Patents & why they matter

Patents can be used to stop others from copying your new products and processes.

Patents are intended to encourage inventors to invent and to share their inventions with the world. Each patent is essentially an agreement between the patent’s owner and the public. In exchange for a 20-year monopoly, the owner files a patent application describing the invention. The patent application is then published (usually 18 months after an initial patent application is filed).

For a patent to be valid, its text and drawings must disclose the invention in sufficient detail for the noninventive worker in the field to work the invention without undue burden. Thus, once the patent comes to an end, the invention is public knowledge and freely available for everyone to use.

Unless you have patent protection, others may be free to copy your new products and processes.

Other key requirements for a valid patent relate to the invention itself. The invention must be sufficiently technical. For example, generally speaking, purely aesthetic developments are not patentable.

  • Let’s say you style a car in a way that simply looks better than other cars. That’s not patentable, although it may well qualify for design protection, which is a topic for another day.
  • On the other hand, if you style the same car in a way that has some unexpected aerodynamic advantage, that styling may well be patentable.

Under Australian law, this ‘sufficiently technical’ requirement is referred to as the ‘manner of manufacture’ requirement, whereas under the international Patent Co-operation Treaty (PCT) it’s called ‘industrial applicability’. Both of these names are unhelpful. The invention does not need to be ‘industrial’ as most people would use the term. Many everyday domestic items are validly patented.

The invention must also be strictly new. The coverage of a patent is defined by its ‘claims’. In much the same way that a mining claim marks out an area of ground, a patent claim marks out an area of technology. Generally speaking, to satisfy the newness requirement (i.e. to be valid) a patent claim cannot cover anything that was previously publicly known (i.e. anything that was not secret) before the initial patent application was filed.

To qualify for a standard patent, the invention must also have an ‘inventive step’ over what was previously publicly known. This requires a nonobvious variation over what was known as understood in the context of common general knowledge in the technology area of the invention. An inventive step is a rather low threshold. You do not need to make a radical breakthrough to qualify for a standard patent.

An inventive step is not required to qualify for an innovation patent. Instead, the invention must vary from what has gone before in a way that makes a substantial contribution to the working of the invention. Case law shows that this is a very low threshold. Any functional point of difference over what was previously publicly known is likely to qualify. Innovation patents have an eight year term.

Why are patents of interest to you?

Unless you have patent protection, others may well be free to copy your new products and processes.

One way to think of profit from innovation is as a graph of profit margin versus time:

wadeson-imageThe graph has a sawtooth profile – a rapid rise in profit margin when a new innovation is released, followed by a period of decline as the profit margin is eroded by competition in the market. The competition may well be from copies of your own products (or services) and/or from products (or services) that your competitors independently develop.

Effective patent protection can be used to limit or entirely suppress both forms of competition, to reduce the rate at which the profit margin is eroded.

Patents also allow you to generate additional profit by generating new licensing streams. Thus, whether patent protection is appropriate involves a comparison of this additional profit with the anticipated patent costs.

How effective your patent protection is depends on a combination of how far your invention departs from what is already publicly known, and the skill of your patent attorney to claim that difference in a way that makes it difficult or impossible for others to compete without encroaching on your patent rights.

Ben Mott, Principal, Mechanical Engineer and Patent Attorney