Intellectual Assets for Engineers and Scientists

Creation and Management

Uday S. Racherla

• Publisher: CRC Press
• Year: 2018
• Print ISBN: 9781138320659
• eBook ISBN: 9780429792380
• Topic: Negocios y empresa
• Subtopic: Gestión industrial

Engineers and scientists engaged in creative works, inventions, and innovations – as part of the free-enterprise, free-market system – must understand what Intellectual Property Rights (IPRs) are and know how to strategically use them to create competitive advantage, wealth, and value. An acknowledged, major contributing factor to non-awareness amongst technical audience is the lack of availability of easily-understandable, business-relevant, and comprehensive books on the subject, that scientists and engineers can access. This book will provide comprehensive, easy-to-understand, innovation management perspectives on a wide range of IPRs for practicing scientists and engineers.

Key Features:

• One-stop shop for valuable information on all forms of IPRs for technical audience

• Strong innovation management component along the lines of technology for business and innovations for customers, and IP laws for protecting and unlocking the value of creative works, inventions, and innovations

• Gives easy-to-read, easy-to-follow innovation management perspectives

• Emphasizes IPR-related topics of practical relevance

• Compares the IP Systems of United States and others (EU, China & India)

Section II

The Full Landscape of Intellectual Property Rights

3

Patents

Patents provide incentives to individuals by recognizing their creativity and offering the possibility of material reward for their marketable inventions. These incentives encourage innovation, which in turn enhances the quality of human life.

World Intellectual Property Organization

Like the physical or financial property rights, intellectual property rights (IPRs) enable the creators/owners of IP to benefit from their investment in creative work. Indeed, Article 27 of the Universal Declaration of Human Rights¹ outlines these rights and awards the rights to benefit from the authorship of scientific, literary, or artistic productions. By IPRs, we mean industrial property (which include patents, trademarks, industrial designs, geographical indications, and protection against unfair competition) and copyrights. As discussed in chapter 2, the Paris Convention (1883) recognized the value of industrial property protection and the Berne Convention (1886) recognized the value of copyright protection.

Part-A: General Overview of Patents

Concept of a Patent

According to the World Intellectual Property Organization (WIPO)^2a:

A patent is “a document—issued upon application, by a government office (or a regional office acting for several countries)—which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent.”

An invention is a solution to a specific problem and may relate to a product or a process.^2a

In another source document, the WIPO states^2b:

A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something or offers a new technical solution to a problem. To get a patent, technical information about the invention must be disclosed to the public in a patent protection.

Similarly, according to the United States Patent and Trademark Office (USPTO)^2c:

A patent for an invention is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office.

According to the Government of India^2d:

A patent is granted for an invention which is a new product or process involving an inventive step and capable of industrial application.

Finally, in China:

A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something or offers a new technical solution to a problem. A patent provides protection for the invention to the owner of the patent and that protection means that the invention cannot be commercially made, used, distributed, or sold without the patent owner’s consent. These patent rights are usually enforced in a court, which, in most systems, holds the authority to stop patent infringement.^2e

Thus, we can note that the concept of a patent involves the following key points:

1. A patent is an exclusive right;

2. It is given to an inventor;

3. It is given for an invention;

4. The invention must show a new/improved way to a product or process;

5. The technical information that describes the invention must be publicly disclosed; and

6. A patent can be issued only by a competent patent granting authority (the national patent office of a country or a regional patent office of a region).^2f

From the above discussion, it should be clear that a patent right is a territorial right (meaning the right is effective only in the country which grants it). For example, a United States (U.S.) patent is legally effective only in the United States, U.S. territories, and U.S. possessions. Also, an inventor who discloses his invention will have no patent until: (a) he files a patent application, (b) his work meets all statutory requirements, and (c) the patent granting authority awards him a patent.

Indeed, patented inventions are absolutely critical to every aspect of our life. Some examples are—the electric bulb (patents of Thomas Edison), plastics (patents of Baekeland), ballpoint pens (patents of Biro), and microprocessors (patents of Intel), to mention a few.^2g Thus, it is important to recognize that a patent is not just an abstract concept and involves the disclosure and protection of inventions (products/processes) potentially valuable to everyday living. As a result, nations and governments reward inventors with patents and encourage them to innovate new or improved products/services to solve the needs, wants, and challenges of the world.

Nature of the Patent Right

According to the USPTO^2c:

The right conferred by the patent 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. Once a patent is issued, the patentee must enforce the patent without the aid of the USPTO.

Thus, a patent right is an exclusionary right and not an affirmative right.

Purpose of Patent Protection

Individuals and companies seek patents to protect their inventions and innovations. Broadly speaking, individuals seek patent protection to strengthen their offerings, improve their position for new venture creation, and/or license or sell their IP to create personal wealth. On the contrary, companies seek patent protection to fulfill much more complex and multidimensional business objectives as indicated below:

1. To deliver higher returns on investment to shareholders and investors. The products/services of a company that are well-protected by patents make imitations by rival competitors very difficult. In addition, a patent can create a barrier for new entrants into the marketplace. As a result, such a company is more likely to achieve sustainable revenues, profits, and market share—which will in turn help it to deliver higher returns on investment to shareholders and investors.^3a

2. To achieve competitive advantage. Patents with strong technical claims enable businesses to make superior marketing claims on their products/services. Generally, as customers verify the marketing claims by their own use of the products/services, they will be willing to pay more for them. Thus, innovative companies, capable of making superior claims, could set higher prices for their products/services.

3. To strengthen the ability to raise capital. Companies with strong patent portfolios often earn “reputation and trust” in the marketplace as “innovative leaders.” As a result, such companies can raise capital when needed—through low-interest bank loans and sale of lucrative company stock.

4. To create an alternative revenue stream and/or test a new business idea. Companies may choose to license/sell some of their patents—that are not either utilized in their current businesses (mission) or not useful in their future plans (vision)—to create an alternative stream of revenue and avoid maintenance fees. Alternatively, they may create a joint venture and test a new business idea at significantly lower risk.

5. To achieve higher valuation of the firm. Companies with strong portfolios of patents (the most tangible of all the intangible assets of a company) can skillfully communicate the same to investors so that it leads to higher valuations of the firms.

6. To enforce patent rights. Companies with strong patent portfolios can enforce patent rights better to prevent/stop counterfeit products/services through aggressive litigation.

NOTE: Starting from this point, this chapter predominantly uses information from the USPTO and WIPO sources for discussion and clarifications. Where r...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• List of Tables
• Preface
• Acknowledgments
• Author
• Section I Foundations
• Section II The Full Landscape of Intellectual Property Rights
• Section III Strategic Intellectual Property Management
• Index