The protection of intellectual property (IP) is a vital ingredient of a knowledge economy. And a patent is a universally accepted way of protecting this IP.
A patent can be described as a social contract between the state and an inventor where, in exchange for complete disclosure of the invention, the state grants the inventor a limited monopoly for 20 years to exclude others from making commercial use of the invention.
Society benefits from the full disclosure because others can now build and improve on it. The limited monopoly can also be extended globally.
There is currently a national, if not global, debate on the sensitive issue of protection of indigenous and traditional knowledge. This debate is healthy and timely, but this article consciously does not deal with this complex issue.
The decision to patent an invention depends on the specific risks and circumstances of each case. In most cases it would make sense to patent when weighing up the potential consequences of not having the protection afforded by a patent. The timing of filing for patent protection must also be carefully considered.
Ideally, a product that can easily be reverse-engineered should be patented to keep competitors from using or imitating the product or any of its novel features.
An alternative to patenting is to keep the invention secret, sometimes referred to as a trade secret. Maintaining this secrecy can be costly. When considering costs as a criterion for a protection strategy, the costs of patenting must be weighed against the often hidden costs of protecting trade secrets. Arguably the most famous trade secret is the Coca-Cola recipe, which has been kept for much longer than 20 years. Coca-Cola has used this prolonged monopoly to build an even higher barrier around the product - the almost invincible Coca-Cola brand.
One of the main reasons for patenting is to give the owner the freedom to use his invention in his own business operations. Another reason is to prevent competitors from using the technology. A third reason could be to codify tacit knowledge so as to sell or license the patent rights to third parties.
To be patented successfully an invention must be new, inventive and have "known utility". "New" means the invention should not have been disclosed by anyone anywhere . To be "inventive" it must not be obvious to someone skilled in the field of the invention. "Known utility" means that the invention must have a useful application.
The strongest argument for patenting is that it stimulates innovation. To develop a new product or technology, and to obtain regulatory approval for it and successfully introduce this to the market could cost millions of rand.
If there were no monopoly rights for the party who paid for the innovation, competitors could easily copy the product and offer it at a much lower price. Few, if any, companies would take this risk and the incentive to innovate would disappear.
The limited monopoly offered by a patent creates a window of opportunity for the innovating organisation to recoup its investment in the innovation before competition drives the price down. So it pays to consider the timing of patent applications to maximise the post-development part of the 20-year monopoly.
In the communications and computer industries, competitive advantage is often created by speed to market rather than patent protection. Technologies in these industries quickly become redundant and a 20-year monopoly may soon be obsolete. Nevertheless, these sectors are the ones in which most patents in the US are granted, despite the spectacular growth in biotechnology and pharmaceuticals in the past decade.
It is a question of realising the maximum value from innovation by choosing the appropriate protection strategy, and getting the timing right when filing for patent protection.
- Sera (Pty) Ltd is the joint CSIR and University of Pretoria intellectual property and commercialisation office.
