Intellectual Property

Patents

An invention must, in general, fulfill the following conditions to be protected by a patent. It must be of practical use and must show an element of novelty, that is, some new characteristic which is not known in the body of existing knowledge in its technical field. This body of existing knowledge is called “prior art”. In addition the invention must involve an inventive step which could not be obviously deduced by a person with average knowledge of the technical field. Further the invention must be capable of industrial application, meaning that it must be capable of being used for an industrial or business purpose beyond a mere theoretical phenomenon.
Finally, its subject matter must be accepted as “patentable” under law. In many countries, scientific theories, aesthetic creations, mathematical methods, plant or animal varieties, discoveries of natural substances, commercial methods, methods for medical treatment (as opposed to medical products) or computer programs are generally not patentable.

What rights does a patent owner have? ↓

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. 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.

What role do patents play in everyday life?

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).

All patent owners are obliged, in return for patent protection, to publicly disclose information on their invention in order to enrich the total body of technical knowledge in the world. Such an ever-increasing body of public knowledge promotes further creativity and innovation in others. In this way, patents provide not only protection for the owner but valuable information and inspiration for future generations of researchers and inventors.

Why are patents useful?

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 as much as possible.

Therefore, patents provide incentives to individuals by offering them recognition for their creativity and the possibility of material reward for their inventions. In return for the exclusive right provided by a patent, the patent applicant is required to disclose the invention to the public by providing detailed, accurate and complete written description of the invention in the patent application. Further, 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.

Are patents relevant to my business?

Most people think of patents in relation to major scientific breakthroughs such as Edison’s first electric lamp or large corporations investing large sums in research and development. However, most patents do not concern scientific breakthroughs, but are granted for inventions that make improvements on existing inventions, for example, on a product with better performance or a process that allows a cheaper or more efficient production of a known product. In addition, certain countries have specific legal provisions for protecting rather incremental innovations under the form of , which have a shorter duration than patents and are generally easier to obtain.

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

Why should I consider patenting my inventions?
  • Exclusive rights – Patents provide you with an exclusive right to prevent or stop others from commercially exploiting the 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 these exclusive 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 will 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 whom 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 do not patent my inventions?

Competitors might take advantage of your invention – 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 scale economies 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 can produce the same product, and often sell it at a lower price as they do not have to recoup research and development costs incurred by your company.

Possibilities to license, sell or transfer technology will be severely hindered – without IP rights, transfers of technology would be difficult if not impossible. Transfer of technology presupposes ownership of a technology which can only be effectively obtained through appropriate IP protection. Without IP protection over the technology in question, parties are suspicious of disclosing their inventions during the negotiations for transferring that technology, fearing that the other side may “run away with the invention”. IP protection, in particular patent protection, is crucial for acquiring technology through its licensing.

Finally, somebody else might patent them if the invention has not been disclosed to the public. With the exception of the system applicable in the United States of America until March 16, 2013, 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 of the employees of your company, somebody else - who may have developed the same or an equivalent invention later - may do so and legitimately exclude your enterprise from the market, limit your activities to the continuation of prior use, where the patent legislation provides for such 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, you may disclose the invention to the public, thereby placing it in the public domain (commonly known as defensive publication). 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.