21 Facts about Patents
Possibly the most important fact about a patent is that it does not provide the patentee with an automatic right to practise the invention described and claimed in his patent. A patent merely provides a right to exclude others from making, using, selling, offering for sale, or importing the patented invention for the duration of the patent but does so only within the territorial limitations of the patent. Patentees must, therefore, ensure they conduct an infringement clearance search before practising their invention.
Whilst the owner of a patent which improves on an already patented invention owned by another may not be able to practise his invention without the permission of the earlier patentee, he can prevent the owner of the earlier patent from practising the improved approach or design.
A patent is, in effect, a limited property right granted to applicants in exchange for their agreement to share the details of their inventions with the public. This exchange requires that the patentee disclose the invention sufficiently well for an expert skilled in the same area of technology to practise the invention without undue experimentation. In the USA, the “best mode” for putting the invention into effect known to the applicant at the time of filing the application must be disclosed. Otherwise, a subsequently granted patent may well be open to an attack of invalidity and may be revoked.
In Europe, the breadth of any granted claims can be construed to be limited to the extent of the disclosure. Examiners at the European Patent Office often require that any claims be limited before grant so as not to extend beyond the teaching of the application itself. This practice encourages the provision of a broad disclosure of examples and extensive experimental data. Once provided, such detail provides excellent support and scope for claim amendment to overcome any prior art, whilst not unduly limiting the scope of any grantable claims.
Patents As Property
Both patent applications and granted patents are “Property” and can be sold, licensed, mortgaged, assigned or otherwise transferred for money or money’s worth.
The rights provided by a patent vary country-by-country. For example, in the UK the practising of a patented invention for pure academic research may avoid infringement. But care must be taken if the academic research has a commercial goal or is part of a commercial contract simply being conducted by an academic institute, as this is considered to have a “commercial end” and may well be considered to be an infringement of the patentee’s rights. In the United States, a patent specifically covers research, except for what has been described as a ‘purely philosophical’ inquiry. A U.S. patent can, therefore, be infringed by any “making” of the invention, even a making that goes towards development of a new invention and which may itself become subject of a patent. However, Australian patent law allows developers to build on top of a patented invention, and provides exceptions from infringement for those who conduct research for both academic and commercial purposes.
Patents are expensive and can cost up to £50,000 up to grant in a typical range of 5 countries and as much again to maintain them until they expire.
Working The Invention
Some countries have “practising provisions” which require the invention to be practised within that territory. The consequences of not practising an invention locally vary from one country to another. They range from revocation of the patent rights, to the awarding of a compulsory licence (to a party wishing to exploit the patented invention) OR a subsequently patented invention, (the exploitation of which is being prevented by the existence of an earlier patent which IS NOT being practised and under which a licence is being refused or is not available on reasonable terms).
Whilst the patentee has the opportunity to challenge the revocation or grant of a licence, a successful challenge usually requires evidence that the patentee has made efforts to practise the invention and/or has been prevented from doing so due to exceptional circumstances. The practising or working of an invention by a licensee is, generally considered to be the equivalent to the working of the invention by the patent holder.
There is no such thing as a “worldwide patent”, although a PCT (International) application is considered to be the equivalent of a regular national or regional application in a large range of countries, including most industrialised nations. Notable exclusions are Taiwan and Argentina, to name but two.
A product placed on the market in a territory where there is no patent for the product in question cannot infringe a patent in another territory.
However, importing a patented product into a patented territory from another country in which there is no equivalent patent is an infringing act and is actionable in court. Action may be taken against the importer, the distributor and anyone who subsequently deals in the infringing product. Infringement by importation extends to importation into a European country in which there is a patent from a European country in which the patentee has chosen not to pursue patent protection. However, if an infringing product is first legitimately placed on the market in a European country in which there is a patent, its importation into another territory within the European Economic Community is not an infringement of a patent in that other country as the principle of “exhaustion of rights” applies.
Action for infringement of a patent may be taken against someone who provided the essential ingredients for enabling a patent to be infringed. However, a defence would exist if the supplier did not know and had no reasonable grounds for supposing a patent existed and that the supply of the materials in question was not for the purposes of infringing said patent. The supply of staple raw materials or commodities is generally not considered to be an actionable act.
Damages For Infringement
Damages for infringement of a patent can range from a reasonable royalty through to an amount equivalent to all the profit made by the infringer. In America it is sometimes possible to recover “punitive damages” of up to three times the profit made by the infringer. An opinion of “non- infringement” made by a professional US attorney may avoid such extreme damages but such opinions can be subject to extensive scrutiny.
Patents are granted for a limited period of time (generally 20 years from the application date) and are subject to the payment of renewal fees that tend to rise as the patent ages.
Patentable Subject Matter
Patents are only granted for inventions that are new, involve an inventive step, are industrially applicable and are not directed to specifically excluded subject matter. Inventions are new if nobody has done or disclosed exactly the same before and inventive if the idea would not be obvious to a person skilled in the same technology. The USA has an exemption that allows a patentee to protect an invention as long as a US application is filed within 12 months of the first disclosure of the idea. Ideas are considered to be industrially applicable if they can be used in industry (including agriculture) but are generally not considered to be industrially applicable if they are used in commerce.
The USA has an exclusion to the last restriction and grants patents for “business methods” which extend from complex methods of trading stocks and shares to the simple process of training a janitor how to clean a window. Examples of excluded subject matter include inventions contrary to morality or public order, schemes, rules or methods of performing a mental act or doing business, the presentation of information and methods of treating the human or animal body by surgery or therapy.
Again, the USA has an exception that allows one to patent medical procedures.
Patent Vs Confidential Info
Whilst keeping an idea secret may well protect the concept for a period of time it will only do so as long as a competitor is unable to work out how you achieved the innovative effect. Once it does so, there is nothing to stop your competitor capturing a large portion of the market you created. Whilst a patent will disclose your concept sufficiently well for a competitor to copy, it will also allow you to stop the competitor through employment of suitable court action and may well allow you to collect damages.
Whilst pure software itself is not patentable it is well established that patents can be obtained for the method behind the software process so long as the method itself is not specifically excluded from patentability and has a “technical effect”. A suitable technical effect may include an improvement in the speed or accuracy of a production process.
Types of Patent Claims
Patent claims may be directed to a product or a method or process for producing a product. In Europe, a granted patent with claims to a process also provides protection for a product obtained directly by the process.
The Importance Of Good Drafting
The strength and value of a patent depends very much on the skills of the patent attorney drafting the application, the strength and breadth of the technical disclosure and supporting data and the extent to which the patent covers the commercial opportunity associated with the invention. Often more money is made through the sale of consumable items associated with the invention than the specific invention itself. A well-researched and drafted patent will protect all the commercial opportunities.
When To Disclose
Whilst the contents of a patent application can be safely disclosed after a patent application has been filed, care should be taken not to disclose details or improvements beyond those disclosed in the patent application as filed, as such a disclosure can be prejudicial to securing protection for the improvements in a subsequent application.
The term “prior art” refers to any disclosure anywhere in the world whether written, verbal, visual or otherwise prior to the date of a patent application. This is regardless of who made the disclosure and regardless of whether someone actually saw the disclosure.
Academics should be aware that simply placing a thesis on the shelves of a library would make its contents available to the public, even if nobody actually views the thesis itself.
A disclosure of the contents of a patent application on the same day that the patent application is filed is not considered to be before the application was filed and is, therefore, not prejudicial to the safe filing of a patent application and securing a subsequent patent.
Using International Time Zones
Sometimes it is possible to forward a patent application to a patent attorney for filing in a country which, due to the international dateline, is actually in a time zone equal to the date before the disclosure, thereby securing protection when, otherwise, all could have been lost.
The Patent Box is a government incentive for companies to apply a lower rate of Corporation Tax on profits earned from its patented inventions after 1 April 2013. Companies who may benefit from the Patent Box must be liable to Corporation Tax, and must make profits from exploiting patented inventions, where the patents have been granted by the UKIPO, the EPO, or some countries in the EEA. In addition, companies must own or be exclusively licensed, as well have undertaken qualifying development on them. Companies may also be eligible if they are a member of a group and qualifying development has been undertaken by another member of that group.
The 10% reduction in Corporation Tax will initially apply to 60% of a company’s trade directly relevant to the Patent Box for the tax year beginning 1 April 2013, but will apply to increasingly larger percentages of the relevant profit in subsequent tax years.