A patent is a property right provided by a sovereign state: it provides the ‘negative right’ to exclude others from making, using, selling, offering for sale, or importing the patented invention for the term of the patent. The right is granted in exchange for placing the information in the public domain.

Patents are awarded for up to 20 years. The product has to be new compared to the ‘current status of technology’. Patents are rather expensive to register for private individuals. There are patent attorneys who can help in the registration process.

Should patents be registered or not? In depends on the particular situation. If you are a high-tech business with a limited income stream and plan to sell the business, patents can really help increase the value of the business.

On the other hand, if you don’t plan to sell the company and the invention gives you a competitive advantage, you don’t necessarily want to register the patent.

Not registering a patent allow you to keep the invention a secret and enjoy its exclusive use. If you were the Coca-Cola company, would you register a patent for the Coke? Well, certainly not.  Remember that after the patent has expired, everybody can use it for free! So you would end-up with many clones for the Coke.

Patents are territorial, with legal differences between the USA and Europe: ‘first to invent’ in the USA versus ‘first to file’ in Europe.

Regarding software: there is still intense debate whether software is patentable or not, with interpretation that differ by country (the European community has a much stricter view that the USA):

  • Where lie the boundaries between what is patentable and what is not patentable?
  • Does the ‘inventive and non-obvious’ requirements apply to software?
  • Do software patents discourage innovation?

In practice, companies cross-licence their software patents to each other – to avoid being sued against patent infringement.

In 2011, a patent war is being waged in the mobile phone space, following the launch of Android by Google and its acquisition of the mobile phone business of Motorola. Apple in particular, who feel threatened and wants to avoid a repeat of the dominance acquired by Microsoft in the PC business in the 1980s, this time with Google in the mobile handset business, has been sueing a number of handset makers, in particular Samsung and HTC.

Patents can be very valuable. In July 2011, Google lost the battle for 6000 Nortel patents against a consortium made of Apple, Microsoft, Ericson, RIM, Sony, EMC. The acquisition price: USD4.5bn.