Patenting, Innovations and copyright
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Patenting, Innovations and copyright

Patent• A Patent is an exclusive right to exploitcommercially a certain invention. Thegovernment grants the patent right to theapplicant if certain terms stipulated by thepatent law have been met:- Inventive step- Novelty– Industrial applicability

Patent...• Inventive step means that the invention isnot obvious for a person skilled in the art.Novelty means that the invention has notbeen public available or not been publishedbefore. Industrial applicability means thatthe invention must be reproducible, i.e.whoever has necessary means can producethe invention according to the description ofthe patent application.

Patent...• A patent gives its proprietor an exclusiveright to exploit the invention but only forlimited time. Its maximum validity (inFinland) is twenty years from theapplication date, providing that annualmaintenance fees are paid.

Patent…• Patent right covers only certain country, i.e.exclusivity is valid only in the countrywhere the patent has been applied for andwhere the maintenance fees have been paid.The right must be sought literally from thenational patent office (in Finland from theNational Board of Patents andRegistrations, PRH).

Patent policy• Patent policy is or it should be an essentialpart of a corporate business strategy. Theaim is to protect products and companyimage against imitators and potentialinfringes. Also an important aim is to enternew markets and defend existing ones.

Patent policy...• Patent policy assists the company or theinventor to create barriers against possiblecompetitors and to increase market share ofa patented product.

Why to apply for a patent?- to obtain exclusivity for own product- to gain foothold in the market from the competitors and to gettime to develop further the company product- the competitors must invest more money and capital to developnew competitive solutions- a patent can be sold or a licence (right to use a patent againstpayments) can be sold- pricing policy can be wider and more expensive (or moreinexpensive) prices can be imposed- patenting brings an image of high-tech company (optional, butoften true)

What can be patented?• A patentable invention has not been defined in the patentlaw. The law only stipulates that a patent can be grantedfor an invention, which is industrially applicable.Furthermore, the invention must be new in comparisonwhat has been public available before the application dateand must be essentially different from it. Essentialdifference means inventive step, a solution which is notobvious for a person skilled in the art and not a merecombination of existing components. Final solution mustbe a novel and surprising combination in comparison toexisting technology. All the inventions and discoveries arenot patentable. A problem and its solution are crucialrequirements for a patent.

What cannot be patented?• Unpatentable inventions are:- discoveries, scientific theories and mathematicalmethods,- artists creations, design of a carpet, a decorativeproduct, i.e.- Rules of a game, business plans, computer programs(accounting systems, advertising methods)- Presentation of information• Artist’s creations may be protected automaticallyby copyright or they can be protected by designpatent.

Computer programs• Computer programs are covered also by copyright.If the invention is a mere computer program it isunpatentable. However, if invention involvesfeatures performed by a computer, it is controlledby a computer or equipment consists partially of acomputer it may be patentable if the inventioncomprises a technical feature and a technical effectis obtained by it.

Medical and chemical field• Also methods for treatment of the human oranimal body by surgery or therapy and diagnosticmethods are considered unpatentable. However,medical instruments, chemical substances andcompositions used in these methods can beprotected by a patent if the invention meets thecriterias of novelty, inventive step and industrialapplicability.

Could a human be patented?• Plant or animal varieties or essentiallybiological processes for producing plants oranimals are excluded from patentability.This does not apply to microbiologicalprocesses or the products thereof which canbe protected by patent if the same terms aremet.

Who could apply for a patent?• A patent application must be filed to a nationalpatent office (in Finland the National Board ofPatents and Registrations, PRH). A particularapplication form available from PRH is needed forthat purpose. The application consists of fourparts: description, claims, drawings and abstract.Inventor or inventors must be designed in theapplication form. Application process can beperformed by the applicant himself or a patentattorney can be used, which is recommendable butcosts more money.

The examination procedure• When the application is filed in PRH aformal examination is performed first. Doesthe application fulfil certain criterias of thepatent law and patent act. Have thepayments been paid? If deficiencies areobserved, a formal notice is given to theapplicant to correct those.

Examination procedure• After formal stage the technicalexamination is performed by some of thetechnical sections. This will lastapproximately 6-8 months and a technicalexamination report is sent to the applicant.He has the opportunity to comment thepossible publications presented in the reportand make a written response to the office.

Examination procedure...• It is possible also to amend the applicationaccording to the report. Based on theresponse the examiner may give a newexamination report or accept theapplication. In case of acceptance the patentwill be published and granted.

Opposition• Within nine months from the grant of thepatent any person may make an oppositionagainst the patent. In the opposition he/shemust argument why the patent should nothave been granted to the invention. Theoffice (PRH) then examines the oppositionand gives the applicant an opportunity tocomment and give a response to theopposition.

Opposition...• Based on the argumentation and documentscited the office either rejects the oppositionand remains the patent in force or acceptsthe opposition and revokes the patent totallyor partially.

Revocation of a patent• After a patent has been granted and theopposition period has ended the only way torevoke a patent is to lodge a case forrevocation in the Helsinki City Court(Helsingin Käräjäoikeus). The process canbe further appealed to the supreme courtproviding that a permission for appeal hasbeen granted.

Maintenance fees• A patent right is not valid automatically butthe annual maintenance fees must be paid.The fees are inexpensive during first years(hundreds of Finnmarks) and increasetowards the end of the 20 year term. Thefinal annual maintenance fee (20 th ) is 4 700FIM.

Patenting abroad• A single national patent (in Finland, i.e.) isoften insufficient in the scope ofinternational (or foreign) marketing andcompetitive advantage. Patent protection isperhaps needed in countries wheresignificant competitors exist or theiroperations should be blocked or prevented.

Patenting abroad...• It is advisable to exploit the Priority systemin foreign patenting. It means that theforeign applications are filed during 12months from the date when domesticapplication was filed in the national patentoffice (in Finland PRH).

Patenting abroad...• If the priority is claimed, the latterapplications are considered having arrivedin the office at the same time as the earlierdomestic application. The novelty andpatentability will be assessed according tothe priority, i.e. the publications publishedafter the first date of application, do notform obstacles for novelty and inventivestep.

Costs and money• Applying for patent(s) abroad causes significantexpenses. Immediately after filing the firstnational application the commercialisation stepsand measures should be taken. The protectedinvention should be marketed effectively to thecompanies or the development process should bepursued as quick as possible. This way theinventor can seek for co-operation with thepotential companies or develop the invention to aproduct in the market.

EP + 5 other states50 000 + 150 000 = 200 000Costs150 000100 00050 00010 000PCT, search and examinationDomestic10 20 30Time

Costs and money...• This way the extent and costs of foreignpatenting could be defined in advance. Theinventor(s) and applicant(s) should alsoconsider and seek for financing, becausetheir own resources are often obsolete.When decision has been made andnecessary financing obtained, it is advisableto consult a registered patent attorney.

Costs and money...• The translation phase and possible textformatting may take one-two months beforethe end of priority year. The situation issimilar with the applications made forfinancing organisations who need at leastone-two months for technical andcommercial evaluation.

Designation for countries• It makes sense to seek for protection only incountries, where the product or licence willlater be sold or marketed or where potentialcompetitors operate. From the commercialpoint of view, the sufficient extent ofprotection is mostly 2-7 countries.

Patenting systems• There are three ways to seek for protectionabroad:- file a national application separately in each country- use an international patenting system (PCT, PatentCooperation Treaty), 98 member countries- exploit a European patenting system (EPC,European Patent Convention), 18 member countries• There are also ways to combine thesesystems.

Patent registration andmaintenance• Despite of the selected patenting system thepatent must be granted, registered andmaintained in force separately in eachcountry, i.e. the protection is only national.

Licensing• Licensing has proved to be perhaps the mostsuccessful method to bring new inventionsonto the market. A license agreement givesthe right to exploit a patent, design patent,trade mark, utility model or technical knowhow.The commercialisation procedure isdefined also in the agreement or in aseparate business plan.

Licensing...• Drawing up the agreement demands bothfor juridical and commercial expertise.Consequently it is recommendable toconsult a professional, a lawyer, an attorneyor a licensing expert before startinglicensing measures or negotiations.

Licensing• The inventor or a SME (Small and Medium-SizedEnterprise) do not often have financial or technicalresources to develop the invention further. In thiscase it could still be exploited and they can collectsome amount of cash flow from the potentiallicense buyer (licensee). Furthermore, licensinggives the licensor the opportunity to follow thedevelopment of the invention and monitor it’slater “commercial success”.

Licensing...• The licensee wants perhaps to enter on the newmarkets with new products, improve its position inthe own product area or expand the product rangewithout significant investments in R&D andincrease its contact network. The foundation of atechnology transfer operation should always be apositive, progressive activity. However, enteringin the contract negotiations involves risks whichthe parties should in advance be aware of. Thefinal agreement must satisfy both – from technical,functional and juridical point of view.

Licensing...• The license agreement gives the licensee a right tomanufacture and sell certain product or method,which is protected, i.e. by a patent. The proprietorof the patent is, however, the licensor.Consequently the license gives only the right tocommercially exploit the patent and the licenseecannot, for example, deposit or sell it to a thirdparty.

Checklist for licensing• Essential questions are:- parties and their background- scope of the license, the invention- to sell, to market and/or to manufacture-territory- term of the agreement- who applies for the patent, who maintains the rights- payments like down-payments, royalties andminimum royalties- exclusive, non-exclusive or sole license- further co-operation, technical assistance

Licensing demands for flexibility• Entering into satisfactory agreementdemands for flexibility from both parties. Inmany cases the licensee is ready to pay thelicensor money which is based only on thecash flow obtained from the sales of thelicensed product or method. A downpaymentdepends often on the licensor’searlier investments in product developmentand patenting.

Money, royalties and payments• If the licensee’s profit is high, the royaltypaid to the licensor could also besufficiently high. Whereas the sales profit isrelatively low, the licensee cannot paylicensor a high royalty. The general rule ofthumb for suitable royalty percent is 2-8 %from revenue without taxes generated bythe product.

Money, royalties and payments...• Royalties in the field of chemical and processtechnology may be below 2 %, however. Whendefining the royalty one should take intoconsideration the development stage of theinvention; is the development process completed orshould the licensee invest money into developmentbefore starting (mass) production. If the inventionis just a mere idea a reasonable solution may bethat a down-payment will not be paid.

What kind of license?• It is advisable to enter into solution of theexclusivity; is the license exclusive or nonexclusive.An alternative is the sole licensewhere the licensee has the exclusivity in theexploitation in addition to the licensor.

Where to find consultancy?• National board of Patents and Registration(Patentti- ja Rekisterihallitus)• Foundation for Finnish Inventions (Keksintösäätiö)(especially in financing for product development,commercialisation and licensing)• Technology Development Centre (Tekes)(especially in financing for product development)• Helsinki University of Technology, InnovationCentre

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