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Investment And Intellectual Property: Patent

Patent refers to the exclusive rights granted to an inventor by the national government of a country. A patent is granted by the government to its inventor or assignee upon the public disclosure of an invention.  The requirements to grant a patent, the procedure to grant it and the extent to which its rights are given to the inventor vary largely from country to country.  Usually a patent can be applied for by the inventor for a useful application of his invention at an industrial scale which is new and non obvious. Patents are usually awarded for various technological inventions. Patents are of two types, viz. utility patents and industrial design patents. A normal patent grants its inventor exclusive rights for a period of twenty years. The exclusive rights granted to the applicant prevent others from distributing, copying, making use of the invention without proper permission from its inventor.

Importance of Patents

Patent usually refers to a right granted to anyone who discovers or invents any new useful thing, or process. A patent enables the holder to prevent others from using, copying, distributing his innovation/discovery without his permission. Different governments have different procedures for granting patents. Patents are granted for inventing new technology or process, for disclosing the invention made, investing and to produce and market the invention. These reasons for the importance of patents are as follows:-

Patent is granted to motivate for the economically efficient research and development. This importance of patents can be clearly seen through a recent study. If Research and development projects are inputs and patents are outputs, recent studies show that large numbers of companies are investing huge sums of money into research and development of new technology. Without patents, research and development would have no importance thereby reducing the number of new technologies invented. Without patents large companies would greatly limit their finances to the research and development department.

Patents provide legal protection to the inventors and their inventions. Patents are meant to encourage disclosure of new inventions to the public while safeguarding the interests of the inventor. Patents provide the inventor with powers that enable him to prevent anybody from using, manufacturing, distributing his innovation without his consent. This aims to help provide legal security which in turn helps motivate the inventors in bringing out their inventions in public without the fear of being exploitation. Moreover when a patent’s term is over (usually it is twenty years) a public record ensures that the inventor’s idea is not lost.

Patents prevent duplication of the same technology. This importance of patent is widely visible in the reverse engineering industries, software industries, etc. In such industries, the cost of commercializing a product can far exceed the cost of its initial research and development. Unless there is a means to prevent copies of the same product at marginal costs, this cost of commercializing the product cannot be recovered. If this cost of commercializing the product cannot be recovered then companies will hardly invest in producing the product at mass scale.

Process of Patent Registration

An application for patent can be said as filed when it is pending at patent office for approval or grant of patent for the said invention. An application made for patent consists of summary about invention, for which patent application is filed, and all the official forms require for filing that application at patent office.

To get a patent on any invention, one need to file an application at patent office with jurisdiction and one has to specify geographical area over which it needs to be covered by patent. Once all the specifications are met with patent laws of national body, patent can be granted for that invention for the said period. A patent application can be divided into two parts, viz.

  • Description of the invention, for which patent is required, all documents related to invention.
  • The request for legal privileges, which is granted once application is considered as well founded.

An application for patent can be constricted to single country, called as national patent application, or it can cover many countries, called as regional patent application, depending on where it is filed.

National application is filed at a national patent office such as UK patent office, which in turn files it at international office and regional patents applications are those, in which application is filed at international patent office such as European patent office. The WIPO (World Intellectual Property Organization) operates PCT (Patent Cooperation Treaty) which provides centralized application process. It enables the inventor to file an application for patent in single language and he can make application in any other region (contracting to PCT) at later day and for that second application also, the application date will be same as that of original application date.

International laws on Patent

Patent is set of rights granted to an inventor by national government for some time period in exchange of public disclosure of that invention. Patent is right provided to inventor for his invention, so that nobody else can reproduce his invention or use his invention without prior permission and for usually 20 years from filling date.  The laws for patents vary from country to country. The patents are granted by and enforcement of patents is governed by national laws as well as international laws on patents.

International laws on patents are the general guidelines or some basic set of rules which all countries and its people should follow.  A key convention related to patent was accepted as guideline for international patent law which is called as Paris Convention for the protection of industrial properties, was signed in 1983. It sets out basic rules related to patents but does not have direct legal effects in national jurisdictions. Most significant point in this convention is provision of right to claim priority, i.e. after one has filed its claim for patent in any member state of Paris convention, he can fill application for patent in any other member state within certain period (12 months) and application date of that application will be regarded as same as first application.

The WTO (World Trade Organization) is particularly active in this area and has proposed TRIPs agreement, which has been successful in providing forum for countries to define internationally accepted laws on patents. Agreement to TRIPs clauses is one of the few thing, that require if any country wants to make any transaction with WTO. So basically its compliance is taken as important by many countries. This has also led to or forced many developing nations to change their national laws on patents as per international guidelines for making patent laws.