Month: December 2014

Does America Need So Many Patents?

A 2012 lawsuit between Apple and Motorola, where both companies accused each other of violating patents for smartphone components, drew attention to the general problems of the American patent system. Experts raise questions on whether the degree of patent protection that is currently provided in all markets, with no distinction by types of inventions or industries, is really needed.

When Patenting Is Good

The U.S. patent law grants a company that was the first to patent a particular kind of product with a long-lasting (typically for 20 years) monopoly for manufacturing and selling this product. Without this protection of intellectual rights, some industries could hardly have existed and developed at all. An example of such an industry is pharmaceutics. The patent system is essential for its survival for the following reasons:

  • The creation and testing of a new drug is extremely costly, while manufacturing costs are low. If copying was possible right away, the inventing company would always be at a loss because competitors would be able to manufacture and sell the same drug without putting a single dollar into its development.
  • Each new drug has to be tested for at least 10 years before it can be sold. A competitive advantage at the start that is gained through patent protection is necessary to compensate for such a long term of recoupment and associated risks.
  • Being first does not create a durable competitive advantage in this industry. Customers do not typically associate a drug with the company that first started selling it.

When Patenting Is Bad

For the same reasons that patenting is good for the pharmaceutics industry, it can be destructive for other kinds of markets – those where the costs of inventions are low as compared to manufacturing costs, and those where being first creates a powerful marketing advantage by itself. The adverse effects are the following:

  • Excessive resources spent by companies in order to speed the invention process up and file a particular patent first. In markets with low invention costs, improvements happen naturally as part of normal market competition. The benefit of “patent races” for customers is negligible (getting a new product several days earlier), while the extra pressure put on company budgets is considerable.
  • The problem of patent trolls – companies that file patents not in order to manufacture a particular product (these companies do not manufacture anything at all) but only to sue others who will manufacture a similar product for patent infringement.

These problems can be solved by the abolishment of patents in industries that do not really need them, like most hi-tech markets.

Unitary Patent: All Your EU Patent Issues Solved in One Go

The first attempts to create a unitary patent for the EU region date back to 1970s. Although, the projects and initiatives introduced at that time had different names, the idea behind them was very similar to the one that prompted the creation of unitary patent that may soon help many businesses and inventors avoid a lot of unnecessary headache.

The main characteristics of the so-called European patent are:

  • The patent, once granted, will be valid at all the member countries. This means that you will not need to apply for a patent in every country separately.
  • The holder of the patent will only have to pay a single renewal fee. This is another huge benefit of the unitary effect. You only need to pay for the patent renewal once, and it will be automatically updated in every European country.
  • There will be only one court to deal with the unitary patent-related issues. The Unified Patent Court is to be the legal body that will govern all the judicial matters associated with this patent.
  • The owner of the patent will be offered uniform protection. This means that should any issue arise, like a patent infringement case, the final decision made by the court will pertain to the patent as a whole, so you won’t have to sue the offenders in every European country.

Considering all these qualities, it is really no wonder that this idea gained popularity quickly. Although it took a lot of time to work out a unitary patent agreement that is accepted by everyone, people finally managed to do this, and many inventors today can benefit from the results of their hard work, right?

It turns out that the situation isn’t as good as it may seem. Spain, Croatia, and Italy decided to fight this project tooth and nail, and their combined efforts managed to hinder the progress of the patent’s legal acceptance.

Why Unitary Patent?

There are many benefits to unitary patent, but the real reason that will definitely make it the most popular European patent option is its affordability. The unitary effect allows the applicants to cut their costs significantly, as they only need to pay for the patent once.

The officials don’t even require for the paperwork to be translated if it is filed in English, German, or French. This also helps cut down your expenses a little. A machine translation of the text may be required, but it will not hold any legal power.

There is no doubt that European unitary patent is the future of this business. Its implementation will be able to simplify the business relations within the EU and with its foreign partners.