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Overview of Patents

5. What are patents or patent rights?

A patent is a form of intellectual property protection that covers products, processes, designs, and other creations (collectively “invention”). A patent conveys a right to exclude others from making, using, selling, or importing the covered invention. Patent rights are basically rights to exclude others. They protect against copies or unauthorized reproductions of the patented item. Patent rights are the subject of federal law, and states may not grant or otherwise regulate patents. The US Patent and Trademark Office (USPTO) is a federal agency that administers the patent system. It reviews and grants petitions to secure patent rights.

•    Note: Registering a patent with the US Customs and Border Protection Agency may help prevent infringement, such as bringing counterfeit goods into the US.

Consistent with other forms of intellectual property, the purpose or objectives of the patent system is to record and disclose patents to the public. The trade off for public disclosure of the invention process is protection of limited rights in the property. The effect is to promote or provide an incentive for creation and innovation. The belief is that innovation is a benefit to society. Providing an individual the right to exclude others from reproducing her creation for commercial purposes allows her to capitalize on her creation without competition. Patent rights last for a statutory period of time (14 or 20 years). Contrary to popular belief, patent rights do not confer the right to make, use, or sell a patented creation. These rights are subject to any laws, regulations, ordinances, etc., that pertain to and may limit rights to use this type of creation (such as environmental regulations, licensing, antitrust rules, consumer regulations, private contracts, etc.). Further, the patent holder may not use her patent in a manner that infringes on the rights of others.

•    Note: Patent protection does not stop a valid purchaser of the item from using the item. Further, it does not stop that individual from reselling the item. It does, however, stop the individual from manufacturing the item, selling the copied item, or (in some instances) using the unauthorized copy. Patent rights provide a specific period of protection that varies depending upon the type of patent. After the expiration of that time, anyone can use, produce, or sell the patented subject-matter (i.e., it enters the “public domain”).

•    Example: BigPharm Corp buys the patent rights to a new drug. It spends over $1 Billion on research and development. Once the clinical trials are complete and the drug is FDA approved, BigPharm releases the drug to the public. Other drug companies are prevented from reproducing the drug and selling it for a 20-year period. In many industries (such as pharmaceuticals) it is imperative to allow creators the ability to recuperate their costs before allowing competitors to capitalize by copying their creation.

•    Discussion: How do you feel about the government granting individuals the exclusive right to make, use, or sell their invention? Why do you think patent rights only allow the ability to exclude others?

•    Practice Question: Mandy is a metal worker. She builds a new machine for bending metal. If Mandy is considering starting a business manufacturing and selling the machine, what are the advantages of pursuing patent protection?

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