WIPO-MOST Intermediate Training Course on Practical Intellectual Property Issues

in Business

Geneva, November 10-14, 2003

Topic 2: Patents

I. Introduction to the patent system

1. What do you imagine when you hear the word “patent”? A great scientific
breakthrough or an invention that has changed the world such as Edison’s electronic lighting?
In fact, it is a misperception to believe that patents only apply to complex physical or
chemical processes and products or are only useful to large corporations. Patents may be
granted to an invention in any area of technology from paper clips to computers. There
already exist thousands of patents for simple everyday products such as pens, glass bottles,
textile fabrics or bicycles.

What is a patent?

2. A patent is an exclusive right granted for the protection of an invention. The patent
provides its owner the exclusive right over the exploitation of the invention for a limited
period of time in return for disclosing the invention to the public. Thus, in general, the patent
owner (patentee) can prevent others from making, using, offering for sale, selling or
importing for those purposes the patented invention without the patentee’s permission. This
exclusive right is given for a limited period of time, generally for 20 years from the filing
date, as long as annual maintenance fees are paid, and has no effect beyond the territory of the
country in which the patent was granted.

3. The theory behind the patent system is that the financial reward flowing from the
exclusive rights and the recognition for the inventor’s creativity would encourage innovative
activities. Further, the patent system requires the disclosure of the inventions to the public,
thereby promoting public dissemination of the knowledge of the inventor and further
development of technology by third parties. In other words, third parties do not need to
“reinvent the wheel.” This cycle of innovation would promote the technical and economic
development with the obvious resultant trade advantages.

How does the patent system affect business?

4. The patent system provides various advantages to the business of an inventor. To name
a few, patent protection may provide:

A strong market position – Through the exclusive rights, the patentee is able to
prevent others from commercially using the patented invention, thereby reducing
competition and establishing himself in the market as the pre-eminent player.

Higher returns on investments – Having invested a considerable amount of

money and time in developing innovative products, the patentee could, under the
umbrella of these exclusive rights, commercialize the invention enabling the
patentee to obtain higher returns on investments.
 page 2

Opportunity to license or sell the rights – If the patentee chose not to exploit the
patent himself, he may sell it or license the rights to commercialize it to another
company. The patentee uses patents to earn royalty revenue by licensing the
patented invention to other firms that have the capacity to commercialize them. In
this way, in particular, small and medium-sized enterprises (SMEs) and research
companies, which may not have sufficient marketing and commercialization
capacity, could trade their innovative knowledge just like a physical product.

Increase in negotiating power – If the patentee is in the process of acquiring the

rights to use the patents of another company, through a licensing contract, the patent
portfolio of the patentee will enhance his bargaining power. That is to say, the
patents may prove to be of considerable interest to the company with whom the
patentee is negotiating and he could enter into a cross licensing arrangement where,
simply put, the rights to use the inventions protected by patents owned by each party
could be exchanged between two parties.

Positive image for your enterprise - Business partners, investors and shareholders
may perceive patent portfolios as a demonstration of the high level of expertise,
specialization and technological capacity. This may prove useful for raising funds,
finding business partners and raising the company’s market value.

5. At the latest, once patented, detailed technical and legal information about the patented
invention is published by the patent Office. Since this publication is a comprehensive
collection of classified technological data, it is useful for any person to keep abreast with the
latest technologies. From the viewpoint of the commercial strategy, patent information would
help to avoid unnecessary expenses in researching what is already known, to identify business
partners, including licensing partners and to monitor activities of competitors. It could also be
used to avoid possible infringement of other’s patents and to oppose grant of patents wherever
they conflict with one’s own patent.1

What happens if the invention is not patented?

6. Patenting may not always be the right solution for the business to gain the maximum
economic benefits from the invention. It is generally advisable to carefully weigh the costs
and benefits of patent protection prior to initiating the process. The costs for obtaining and
maintaining patents may include costs relating to: (i) application fees and other prosecution
fees to be paid to the patent Office; (ii) the costs relating to patent attorneys; (iii) the costs
of translation where an application is filed with the foreign patent Office the official language
of which is different; and (iv) the costs of maintaining patents after grant. It is important,
therefore, to understand what may happen if a patentable invention does not obtain a patent.

Somebody else might patent the invention - In most countries, where more than one
applicant have filed patent applications for the same invention independently, the first
applicant to apply for a patent has the right to a patent. This may in fact mean that, if
you do not patent your invention, somebody else - who may have developed the same

1
For further information about patent information, reference is made to Topic 13, Importance of
Using Patent Information.
 page 3

or an equivalent invention later - may obtain a patent and legitimately exercise the
exclusive rights to commercially exploit the invention and limit the activities of your
company.

• Competitors will take advantage of your invention - If the product is successful,

many other competitor firms will be tempted to make the same product by using your
invention but without having to pay for such use. The same products are often sold at
a lower price as they do not have to recoup research and development costs.

• Possibilities to license, sell or transfer technology will be severely hindered -

Without patent rights, transfers of technology would be difficult if not impossible.
Patent protection is crucial for acquiring technology through its licensing.

III. Conditions of patentability

7. Not all the inventions can obtain patents. An invention must meet several criteria if it is
to be eligible for patent protection. These include, most significantly, that the invention must
consist of patentable subject matter, the invention must be capable of industrial application
(useful), it must be new (novel), it must involve an inventive step (be non-obvious), and the
disclosure of the invention in the patent application must meet certain standards.

Patentable subject matter

8. Patents are granted for inventions. In general, an invention may be described as a

solution to a technical problem. For example, merely finding something that already exists in
nature, which is called discovery, is not an invention. To qualify the invention, human
intervention must be added. Thus, a substance extracted from a plant existing in nature may
be an invention. Under many national laws, an invention within the meaning of the patent
law is defined in terms of a non-exhaustive negative list, i.e., subject matter that is not
regarded as inventions. They may include:

- discoveries, scientific theories and mathematical methods;

- aesthetic creations;

- schemes, rules and methods for performing mental acts, playing games or doing
business, and programs for computers;

- presentations of information.

9. In principle, patents shall be available for any inventions in all fields of technology. In
many countries, however, certain inventions are not considered patentable subject matter in
view of the objective of the patent system and the broader public policy, i.e., to encourage
innovative activities while taking into account the legitimate public interests. Depending on
the national law of each country, some of the following may not be patentable subject matter:

- inventions the prevention within the territory of the commercial exploitation of which
is necessary to protect public order or morality. However, such exclusion should not be made
merely because the exploitation is prohibited by the law;
 page 4

- diagnostic, therapeutic and surgical methods for the treatment of humans and animals;

- plants and animals other than microorganisms, and essentially biological processes for
the production of plants or animals other than non-biological and microbiological processes.
However, the protection of plant varieties should be provided either by patents or by an
effective sui generis system or by any combination thereof.

Industrial applicability (Utility)

10. An invention must be capable of being made or used in some kind of industry. This
means that the invention can be applied for practical purposes, and not be purely theoretical.
If the invention is a product, it should be possible to make that product. If the invention is a
process, it should be possible to carry that process out or use it in practice.

11. The word “industry” is meant in its broadest sense as anything distinct from purely
intellectual or aesthetic activity. Thus, industrial applicability means the possibility of the
application of an invention by technical means on a certain scale.

12. The typical examples of inventions not being capable of industrial application are: (1)
those which appear to be impossible to carry out because they contravene the laws of nature
(for example, a perpetual motion machine); and (2) those concerning methods which could be
considered to fall entirely within the private or personal sphere.

13. In some countries, instead of industrial applicability, an invention must have utility.
One of those countries considers that the utility requirement is met if the applicant has
asserted that the invention is useful for any particular practical purpose (i.e., it has a “specific
and substantial utility”) and the assertion would be considered credible by a person of
ordinary skill in the art.

Novelty

14. An invention is new (or novel) if it does not form part of the prior art. “Prior art” is, in
general, all the knowledge that existed prior to the filing date (or the priority date2) of the
relevant application, whether it existed by way of written or oral disclosure. The definition of
“prior art” differs from country to country. In many countries, any information made
available to the public anywhere in the world in any form, for example, in written form (ex.
publication), by oral communication (ex. oral presentation at a conference), by display or
through use (ex. public demonstration), constitutes prior art. Today, publication on the
Internet must increasingly be taken into consideration. Thus, in principle, the publication by
the inventor concerning his invention in a scientific journal before the filing date of the
relevant patent application can destroy the novelty of the invention, and consequently, render
it not patentable. 3

2
The expression “priority date” is explained in paragraph 45.
3
Many countries provide a grace period of up to six or 12 months prior to the filing date (or the
priority date) during which certain types of disclosures of the invention may be made without
affecting the patentability of the invention.
 page 5

15. In some other countries, non-written disclosures in foreign countries are not part of
prior art. Therefore, if the invention is used only in a foreign country and there is no written
material describing the invention, the novelty of the invention cannot be destroyed.

16. When assessing novelty, it is not permissible to combine separate items of prior art
together. For example, if the invention concerns the combination of elements A and B, and
one prior publication described only the element A and another prior publication described
only the element B, the invention combining elements A and B meets the novelty
requirement.

Inventive step (Non-obviousness)

17. “Inventive step” (also referred to as “non-obviousness”) means that, having regard to
the prior art, the invention must not be obvious to a person skilled in the art. The expression
“inventive step” conveys the idea that it is not enough that the claimed invention is new, that
is, different from what exists in the state of the art on the filing date (or the priority date), but
that the difference is significant and essential to the invention. The inclusion of such a
requirement is based on the premise that patent protection should not be granted to anything
that a person with ordinary skill could deduce as an obvious consequence thereof.

18. The expression “a person skilled in the art” is intended to exclude the “best” expert that
can be found. It is generally recognized that such a person is a hypothetical person with
general knowledge and ordinary skill in the relevant field of the art.

19. As distinct from the assessment of novelty, more than one item of prior art may be
combined to determine the lack of inventive step. The claimed invention lacks inventive step
if, on the filing date (or priority date), a person skilled in the art can reach the claimed
invention by substituting, combining or modifying those items of prior art, in so far as such
substitution, combination or modification is obvious to a person skilled in the art. This means
that there existed certain teachings in the state of the art that motivated a person skilled in the
art to substitute, combine or modify those items of prior art.

20. In many cases, it is useful to assess inventive step in relation to three aspects, namely,
the problem to be solved, the solution to that problem and the advantageous effects of the
invention with reference to the background art.

Disclosure of the invention

21. Another requirement concerning the patentability of the invention is whether or not the
invention is sufficiently disclosed in the application. The application must disclose the
invention in a manner sufficiently clear and complete for that invention to be carried out by a
person skilled in the art. This means that, on the basis of the explanations in the application, a
person skilled in the art can make or use the invention without undue experimentation. Since
one of the functions of the patent system is to disseminate knowledge to the public,
sufficiency of disclosure of the invention in the application is an important requirement to be
complied with.

22. As regards inventions relating to biological material, it may not always possible to
describe such an invention in a patent application so as to enable a person skilled in the art to
carry out the invention without having access to that material. Therefore, in many countries,
 page 6

such biological material may be deposited with one of the authorized depositary institutions.
A reference to the deposited biological material in a patent application has the effect that the
deposit would be taken into account when assessing the compliance with the disclosure
requirement, to the extent that the material cannot be described in the application.

IV. How to obtain a patent?

Preparation and filing of a patent application

23. The first step to obtain a patent is to file a patent application with a patent Office. One
needs to be familiarized with both technology and law in order to draft a patent application
properly and to proceed with the application before the Office. Therefore, although it is
generally possible to file a patent application without using a patent attorney, it is highly
advisable to consult an experienced professional not only for drafting a patent application but
also during the whole procedure before the patent Office. Some countries require that
foreigners who do not have any domicile in the country be represented by a patent attorney
who is authorized to practice before the Office.

24. Prior to filing a patent application, a prior art search may be conducted, as it will give an
indication of whether the invention is likely to be patentable. Today, many patent Offices
worldwide provide free on-line patent databases. Although this enhances the possibility for
the inventors to carry out the prior art search by themselves, in order to conduct a thorough
search, it is advisable to consult a professional expert.

25. As indicated in paragraph 6, in a great majority of the countries, obtaining an earlier

filing date is crucial if there is more than one patent application filed in respect of the same
invention. Also, it is a key date for the determination of novelty and inventive step. Further,
the inventor should be careful not to disclose the invention to the public prior to the filing date
of the patent application with respect to that invention, since in many countries, such a
disclosure may destroy the novelty of the invention.

26. In general, a patent application consists of the following elements: a request, a

description, claims, drawings (if necessary) and an abstract.

27. The request contains the title of the invention and bibliographic data such as the
applicant’s name and his address. The description, together with the drawings, if any,
provides the detailed explanation about the invention and sets out at least one mode for
carrying out the invention.4 The claims are the most important part of the application, since
they define the subject matter for which patent protection is sought. This means that, once a
patent is granted, the scope of the patent protection is determined by what is written in the
claims. Therefore, the claims shall be written in a clear and concise manner. The abstract is a
concise summary of the application, which should merely serve the purpose of information.

4
In some countries, the best mode known to the applicant should be provided in the description.
 page 7

Grant of the patent

28. Once an application has been received, the patent Office generally takes a series of steps
prior to granting the patent. There are three main activities, namely, a formality examination,
a substantive examination and the grant and publication of the patent.

29. The formality examination consists of checking whether the application contains all the
relevant information from the formality point of view and whether any other necessary
documents have been submitted. The applicant is given the opportunity to correct any defects
identified during the formality examination, and if such defects are not corrected within a
specific time, the patent Office rejects the application.

30. The aim of the substantive examination is to ensure that the application satisfies the
conditions of patentability, such as novelty, inventive step and industrial applicability, before
granting a patent. The applicant is given an opportunity to remove any objections raised
during the substantive examination. Not all the patent Offices conduct a substantive
examination. Patent Offices in a number of countries grant patents on the basis of the
formality examination and the compliance with certain requirements, such as the claimed
invention is not excluded from patentable subject matter. Under such a system, the actual
validity of the patent and whether it meets the requirements of patentability are only verified
by the courts in case of dispute.

31. When the examination process has reached a conclusion favorable to the applicant, the
patent Office will grant a patent. The details of the patent are entered into the patent register,
and a certificate of grant is issued to the applicant. Further, the patent Office publishes the
patent for public inspection. In a number of countries, in order to ensure the earlier
dissemination of the technical information contained in patent applications, patent
applications are published 18 months after the filing date (or the priority date).

Review and revocation of a patent

32. When the applicant does not agree with the final conclusion made by the Office, he may
appeal to a court for a judicial review.

33. Similarly, if, for example, one finds that a patent is granted to his competitor with
respect to an invention which does not meet all the patentability criteria, he may request the
revocation of that patent by a court. In some countries, a quasi-judicial procedure, which is
cheaper and quicker than a judicial procedure, is established before the patent Office in order
to review the final decisions made by the examiners.

VII. Exclusive rights conferred by a patent

34. Generally speaking, a patentee acquires the right, enforceable by law, to decide who
shall and who shall not exploit his patented invention. The patentee can prevent others from
making, using, offering for sale, selling or importing for those purposes the patented invention
without the patentee’s permission. He retains this right for a limited period of time, generally
for 20 years from the filing date, provided any necessary maintenance fees are paid. This
exclusive right of the patentee has two main applications in practice, namely protection
 page 8

against infringement, and the possibility of assigning or licensing the right, in part or in
whole.5

35. An infringement of the patentee’s exclusive right involves the unauthorized exploitation
of the patented invention by a third party. The initiative for enforcing a patent rests
exclusively with the patentee. Thus it is he who is responsible for detecting infringements
and for bringing them to the infringer’s attention. The remedies which may be available to
the patentee are usually provided in the patent law and included generally civil and criminal
sanctions. Civil sanctions normally available include the award of damages, the grant of an
injunction, or any other remedy provided under the law such as the seizure and destruction of
the infringing products or the tools used for the manufacture of those products. The usual
forms of criminal sanction are punishment by imprisonment or by a fine, or both.6

36. The national laws of most countries provide limited exceptions to the exclusive rights
conferred by a patent. These exceptions are provided carefully so that they do not
unreasonably conflict with the normal exploitation of the patent and do not unreasonably
prejudice the legitimate interests of the patentee, taking account of the legitimate interests of
third parties. Depending on the national law, they include, for example:

- the acts of exploiting the patented invention for the sole purpose of personal use;

- the acts of exploiting the patented invention for the sole purpose of scientific research
and experiment;

- the acts of exploiting the patented invention forming part of vessels, aircrafts or land
vehicles which temporarily or accidentally enter the country concerned;

- the acts of exploiting the patented invention by a third party who started making or
using patented invention before the filing date of the patent application concerned, and who
has the right to continue to make or use that invention;

- the acts of exploiting the patented invention under a non-voluntary license or under
the authorization granted by the government under certain conditions.

VIII. Who has the right to a patent?7

37. In many countries, an inventor or his successor in title has the right to a patent.
Therefore, any natural person or legal entity may be entitled to the right to a patent by virtue
of transfer of the right from the inventor, such as through assignment, donation, inheritance,
bankruptcy and the like.

5
As regards the details concerning licensing of intellectual property rights, reference is made to
Topic 20, Licensing of Intellectual Property Rights.
6
As regards further information concerning enforcement of intellectual property rights, reference
is made to Topic 11, Effective Enforcement of IPRs.
7
As regards further information concerning ownership of intellectual property rights, reference is
made to Topic 19, Ownership of IP Assets.
 page 9

38. The question becomes more complicated where an invention was made by an employee
or a work was commissioned to, for example, an independent consultant. The answer to the
question concerning ownership under these situations vary significantly from one country to
another, depending on the national law and on the facts and circumstances of a particular
employer-employee relationship.

39. In many countries, the employer owns an invention made by his employee if the
invention was made in the performance of the employment contract, unless the employment
contract stipulates otherwise. In other countries, conversely, the right belongs in principle to
the employee inventor, unless otherwise agreed. In some countries, the employee inventor
may retain the right to exploit the invention, but the employer is often given a non-exclusive
right to use the invention for its internal purposes. Further, in some countries, the employee
inventor has the right to a fair and reasonable remuneration for his invention if the employer
takes rights to his invention.

40. In the great majority of countries, where applications concerning the same invention
have been filed by more than one inventor who independently invented the invention, the
applicant who first filed a patent application has the right to a patent (first-to-file system). In
the United States of America, under this situation, the person who first invented the invention
has the right to a patent (first-to-invent system).

IX. How to protect an invention abroad?

Why do we need a patent abroad?

41. The rights conferred by a patent are “territorial rights”. This means that a patent granted
in one country is enforceable only in that country. For example, a patentee who has obtained
a patent with respect to a certain invention in France cannot sue a third party who is using that
invention without his consent in the United States of America for the infringement of his
patent, unless the patentee has an equivalent patent granted by the patent Office of the United
States of America. This is why it may be worth considering filing a patent application not
only in the domestic country, but also abroad. The desirability of protecting the invention
abroad may be considered carefully in view of the costs and time necessary for protecting the
invention abroad, the nature of the invention, the international dimension of the business
activity etc.

42. In certain regions, some countries have established regional patent Offices for obtaining
patent protection within the region with a single application.8 A regional patent can be
considered as a “bundle of patents”, since it has the effect of a national patent in the member
States designated in the application9 or in each of the member States of the regional
agreement.10 The regional patent, however, is not a supranational title of protection.

8
African Regional Industrial Property Office (ARIPO) [http://aripo.wipo.net/], African
Intellectual Property Office (OAPI) [http://oapi.wipo.net/], Eurasian Patent Office (EAPO)
[http://www.eapo.org/] and European Patent Office (EPO) [http://www.european-patent-
office.org/].
9
This system applies to ARIPO. EAPO and EPO.
10
This system applies to OAPI.
 page 10

Therefore, the enforcement of rights should be sought for in each member States, and the
invalidation of the patent has effect only in the member States concerned.

How to obtain a patent abroad?

43. There are essentially two procedures for applying for patent protection in foreign
countries. One option is to file patent applications with each national/regional patent Office
of the country/region in which patent protection is sought. Another option is to file an
international application under the Patent Cooperation Treaty (PCT) which simplified the
procedure for simultaneously seeking patent protection in a large number of countries,
provided an applicant is a national or a resident of the Contracting State of that Treaty.11

44. The preparation and prosecution of patent applications in foreign countries can be very
costly and time consuming. Each application may have to be translated into a prescribed
language of each country. Financial resources should be available since fees need to be paid
to each national/regional Office. It may be necessary to engage a patent attorney in each
country to prosecute the applications. Therefore, in order to facilitate the filing of patent
applications abroad, the Paris Convention for the Protection of Industrial Property (Paris
Convention) established a mechanism called “right of priority.”

45. The right of priority means that, on the basis of a regular application filed by a given
applicant in one of the Contracting Parties of the Paris Convention, the same applicant (or his
successor in title) may, within 12 months, apply for patent protection in all the other
Contracting Parties.12 These later applications will then be regarded as if they had been filed
on the same day as the earliest application. The filing date of the earliest application is called
the “priority date.” Hence, these later applications enjoy a priority status with respect to all
applications relating to the same invention filed after the priority date. They also enjoy a
priority status with respect to all acts accomplished after that date which would normally be
apt to destroy the novelty or inventive step of the invention.

46. The right of priority offers great practical advantages to applicants desiring patent
protection in foreign countries. The applicant is not required to present all applications at
home and in foreign countries at the same time, since he has 12 months at his disposal to
decide in which countries to request patent protection. The applicant can use this priority
period to organize the steps to be taken to secure patent protection in the various countries of
interest in each particular case.

11
International applications under the PCT can be considered as a “bundle of national/regional
applications,” since a single international application has the same effects as relevant
national/regional applications. As regards details concerning the PCT, reference is made to
Topic 6, The Patent Cooperation Treaty (PCT) and Its Importance for Developing Countries.
12
As of July 15, 2003, 164 States are Contracting Parties to the Paris Convention. In accordance
with Article 2.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS Agreement), Members of the WTO shall also recognize the right of priority of the
nationals and residents of other Members of the WTO.
 page 11

X. Alternatives to patent protection

47. In many countries, the economic and social value of an invention can be protected not
only by patents but also by other titles of intellectual property protection. In particular, utility
models and trade secrets may be worth mentioning. Costs and benefits of each title of
protection should be evaluated carefully on a case by case basis.

Utility models or similar titles of protection

48. In some countries, inventions may also be protected by utility models, which are also
known as “innovation patents,” “utility innovations” or “short-term patents.”

49. The procedural and substantive requirements concerning utility models differ
significantly from one country to another. In general, however, the main differences between
utility models and patents may be described as follows:

• The requirements for acquiring a utility model are less stringent than for patents.
While the requirement of “novelty” is always to be met, that of “inventive step” or
“non-obviousness” may be much lower or absent altogether. In practice, protection
for utility models is often sought for innovations of a rather incremental character
which may not meet the patentability criteria.

• The term of protection for utility models is shorter than for patents (usually between 7
and 10 years without the possibility of extension or renewal).

• In most countries where utility model protection is available, patent offices do not
examine applications as to substance prior to registration. This means that the
registration process is often significantly simpler and faster.

• Utility models are much cheaper to obtain and to maintain.

• In some countries, utility model protection can only be obtained for certain fields of
technology and only for products but not for processes.

50. In essence, the features of utility models is a quick, simple and cheap procedure with
shorter term of protection. The utility model registration system is therefore more suitable
than the patent system if the protection is required for a product with a short life cycle or an
invention which may not merit patent protection (for example, minor improvement), but
nevertheless is worth being protected by an intellectual property title.

51. Some countries allow filing both a patent application and a utility model application at
the same time so that the applicant can reap and enjoy the fruit of the invention first while he
is still waiting for the usually longer process of patent grant. But if there is a decision to grant
a patent, laws generally require applicants to select only one of the two titles of protection for
that same invention.
 page 12

Trade secrets

52. An invention may involve confidential business information which may be protected by
trade secrets.13 On the one hand, trade secret protection does not require any registration, and
its term of protection is unlimited as long as the information remains confidential. On the
other hand, the information protected under trade secret protection cannot prevent a third
party, who independently developed the invention involving the same information, from
obtaining a patent for that invention. Since, in general, information protected under trade
secrets are not made available to the public, they cannot be part of the prior art under patent
law. Further, that third party may independently decide to disclose that same information to
the public. Once such a disclosure is made, the value of the trade secret will be lost.

[End of document]

13
As regards details concerning trade secrets, reference is made to Topic 1, Trade Secrets.