Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Patent

What it is:

A patent is a grant of property rights to an invention. In the United States, this is done through the U.S. Patent and Trademark Office.

How it works (Example):

A patent prevents others from using, making or selling a specific invention within the U.S. Use of the term "patent pending" or "patent applied for" is intended to inform the general public that the inventor has filed a patent application on the item, but these terms do not protect the inventor until a patent is actually granted. Only the inventor of the invention can apply for a patent, although there are exceptions.

There are three types of patents: utility patents, plant patents, and design patents. Anyone who invents or discovers a "new and useful" process, article of manufacture, composition of matter, machine, or improvement upon these things may be eligible for a utility patent. Plant patents are awarded to anyone who invents or discovers and asexually reproduces a "distinct and new variety of plant." Design patents generally go to anyone who invents a "new, original, and ornamental design for an article of manufacture." Inventions related to the use of "special nuclear material or atomic energy in an atomic weapon" are not eligible for patents. The U.S. Patent and Trademark Office will also not patent "laws of nature, physical phenomena, and abstract ideas," nor is a "mere idea or suggestion" eligible. Prior foreign use or existing domestic use of an invention also influence whether an invention is eligible for patent.

To apply for a patent, the inventor must first file either a provisional or non-provisional application for a patent, which includes a description and drawing of the invention. The U.S. Patent and Trademark Office then provides the inventor with an application number and official filing date. After 18 months, the U.S. Patent and Trademark Office publishes the patent application, and the general public may protest or request access to the entire application file. The application is sent to a patent examiner who specializes in the invention's area of technology, and the examiner evaluates the invention and application for compliance with patent guidelines. The examiner may accept or reject the application, and the applicant may appeal a rejection. If a patent is granted, the manufacturer or seller of the patented article must mark the articles with the patent number.

Why it Matters:

Article I, Section 8 of the U.S. Constitution allows Congress to enact patent laws. Patent laws were most recently revised on November 29, 1999, with the passage of the American Inventors Protection Act.

Inventors may allow others to manufacture or sell their patented inventions in exchange for money. American law allows inventors to enforce their patents by bringing patent infringement lawsuits in federal court against anyone who uses the patented invention without permission.

Patents expire. In the United States, a utility patent issued on or after June 8, 1995, expires on the later of either 17 years from the grant date or 20 years from the first effective filing date. Design patents expire 14 years from the patent grant date. A patent may also expire if the owner fails to pay required maintenance fees, which may occur if the owner is unable to commercially exploit the invention. Sometimes, a court invalidates patents for various reasons. When a patent expires or is invalidated, the related invention could fall into the public domain and may be used or exploited without the inventor's permission.
 

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