Patents: An Overview and Legal Aspects

Patents: An Overview and Legal Aspects

Rita Ghial (Panjab University, India)
Copyright: © 2017 |Pages: 19
DOI: 10.4018/978-1-5225-2414-4.ch001
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Abstract

In this chapter, we review the legal effects of patent rights and specifically address the legal aspects of the patent system. The production and dissemination of new knowledge is fraught with market failures because knowledge is a public good. Patents provide a second-best solution to the resulting appropriability problem. We review the main benefits, types and costs of the patent system, focusing on the role that patents play in providing incentives for innovation, in promoting the dissemination of knowledge, and in helping technology transfer and commercialization of new technology. From a more normative perspective, we address the questions of what the features of an optimal patent system are and whether the patent system is socially desirable. We examine the problem of the optimal length and scope of patent protection, both for the case of a single innovation and for the richer case of cumulative innovations. Finally, we review the recent changes in patent regime and it is based on the view that stronger patents would boost innovation and the issues related to how the patent system influences the market structure and research and development investments.
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Introduction

Intellectual property is the intangible product of the mind’s work. The United States and other developed nations generally recognize four different routes for protecting intellectual property: copyright, trademark, trade secret and patent (Auerbach, 2006). A patent is a document, issued, upon application, by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent. Patents play an increasingly important role in innovation and economic performance (Peters, 2006). Between 1992 and 2002, the number of patent applications filed in Europe, Japan and the United States increased by more than 40% (Brown, 2009). The increasing use of patents to protect inventions by businesses and public research organisations is closely connected to recent evolutions in innovation processes, the economy and patent regimes (Durham, 1999). Scientific and technological advances have created new waves of innovation, notably in information and communications technology (ICT)1 and biotechnology, and innovation processes themselves have become centred less on individual firms and more dependent on interactions among global networks of actors in the public and private sectors (Moursund, 2005). Shifts in the legal and regulatory frame work of patent regimes have resulted in more expansive domains of patentable subject matter (patent regimes in many countries now include biotechnology and software), and more robust and more valuable patents (Arnold, 2007). Like a deed to real property, most governments require a patent to specify the metes and bounds of the property claimed to constitute the invention. This legal description of the invention is found in the patent’s claims. Unlike real property whose borders can be measured with precision, the precise boundaries of an invention cannot be precisely determined. Thus, a patent often presents a set of claims of varied scope which extend inward from a broad description of the invention to a narrow description of the patent’s core invention (Pilani. Entrepreneurship Development and IPR unit, n. d.). A patent endows its owner with a limited term of years in which the patent owner may exclude others from making, selling, using or importing the invention claimed in the patent. It is important to recognize that a patent provides only a right to exclude others from practicing an invention (i.e., manufacture, use, sale or importation). It does not confer an affirmative right on the patent holder to actually make, use, sell, or import the invention claimed in the patent. The patentee’s ability to practice the patented invention may be restricted by the patents of others (Pilani. Entrepreneurship Development and IPR unit, n. d.).

The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States.2 What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention. Once a patent is issued, the patentee must enforce the patent without aid of the USPTO. There are three types of patents:

  • 1.

    Utility patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof;

  • 2.

    Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture; and

  • 3.

    Plant patents may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant (Khaliq & Winarski, 2014).

A patent has two important functions:

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