The value of patent protection

Typical patent application preparation and filing workflow.Consider the statistics. Business leaders such as Motorola, IBM, Harris Corporation, and United Technologies Corporation are awarded hundreds of patents each year for innovations created by their Florida-based employees or inventors. Regardless of size, successful companies understand the value of United States patent protection. Developing a patent portfolio offers a number of strategic business advantages.   A typical patent application workflow is shown above.  Click on the graphic to enlarge.

Competitive Advantage

Companies with a strong patent portfolio establish effective, lawful barriers to competition. Many companies fail to realize the true value of their innovations until those same innovations are adopted by the competition. Securing a patent will provide you with legal recourse to enjoin and recover damages from competitors who manufacture, use, sell or import your company’s innovations.

Enhance Revenues

Patent rights are a valuable business asset. Licensing agreements with third parties, or even competitors may result in significant royalties paid to your company for the use of its technology. Licenses may be granted specifically for certain periods of time or for only certain geographical locations. Patent rights may be sold outright or even donated to an educational institution, such as a local university, for tax purposes. A patent portfolio may increase the overall value of a company seeking to be sold or merged into another company.

Marketing Value

The "patent pending" or granted patent designation is an effective marketing tool. How do customers choose your product or services over your competition? How do you communicate to your customers that your products or services are superior to your competitor’s? Your patent portfolio inspires confidence in your customer’s purchasing decision. Your company becomes a nationally recognized contributor to the advancement of your field. The grant of a patent is often newsworthy and may be utilized to bring positive public attention to your company.

Background Information

The Constitution of the United States gives Congress the power to enact laws relating to patents, in Article I, section 8, which reads "Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited  times to authors and inventors the exclusive right to their respective writings and discoveries." Under this power Congress has from time to time enacted various laws relating to patents. The first patent law was enacted in 1790. The law now in effect is a general revision which was enacted July 19, 1952, and which came into effect January 1, 1953. It is codified in Title 35, United States Code.

The patent law specifies the subject matter for which a patent may be obtained and the conditions for patentability. The law establishes the Patent and Trademark Office to administer the law relating to the granting of patents, and contains various other provisions relating to patents.

A patent for an invention is a grant of a property right by the Government to the inventor (or his or her heirs or assigns), acting through the Patent and Trademark Office. The term of the patent shall be 20 years from the date on which the application for the patent was filed in the United States or, if the application contains a specific reference to an earlier filed application under 35 U.S.C. 120, 121 or 365(c), from the date the earliest such application was filed, subject to the payment of maintenance fees. The right conferred by the patent grant extends only throughout the United States and its territories and possessions.

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. 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.

The patent law specifies the general field of subject matter that can be patented and the conditions under which a patent may be obtained. In the language of the statute, any person who "invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent," subject to the conditions and requirements of the law. The word "process" is defined by law as a process, act or method, and primarily includes industrial or technical processes. The term "machine" used in the statute needs no explanation. The term "manufacture" refers to articles which are made, and includes all manufactured articles. The term "composition of matter" relates to chemical compositions and may include mixtures of ingredients as well as new chemical compounds. These classes of subject matter taken together include practically everything which is made by man and the processes for making the products.

The Atomic Energy Act of 1954 excludes the patenting of inventions useful solely in the utilization of special nuclear material or atomic energy for atomic weapons.

The patent law specifies that the subject matter must be "useful." The term "useful" in this connection refers to the condition that the subject matter has a useful purpose and also includes operativeness, that is, a machine which will not operate to perform the intended purpose would not be called useful, and therefore would not be granted a patent.

Interpretations of the statute by the courts have defined the limits of the field of subject matter which can be patented, thus it has been held that the laws of nature, physical phenomena and abstract ideas are not patentable subject matter.

A patent cannot be obtained upon a mere idea or suggestion. The patent is granted upon the new machine, manufacture, etc., as has been said, and not upon the idea or suggestion of the new machine. A complete description of the actual machine or other subject matter for which a patent is sought is required.

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