IIDS Lect 4_ Part 3: Entrepreneurial performance: Innovation
3. Intellectual property rights: Patents
Intellectual property (IP) refers to creations of the mind, such as inventions, literary and artistic works, ... (WIPO, 2014)
Different ways of protecting intellectual property, each designed to protect different things:
(Invention) Patent: Property right protecting an invention (e.g., process, machine, manufactured items, or variety of plant).
Trademark: An indicator used to distinguish the source of a good (e.g., by protecting words or symbols).
Design (patents): A design consists of the visual ornamental characteristics embodied in, or applied to, an article of manufacture.
Copyright: A property right protecting works of authorship (e.g., artistic or literary work).
see slide 16-20
Patents: Basic knowledge
Novelty: The invention must be new. It must have some physical or method-step difference over all prior developments (“prior art” = state of knowledge existing/available before the invention).
Unobviousness: The invention must differ substantially and significantly and not be obvious to one with ordinary skill in the “art” or field of the invention (“inventive step”).
A patent is a property right granted by the federal government that excludes others from producing, using, or selling the invention, or from importing the invention for a limited time in exchange for public disclosure of the nature of the invention.
(Commercially) usable: The invention must be (commercially) usable. Any use usefulness will suffice.
see slide 22-24
What is patentable? (1/2)
However, (in Germany) patent protection is excluded for:
In addition, the following are typically not patentable:
Because of its changing nature, the term „invention“ is not clearly defined in patent law.
Discoveries, scientific theories, rules, ...
Plants and animals
Patentable under certain conditions: Microbiology, biotechnology, software
Substituting one material for another (e.g., plastic for metal)
Merely changing the size of an already existing device
Making something more portable
Substituting an element for an equivalent element
Altering an items shape
see appendix slide 26, 31 + see slides 27-30; 32
Patenting and infringing (1/3)
Must be found out by patent holder. If court rules in favor of patentee (i.e., if infringement indeed took place), he is entitled to:
Injunction
Damages
The infringer must stop using the patented technology.
Very powerful tool, especially when infringer has invested in complementary assets (e.g., production technology).
The infringer must pay damages to the patentee
Different mechanisms of calculation possible:
Infringer’s profits (due to use of the patented
technology)
Lost profits of patentee
“Reasonable royalty”