A Business-Oriented Overview of IP
for Law and Management Students
Geneva, May 29-31, 2007
Small and Medium-Sized Enterprises (SMEs) Division
World Intellectual Property Organization (WIPO)
TOPIC 2
The Role of Patents and Patent
Information in Business Strategy
Factors Determining Success
of a New/Improved Product
• The product provides functional advantages over
competing or substitute products.
• The retail-selling price is considered to be advantageous
• The product and/or its packaging has an attractive design
• The new product is properly branded, promoted and
advertised
• The new product is readily available to customers in the
main retail shops
• Consistent product quality
• A number of after-sales services are provided
Different Ways of Protecting Inventions
• A variety of mechanisms are employed by firms to protect
their inventions
–
–
–
–
Secrecy
Lead time
Complementary capabilities (e.g., sales and service, manufacturing)
Patents
Relative Effectiveness of Mechanisms
• For product innovations
– Top mechanisms overall: Secrecy and lead time
– Patents least effective overall
• Relatively effective in drugs and medical equipment.
• Less effective in semiconductors & communications
equipment
– Larger firms report patents to be more effective
What is a Patent?
• A patent is a right to exclude all others from exploiting an
invention, which is a a new, non-obvious and useful…
– Process (Treatment of cane; bamboo; finishing of a product;
kiln)
– Machine (Looms; instruments)
– Manufacture (Belt; fastening mechanism)
– Composition of matter (Alloy)
– Improvements (radical/incremental)
• What is an invention?
– Technical solution to a technical problem (Functional versus
Form/aesthetic)
What to Patent: Priorities
• What to patent
– potential commercial products of a company
– methods of making and using the products
– systems utilizing the company’s products
• made by company’s customers
– parts of your product made by vendors
– commercially important inventions
– blocking patents to block competitors
Some Legal Considerations
• Patentabililty requirements:
– Must be new (Worldwide)
– Must have an inventive step/non-obvious
– Must be capable of industrial application
• Maximum duration of a patent: 20 years (renewal fees must
be paid)
• Territorial right
• Used publicly, Published, Sold or Offered for Sale
• Patty Patent/Utility Model
Prior Art
• All information available prior to the date of filing of the
relevant patent application against which the patentability of
the invention will be determined.
• Existing relevant technology
• Can be your own technology or of others
• Secret prior art
• Novelty/Nonobviousness
• First to File/First to Invent (USA)
Exclusive Patent Rights
• Right to exclude others from making, using, selling
or importing the claimed invention.
• Virtually no rights in unclaimed subject matter
– Strategic claim drafting is important
• No automatic right to use patented invention
Patents: Some Examples
Patents that have changed the world:
• Patent number: US 223,898. Edison’s electric bulb.
Patents for simple low/tech products:
• The inventor licensed the system for opening CocaCola cans at 1/10 of a penny per can. During the
period of validity of the patent the inventor obtained
148,000 UK pounds a day on royalties.
• Post-it notes: invented by chance, initially ignored by
inventors but valued by the manager
ANATOMY OF A PATENT
ANATOMY OF A PATENT (cont’d)
THE PATENT APPLICATION
• SPECIFICATION
• CLAIMS
• INVENTORSHIP
SPECIFICATION
• A written description of the invention in clear and concise terms.
• The Specification must be enabling, that is, describe the invention
in such a way as to permit one skilled in the art to make and use
the invention.
• The Specification must disclose a mode/the best mode of making
and using the invention. There can be no “material secrets” kept
from a patent application.
• Should also include reasonable alternatives to the preferred
embodiments in order to avoid any inference that the invention is
limited to the preferred embodiments.
CLAIMS
• Must “particularly point out” and “distinctly claim” the
subject matter of the invention.
• Independent claim: A claim which does not reference
any other claim.
• Dependent claim: A claim which references an
independent claim or another dependent claim. Adds
subject matter (limitations) to the preceding claim(s).
Claim Scope
• Independent claims define patent scope
• Dependent claims are fallbacks
– prior art
INVENTORSHIP
• In the United States, the patent application must be filed in the
name of the inventor(s).
• Inventorship is purely a legal question, and is determined by
an examination of who contributed creatively to what is being
claimed. Inventorship cannot be dictated by politics, funding,
ego, or even goodwill.
• An inventor can be anyone, and must be everyone, who
contributes creatively to the conception or reduction to practice of
the invention.
• Multiple inventors are referred to as JOINT INVENTORS.
Reasons for Patenting
• Reasons (nonexclusive)
– Prevent copying
– Patent blocking
– Prevent suits
– Use in negotiations
– Enhance reputation
– Licensing revenue
– Measure performance
Products
96%
82
59
48
48
28
6
Processes
78%
64
47
37
34
23
5
Limits on Patent Effectiveness:
Why Firms do not Patent
• Most important reasons for not applying
– Demonstration of novelty (32%)
– Information disclosure (24%)
– Ease of inventing around (25%)
• Negative partial correlation between firm size
and defense cost as reason not to patent suggests
why larger firms report (product) patents to be
more effective.
Distinguish Between “Complex” and
“Discrete” Product Industries
• Complex product industries: Where a product
protected by numerous (e.g., hundreds) patents
(e.g., computers, communications equipment),
that is, more patents read on a product.
• Discrete product industries: Where a product
protected by relatively few patents (e.g., drugs,
chemicals)
Distinction Implies Different Uses
of Patents by Industry Type
• Complex product industries: Patents used to block rival
use of complements to
– Assure inclusion or “player” status in cross-licensing
negotiations in order to gain access to rivals’ technologies
– Gain freedom to operate and design freedom via “mutually
assured destruction”
• Discrete product industries: Patents used to block
substitutes by creating patent “fences;” not to compel
cross-licensing.
Defensive Patent Strategy
• Large portfolio of patents of various scope
– Protect products from copying
– Cause competitor to design around
– Reduce risk of patent infringement suit by competitors
- mutually assured destruction
– Cross licensing - market entry
• Medium to large size companies
• High cost
Offensive Patent Strategy
• Small portfolio of pioneering patents
– Market leadership & advantage
– Licensing
– Deal & merger leverage
• Small to medium size companies
• Reasonable cost
• Market monitoring
Strategies for Acquisition of Patents
• WHAT to patent?
– Patent on every invention or only on high value
inventions
– Gillette Mach 3 (one product, 35 patents)
– Patent mining
Strategies for Acquisition of Patents
• WHEN to patent?
– Delay in filing a patent application may lead to losing
the patent to a competitor
– Grace Period
– First-to-file/invent system
– Annual maintenance fees often increase with time
Strategies for Acquisition of Patents
•
WHERE to patent?
– Where will the product be commercialized?
– What are the costs involved in patenting abroad?
– What are the main markets for the product?
– Where are the main competitors based?
– Advantages of the PCT (provides more time)
Strategies for Acquisition of Patents
• WHO owns the patent?
– Company, entrepreneur or employee?
– What happens for subcontracted work?
Strategies for Patent Exploitation
• Case study of own exploitation of a patent
–
–
–
–
–
Case: Mandy Haberman
Invention of a non-spill drinking vessel
Application for patents and industrial designs
Registered mark: Anywayup®
Difficulties in accessing the main retail stores and
supermarkets
– Search for a partner
– Creation of a new company to commercialize the
product
– Infringement and litigation
Strategies for Patent Exploitation
• Case study of a combined patent exploitation strategy:
own exploitation and licensing
–
–
–
–
Case: Pliva - Pfizer
New antibiotic
Patent application in Croatia and abroad
Patent search by Pfizer leads to the discovery of the Pliva
patent
– Pliva licenses Pfizer to produce the antibiotic in the US as well
as in some other countries while Pliva maintains the exclusive
right to commercialize it in Central and Eastern Europe
Strategies for Patent Exploitation
• Case study of a non-exclusive
licensing strategy:
– Case: Bishop Engineering
– Enterprise specialized in power steering
technology
– Over 300 patents since WWII
– Earns 1 Australian dollar per unit made
– Over 5 million dollars a year on royalties
PATENT INFORMATION:
THE OTHER SIDE OF THE COIN
PATENT INFORMATION
The other side of the Coin
PATENT
 1. “deed securing to a person an exclusive
right granted for an invention”
 2. “open, evident, manifest”; “open to public
perusal” < Latin patens
(Collins Dictionary)
Patent Information
• All patents are published (generally 18 months after the
application is filed) and are in the public domain
• A patent is an exchange between the inventor and society
• It is a key element of the balance of the existing
international patent system
Using Patent Information
Did you know?
• The entire set of patent documents worldwide includes
approximately 40 million items.
• Every year approximately 1 million patent applications are
published.
• About two-thirds of the technical information revealed in patents
is never published elsewhere.
Using Patent Information
Did you know?
• Most of the inventions are disclosed to the public for
the first time when the patent is being published. (e.g.
jet engine invented by Wittle in 1936).
• The information contained in the patent documents is
NOT SECRET!
Using Patent Information
• “Patent information” is the technical and legal information
contained in patent documents that are published
periodically by patent offices.
• A patent document includes the full description of how a
patented invention works and the claims which determine
the scope of protection as well as details on who patented
the invention, when it was patented and reference to
relevant literature.
Relevance of patent documents
Technological relevance
Patent information
Legal relevance
Commercial relevance
Using Patent Information
Legal relevance:
• Avoid possible infringement problems
• Assess patentability of your own inventions
• Oppose grant of patents wherever they
conflict with your own patent
Using Patent Information
Technological relevance:
• Keep abreast with latest technologies in your field of
expertise
• Avoid unnecessary expenses in researching what is already
known
– In Europe, more than US$ 30 mill. per year is waisted in
unnecessary research - 30% of the total investment in R&D
• Identify and evaluate technology for technology transfer
• Get ideas for further innovation
• Identify alternative technologies
Using Patent Information
Commercial Relevance
• Locate business partners
• Locate suppliers and materials
• Monitor activities of real and potential
competitors
• Identify niche markets
PatentScope - WIPO Patent and
PCT Resources on the Internet
http://www.wipo.int/patentscope
What is PatentScope
?
• PatentScope is
– Access to WIPO’s Patent and PCT resources in
one place
– Access to the technical information contained in
more than one million international patent
applications
– The platform for online electronic publication of
PCT international applications
– More information on emerging issues, patent data,
patent information and statistics
PatentScope - Overview of Content
• Patent Cooperation Treaty (PCT)
– Legal, technical and general information about the international patent
filing system (PCT) including electronic filing.
• Patent Data
– More than 1 million international patent applications available for
search, detailed enquiries and as data subscription services
• Patent Statistics
– Monthly statistical reports on PCT
– Annual reports on world-wide patenting activity, data query facility.
• Patent Services for Developing Countries
– Search reports, access to patent documentation
PatentScope - Overview of Content
• Patent Information
– Tutorials, Frequently Asked Questions
• Current Issues
– Numerous links to web sites, articles and studies on topical issues such
as genetic resources, traditional knowledge, software, business
methods, etc.
• Patent Law
– International Treaties administered by WIPO
– Links to intellectual property laws of nearly 100 member states
• Frequently Asked Questions
• Meetings, Seminars, Training
• Email updates
PCT Resources
• PCT Background
• Legal Information
• Guides, instructions,
forms
• Meetings, Training,
Documents
PCT Resources - Gallery of Inventions
• 20 (and growing)
notable inventions
that have been
patented via the
PCT system
Information on Patents
• Current and emerging
issues in the patent
system
– Background
information
– Studies, articles
– Links to related
resources
WIPO’s Patent Information
Services for Developing Countries
• State of the Art Search Reports
• Search and examination
– of patent applications filed with Industrial Property Offices
participating in the International Cooperation for the Search and
Examination of Inventions programme (ICSEI).
• Information services
– Equivalent patent documents (patent family reports).
• Patent Documents
– Delivery of copies of individual patent documents.
Patent Statistics
PCT Applications Filing Trends
• Data Query (export
data in Excel format
based on user-defined
criteria)
• Patent statistics from
1883 to the present
day
Forecast
Actual
% Growth Rate
14,000
• Monthly reports of
PCT filing trends
30%
13,000
12,000
25%
10,000
20%
9,000
8,000
7,000
15%
6,000
5,000
10%
4,000
Percentage growth
11,000
Applications per month
• PCT national phase
entry statistics
Trend
3,000
5%
2,000
1,000
0
0%
1
4
2001
7
10
1
4
2002
7
10
1
4
2003
7
10
1
4
2004
7
10
1
4
2005
7
10
Filing Date
IAs Filed
Growth Rate
2001
2002
2003
108,230
110,390
2.0%
115,195
4.4%
2004
2005
2005
(to date) (forecast)
122,408
62,825
132,500
6.3%
8.2%
Search International Applications
• PatentScope Search gives access
to the complete collection of
published PCT international
applications (more than one
million)
• Search using
– keywords
– boolean operators (AND, OR)
– field codes (applicant name,
publication date, etc)
Bibliographic Data
• View the latest bibliographic data
on record at the International
Bureau including changes since
publication
• View full text of description and
claims for latin-language
applications
• View National Phase Information
where available
• View publication Notices
Documents
• Access to the documents contained in the
file of the International Bureau
– Publications
– Priority Documents
– Declarations (e.g. of inventorship)
– Written Opinions, Examination
Reports and related documents
• View or download the documents in
different formats
– PDF
– XML
– HTML
THANK YOU
Email:
german.cavazostrevino@wipo.int
http:/www.wipo.int/sme/