Information for Corporate Clients
PATENTS
1. What is a patent?
A patent is a monopoly that is granted to a person who makes a new invention in the useful arts. A patent monopoly give the patent owner the right to exclude other persons from exploiting the invention in the country in which the patent is registered, say Australia, for the term of the patent. A patent has a limited term of 20 years from the date of filing a complete patent application and after that the invention is free to be exploited by the public.
The fundamental principle on which the patent system is built is that the inventor obtains a short term monopoly in return for making their invention available to the public after the patent has expired. The short term monopoly is obtained in return for a consideration of full disclosure of the invention to the public so that the public can work the invention when the patent has expired.
The policy behind the existence of the patent system is that the short term monopoly granted by the patent system encourages and rewards investment in innovation and research and development (R&D). This then results in products and services being made available to the public that otherwise would not have been developed.
A good example of the importance of the patent system is the pharmaceutical industry. Pharmaceutical companies make significant investments in research and development to develop new and useful drugs for mankind. The patent system enables them to get a return on this investment over the term of the patent namely 20 years. Without the 20 year monopoly there would not be sufficient incentive for companies to invest large sums of money in R&D. After the patent has expired, the market place can be exploited by all pharmaceutical companies including generics, and this in turn leads to price competition in the market place reducing prices.
2. Patentable Subject Matter
Australian patent law provides a broad range of patentable subject matter and is not fettered or defined in any way by a list of technical categories with corresponding definitions of the scope of these technical categories.
Instead the scope of patentable subject matter is defined broadly by the Courts as any environment that is altered as a result of human intervention in the area of economic endeavour.
As a result many diverse areas of technical innovation have been successfully argued to be patentable subject matter in Australia. Further as new technologies evolve, the law in Australia has sufficient flexibility to adapt to include these new areas as patentable subject matter.
Examples of patentable subject matter in Australia include:
- Methods of medical treatment of the human body;
- Computer software;
- Business methods;
- Methods of manufacture of goods;
- Methods of treating agricultural crops; and
In a leading Australian case on patentable subject matter the High Court of Australia held that a method of treating an agricultural crop with a certain chemical to selectively remove the weed was patentable. Even though the method did not involve working with an actual product that was vended the invention resulted in a product in the form of an artificial environment produced by human intervention (the area of land to which the chemical was applied) and the invention was undoubtedly in the area of economic endeavour because it increased crop yields.
3. The benefits of patent protection
The benefits of patent protection are immediately obvious. That is it secures for the patent owner a monopoly right to exploit the invention in the area covered by the patent for a term of 20 years.
Further the scope of the patent can be defined generically to cover the broad concept of the invention and protect a much broader area than the actual embodiment being commercialized by the patent owner.
The monopoly right helps to give the patent owner pricing power on the sale of their patented goods or services because other traders cannot compete with them to the extent that their goods infringe on the territory covered by the patent.
Further a patent right confers a property right on a person who develops a new and useful invention. This enables them to license the property right to third parties. It also enables them to assign a property right to third parties. Thus it effectively converts an intangible idea into a piece of real property that can be licensed and transferred to third parties.
Finally the existence and scope of a patent is recorded on a public register that can be access by third parties. Consequently the existence and scope of patent rights is published and made apparent to third parties and provided that a patented product is marked there is a presumption that third parties had notice of the existence of the patent. This arguably makes patents easier to assert than unregistered rights such as copyright and confidential information.
*Please refer to our brochure for more information on patents*
