What you don’t know about patents

If you’ve been fol­low­ing the Smoltek news feed, you’ll know that we are apply­ing for patents in spades. This is nat­ur­al; the patents give us time to mon­e­tize the cut­ting-edge tech­nol­o­gy we have devel­oped with your investment.

We have patent­ed 17 inven­tions and have pend­ing appli­ca­tions for anoth­er four. The inven­tions are patent­ed in the EU, the US, and many oth­er coun­tries. At the time of writ­ing, we have 89 approved patents and more than 20 pend­ing patent applications.

Every patent appli­ca­tion requires a lot of work, both before the appli­ca­tion is filed and when the patent is pend­ing, as well as after­ward. Let’s take a clos­er look at what is required to apply for a patent and how it works.

Requirements

To patent an inven­tion, it gen­er­al­ly needs to meet the fol­low­ing for­mal requirements:

• Nov­el­ty: The inven­tion must not have been pre­vi­ous­ly known. An inven­tion can­not be patent­ed if it has been made known pri­or to the appli­ca­tion, for exam­ple, by the inven­tors themselves.
• Inven­tive step: The inven­tion must be sub­stan­tial­ly dif­fer­ent from any­thing pre­vi­ous­ly known and must not be obvi­ous to any­one with knowl­edge and expe­ri­ence in the field.
• Indus­tri­al applic­a­bil­i­ty: The inven­tion must be capa­ble of being man­u­fac­tured or per­formed in some sort of indus­tri­al way. Indus­tri­al­iza­tion in this con­text has a much broad­er mean­ing than usu­al and also includes activ­i­ties such as trans­porta­tion, agri­cul­ture, hunt­ing, pub­lic admin­is­tra­tion, and health care.
• Sub­ject mat­ter eli­gi­bil­i­ty: The inven­tion must be patentable.

The last require­ment needs some fur­ther explanation.

What’s patentable?

You can­not patent an idea, a sci­en­tif­ic dis­cov­ery or the­o­ry, a math­e­mat­i­cal method, a pro­gram for com­put­ers, an artis­tic cre­ation, a pre­sen­ta­tion of infor­ma­tion, or schemes, rules, and meth­ods for per­form­ing men­tal acts, play­ing games, or doing business.

An inven­tion must be tech­ni­cal in nature to be patentable. This means that the claims must fall into one or more of the fol­low­ing categories:

• Process: These claims refer to steps in a process or method.
• Appa­ra­tus: These claims refer to the struc­tur­al or func­tion­al aspects of an appa­ra­tus or device.
• Man­u­fac­ture: These claims are con­cerned with how an item is made and what it is made of.
• Com­po­si­tion of Mat­ter: These claims cov­er chem­i­cal com­po­si­tions and compounds.

Patent application

To apply for a patent, an appli­ca­tion must be filed with a nation­al patent office.

An appli­ca­tion must meet sev­er­al for­mal require­ments. In par­tic­u­lar, it must con­sist of the fol­low­ing elements:

• Abstract: A sum­ma­ry of the tech­ni­cal con­tent so that inter­est­ed par­ties can eas­i­ly under­stand the inven­tion’s purpose.
• Descrip­tion: Instruc­tions suf­fi­cient­ly detailed to enable a per­son knowl­edge­able in the field to apply the invention.
• Claims: A set of legal claims about what the patent will pro­tect. Each claim should belong to one or more of the cat­e­gories described above.
• Draw­ings: Any draw­ings and fig­ures nec­es­sary to explain the inven­tion and the claims.

The claims are the most crit­i­cal part of the appli­ca­tion. They should be as broad and gen­er­al as pos­si­ble to pro­vide good pro­tec­tion while being clear, con­cise, and sup­port­ed by the descrip­tion. They serve as the basis for deter­min­ing whether an inven­tion infringes the patent and are crit­i­cal­ly ana­lyzed dur­ing the patent exam­i­na­tion process.

Patent pending

Once the appli­ca­tion is filed, the legal terms “patent pend­ing” and “patent applied for” can be used to dis­cour­age oth­ers from copy­ing the invention.

The mark­ing informs oth­ers that an appli­ca­tion has been filed, and they may be liable for infringe­ment once the patent has been grant­ed. How­ev­er, there is no enforce­able right until the patent is actu­al­ly issued. 

The long journey of the patent application

It takes years from the moment the appli­ca­tion is sub­mit­ted until it is grant­ed (or reject­ed). It’s not a quick process because it is thor­ough. It has to be. The result is a restric­tion on the rights of oth­ers, and thus, the gov­ern­ment wants to be on the safe side that it is justified.

When the patent office receives an appli­ca­tion, a for­mal exam­i­na­tion begins. An offi­cer checks that the appli­ca­tion meets all for­mal requirements.

Investigation far and wide

Once the for­mal exam­i­na­tion is com­plete, the tech­ni­cal exam­i­na­tion begins. A patent exam­in­er reviews the appli­ca­tion, check­ing that every­thing need­ed to grant a patent is in place. They also search glob­al data­bas­es to ensure that no sim­i­lar inven­tions are pub­lished. If the patent exam­in­er finds obsta­cles to grant­i­ng the appli­ca­tion, the appli­cant receives a tech­ni­cal notice. The appli­cant can respond if they dis­agree with the patent examiner.

The appli­ca­tion becomes pub­lic when the patent is grant­ed or after 18 months from the fil­ing date if it has not been with­drawn before then. At that point, the recipe for the secret sauce becomes pub­lic. So, if one is not absolute­ly sure about being grant­ed the patent, it may be appro­pri­ate to with­draw the appli­ca­tion to keep the inven­tion secret.

Communication ping-pong

If the patent office con­cludes that your appli­ca­tion’s require­ments are patentable and that there are good chances to issue a patent, the appli­cant receives a final notice. Then, the appli­cant can make minor changes, such as cor­rect­ing spelling errors.

Now comes a noti­fi­ca­tion that the patent office will “issue the patent.” This is the very last chance to with­draw the application.

Final­ly, the patent office announces that the patent has been granted.

Now every­thing is peace and joy. Or is it?

Of course, it’s not. All com­peti­tors and oth­er trou­ble­some char­ac­ters have nine months to object to the patent. Nat­u­ral­ly, the patent hold­er can con­test the objec­tion. If the patent office accepts the objec­tion, the patent can either be revoked or amended.

What are the alternatives?

Apply­ing for a patent requires a lot of work, takes quite some time, and costs a fair amount of mon­ey. Are there no more straight­for­ward and cheap­er alternatives?

Sure, there are.

For starters, you can just shut up. Keep your inven­tion to your­self. Don’t reveal your secret sauce. As a result, your inven­tion enjoys a cer­tain legal pro­tec­tion as it is con­sid­ered a trade secret. If some­one leaks the trade secret, they may be guilty of a breach of con­fi­den­tial­i­ty or cor­po­rate espionage.

One advan­tage over patents is that your secret remains secret, and anoth­er is that no one can freely copy it after twen­ty years. On the oth­er hand, there is noth­ing to stop a com­peti­tor from reverse engi­neer­ing your prod­ucts to find out your secret and then using it themselves.

Anoth­er solu­tion is defen­sive publishing.

Defensive publishing

One dis­ad­van­tage of keep­ing your inven­tion secret is that some­one else may come up with some­thing sim­i­lar and apply for a patent. Sud­den­ly, you are infring­ing their patent – even if you have made your inven­tion entire­ly on your own and per­haps even long before them.

To pre­vent that from hap­pen­ing, you can pub­lish a detailed descrip­tion of your inven­tion. This makes it impos­si­ble for oth­ers to apply for a patent on the inven­tion, as it is already known. This is called defen­sive pub­lish­ing because it is a pub­li­ca­tion that defends you against the very pos­si­bil­i­ty of some­one else patent­ing the idea in the future.

An obvi­ous dis­ad­van­tage is that your secret does not remain secret. Any­one is free to use your inven­tion. More­over, you have made it impos­si­ble for your­self to apply for a patent in the future, as it is already known.

World patent

Giv­en the options, patents are not so bad after all. So, you decide to go through all the hoops to get a patent grant­ed. Con­grat­u­la­tions! Your inven­tion is now protected.

There is only one catch. The patent is only valid in coun­tries where you have been grant­ed it. In the rest of the world, any­one can copy your inven­tion, which is now pub­lished and pub­licly avail­able. Darn!

Unfor­tu­nate­ly, there is no world patent or even a Euro­pean patent. Sure, many peo­ple talk about them as if they exist, but they do not. What exists is the pos­si­bil­i­ty of apply­ing in sev­er­al coun­tries at the same time. But in the end, each coun­try’s patent office has to approve the patent, and you have to pay fees for all of them.

The urgency of international patents

You need to know if you want to apply for a patent out­side your own coun­try almost from the start, as inter­na­tion­al patent appli­ca­tions must be filed with­in 18 months. Guess why!

You are absolute­ly right. After 18 months, your nation­al appli­ca­tion is pub­lished, mak­ing your inven­tion unpatentable. Remem­ber the nov­el­ty require­ment? There­fore, all inter­na­tion­al appli­ca­tions must be sub­mit­ted before that date.

Closing the loopholes

In the peri­od between the first appli­ca­tion and the receipt of the inter­na­tion­al appli­ca­tions, some­one else may come up with the same inven­tion and apply for a patent in their coun­try. If this hap­pens before your appli­ca­tion is pub­lished, i.e. with­in the first 18 months, the nov­el­ty require­ment is met. As a result, your appli­ca­tion will be refused.

To close this loop­hole, the appli­ca­tion must be filed even ear­li­er, with­in 12 months of the nation­al appli­ca­tion. Then, the date of the first appli­ca­tion also counts as the date of the sub­se­quent ones under the Paris Con­ven­tion of 1883.

Last deadline

A final dead­line to keep an eye on is 30 months after the first appli­ca­tion. This is the time­frame with­in which inter­na­tion­al appli­ca­tions must be completed.

So the process is that you first apply for a nation­al patent, then start the inter­na­tion­al appli­ca­tion with­in 12 months, and com­plete the inter­na­tion­al appli­ca­tion with­in 30 months.

In between, you will hope­ful­ly have been informed whether the nation­al patent has been approved, which indi­cates that the inter­na­tion­al appli­ca­tions will prob­a­bly be approved as well. But, again, each nation’s patent office makes its own deci­sions, so noth­ing is cer­tain until it is certain.

Need of patent agency

As you can imag­ine, apply­ing for a patent is not easy. There is a lot to keep track of. Get it wrong, and you’re screwed. That’s why we hire a patent agency to help us with this, even though we do a lot of the work ourselves.

Patent families

Every patent­ed inven­tion has a first patent, the one that was first applied for, and then sev­er­al inter­na­tion­al patents, all relat­ing to pre­cise­ly the same inven­tion. These are col­lec­tive­ly known as a patent fam­i­ly.

Cur­rent­ly, Smoltek has 89 grant­ed patents across 17 patent fam­i­lies. We have anoth­er 4 patent fam­i­lies in the mak­ing and about 20 pend­ing patents. New patent fam­i­lies are added reg­u­lar­ly, and with them come many patents over sev­er­al years.

Not what you think

I’m glad to see that you’ve stuck around until now. I guess it’s because my cliffhang­er at the begin­ning is work­ing. You are dying to know why it is not true that a patent gives the hold­er the right to make, use, and sell an invention. 

If you con­sid­er the fol­low­ing two exam­ples, you will see that it is pret­ty logical:

• Being grant­ed a patent for a new type of med­i­cine does not auto­mat­i­cal­ly give you the right to man­u­fac­ture, use, or sell the med­i­cine. Even if the med­i­cine rep­re­sents an inno­v­a­tive treat­ment, it must first under­go exten­sive clin­i­cal tri­als and be approved by drug reg­u­la­to­ry author­i­ties before it can be made avail­able to the pub­lic. This step is cru­cial to ensure that the med­i­cine is safe and effec­tive for its intend­ed use.
• Being grant­ed a patent for an inno­v­a­tive improve­ment to the design of an appa­ra­tus already patent­ed by some­one else does not auto­mat­i­cal­ly give you the right to make, use, and sell the improved appa­ra­tus. While your improve­ment may be sig­nif­i­cant, you still need per­mis­sion from the hold­er of the orig­i­nal patent to exer­cise the rights of the under­ly­ing appa­ra­tus, as the orig­i­nal design is still pro­tect­ed under their patent.

Now you under­stand why a patent does not con­fer the right to make, use, and sell an inven­tion, right?

Patent rights

So, what is a patent?

It is essen­tial­ly a right to restrict oth­ers from mak­ing, using, and sell­ing an invention.

It does­n’t just sound crazy, it is crazy. Or…? If you pon­der the fol­low­ing two exam­ples, it may not seem as far-fetched as it first appears.

• After long and cost­ly research, you have devel­oped a rev­o­lu­tion­ary med­i­cine, but you don’t have the mon­ey or skills to build your own pill fac­to­ry. If you want a phar­ma­ceu­ti­cal com­pa­ny to pro­duce your med­i­cine, you have to share the for­mu­la. With­out the right to restrict oth­ers from mak­ing, using, and sell­ing it, there is noth­ing to stop them from prof­it­ing from your hard work with­out com­pen­sa­tion. With a patent, you can approach sev­er­al of them with­out the risk of rip-off.
• You’ve fig­ured out a real­ly inno­v­a­tive improve­ment to some­one else’s  device. Since you are an hon­est guy who does­n’t steal oth­er peo­ple’s ideas, you pro­pose the improve­ment with the hope of being com­pen­sat­ed. With­out the right to restrict oth­ers from mak­ing, using, and sell­ing your improve­ment, you risk get­ting only a thank-you as a reward. With a patent, you have a much stronger nego­ti­a­tion position.

Negative right is positive

The right of a patent hold­er to deny oth­ers the use of an inven­tion is called a neg­a­tive right in patent law.

The neg­a­tive right sounds neg­a­tive, but it is actu­al­ly some­thing pos­i­tive; it gives the patent hold­er an exclu­sive right to decide who can do what with the invention.

For exam­ple, the patent own­er can decide that nobody is allowed to do any­thing with the inven­tion, and thus be the sole user of it. Or the paten­tee can give select­ed com­pa­nies the right to use the invention.

The lat­ter is called licens­ing. The patent hold­er grants a par­ty a license to use the patent under cer­tain con­di­tions. The most com­mon con­di­tion is that the oth­er par­ty pays a roy­al­ty – a fee for each item sold that is made using the patent. How­ev­er, con­di­tions that lim­it the licensed right to a par­tic­u­lar appli­ca­tion or geo­graph­ic area are also common.

We will explore what this means for deep-tech com­pa­nies like Smoltek in a future arti­cle. Don’t miss it!

Intermezzo

Now you under­stand why a patent is not a right to pro­duce, use, or sell your inven­tion but a right to deny oth­ers that right. You can use this right to grant oth­ers per­mis­sion to pro­duce, use, or sell your inven­tion on the terms you dictate.

So who gives this right?

The gov­ern­ment does, through its patent office.

But why does the gov­ern­ment, which is sup­posed to treat every­one in its ter­ri­to­ry equal­ly, want to give some­one an exclu­sive right to deny oth­ers the use of an invention?

Social contract

In exchange for dis­clos­ing the secret sauce, the patent hold­er is giv­en the exclu­sive right to deter­mine, for a lim­it­ed time, usu­al­ly twen­ty years, who can use the inven­tion and under what conditions.

The patent own­er ben­e­fits from

• Com­peti­tors can only use the solu­tion under a license, allow­ing the paten­tee to recoup its invest­ment either by licens­ing or by being the sole provider of the solution;
• with­out a license, com­peti­tors can­not copy the solu­tion, allow­ing them to recoup their investment;
• com­peti­tors are forced to devel­op their own inven­tions rather than pla­gia­rize, giv­ing them an advan­tage in the mar­ket­place; and
• they can talk open­ly about their inven­tion with­out risk­ing los­ing the ben­e­fits, mak­ing it eas­i­er to nego­ti­ate with investors, part­ners, and buyers.

Soci­ety and human­i­ty at large will ben­e­fit from

• that the details of new tech­nolo­gies become pub­licly avail­able, allow­ing knowl­edge to spread and soci­ety to develop;
• oth­ers can find prob­lems and solu­tions, which improves the inven­tion and devel­ops the tech­nol­o­gy faster
• any­one can exploit the tech­nol­o­gy after the patent expires, and
• the inven­tion is not lost to humanity.

Historical retrospect

The idea of giv­ing the inven­tor a time-lim­it­ed exclu­siv­i­ty goes back a long way.

As ear­ly as 500 BCE, the Greek city of Sybaris, in what is now Italy, is said to have giv­en inven­tors the right to make mon­ey from “any new refine­ment in lux­u­ry” for a whole year.

Almost two thou­sand years lat­er and a bit fur­ther north on the Apen­nine Penin­su­la, this idea had evolved into some­thing akin to today’s patents: In 1474, the Sen­ate of Venice decid­ed that the inven­tor was grant­ed ten years of legal pro­tec­tion against poten­tial infringers in exchange for com­mu­ni­cat­ing new and inven­tive devices to the Repub­lic. This is gen­er­al­ly con­sid­ered the birth of patents and patent law as known today.

In the more than five hun­dred years since then, the patent sys­tem has devel­oped in small steps in many parts of the world. Some milestones:

• 1474: The Venet­ian Patent Statute intro­duced the world’s first patent sys­tem, pro­tect­ing new inventions.
• 1555: France intro­duces the pub­li­ca­tion of patent descrip­tions, increas­ing transparency.
• 1624: Eng­land for­mal­izes patents as rights for inventors.
• 1790: The Unit­ed States passed its first patent law intro­duc­ing a stan­dard­ized patent process.
• 1791: France cre­ates a mod­ern patent system.
• 1883: Paris Con­ven­tion for the Pro­tec­tion of Indus­tri­al Prop­er­ty stan­dard­ized inter­na­tion­al patent laws.
• 1970: Patent Coop­er­a­tion Treaty (PCT) sim­pli­fied glob­al patent filings.
• 1977: The Euro­pean Patent Con­ven­tion (EPC) uni­fied patent pro­tec­tions across Europe.
• 1994: Agree­ment on Trade-Relat­ed Aspects of Intel­lec­tu­al Prop­er­ty Rights (TRIPS) inte­grat­ed patents into inter­na­tion­al trade.

Let’s sum up

What have we learned? Patents give the hold­er the right to restrict oth­ers from mak­ing, using, and sell­ing inven­tions. The gov­ern­ment grants this right for a lim­it­ed peri­od, usu­al­ly twen­ty years, in exchange for mak­ing the inven­tion gen­er­al­ly known for the ben­e­fit of human­i­ty. And that this idea is at least more than 500 years old (if not 2500 years).

You could say that in the long run, patents turn inven­tions into open source. Even the name reflects that. The word patent comes from the Latin patere, which means “to be open” (for pub­lic inspec­tion – just like open source).

Amaz­ing! Isn’t it?

In an upcom­ing arti­cle, we will look deep­er into patents—or rather, their impor­tance for you as an investor and share­hold­er in a deep tech company.