Our legal system provides certain rights and protections for owners of property. The kind of property that results from the fruits of mental labor is called intellectual property. Rights and protections for owners of intellectual property are based on federal patent, trademark and copyright laws and state trade secret laws. In general, patents protect inventions of tangible things; copyrights protect various forms of written and artistic expression; and trademarks protect a name or symbol that identifies the source of goods or services.

The details of this law, the protection provided, and the liability for unauthorized use or disclosure depends upon the State within which the reader resides. The law varies from State to State. However, the reader should know that a trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. (Restatement of Torts 757)

What Is A Patent?

A patent is a document, issued by the federal government, that grants to its owner a legally enforceable right to exclude others from practicing the invention described and claimed in the document. Congress allows this right, for a term ending twenty years from the date of filing of an application for patent, to encourage the public disclosure of technical advances and as an incentive for investing in their commercialization. Thus, the overall progress of technical innovation is favored, while at the same time inventors are rewarded for their specific contributions. Like other forms of property, the rights symbolized by a patent can be inherited, sold, rented, mortgaged and even taxed. When a patent expires, or is held invalid, the right to exclude the others ceases. The public is the ultimate beneficiary of the technical advance.

Under What Conditions Is A Patent Granted?

Congress has specified that a patent will be granted if the inventor files a timely application which adequately describes a new, useful and unobvious invention of proper subject matter. To be timely, an application must be filed within one year of certain acts (by the inventor or others) which place the invention in the hands of the public i.e., patented or published anywhere in the world, on sale or in public use in this country. This one-year grace period, however, is not available in most foreign countries.

A U.S. inventor who wants to obtain corresponding foreign patents must first file an application in the U.S. before any divulgation, whether in written or oral form, of the invention to the public. The description of the invention in the application must be complete enough to enable others to practice the invention. Moreover, the application must describe the best manner (“best mode”) known to the inventor of carrying out the invention.

The described invention must be new i.e., not invented first by another or identically known or used by others in this country or patented or published anywhere in the world before the actual invention date (not the application filing date). The invention also must be useful i.e., serve some disclosed or generally known purpose.

The requirement of unobviousness means that the differences between the invention and the prior public knowledge in its technical field must
be such that a person having ordinary skill in this field would not have found the invention obvious at the time it was made.

The proper subject matter of a patent is any product, process, apparatus or composition, including living matter such as genetically engineered bacteria or plants. Special provisions also permit patents directed to certain distinct and new varieties of plants (Plant Patent) and new original and ornamental designs for articles of manufacture (Design Patent). Purely mental processes, newly discovered laws of nature and methods of doing business are not proper subjects for a patent.

Why Obtain A Patent?

Most inventors seek a patent to obtain the actual or potential commercial advantages that go along with the right to exclude others. Given the high cost of research and development, the opportunity to recoup these costs through commercial exploitation of the invention may be the primary justification for undertaking research in the first place.

Patent rights can be commercially exploited in two basic ways: (1) directly, by the inventor’s practice of the invention to obtain an exclusive marketplace advantage (as where the patented technology results in a better product or produces an old product less expensively) and/or (2) indirectly, by receiving income from the sale or licensing of the patent.

It is important to note that a patent (i.e., the right to exclude others) does not give the inventor the right to practice the invention. The inventor can practice his invention only if by so doing he does not also practice the invention of an earlier unexpired patent. While only one patent can be granted on a particular invention, it is easy to see how more than one patent could be infringed by making a single product.

For example, consider that A has a patent on a new type of door and B invents an improved door of this type with a special lock. B could not sell the improved locking door since A’s patent broadly covers all doors of this type. On the other hand, A could not incorporate the improved lock in his basic door since B’s patent covers this combination. In these circumstances both A and B can be free to practice the best technology (locking door) only if each grants a patent license to the other.

The indirect exploitation of a patent may be exclusive, e.g., by selling all rights in the patent or granting an exclusive license. Licenses can be non-exclusive, allowing many parties, including the inventor, to practice the invention simultaneously. A patent may also provide commercial advantages in addition to the potential for an exclusive market position or licensing income. A patent often lends business credibility to start up ventures and can open doors to both technical assistance and financing necessary to bring a new product to market. An improvement patent may also provide the barter necessary to cross license any basic patents held by others which block the path to market.