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Patents and Intellectual Property

Patents offer protection to companies that create new designs, machines, processes, compositions of matter and articles of manufacture. The U.S. Patent and Trademark Office also grants patents to those who discover or invent new plant varieties. Without patents, a company’s creative work might be copied by rivals, who could duplicate the final products without having to pay the high costs of product research and development. Applying for a patent can be time-consuming and expensive. Most American business owners believe that patents are important despite their cost. Several kinds of patents are available, and effective business managers will be aware of how and when to use them to build their companies. Businesses will also benefit when they follow the proper procedures to ensure that their intellectual property is protected.

Benefits

Establishment of Production Rights

Any company involved in creating its own products or services has a stake in seeking legal protection for those creations in the marketplace. Having a unique product or service to offer consumers is a large selling point, and patent or copyright protection ensures that the company not only has the rights to the original idea in terms of profiting from it, but also the right to pursue others who try to encroach upon their creation through duplication of the original product or service.

Production Safeguards

In 2010, the United States Patent Office awarded 219,614 patents in total. This represented a record number of patents, and a 31 percent increase over the number awarded in 2009. This number reveals the importance industry places on the patent process and the protection offered by pursuing new patents. With a patent in place, a company is free to produce the patented product with the full knowledge that if another company attempts the same product, they can bring the full force of United States Patent law down upon them.

With 5,896 patents awarded to a single company in 2010, the protection of patent law is foremost in the minds of producers. It not only protects an original idea now, but also extends decades into the future, offering the ability for continued profit from the application of original ideas.

Derivative Products Protection

Patent and intellectual property protection extends to the protection of the owner from some derivative products. If a company has a patented idea, it can expand on that idea under its previous protection, without the need for a new patent covering every small change. That is, as long as the changes are directly attributable to the original work. The protection keeps others from doing the same; however, this also protects the patent holder from a competitor making a small change to a protected idea and marketing the new product as its own.

International Treaty Protection

Another benefit of intellectual property protection and patents is the establishment of an owner for a product or idea internationally. There are international treaties covering most of the world that recognize patents as international instruments. Protection in one country extends to others, protecting intellectual property holders from competitors using their ideas and designs overseas, or importing competing products based on the designs to the original producer’s country.

Pitfalls

Patent Expiration

A patent is available on a product for 17 years. During those 17 years a company has sole control over the product and no other company can release the same product under another name.  For example, a drug manufacturer can release a medication and control the product for 17 years before other drug companies can release the same formula. For the original manufacturer, the end of the patent will mean an increase in competition and a decrease in sales. For other manufacturers, they will have to wait before they can release the same product under another name.

Cost

Obtaining a patent on a product is not cheap.  For a new company, this cost can be excessive and difficult to obtain. If the cost is a factor, the company may have to wait to come up with funding and run the risk of competition releasing another similar product. If this happens, the original product will likely not be released due to patent regulations.

Loopholes

When a company uses loopholes to renew their patent, other manufacturers will not be able to release similar products and consumers will continue to pay large fees to the company that has the monopoly.  High prices are often the result of new patents. When consumers do not have a choice on a variety of similar products they must pay a higher price if they want to use the product.

Publicity

When you apply for a patent you are making the details of your product publicly known. Keeping your invention or product a secret will keep competitors at bay.

Time-Consuming

Applying for a patent on a new product can be very time-consuming. Generally it takes two to three years for a patent to be granted. During this time after the details of your product become public, another company can come in and release a similar product and take monopoly over it before you have the patent granted.

Pricing

Patent and intellectual property is often overlooked when a business introduces a new product into the market. In a 2011 Intellectual Property Survey Report, almost three-quarters of U.S. businesses agreed with the idea that patents were of significance importance to a business organization. This response was in stark contrast to their European associates, of which only just over half concurred.

Hidden Benefits

A large number of business organizations do not take patents seriously because it is viewed as an unnecessary expense. However, intellectual property is a vital part of any business organization. Many consumers will not place their trust in a business does not place importance on protecting their intellectual property.

Conclusion

Patents ensure that companies can benefit from their original work and offer protection from competitors who would like to copy the products and ideas of others. The Patent Cooperation Treaty also makes it possible to apply for patent protection in other countries, which helps businesses protect their intellectual property abroad.

Patents only last for 17 to 20 years. The length of patent protection depends on when the applicant applied for the patent. They are expensive, and the application process is slow. In addition, when companies take out patents, they are making the details of their patented products available to the public when they might prefer to keep such details secret. Nevertheless, patents are useful for individual companies and for the economy as a whole, as they encourage creative thinking and innovation.