Fundamentals of Intellectual Property

by Steven L. Nichols

Today, many employers and business managers expect their engineers, designers and scientists to be sources of innovation that can be protected as a valuable asset. Additionally, engineers, scientists and business managers often enhance their career opportunities and gain prestige when they have a history of obtaining patents on inventions. Led by their ideas, many engineers establish technology-based companies, with intellectual property the principal assets. Consequently, engineers and scientists can benefit from understanding how to obtain and maintain intellectual property rights.

The Intellectual Property Concept

The intellectual property concept has existed for millennia. In fact, around 500 B.C., a Greek colony in southern Italy named Sybarius gained fame for its quality of life and the luxury in which its citizens lived. One historian noted how Sybarites’ recognition of intellectual property rights contributed to the colony's standard of living. “The Sybarites, having given loose to their luxury, made a law that if any confectioner or cook invented any peculiar and excellent dish, no other artist was allowed to make the same dish for a year. But he alone who invented it was entitled to all the profits to be derived from the manufacture of it for that time; that others might by induced to labour at excelling in such pursuits.”

This anecdote encapsulates the principal concept that underlies intellectual property. The purpose of intellectual property is to reward and encourage producing things that society values.  In the case of patents, the idea is to encourage invention and accelerate the pace of technology.  In return for disclosing their work, inventors receive an exclusive right to that invention for a limited time.

What is Patentable?

The U.S. Supreme Court has ruled that utility patents can be sought for "anything under the sun, made or done" by mankind. Utility patents cover methods or processes, machines, manufactured articles, compositions of matter and improvements on any of these. For example, a utility patent can cover an electronic device, a chemical compound, a software application, a business method, a process for making breakfast cereal or genetically engineered life forms.

For any “invention” to be patented, it must meet three basic legal requirements: it must be useful; it must be new; and it must be unobvious. As long as an invention actually works, it generally meets the “usefulness” requirement. Inventions meet the “new” requirement if the U.S. Patent Office (PTO) cannot find a previous patent or publication or other prior public knowledge that describes or anticipates the invention. If PTO does find prior related patents or publications, it then considers whether the “invention” is considered “obvious.” Inventions meet the “unobvious” requirement if no combination of previous patents or publications suggest the invention.

Claims: What a Patent Covers

Each utility patent ends in a set of claims. Claims are statements that summarize the invention and define what the patent covers. If everything in a claim is true of someone else’s product or method, the product or method infringes that patent. Further, if a product or method infringes any one claim, it infringes the entire patent.

If the patent text describes an invention or ideas but the claims do not describe them, then those elements are not covered by the patent and the patent holder loses the rights to that subject matter. It is critical, therefore, to recite all significant subject matter in a patent application in the claims.

Inventors’ Rights

A patent can have any number of inventors. To qualify as an inventor, a person must have contributed something included in one or more of the patent claims. In the first instance, the inventors are the owners of the patent application or the issued patent. Unless they have an agreement to the contrary, each inventor has a right to exploit the subject matter of the patent without sharing the proceeds with the other inventors.

Inventors can sell or transfer their rights to a patent or patent application at any time. Often, as a condition of employment, companies require employees who are involved in research to agree that any inventions resulting from their work will belong to the company.

When different people discover an invention at about the same time and are both claiming patent rights, the rule in almost every country in the world is that the first to file an application will be the one who receives the patent. The United States has its own first-to-invent rule. The first-to-invent rule awards the patent to the inventor who was the first to invent and diligently pursued the invention. This rule makes it important for inventors to document the conception and subsequent development of their inventions, so they can present evidence of their date of invention, if necessary.

International Patent Rights

Under the current global system, a patent is only valid in the country in which it was issued. Thus, a U.S. patent provides the right to exclude others from the invention only within the national boundaries and territories of the United States. A U.S. patent does not give its owner any rights in any other country.

Apply First

U.S. patent law affords inventors a one-year grace period in which to file a patent application after they disclose an invention to the public. For example, if inventors start selling an invention, publicize an invention in a published paper or article, or present an invention at a trade show or conference, they have up to a year to file a U.S. patent application on their invention. However, if a patent application was not filed before the public disclosure, the right to seek a patent in countries other than the United States may be lost. Consequently, even though the United States grants a grace period between public disclosure and application filing, it is best not to disclose any invention publicly until after you file a patent application.

Steven L. Nichols is the managing partner of the Utah Office of Rader, Fishman & Grauer PLLC, a nationally known law firm specializing in intellectual property law. For a more in-depth treatment of intellectual property, contact Mr. Nichols at sln@raderfishman.com.