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A Business-Oriented Overview of IPfor Law and
Management StudentsGeneva, May 29-31, 2007
Small and Medium-Sized Enterprises (SMEs)
Division World Intellectual Property Organization
(WIPO)
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TOPIC 2The Role of Patents and Patent
Information in Business Strategy
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Factors Determining Success of a New/Improved
Product

• The product provides functional advantages over
  competing or substitute products.
• The retail-selling price is considered to be
  advantageous
• The product and/or its packaging has an
  attractive design
• The new product is properly branded, promoted and
  advertised
• The new product is readily available to customers
  in the main retail shops
• Consistent product quality
• A number of after-sales services are provided

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Different Ways of Protecting Inventions

• A variety of mechanisms are employed by firms to
  protect their inventions
• Secrecy
• Lead time
• Complementary capabilities (e.g., sales and
  service, manufacturing)
• Patents

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Relative Effectiveness of Mechanisms

• For product innovations
• Top mechanisms overall Secrecy and lead time
• Patents least effective overall
• Relatively effective in drugs and medical
  equipment.
• Less effective in semiconductors communications
  equipment
• Larger firms report patents to be more effective

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What is a Patent?

• A patent is a right to exclude all others from
  exploiting an invention, which is a a new,
  non-obvious and useful
• Process (Treatment of cane bamboo finishing of
  a product kiln)
• Machine (Looms instruments)
• Manufacture (Belt fastening mechanism)
• Composition of matter (Alloy)
• Improvements (radical/incremental)
• What is an invention?
• Technical solution to a technical problem
  (Functional versus Form/aesthetic)

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What to Patent Priorities

• What to patent
• potential commercial products of a company
• methods of making and using the products
• systems utilizing the companys products
• made by companys customers
• parts of your product made by vendors
• commercially important inventions
• blocking patents to block competitors

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Some Legal Considerations

• Patentabililty requirements
• Must be new (Worldwide)
• Must have an inventive step/non-obvious
• Must be capable of industrial application
• Maximum duration of a patent 20 years (renewal
  fees must be paid)
• Territorial right
• Used publicly, Published, Sold or Offered for
  Sale
• Patty Patent/Utility Model

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Prior Art

• All information available prior to the date of
  filing of the relevant patent application against
  which the patentability of the invention will be
  determined.
• Existing relevant technology
• Can be your own technology or of others
• Secret prior art
• Novelty/Nonobviousness
• First to File/First to Invent (USA)

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Exclusive Patent Rights

• Right to exclude others from making, using,
  selling or importing the claimed invention.
• Virtually no rights in unclaimed subject matter
• Strategic claim drafting is important
• No automatic right to use patented invention

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Patents Some Examples

• Patents that have changed the world
• Patent number US 223,898. Edisons electric
  bulb.
• Patents for simple low/tech products
• The inventor licensed the system for opening
  Coca-Cola cans at 1/10 of a penny per can. During
  the period of validity of the patent the inventor
  obtained 148,000 UK pounds a day on royalties.
• Post-it notes invented by chance, initially
  ignored by inventors but valued by the manager

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ANATOMY OF A PATENT
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ANATOMY OF A PATENT (contd)
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THE PATENT APPLICATION

• SPECIFICATION
• CLAIMS
• INVENTORSHIP

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SPECIFICATION

• A written description of the invention in clear
  and concise terms.
• The Specification must be enabling, that is,
  describe the invention in such a way as to permit
  one skilled in the art to make and use the
  invention.
• The Specification must disclose a mode/the best
  mode of making and using the invention. There
  can be no material secrets kept from a patent
  application.
• Should also include reasonable alternatives to
  the preferred embodiments in order to avoid any
  inference that the invention is limited to the
  preferred embodiments.

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CLAIMS

• Must particularly point out and distinctly
  claim the subject matter of the invention.
• Independent claim A claim which does not
  reference any other claim.
• Dependent claim A claim which references an
  independent claim or another dependent claim.
  Adds subject matter (limitations) to the
  preceding claim(s).

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Claim Scope

• Independent claims define patent scope
• Dependent claims are fallbacks
• prior art

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INVENTORSHIP

• In the United States, the patent application must
  be filed in the name of the inventor(s).
• Inventorship is purely a legal question, and is
  determined by an examination of who contributed
  creatively to what is being claimed.
  Inventorship cannot be dictated by politics,
  funding, ego, or even goodwill.
• An inventor can be anyone, and must be everyone,
  who contributes creatively to the conception or
  reduction to practice of the invention.
• Multiple inventors are referred to as JOINT
  INVENTORS.

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Reasons for Patenting

• Reasons (nonexclusive) Products Processes
  
• Prevent copying 96 78
• Patent blocking 82 64
• Prevent suits 59
  47
• Use in negotiations 48 37
• Enhance reputation 48 34
• Licensing revenue 28 23
• Measure performance 6 5

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Limits on Patent Effectiveness Why Firms do not
Patent

• Most important reasons for not applying
• Demonstration of novelty (32)
• Information disclosure (24)
• Ease of inventing around (25)
• Negative partial correlation between firm size
  and defense cost as reason not to patent suggests
  why larger firms report (product) patents to be
  more effective.

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Distinguish Between Complex and Discrete
Product Industries

• Complex product industries Where a product
  protected by numerous (e.g., hundreds) patents
  (e.g., computers, communications equipment), that
  is, more patents read on a product.
• Discrete product industries Where a product
  protected by relatively few patents (e.g., drugs,
  chemicals)

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Distinction Implies Different Uses of Patents by
Industry Type

• Complex product industries Patents used to block
  rival use of complements to
• Assure inclusion or player status in
  cross-licensing negotiations in order to gain
  access to rivals technologies
• Gain freedom to operate and design freedom via
  mutually assured destruction
• Discrete product industries Patents used to
  block substitutes by creating patent fences
  not to compel cross-licensing.

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Defensive Patent Strategy

• Large portfolio of patents of various scope
• Protect products from copying
• Cause competitor to design around
• Reduce risk of patent infringement suit by
  competitors - mutually assured destruction
• Cross licensing - market entry
• Medium to large size companies
• High cost

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Offensive Patent Strategy

• Small portfolio of pioneering patents
• Market leadership advantage
• Licensing
• Deal merger leverage
• Small to medium size companies
• Reasonable cost
• Market monitoring

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Strategies for Acquisition of Patents

• WHAT to patent?
• Patent on every invention or only on high value
  inventions
• Gillette Mach 3 (one product, 35 patents)
• Patent mining

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Strategies for Acquisition of Patents

• WHEN to patent?
• Delay in filing a patent application may lead to
  losing the patent to a competitor
• Grace Period
• First-to-file/invent system
• Annual maintenance fees often increase with time

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Strategies for Acquisition of Patents

• WHERE to patent?
• Where will the product be commercialized?
• What are the costs involved in patenting abroad?
• What are the main markets for the product?
• Where are the main competitors based?
• Advantages of the PCT (provides more time)

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Strategies for Acquisition of Patents

• WHO owns the patent?
• Company, entrepreneur or employee?
• What happens for subcontracted work?

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Strategies for Patent Exploitation

• Case study of own exploitation of a patent
• Case Mandy Haberman
• Invention of a non-spill drinking vessel
• Application for patents and industrial designs
• Registered mark Anywayup
• Difficulties in accessing the main retail stores
  and supermarkets
• Search for a partner
• Creation of a new company to commercialize the
  product
• Infringement and litigation

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Strategies for Patent Exploitation

• Case study of a combined patent exploitation
  strategy own exploitation and licensing
• Case Pliva - Pfizer
• New antibiotic
• Patent application in Croatia and abroad
• Patent search by Pfizer leads to the discovery of
  the Pliva patent
• Pliva licenses Pfizer to produce the antibiotic
  in the US as well as in some other countries
  while Pliva maintains the exclusive right to
  commercialize it in Central and Eastern Europe

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Strategies for Patent Exploitation

• Case study of a non-exclusive licensing strategy
• Case Bishop Engineering
• Enterprise specialized in power steering
  technology
• Over 300 patents since WWII
• Earns 1 Australian dollar per unit made
• Over 5 million dollars a year on royalties

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PATENT INFORMATION THE OTHER SIDE OF THE COIN
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PATENT INFORMATIONThe other side of the Coin

• PATENT ? 1. deed securing to a person an
  exclusive right granted for an invention
• ? 2. open, evident, manifest open to public
  perusal lt Latin patens
• (Collins Dictionary)

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Patent Information

• All patents are published (generally 18 months
  after the application is filed) and are in the
  public domain
• A patent is an exchange between the inventor and
  society
• It is a key element of the balance of the
  existing international patent system

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Using Patent Information

• Did you know?
• The entire set of patent documents worldwide
  includes approximately 40 million items.
• Every year approximately 1 million patent
  applications are published.
• About two-thirds of the technical information
  revealed in patents is never published elsewhere.

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Using Patent Information

• Did you know?
• Most of the inventions are disclosed to the
  public for the first time when the patent is
  being published. (e.g. jet engine invented by
  Wittle in 1936).
• The information contained in the patent documents
  is NOT SECRET!

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Using Patent Information

• Patent information is the technical and legal
  information contained in patent documents that
  are published periodically by patent offices.
• A patent document includes the full description
  of how a patented invention works and the claims
  which determine the scope of protection as well
  as details on who patented the invention, when it
  was patented and reference to relevant
  literature.

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Relevance of patent documents
Technological relevance
Patent information
Legal relevance
Commercial relevance
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Using Patent Information

• Legal relevance
• Avoid possible infringement problems
• Assess patentability of your own inventions
• Oppose grant of patents wherever they conflict
  with your own patent

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Using Patent Information

• Technological relevance
• Keep abreast with latest technologies in your
  field of expertise
• Avoid unnecessary expenses in researching what is
  already known
• In Europe, more than US 30 mill. per year is
  waisted in unnecessary research - 30 of the
  total investment in RD
• Identify and evaluate technology for technology
  transfer
• Get ideas for further innovation
• Identify alternative technologies

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Using Patent Information

• Commercial Relevance
• Locate business partners
• Locate suppliers and materials
• Monitor activities of real and potential
  competitors
• Identify niche markets

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PatentScope - WIPO Patent and PCT Resources on
the Internet
http//www.wipo.int/patentscope
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What is PatentScope ?

• PatentScope is
• Access to WIPOs Patent and PCT resources in one
  place
• Access to the technical information contained in
  more than one million international patent
  applications
• The platform for online electronic publication of
  PCT international applications
• More information on emerging issues, patent data,
  patent information and statistics

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PatentScope - Overview of Content

• Patent Cooperation Treaty (PCT)
• Legal, technical and general information about
  the international patent filing system (PCT)
  including electronic filing.
• Patent Data
• More than 1 million international patent
  applications available for search, detailed
  enquiries and as data subscription services
• Patent Statistics
• Monthly statistical reports on PCT
• Annual reports on world-wide patenting activity,
  data query facility.
• Patent Services for Developing Countries
• Search reports, access to patent documentation

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PatentScope - Overview of Content

• Patent Information
• Tutorials, Frequently Asked Questions
• Current Issues
• Numerous links to web sites, articles and studies
  on topical issues such as genetic resources,
  traditional knowledge, software, business
  methods, etc.
• Patent Law
• International Treaties administered by WIPO
• Links to intellectual property laws of nearly 100
  member states
• Frequently Asked Questions
• Meetings, Seminars, Training
• Email updates

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PCT Resources

• PCT Background
• Legal Information
• Guides, instructions, forms
• Meetings, Training, Documents

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PCT Resources - Gallery of Inventions

• 20 (and growing) notable inventions that have
  been patented via the PCT system

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Information on Patents

• Current and emerging issues in the patent system
• Background information
• Studies, articles
• Links to related resources

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WIPOs Patent Information Services for Developing
Countries

• State of the Art Search Reports
• Search and examination
• of patent applications filed with Industrial
  Property Offices participating in the
  International Cooperation for the Search and
  Examination of Inventions programme (ICSEI).
• Information services
• Equivalent patent documents (patent family
  reports).
• Patent Documents
• Delivery of copies of individual patent
  documents.

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Patent Statistics

• Monthly reports of PCT filing trends
• PCT national phase entry statistics
• Data Query (export data in Excel format based on
  user-defined criteria)
• Patent statistics from 1883 to the present day

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Search International Applications

• PatentScope Search gives access to the complete
  collection of published PCT international
  applications (more than one million)
• Search using
• keywords
• boolean operators (AND, OR)
• field codes (applicant name, publication date,
  etc)

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Bibliographic Data

• View the latest bibliographic data on record at
  the International Bureau including changes since
  publication
• View full text of description and claims for
  latin-language applications
• View National Phase Information where available
• View publication Notices

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Documents

• Access to the documents contained in the file of
  the International Bureau
• Publications
• Priority Documents
• Declarations (e.g. of inventorship)
• Written Opinions, Examination Reports and related
  documents
• View or download the documents in different
  formats
• PDF
• XML
• HTML

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THANK YOU
Email german.cavazostrevino_at_wipo.int http/www.w
ipo.int/sme/