The patent: Not a carte blanche

"If you don’t invent, you disappear. If you don’t patent, you lose out."
(Erich Otto Häusser, German lawyer, President of the German Patent and Trademark Office 1976-1995)

The patent is probably the best-known but most frequently misunderstood intellectual property right. A patent is not an official permit to make actual use of an invention. Rather, it is a right which can be used to prohibit third parties from making commercial use of the protected invention. A granted patent therefore does not provide protection against the infringement of third-party property rights when using the invention.

Basics

What can be protected by a patent?

Patents are granted in relation to technical inventions.

Which requirements must be met?

In substantive terms, an invention must meet the following requirements in order to be patentable:

• it must be novel;

• it must not be obvious (so it must be based on what is called an inventive step or have a sufficient level of inventiveness);

• it must be industrially applicable;

• it must be sufficiently disclosed in the application documents for it to be able to be carried out by the person of routine skill in the art.

What is the process?

In some countries, patent applications are not given a substantive examination. This is the case in Switzerland in particular. In general, the legal validity of such patents which have not been subject to substantive examination is not then clarified by the courts until a dispute arises.

However, in other countries, for example Germany or else at the European Patent Office, patent applications are also examined substantively for their novelty and inventive step, and a patent is only granted if those requirements are met. Thus, patents which have been substantively examined in this way also enjoy an enhanced presumption of legal validity in the event of disputes.

Patent protection is territorially limited to individual countries. However, in Europe a centralized application and examination procedure is available under the European Patent Convention (EPC) at the European Patent Office (EPO). Thus, one single examination procedure allows the substantive scope of protection to be determined for 38 Member States (status: August 2013). This means a substantial simplification of the procedure, as there is no need for a number of sets of examination proceedings to be coordinated. In order to obtain actual protection in the Member States, annual fees then need to be paid in the countries desired, and in some cases translations also need to be filed.

There is no such thing as a world patent, although this is often referred to in the media. What is meant is in most cases a patent application under the Patent Cooperation Treaty (PCT). This is merely a procedure by which an application date can be secured for currently 146 Member States (status: September 2012). A simple way of thinking of a PCT application is as an option with a duration of 30 months: if the application is not prosecuted further in the Member States within this period, it is lost without any patent coming into existence.

Patent protection can exist for a maximum of 20 years from the application date.

And the costs?

The costs of a patent application are composed of attorneys’ fees, office fees and annual fees.

Office fees and annual fees are fixed and thus are easy to budget for. However, attorneys’ fees vary depending on the actual amount of work required for the preparation of the application and for subsequent responses to any office actions. Nevertheless, we would of course be happy to provide you with an individual estimate of costs.

A few years ago, a study by the European Patent Office estimated that the approximate total costs of a patent granted via the European Patent Convention were as follows (although, in most cases, the validation costs have reduced because of simplifications of the rules on languages, the information is still useful as a guide):

European patent (direct)
Size:	18 pages
Validation in:	6 countries
Maintenance over:	10 years
Total costs:	approx. EUR 32,000
of which office fees:	approx. 14%
of which attorneys' fees:	approx. 31%
of which validation costs:	approx. 22%
of which annuities:	approx. 32%
European patent (via PCT)
Size:	26 pages
Validation in:	8 countries
Maintenance over:	10 years
Total costs:	approx. EUR 47,000
of which office fees:	approx. 14%
of which attorneys' fees:	approx. 27%
of which validation costs:	approx. 27%
of which annuities:	approx. 32%

Do you have any more questions?

Please look in the FAQs or contact us.

And now to the practice

Up until the mid-1980s it was possible to observe a very precise correlation between expenditure on R&D and the number of patent applications filed (OECD countries und USA). Since then, however, the numbers of applications have increased significantly more quickly than expenditure on R&D. Why is this so?

It is by no means the case that every invention which is patent-protected today is revolutionary from a technological point of view. Patents often relate to improvements which the inventor himself or herself does not consider to be patentable, but rather considers to be a logical progression. Other patents can be technically circumvented by the simplest of means. Nevertheless, behind such patents there is generally a conscious decision to make an investment: it is expected that they will more than repay the patent costs, which are considerable. How can that work?

Today, it is no longer the case that patent applications are filed simply because that is what people do at the end of a development project. Patents are used intensively for the following purposes, for example:

• Safeguarding of commercial relationships with suppliers, customers and distributors by means of the disciplining effect of patent protection.

• Safeguarding of business models which are designed to achieve profits by way of high margins on consumables.

• Safeguarding of one’s own underlying development work before beginning on further developments jointly with partners.

• Prevention of exploitation of costly approval procedures by free riders.

• As a negotiation tool in disputes.

We see patents as tools. And, as with tools, it is also the case with patents that the supposedly universal tool can do everything, but generally cannot do anything very well. However, we aim to structure the patent protection for your invention in such a way that it best serves your intended purpose. Your business model determines which scope of protection should be sought. This is:

Business-driven IP.