Patenting, etc

Patenting, etc., Management of Technological Innovation, KV Patri

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Patenting, etc.


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Management of Technological Innovation

Lesson 9Patenting, etc.


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Patent: The Inventor’s MonopolyIn economic terms, the main feature of a patent is that it

confers a temporary monopoly upon the inventor. Whether that monopoly has any economic value depends first, on whether the invention is developed into a working innovation. Since a large number of patented inventions inventions never get beyond being registered by the Patent Office, it is obvious that in the judgment of inventors or financiers they are not worth developing. However, there is no assurance that judgments about the potential value of a patent are correct. It must be noted that some patents have been picked up much later and turned into successful innovations.


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Patents provide protection• A patent is defined as the right to prevent

others from making, using, selling, or importing a given invention.

• Patents are more effective in protecting product innovations than process innovations.

• Patent protection is valued higher in some industries (e.g. chemical-related because it is more difficult invent around a clearly stated chemical formula than round other forms of innovation) than others.


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If in doubt, patent“On 10 March 1875 Alexander Graham Bell called

to his assistant ‘Mr. Watson. Come here, I want you’—the surprising thing about the exchange being that it was the world’s first telephone conversation. Excited by their discovery, they demonstrated their idea to senior executives at Western Union. Their written reply, a few days later, suggested that ‘after careful consideration of your invention, which is a very interesting novelty, we have come to the conclusion that it has


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no commercial possibilities . . .we see no future for an electrical toy.’ Within four years of the invention there were 50,000 telephones in the USA and within 20 years there were 5 million. In the same time the company which Bell formed, American Telephone and Telegraph (AT&T) over the next 20 years grew to become the largest corporation in the USA, with net worth of $1000/share. The original patent (number 174455) became the single most valuable patent n history.”


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Nationalities of top 20 firms in US patenting

Field Europe Japan USAIndustrial chemicals 8 1 11

Fine chemicals 7 1 0

Defense-related 6 0 14

Motor vehicles 4 11 5

Electrical machinery 4 6 10

Telecommunications 4 6 10

Non-electrical machinery 3 9 8

Electronic capital goods 3 8 9

Materials 3 4 13

Raw materials based technologies 3 1 16

Electronic consumer goods 2 14 4


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Patent search can be used for technological monitoring and competitor analysis

(1985-94)For instance, if you are interested in electronic computers,

you can access records of US patents and look for nine-digit subclass entitles ‘Electrical Computers: business practice and management, finance (e.g. securities, commodities). Patenting began in this class in the 1970s, but only took-off in the mid- 1980s, increasing from five patents granted in 1985 to 49 in 1993. Technological entrants into the field have been numerous, with individually owned patents (in fact, mainly very small firms) accounting for a quarter of the total.


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“The more the knowledge about a particular technology can be codified, i.e. described in terms of formulae, blueprints and rules, the easier it is to transfer, and the more speedily and extensively such technologies can be diffused. Knowledge that cannot easily be codified, often termed ‘tacit is, by contrast, much more difficult to acquire, since it can only be transferred effectively by experience and face-to-face interactions. Hence it might be preferable to develop tacit technologies in-house. In the absence of intellectual property rights (IPR) or patent protection, tacit technologies provide a more durable source of competitive advantage than those which can easily be modified.”


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Guinness was the first to develop “a small plastic, gas-filled, device that gave canned beer the same creamy head as keg beer. This ‘widget’ initially provided the company with a source of competitive advantage and greater sales, but soon it was copied by others and Guinness lost its competitive advantage. This was because the technology was easily codifiable and hence varied.”


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Patentable InventionsAccording to US Patents Office, in order to be eligible for

patent protection, an invention must be

(i) new and unobvious (the former involves much cross checking, the latter is a matter of interpretation),

(ii) not previously achieved by someone else,

(iii) useful and important (both matters of interpretation),

(iv) not injurious to public or moral health.

Patented inventions can be ridiculous (a coin-holding pocket comb) or sublime (a method for removing radioactive contaminants).


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Utility patents may be granted to person who invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. There are three basic requirements for utility patents; Nonobviousness is judged by taking the frame of mind of an average person in a given field with knowledge of all prior art (previous knowledge and inventions).

Novelty simply means that you cannot patent something that is already known or patented.

Utility patents do not apply to theoretical phenomena or ideas, the invention/discovery must be useful.


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Patentable biotechnology inventions: A process of genetically altering or otherwise

inducing a single or multi-celled organism to: Express an exogenous nucleotide sequence

Inhibit, eliminate, augment, or alter expression of an endogenous nucleotide sequence

express a specific physiological characteristic not normally associated with that organism

Cell fusion procedures yielding a cell line that expresses a specific protein (eg. monoclonal antibody)

A method of using a product produced by the above manipulations


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Plant patents may be granted to anyone who has invented or discovered and asexually reproduced any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber-propagated plant or a plant found in an uncultivated state. Asexually propagated plants are those that are reproduced by means other than from seeds, such as by the rooting of cuttings, by layering, budding, grafting, inarching, etc. The purpose of asexual reproduction is to establish the stability of the plant. The term "tuber" is refers to a short, thickened portion of an underground branch. Such plants covered by the term "tuber-propagated" are the Irish potato and the Jerusalem artichoke. Algae and macro fungi are regarded as plants, but bacteria are not. Grant of a patent for a plant precludes others from asexually reproducing or selling or using the patented plant. A plant patent is regarded as limited to one plant, or genome. A sport or mutant of a patented plant would not be considered to be of the same genotype, would not be covered by the plant patent of the parent plant, and would be separately patentable.


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The third category of patents, design patents, applies to any new and nonobvious ornamental design for an article of manufacture. The design patent protects only the appearance of an article, but not its structural or functional features. This has little application in biology.


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• When a utility or plant patent expires, the subject matter of the patent becomes public domain.

• A provisional patent allows you to delay filing for a patent for up to a year. A provisional patent does not require any formal claims, oaths, declarations or information of prior art.


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A provisional patent must contain a written description of the invention, any drawings necessary to understand the invention, and the names of all the inventors. A provisional patent must by applied for within one year following the date of first sale, offer for sale, public use, or publication of the invention. The term of a patent does not include the provisional patent period, thus a patent may last 21 years from the time of provisional patent application.


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US Patent Procedure1. Petition: Inventor submits a standardized legal document

containing the specifications of the invention. These include the general nature of the invention, the purpose for which it is intended, appropriate descriptions and drawings, and a list of claims made for the idea. Payment of various fees is connected with successive steps in the proceedings.

2. Notice of Allowance: Upon receiving a petition, the Patent office classifies it and searches previous claims under the particular classification. If no match is found, and other requirements are met, a notice of allowance is issued. Under certain conditions, amendments to the petition may be possible.


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3. An inventor whose petition has been rejected may carry his or her case to the Board of Appeals of the Patent Office, and from there to the Court of Customs and Patent Appeals.

Each of the above steps, from the preparation of the petition in proper form to any possible appeal, requires the counsel of a patent attorney.

Once a patent has been issued, it is out of the jurisdiction of the Patent Office. Infringement and other cases fall within the jurisdiction of the regular courts.

Such terms as ‘patent applied for’ or ‘patent pending’, when attached to new products, have no legal significance.

Patenting laws countries are anything but uniform.


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A lesson from Edison’s patentOn 27 January 1880 Thomas Edison was issued a patent on

the first practical light bulb. It covered, as he stated in his first claim, ‘An electric lamp for giving light by incandescence, consisting of a filament of carbon of high resistance, made as described, and secured to metallic wires, as set forth.”

Note that you could easily legally ‘infringe’ on this patent by inventing and marketing a light bulb using a filament made up of some other material since Edison’s claim very narrowly referred to carbon filament. Edison rectified the situation in subsequent patents.


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How much does a patent cost?

There are two price schedules for patents. Small entities (individuals, non-profit institutions and businesses with less than 500 employees) pay half the normal fee. The basic filing fee is currently $760 ($380 for small entities), and the plant patent filing fee is $480. The fees due upon issue of a patent are $1,210 for utility patents and $580 for plant patents. The maintenance fees for patents are $940 due at 3.5 years, $1,900 at 7.5 years and $2,910 at 11.5 years. Other miscellaneous fees may apply. A provisional

patent costs $150.


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While it is possible to file a patent without a lawyer, it may not be advisable. One must weigh the savings of self-filing against the benefits of a professional prepared patent that may fare better in response to challenges. Professionally prepared patents may range from $2,000 to $15,000 depending upon the complexity of the patent.


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Patent Notebook

Patents are not necessarily awarded to the first to file, but sometimes awarded to the person who was first to invent. A good laboratory notebook can help protect against claims of prior invention, or to prove prior invention.


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Some of the qualities of a good notebook are: Bound and numbered pages

Dates when an idea was formed and work begun and completed recorded

Initial statements of objectives prior to experiments

Full citations of standard protocols

Test results attached to notebook, signed and dated across added page and underlying notebook page.

Conclusions and evaluation of results

• Every page signed and dated by inventor and a witness

Documents

Patenting, etc