Patent

Intellectual property law

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A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years in exchange for publishing an enabling disclosure of the invention. In most countries, patent rights fall under private law and the patent holder must sue someone infringing the patent in order to enforce their rights. In some industries patents are an essential form of competitive advantage; in others they are irrelevant.

The procedure for granting patents, requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims that define the scope of protection that is being sought. A patent may include many claims, each of which defines a specific property right. These claims must meet various patentability requirements, which in the US include novelty, usefulness, and non-obviousness.

Under the World Trade Organization's (WTO) TRIPS Agreement, patents should be available in WTO member states for any invention, in all fields of technology, provided they are new, involve an inventive step, and are capable of industrial application. Nevertheless, there are variations on what is patentable subject matter from country to country, also among WTO member states. TRIPS also provides that the term of protection available should be a minimum of twenty years.

Patents are given to inventors to stimulate the invention of new products. However, patents are also a source of corruption when they are resold to companies for price gouging, or when they are given for products developed with the help of government funding. Reforms to prevent price gouging and corruption could improve patent systems.

Definition

The word patent originates from the Latin patere, which means "to lay open" (i.e., to make available for public inspection). It is a shortened version of the term letters patent, which was an open document or instrument issued by a monarch or government granting exclusive rights to a person, predating the modern patent system. Similar grants included land patents, which were land grants by early state governments in the US, and printing patents, a precursor of modern copyright.

In modern usage, the term patent usually refers to the right granted to anyone who invents something new, useful and non-obvious. A patent is often referred to as a form of intellectual property right, an expression which is also used to refer to trademarks and copyrights, and which has proponents and detractors (see also Intellectual property § The term "intellectual property"). Some other types of intellectual property rights are also called patents in some jurisdictions: industrial design rights are called design patents in the US, plant breeders' rights are sometimes called plant patents, and utility models and Gebrauchsmuster are sometimes called petty patents or innovation patents.

The additional qualification utility patent is sometimes used (primarily in the US) to distinguish the primary meaning from these other types of patents. Particular species of patents for inventions include biological patents, business method patents, chemical patents and software patents.

History

The Venetian Patent Statute, issued by the Senate of Venice in 1474, and one of the earliest statutory patent systems in the world.]] Although there is some evidence that some form of patent rights was recognized in Ancient Greece in the Greek city of Sybaris, the first statutory patent system is generally regarded to be the Venetian Patent Statute of 1474. However, recent historical research has suggested that the Venetian Patent Statute of 1474 was inspired by laws in the Kingdom of Jerusalem that granted monopolies to developers of novel silk-making techniques. Patents were systematically granted in Venice as of 1474, where they issued a decree by which new and inventive devices had to be communicated to the Republic in order to obtain legal protection against potential infringers. The period of protection was 10 years. As Venetians emigrated, they sought similar patent protection in their new homes. This led to the diffusion of patent systems to other countries.

The English patent system evolved from its early medieval origins into the first modern patent system that recognized intellectual property in order to stimulate invention; this was the crucial legal foundation upon which the Industrial Revolution could emerge and flourish. By the 16th century, the English Crown would habitually abuse the granting of letters patent for monopolies. After public outcry, King James I of England (VI of Scotland) was forced to revoke all existing monopolies and declare that they were only to be used for "projects of new invention". This was incorporated into the Statute of Monopolies (1624) in which Parliament restricted the Crown's power explicitly so that the King could only issue letters patent to the inventors or introducers of original inventions for a fixed number of years. The Statute became the foundation for later developments in patent law in England and elsewhere.

Important developments in patent law emerged during the 18th century through a slow process of judicial interpretation of the law. During the reign of Queen Anne, patent applications were required to supply a complete specification of the principles of operation of the invention for public access. Legal battles around the 1796 patent taken out by James Watt for his steam engine, established the principles that patents could be issued for improvements of an already existing machine and that ideas or principles without specific practical application could also legally be patented.

The English legal system became the foundation for patent law in countries with a common law heritage, including the United States, New Zealand and Australia. In the Thirteen Colonies, inventors could obtain patents through petition to a given colony's legislature. In 1641, Samuel Winslow was granted the first patent in North America by the Massachusetts General Court for a new process for making salt.

The modern French patent system was created during the Revolution in 1791. Patents were granted without examination since inventor's right was considered as a natural one. Patent costs were very high (from 500 to 1,500 francs). Importation patents protected new devices coming from foreign countries. The patent law was revised in 1844 – patent cost was lowered and importation patents were abolished.

The first Patent Act of the U.S. Congress was passed on April 10, 1790, titled "An Act to promote the progress of useful Arts". The first patent under the Act was granted on July 31, 1790 to Samuel Hopkins for a method of producing potash (potassium carbonate). A revised patent law was passed in 1793, and in 1836 a major revision to the patent law was passed. The 1836 law instituted a significantly more rigorous application process, including the establishment of an examination system. Between 1790 and 1836 about ten thousand patents were granted. By the American Civil War about 80,000 patents had been granted.

Major occurrences in a Patent Law: Claims and Infringement

Patents give limited legal monopoly rights to inventors or their assigns, but the scope of those rights depends on the quality and wording of the patent itself. There are two critical times for determining whether a patent passes muster under the statutory standard:

• when the application is submitted to the scrutiny of an examiner at the Patent and Trademark Office (PTO) to determine whether it should issue as a patent, and

• when litigation arises concerning the already-issued patent.

Despite the fact that an issued patent enjoys a presumption of validity, litigation often presents the more rigorous test for a patent because an accused infringer will often, as a defense to infringement, attack the validity of the patent being asserted. Litigation also differs from examination in that the patent claims are compared, not only to the prior art, but also to the accused device or process to check whether the device constitutes the invention ( Nelson, 2003.)

Patent claims

Let us start with the definition: The specific attributes of novelty of the item, for which a patent is sought, are called claims.

Today, patents must contain claims, and the claim language has become the central focus of both patent drafting and patent litigation. The claims are made up of formal—sometimes technical—language, carefully chosen to set forth the legal parameters of the invention. The claim language is scrutinized and compared to other inventions, publications, and other kinds of prior art to see if the invention is truly novel and not obvious. The claims are also scrutinized to determine infringement—whether or not the subject matter of the accused device falls within the scope of the claims (ibid. 2003.)

Claims generally consist of three parts:

• a preamble;

• a transition phrase such as "comprising"; and

• a list of components, steps, and relationships that the applicant deems essential to defining the invention.

Each claim is written in the form of a sentence.

EXAMPLE: A simple claim of an apparatus for keeping a human head dry during a shower, could read as follows.

"...An apparatus for keeping a human head dry during a shower, comprising:

*(a) a waterproof material larger than the head,

*(b) connected to an elastic material at the edge of said waterproof material,

*(c) said elastic material allowing for insertion of the head,

*(d) said elastic material keeping said waterproof material snuggly fitted to, and enclosing the head..."

By virtue of authorship, the drafter of a claim has full discretion in organizing a claim into subparts, and the author also has the option of numbering the subparts, of spacing them, or distinguishing them in some other way (ibid. 2003.)

Infringement

Patent litigation arises when a patent holder, or patentee, elects to assert her patent rights against someone else that she believes is producing or selling a device that is identical to, or resembles very closely, her patented device.

The patent provides notice to the public of the rights of the patentee, but once the PTO has issued a patent, it is up to the patentee to enforce that patent through civil actions against infringers. The patentee has an incentive to sue infringers because they may erode the rightful limited monopoly and destroy the economic value of the patent.

Infringement can be relatively easy to detect and defeat when the accused product is identical to the patented product.

However, two products are never placed side by side to determine infringement. Rather, the accused product is compared to the claims of the patent. Because language is inherently imprecise, this comparison of device to language is a great source of uncertainty in the law (ibid. 2003.)

And just because the claim language can be ambiguous and subject to more than one interpretation, the court interprets the claim language and sets forth which of the plausible interpretations will be used. Once the court has completed this interpretation process, it is up to the jury to compare the accused device to the patent claims as construed by the court. If the jury finds that the accused device has all the requirements of a claim, it finds literal infringement.

This description of the process for determining literal infringement has used the word "requirements" to describe the components of a claim. Note that the court aids jury members to determine what those requirements are before the jury compares the patent claims to the accused device to decide whether infringement has occurred. Both the claim interpretation (or claim construction) by the court and the comparison by the jury are potential sources of uncertainty in the law (ibid. 2000.)

The process of claim interpretation during the patent infringement litigation–which, as we heard above, may be a potential source of "uncertainty in the law"—has three additional procedural methologies that help to zero on the correct court ruling. These are known as: The Doctrine of Equivalents, The All Elements Rule, and Prosecution History Estoppel.

• Doctrine of Equivalents

Under current law, infringement may also occur under the doctrine of equivalents. If literal infringement were the only kind of infringement, it would perhaps be easier to predict the outcome in infringement actions because the uncertainty would lie principally in the various possibilities of claim construction. However, restricting infringement to literal infringement would also provide opportunities for third parties to commit fraud on patents.

EXAMPLE: Inconsequential changes in the patented device, which though adding nothing, would take his imitation beyond the reach of the law.

The doctrine of equivalents is used to prevent this kind of counterfeiting. Originating in 1853, this doctrine was explained a century later by Justice Jackson:

"…….Equivalence, in the patent law, is not the prisoner of a formula and is not an absolute to be considered in a vacuum. It does not require complete identity for every purpose and in every respect……."

In the same tenor one of the recent court rulings states, that:

”… the specification and prosecution history of a patent are parts of the intrinsic record that are to be primarily used to interpret claim meaning…and that dictionary definitions can be helpful in interpreting ambiguous claim terms but they “do not require, or even allow, the Court to disregard the intrinsic record…..” (Gelman, 2005)

Thus the doctrine of equivalents is used to expand patent rights beyond their literal boundaries to prevent fraud. A product infringes through the doctrine of equivalents if it does not contain all the exact requirements in the claim language, but very nearly so. Infringement under the doctrine of equivalents is also called nontextual infringement because infringement can be found even though the literal textual requirements are not met.

• The All Elements Rule

The doctrine of equivalents is meant to prevent fraud on the patent system, but this doctrine is also susceptible to exploitation. Just as unscrupulous infringers can attempt to defraud a patentee (and can be thwarted by the doctrine of equivalents), so can a patentee defraud the public by attempting to extend patent rights beyond reasonable bounds through the doctrine of equivalents.

Patent law has developed restraints on the doctrine of equivalents to prevent this problem. One fundamental restraint is the All Elements Rule.

The All Elements Rule refines the application of the doctrine of equivalents in two important ways:

• First, it requires that the equivalents analysis focus on matching parts of the claim language to equivalent parts or components (elements) of the accused device.

This aspect of the All Elements Rule comes from the word "elements" in the rule. Thus, the All Elements Rule dictates that the way to determine if a product infringes through the doctrine of equivalents is not to examine the product as a whole to see if it resembles the claimed invention. Rather, the analysis must be a disciplined and systematic one, where each element is compared; the function/way/result analysis must be made "element by element."

• The second important way that the All Elements Rule refines the application of the doctrine of equivalents is that it requires each piece or component of the claimed invention to have a corresponding piece or component in the accused device.

Thus, it requires all the claimed elements to be present in the accused device. This aspect of the All Elements Rule comes from the word "all" in the rule. But this aspect of the doctrine of equivalents necessarily dovetails with literal infringement: each of the requirements set forth by a claim must be met either literally or by an equivalent in order for infringement to be found.

In other words, a patentee will not succeed in an infringement action if the accused product lacks one of the claimed elements completely, even if the two products generally accomplish the same result in substantially the same way.

Note that the All Elements Rule helps the accused infringer because it necessitates that each requirement of the claim have a corresponding counterpart in the accused device; the patentee may not successfully assert that the accused device is generally similar to the claimed device without showing this correspondence.

• Prosecution History Estoppel

The doctrine of equivalents is thus restrained by the All Elements Rule, but this is not the only safeguard the law places on that doctrine.

A second restraint on a patentee's use of the doctrine of equivalents to unfairly expand patent rights is called prosecution history estoppel.

If a patent applicant—during the course of prosecution—is forced by the examiner to limit broad claims (thus relinquishing subject matter) in order to meet the requirements of novelty, nonobviousness, and so forth, prosecution history estoppel prohibits holder from later reclaiming the relinquished subject matter. If the applicant limits the claims by making limiting arguments to the patent examiner, the result is argument-based estoppel.

If the applicant limits the claims by amending them, the result is amendment-based estoppel. The limitations made during prosecution thus remain in force, and the correspondence between patent attorney and patent examiner serves as a record of these limitations.

Corporations, Assigns, Public Money, and Corruption

When U.S. patents began, it was assumed that patents would be held by individuals. The U.S. Founders specifically forbid operation of the East India and Hudson's Bay companies because of their quasi-monopoly status and ties to the King of England and the cronyism that awarded profits to shareholders. At the end of the 19th century the Supreme Court decision on Santa Clara County v. Southern Pacific Railroad Company determined that a corporation is a legal "person" with respect to economic rights. Thus, corporations could develop, hold, or purchase patents. This opened a pandora's box of ethical issues regarding patents, particularly as related to serving the public interest.

One prominent ethical problem is related to patents on medicine, when people are very sick and perhaps will die without it. They are in a very vulnerable position and will often pay virtually any price to stay alive. There are many examples of pharmaceutical companies taking advantage of such consumers and charging hundreds or thousands of dollars for treatments which, on a competitive market might sell for a few dollars. This is particularly true of publicly-traded stock companies, whose primary goal is profit for investors, and conscience does not play an important role. If the situation is serious enough, as in the case of insulin, or HIV-AIDS treatments, the government may intervene. Or, in the case of the COVID-18 vaccines or treatments, governments, in collusion with manufacturers, will pay an inflated price and hide the long-term costs to citizens.

A second problem is a company buying patent rights from the inventor with the intention of raising the price. While the inventor may receive an acceptable personal windfall, the trading of patents does not serve society and was the original purpose of the patent. The patent buyer neither invented the product nor served the public interest, but profited from buying monopoly status at everyone else's expense. This is an example of the abuse or hijacking of the patent system.

A third ethical problem is the patenting of a product that received development funding from the government. In this case, taxpayers is paying part of the cost of the research and, arguably the developer is working for the government. Government-developed products should be in the public domain, and it is unethical for individuals to get large payouts at public expense. Nevertheless, government agency elites and the corporations they are supposed to regulate often collude to profit by patenting such products. For example, Merck sold millions of doses of Molnupiravir to governments at $700 per treatment, when the production cost of the drug is about $17. Merck did not even develop this drug, but bought the patent on the drug that was developed with more than $30 million in research grants to an organization affiliated with Emory University. Ethically, this drug should have been denied the patent and put in the public domain, letting the society that paid for the drug reap the benefits.

Besides, denying patents to products developed with government subsidies, there are other ways that governments could check against price gouging while providing a significant windfall to the developer:

1. Require mandatory subrights sales to other producers. A common fee of 10% royalties for subrights would only raise the market price of the product by 10%, essentially giving the patent holder a 20% windfall on every product sold by another producer.
2. Allow the government to buy the patent for a significant price, by double or triple the development cost to the producer. This would make the product a generic drug in the public domain while giving the patent holder a windfall.

Both of these strategies would serve the interests of the developer and society as a whole while preventing unethical price gouging.

Conclusion

The plate of the Martin ejector seat of the military aircraft, stating that the design is covered by multiple patents in Britain, South Africa, Canada and "others." Dübendorf Museum of Military Aviation.

Patents can generally only be enforced through civil lawsuits (for example, for a US patent, by an action for patent infringement in a United States federal court), although some territories (such as France and Austria) have criminal penalties for wanton infringement. Typically, the patent owner will seek monetary compensation for past infringement, and will seek an injunction prohibiting the defendant from engaging in future acts of infringement. In order to prove infringement, the patent owner must establish that the accused infringer practices all of the requirements of at least one of the claims of the patent (noting that in many jurisdictions the scope of the patent may not be limited to what is literally stated in the claims, for example due to the "doctrine of equivalents").

An important limitation on the ability of a patent owner to successfully assert his or her patent in civil litigation is the accused infringer's right to challenge the validity of that patent. Civil courts hearing patent cases can and often do declare patents invalid. The grounds on which a patent can be found invalid are set out in the relevant patent legislation and vary between countries. Often, the grounds are a sub-set of the requirements for patentability in the relevant country.

Patents in force in 2000

The vast majority of patent rights, however, are not determined through litigation, but are resolved privately through patent licensing. Patent licensing agreements are effectively contracts in which the patent owner (the licensor) agrees not to sue the licensee for infringement of the licensor's patent rights, usually in return for a royalty or other payment. It is not uncommon for companies engaged in complex technical fields to enter into dozens of license agreements associated with the production of a single product. Moreover, it is equally common for competitors in such fields to license patents to each other under cross-licensing agreements in order to gain access to each other's patents. A cross-license agreement could be highly desirable to the mousetrap developers discussed above, for example, because it would permit both parties to profit off each other's inventions.

There are four primary incentives embodied in the patent system: the incentive to invent in the first place; the incentive to disclose the invention once made; the incentive to invest the sums necessary to experiment, to produce, and finally get the invention on the market; and the incentive to design around and improve upon earlier patents.

• First, patents provide incentives for economically efficient research and development (R&D). Many large modern corporations have annual R&D budgets of hundreds of millions or even billions of dollars. Without patents, R&D spending would be significantly less or eliminated altogether, limiting the possibility of technological advances or breakthroughs. Corporations would be much more conservative about the R&D investments they made, as third parties would be free to exploit any developments. This second justification is closely related to the basic idea underlying traditional property rights: why build a house if another person could freely occupy it?

• Second, in accordance with the original definition of the term "patent," patents facilitate and encourage disclosure of innovations into the public domain for the common good. If inventors did not have the legal protection of patents, in many cases, they would prefer or tend to keep their inventions secret. Awarding patents generally makes the details of new technology publicly available, for exploitation by anyone after the patent expires, or for further improvement by other inventors. Furthermore, when a patent's term has expired, the public record ensures that the patentee's idea is not lost to humanity.

• Third, in many industries (especially those with high fixed costs and either low marginal costs or low reverse engineering costs — computer processors, software, and pharmaceuticals being prototypical examples), once an invention exists, the cost of commercialization (testing, tooling up a factory, developing a market, etc.) is far more than the initial conception cost. (For example, the internal "rule of thumb" at several computer companies in the 1980s was that post-R&D costs were 7-to-1). Unless there is some way to prevent copies from competing at the marginal cost of production, companies will not make that productization investment.

• Fourth, patent rights create an incentive for companies to develop workarounds to patented inventions, thereby creating improved or alternative technologies that might not otherwise have been developed.

One side effect of modern-day patent usage is that the small-time inventor can use the exclusive right status to become a licensor. This allows the inventor to accumulate capital quickly from licensing the invention and may allow rapid innovation to occur because he or she may choose to not manage a manufacturing build-up for the invention. Thus the inventor's time and energy can be spent on pure innovation, allowing others to concentrate on manufacturability. On the other hand, licensing to a large capital investment-financed firm can lead to unethical practices that cause price gouging and even public harm. The patent system needs laws to reform and check the uses of the patent system that have emerged, especially with companies only driven by stock investor profit.

Notes and References

• [1] Part of the impetus for the revision was the adoption of the United States Code system in 1926. When the code was established prior laws had been compiled into it but nor re-enacted. Subsequently it was felt desirable to clean up and re-enact each title of the code as positive law. In 1952 it was patents turn.
• [2] The definition specifically stated that "patentability shall not be negatived by the manner in which the invention was made," apparently to ensure that issues of obviousness were assessed objectively and that invention did not have to be the result of a "flash of genius."
• [3] This provision was intended as a partial statutory overruling of the Supreme Court's decision in Halliburton Oil Well Cementing Co v. Walker 71 USPQ 175 (1946) which had held that any definition of a component of a claim by the function that it was to perform lacked clarity and constituted an "overhanging threat" which could serve to "frighten[] from the course of experimentation ... inventive genius [which] may evolve many more devices to accomplish the same purpose."
• Gelman, Lauren, “Claim Term is Defined by Specification and Prosecution History rather than Dictionary Definition,” Stanford Law School, The Center for Internet and Society, 2005
• Ladas & Parry, LLP, “A Brief History of the Patent Law of the United States” - revised 7/12/2003
• Nelson, Philip, M.,”Definition for "limitation" in the context of prosecution history estoppel and the all elements rule…,” Brigham Young University Law Review, 2003
• Twain, Mark, A Connecticut Yankee in King Arthur's Court, 1889

External links

• List of Patent Offices maintained by WIPO

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