)
In 1641, Samuel Winslow was granted the first patent in North America by the Massachusetts General Court for a new process for making salt....

 was granted the first patent in North America by the Massachusetts General Court
Massachusetts General Court
The Massachusetts General Court is the state legislature of the Commonwealth of Massachusetts. The name "General Court" is a hold-over from the Colonial Era, when this body also sat in judgment of judicial appeals cases...

 for a new process for making salt.

In France, patents were granted by the monarchy and by other institutions like the "Maison du Roi". The Academy
French Academy of Sciences
The French Academy of Sciences is a learned society, founded in 1666 by Louis XIV at the suggestion of Jean-Baptiste Colbert, to encourage and protect the spirit of French scientific research...

 examined novelty. Examinations were generally done in secret with no requirement to publish a description of the invention. Actual use of the invention was deemed adequate disclosure to the public. The modern French patent system was created during the Revolution in 1791. Patents were granted without examination since inventor's right was considered as a natural one

In the United States, during the so-called colonial period and Articles of Confederation
Articles of Confederation
The Articles of Confederation, formally the Articles of Confederation and Perpetual Union, was an agreement among the 13 founding states that legally established the United States of America as a confederation of sovereign states and served as its first constitution...

 years (1778–89), several states adopted patent systems of their own. The first Congress adopted a Patent Act
Patent Act of 1790
The Patent Act of 1790 was the first patent statute passed by the federal government of the United States. It was enacted on April 10, 1790, about one year after the constitution was ratified and a new government was organized. The law was concise, defining the subject matter of a U.S...

, in 1790, and the first patent was issued under this Act on July 31, 1790 (to Samuel Hopkins
Samuel Hopkins (inventor)
Samuel Hopkins was an American inventor from Philadelphia, Pennsylvania, and Pittsford, Vermont. On July 31, 1790, he was granted the first U.S. patent, under the new U.S. patent statute just signed into law by President Washington on April 10, 1790...

 of Vermont for a potash
Potash
Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains, and this was the major historical source for it before the industrial era...

 production technique).

Effects


A patent is not a right to practice or use the invention. Rather, a patent provides the right
Right
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...

 to exclude others from making, using, selling, offering for sale, or importing the patented invention
Invention
An invention is a novel composition, device, or process. An invention may be derived from a pre-existing model or idea, or it could be independently conceived, in which case it may be a radical breakthrough. In addition, there is cultural invention, which is an innovative set of useful social...

 for the term of the patent
Term of patent
The term of a patent is the maximum period during which it can be maintained into force. It is usually expressed in number of years either starting from the filing date of the patent application or from the date of grant of the patent. In most patent laws, renewal annuities or maintenance fees have...

, which is usually 20 years from the filing date subject to the payment of maintenance fees
Maintenance fee (patent)
Maintenance fees or renewal fees are fees that are paid to maintain a granted patent in force. Some patent laws require the payment of maintenance fees for pending patent applications. Not all patent laws require the payment of maintenance fees and different laws provide different regulations...

. 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 that may still be covered by someone else's patent. If an inventor takes an existing, patented mouse trap
Mouse Trap
Mouse Trap is a 1981 arcade game released by Exidy, similar to Pac-Man. It was ported to three home systems by Coleco; Coleco's ColecoVision, Mattel's Intellivision, and the Atari 2600.-Comparison to Pac-Man:...

 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" that require 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
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

 and Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...

) have criminal penalties for wanton infringement. Typically, the patent owner will seek monetary compensation for past infringement, and will seek an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...

 prohibiting the defendant from engaging in future acts of infringement. To prove infringement, the patent owner must establish that the accused infringer practices all the requirements of at least one of the claims of the patent. (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
Doctrine of equivalents
The doctrine of equivalents is a legal rule in most of the world's patent systems that allows a court to hold a party liable for patent infringement even though the infringing device or process does not fall within the literal scope of a patent claim, but nevertheless is equivalent to the claimed...

").

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 not valid. A patent can be found invalid on grounds that are set out in the relevant patent legislation that vary between countries. Often, the grounds are a subset of requirements for patentability
Patentability
Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent...

 in the relevant country. Although an infringer is generally free to rely on any available ground of invalidity (such as a prior publication
Novelty (patent)
Novelty is a patentability requirement. An invention is not patentable if the claimed subject matter was disclosed before the date of filing, or before the date of priority if a priority is claimed, of the patent application....

, for example), some countries have sanctions to prevent the same validity questions being relitigated. An example is the UK Certificate of contested validity
Certificate of contested validity
In United Kingdom patent law, a certificate of contested validity is an order usually made by the Patents Court or Patents County Court after a patent infringement action in which the validity of the patent is unsuccessfully challenged.Section 65 of the UK Patents Act 1977 allows the Court to make...

.

Patent licensing agreements
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...

 are contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

s in which the patent owner (the licensor) agrees to forgo their right to sue the licensee for infringement of the licensor's patent rights, usually in return for a royalty or other compensation. 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
Cross-licensing
A cross-licensing agreement is a contract between two or more parties where each party grants rights to their intellectual property to the other parties.-Patent law:...

 agreements in order to share the benefits of using each other's patented inventions.

Therefore, patents may be enforced through litigation, and a common defense is an invalidity challenge. Patents may also be subject to licensing agreements. The vast majority of patents are however never litigated or even licensed.

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
Assignment (law)
An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee...

 to a corporate entity subsequently and inventors may be required to assign inventions to their employers under a 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 or specifically assigned employment duties, where an invention might reasonably be expected to result from carrying out those duties, or if the inventor had a special obligation to further the interests of the employer's company.
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
Market liquidity
In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value...

 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
Patent office
A patent office is a governmental or intergovernmental organization which controls the issue of patents. In other words, "patent offices are government bodies that may grant a patent or reject the patent application based on whether or not the application fulfils the requirements for...

 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
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 (WTO) being particularly active in this area. The TRIPs Agreement
Agreement on Trade-Related Aspects of Intellectual Property Rights
The Agreement on Trade Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization that sets down minimum standards for many forms of intellectual property regulation as applied to nationals of other WTO Members...

 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
Paris Convention for the Protection of Industrial Property
The Paris Convention for the Protection of Industrial Property, signed in Paris, France, on March 20, 1883, was one of the first intellectual property treaties. It established a Union 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
Priority right
In patent, industrial design rights and trademark laws, a priority right or right of priority is a time-limited right, triggered by the first filing of an application for a patent, an industrial design or a trademark respectively...

: 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 UK, substantive patent law is contained in the Patents Act 1977 as amended. In the United States, the Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...

 empowers Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....

 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
Title 35 of the United States Code
Title 35 of the United States Code is a title of United States Code regarding patent law. The sections of Title 35 govern all aspects of patent law in the United States. There are currently 37 chapters, which include 376 sections , in Title 35.Federally recognized forms of intellectual property are...

 and created the United States Patent and Trademark Office
United States Patent and Trademark Office
The United States Patent and Trademark Office is an agency in the United States Department of Commerce that issues patents to inventors and businesses for their inventions, and trademark registration for product and intellectual property identification.The USPTO is based in Alexandria, Virginia,...

.

In addition, there are international treaty procedures, such as the procedures under the European Patent Convention
European Patent Convention
The Convention on the Grant of European Patents of 5 October 1973, commonly known as the European Patent Convention , is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted...

 (EPC) [administered by the European Patent Organisation
European Patent Organisation
The European Patent Organisation is a public international organisation created in 1977 by its contracting states to grant patents in Europe under the European Patent Convention of 1973...

 (EPOrg)], and the Patent Cooperation Treaty
Patent Cooperation Treaty
The Patent Cooperation Treaty is an international patent law treaty, concluded in 1970. It provides a unified procedure for filing patent applications to protect inventions in each of its contracting states...

 (PCT) (administered by WIPO and covering more than 140 countries), that centralize some portion of the filing and examination procedure. Similar arrangements exist among the member states of ARIPO
African Regional Intellectual Property Organization
The African Regional Intellectual Property Organization , formerly African Regional Industrial Property Organization, is an intergovernmental organization for cooperation among African states in patent and other industrial property matters...

 and OAPI
Organisation Africaine de la Propriété Intellectuelle
The Organisation Africaine de la Propriété Intellectuelle or OAPI is an intellectual property organization, headquartered in Yaoundé, Cameroon. The organisation was created by Bangui Agreement of March 2, 1977...

, the analogous treaties among African countries, and the nine CIS
Commonwealth of Independent States
The Commonwealth of Independent States is a regional organization whose participating countries are former Soviet Republics, formed during the breakup of the Soviet Union....

 member states that have formed the Eurasian Patent Organization
Eurasian Patent Organization
The Eurasian Patent Organization is a regional organization set up by the Eurasian Patent Convention . Its task is to grant Eurasian patents...

.

Application and prosecution



A patent is requested by filing a written application
Patent application
A patent application is a request pending at a patent office for the grant of a patent for the invention described and claimed by that application. An application consists of a description of the invention , together with official forms and correspondence relating to the application...

 at the relevant patent office. The person or company filing the application is referred to as "the applicant". The applicant may be the inventor or its assignee. The application contains a description of how to make and use the invention that must provide sufficient detail
Sufficiency of disclosure
Most patent law systems require that a patent application disclose a claimed invention in sufficient detail for the notional person skilled in the art to carry out that claimed invention. This requirement is often known as sufficiency of disclosure or enablement, depending on the...

 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".

After filing, an application is often referred to as "patent pending
Patent pending
The expressions "patent pending" or "patent applied for" refer to a warning that inventors are entitled to use in reference to their product or process once a patent application has been filed, but prior to the patent being issued or the application abandoned...

". While this term does not confer legal protection, and a patent cannot be enforced until granted, it serves to provide warning to potential infringers that if the patent is issued, they may be liable for damages.

For a patent to be granted, that is to take legal effect in a particular country, the patent application must meet the patentability
Patentability
Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent...

 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
Patent attorney
A patent attorney is an attorney who has the specialized qualifications necessary for representing clients in obtaining patents and acting in all matters and procedures relating to patent law and practice, such as filing an opposition...

 and one or more opportunities 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
Maintenance fee (patent)
Maintenance fees or renewal fees are fees that are paid to maintain a granted patent in force. Some patent laws require the payment of maintenance fees for pending patent applications. Not all patent laws require the payment of maintenance fees and different laws provide different regulations...

 to keep the patent in force. These fees are generally payable on a yearly basis, although the US is a notable exception. Some countries or regional patent offices (e.g. the European Patent Office
European Patent Office
The European Patent Office is one of the two organs of the European Patent Organisation , the other being the Administrative Council. The EPO acts as executive body for the Organisation while the Administrative Council acts as its supervisory body as well as, to a limited extent, its legislative...

) also require annual renewal fees to be paid for a patent application before it is granted.

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
London Agreement (2000)
The London Agreement, formally the Agreement on the application of Article 65 of the Convention on the Grant of European Patents and sometimes referred to as the London Protocol, is a patent law agreement concluded in London on 17 October 2000 and aimed at reducing the translation costs of European...

 entered into force on May 1, 2008, this estimation is however no longer up-to-date, since fewer translations are required.

In the United States, in 2000 cost of obtaining patent (patent prosecution
Patent prosecution
Patent prosecution describes the interaction between applicants and their representatives, and a patent office with regard to a patent, or an application for a patent...

) was estimated from $10'000 to $30'000 per patent. When patent litigation is involved (which in year 1999 happened in about 1'600 cases compared to 153'000 patents issued in the same year ), costs increase significantly: while 95% of patent litigation cases are settled out of court, but when the case reaches the court, direct legal costs of patent litigation are on average in the order of a million dollars per case, not including associated business costs.

Alternatives to applying for a patent


A defensive publication
Defensive publication
A defensive publication, or defensive disclosure, is an intellectual property strategy used to prevent another party from obtaining a patent on a product, apparatus or method for instance. The strategy consists in disclosing an enabling description and/or drawing of the product, apparatus or method...

 is the act of publishing a detailed description of a new invention without patenting it, so as to establish prior art
Prior art
Prior art , in most systems of patent law, constitutes all information that has been made available to the public in any form before a given date that might be relevant to a patent's claims of originality...

 and public identification as the creator/originator of an invention, although a defensive publication can also be anonymous. A defensive publication prevents others from later being able to patent the invention.

A trade secret
Trade secret
A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers...

 is the act of not disclosing the methods by which a complex invention works or how a chemical is formulated. However, trade secrets do not provide legal protection like patents, and are vulnerable to reverse engineering
Reverse engineering
Reverse engineering is the process of discovering the technological principles of a device, object, or system through analysis of its structure, function, and operation...

 and information leaks, i.e. breaches of confidentiality and corporate espionage. An advantage of a trade secret is that whereas a patent is only in force for a specified time, after which others may freely copy the invention, a trade secret is unknown and allows its holder to maintain a monopoly for as long as they can keep it secret.

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
Design around
In the field of patents, the phrase "to design around" means to invent an alternative to a patented invention that does not infringe the patent’s claims. The phrase can also refer to the invention itself....

 and improve upon earlier patents.
  1. Patents provide incentives for economically efficient research and development
    Research and development
    The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...

     (R&D). A study conducted annually by the IPTS shows that the 2,000 largest global companies invested more than 430 billion euros in 2008 in their R&D departments. If the investments can be considered as inputs of R&D, patents are the outputs. Based on these groups, a project named Corporate Invention Board, had measured and analyzed the patent portfolios to produce an original picture of their technological profiles. Supporters of patents argue that without patent protection, 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
    Free rider problem
    In economics, collective bargaining, psychology, and political science, a free rider is someone who consumes a resource without paying for it, or pays less than the full cost. The free rider problem is the question of how to limit free riding...

     any developments. This second justification is closely related to the basic ideas underlying traditional property rights.
  2. In accordance with the original definition of the term "patent," patents facilitate and encourage disclosure of innovation
    Innovation
    Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...

    s into the public domain
    Public domain
    Works are in the public domain if the intellectual property rights have expired, if the intellectual property rights are forfeited, or if they are not covered by intellectual property rights at all...

     for the common good
    Common good
    The common good is a term that can refer to several different concepts. In the popular meaning, the common good describes a specific "good" that is shared and beneficial for all members of a given community...

    . 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
    Term of patent
    The term of a patent is the maximum period during which it can be maintained into force. It is usually expressed in number of years either starting from the filing date of the patent application or from the date of grant of the patent. In most patent laws, renewal annuities or maintenance fees have...

     has expired, the public record ensures that the patentee's idea is not lost to humanity.
  3. In many industries (especially those with high fixed cost
    Fixed cost
    In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as salaries or rents being paid per month, and are often referred to as overhead costs...

    s and either low marginal cost
    Marginal cost
    In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good...

    s or low reverse engineering costs — computer processors, 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.

Another effect of modern patent usage is to cause competitors to design around (or to "invent around" according to R S Praveen Raj
R S Praveen Raj
R S Praveen Raj is an Indian social activist and intellectual property rights expert. Born on 31 March 1979, he started his career as an electrical and electronics engineer...

) each other's patents. This may promote healthy competition among manufacturers, resulting in gradual improvements of the technology base. This may help augment national economies and confer better living standards to the citizens.

Criticism



As state-granted monopolies, patents have been criticized as inconsistent with free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...

. On that basis, in 1869 the Netherlands abolished patents, and did not reintroduce them until 1912.

Patents have also been criticized for being granted on already-known inventions, with many complaining in the United States that the USPTO fails "to do a serious job of examining patents, thus allowing bad patents to slip through the system." On the other hand, it has been argued that because of low number of patents going into litigation, increasing quality of patents at patent prosecution
Patent prosecution
Patent prosecution describes the interaction between applicants and their representatives, and a patent office with regard to a patent, or an application for a patent...

 stage will increase overall legal costs associated with patents, and that current USPTO policy is a reasonable compromise between full trial on examination stage on one hand, and pure registration without examination, on the other hand.

Patent trolls are one of common criticisms against patents , though some commentators suggest that patent trolls are not bad for the patent system at all but instead realign market participant incentives, make patents more liquid, and clear the patent market.

Pharmaceutical patents prevent generic alternatives to enter the market until the patents expire, and thus maintains high prices for medication. 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. Critics also question the rationale that exclusive patent rights and the resulting high prices are required for pharmaceutical companies to recoup the large investments needed for research and development. One study concluded that marketing expenditures for new drugs often doubled the amount that was allocated for research and development.
Other articles shed light on the problems of today's medical research. It sets wrong priorities in research and pricing, and pushes the state-run healthcare systems even of rich nations to their limits.

In one response to these criticisms, one review concluded that less than 5 percent of medicines on the World Health Organization
World Health Organization
The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...

's list of essential drugs are under patent. Also, the pharmaceutical industry has contributed US$2 billion for healthcare 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 to provide medication to the poor. Other groups are investigating how 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.

Some public campaigns have expressed a concern for "preventing the over-reach" of IP protection including patent protection, and "to retain a public balance in property rights" of this kind.

Proposed alternatives to the patent system


Alternatives have been discussed to address the issue of financial incentivization to replace patents. Mostly, they are related to some form of direct or indirect government funding. One example is the idea of providing "prize money" (from a "prize fund" sponsored by the government) as a substitute for the lost profits associated with abstaining from the monopoly given by a patent. Another approach is to remove the issue of financing development from the private sphere all together, and to cover the costs with direct government funding.

See also



External links