New York Private Equity Lawyer & Attorney : Geoffrey Parnass : Corporate & Business Law

Patents are usually applied for by individuals and then assigned to the companies that support the research and development. Manufacturers typically seek utility patents, which cover the useful or functional aspect of an invention. The legal rights awarded to an inventor are spelled out in a formal document issued by the United States Patent and Trademark Office. In addition to sections describing the invention and the way it has solved problems hitherto unsolved, the patent document spells out the exact protection of the invention, in the same way that a deed describes the metes and bounds of a piece of land.

Patents can also be granted for the design of a product. Design patents are granted to protect designs that are new, original and ornamental. An element of a product that is predominantly functional, such as the blades of a propeller, cannot receive a design patent, since it is not primarily ornamental. Design patents last only fourteen years and are generally easier to obtain than utility patents, although their coverage is generally less powerful.

A patent is only granted to inventions that are novel and not obvious to one skilled in the field in which the invention exists. An invention is not novel if it is already known, or the invention was already patented or appeared in a printed publication before the date of invention. The rules on novelty are quite technical and it is important to conduct a thorough search of the prior art before filing a patent application. Unless an investor is familiar with the procedures for conducting these searches, they should be conducted by experienced patent attorneys.

An invention must not be “obvious” to someone skilled in the field in which the invention exists. An invention may be novel, but if it is an obvious variation of known technology, it will not receive a patent. To make this assessment, the patent office or the court (if the patent is challenged) must imagine a hypothetical person skilled in the relevant art, and ask whether the invention would have been obvious to that person. This assessment is very fact intensive and open to dispute, and the requirement is responsible for a good deal of litigation.

Finally a patent must disclose in clear and complete terms how one with ordinary skill in the technology field could make and use the invention. This is part of the bargain with the federal government. If the disclosure is incomplete or too obscure, leaving the public without the ability to practice the invention when the patent expires, the patent will be denied or invalidated by a court. 

The owner of a patent has the right to exclude others from making, using or selling the invention. There is no requirement that the patent owner actually use the invention in order to exclude others. As with a piece of land, the owner can elect to let it sit fallow and still keep others from trespassing. But unlike land, the patent gives the owner the right to keep others from producing products that are “equivalent” to the invention. This keeps others from making a trivial change to an invention just to avoid infringement. A product is considered equivalent if it performs substantially the same function, in substantially the same way, to achieve substantially the same result as the invention. 

Patents issued today are granted a 20-year period of protection from the date the application is filed with the federal government. The owner must pay maintenance fees to keep the patent in force. Under patent treaties with other countries, the patent can be registered in foreign jurisdictions and protected or licensed there. If someone infringes a patent, the owner can sue in federal court and obtain an injunction, monetary damages and an award of attorneys' fees.