The basics of IP: Patents and utility models


The basics of IP: Patents and utility models

Ludwig Lindermayer is a patent and trademark attorney at PAUSTIAN & PARTNER. In a series of thought leadership pieces, he outlines the basics of intellectual property and how best to protect them as a startup.

In this session on intellectual property (IP) we will continue our journey through the IP-rabbit hole and shed light on presumably the most iconic of all IP-rights: the patent.

Since laws and case law vary considerably from country to country and with  regional systems like the European Patent Office on top of that, we will only deal with the basics of patents and the so-called "little brother" utility model here.

The first patent law in todays' sense was established 1474 in Venice. England followed in 1624 with the "Statute of Monopolies" that became the role model for all patent laws to come.

The term "monopoly" is the essence of what a patent is all about: The applicant is granted a monopoly on his invention by awarding the inventor the right to prevent others from doing as is described in the patent. So the initial (and very basic) idea behind a patent is that the inventor tells the world about his invention and in doing so, advances society. The inventor in turn gets a monopoly for said invention as a reward.

On a side note, this is why the patent system is designed somewhat fail-safe from the beginning: If the invention does not work, the worst case is that the inventor is granted the right to prevent others from doing what did not work in the first place.

What can be submitted for a patent? Short answer: literally everything – even a cheese sandwich (no joke, please see US 20130295234 A1). Thus the question rather is: "What can be patented?"

Patents protect technical inventions. So no shapes, colours, etc. as long as they are not needed to achieve a technical effect: rough surface on an adhesive tape = reduced slip on steps, bright red colour on a life vest = increased visibility. These are examples of shapes and colours that are technical features.

To get a patent the technical features of the invention –in the above example rough surface on an adhesive tape or the bright red colour on a life vest– need to be novel, inventive and enabling. There are of course some more points to consider like industrial applicability and the invention filed must not be excluded by law, but as I promised we'll keep this as simple as possible we'll focus on novelty and inventiveness mainly. By the way, the lack of technical features doomed the application of the cheese sandwich…

Novelty is the answer to the question "Is it already out there?". So in a way, checking if the technical features had been previously disclosed all together. If yes, the invention is not novel and thus no patent will be awarded.

Inventiveness deals with technical creativity of sorts. If there is a difference regarding the technical features and the prior art – in other words the invention is novel, then one would check if said difference is inventive. Or in other words, would a skilled person in that field of technology find the difference without being technically creative (inventive). You see, even if the level of detail is tuned down to the bare minimum, there are a lot of questions: Who is that skilled person and what's the person's knowledge? What is considered obvious and thus not inventive – what is the threshold there? I'll try to explain with an example: If the invention is the method of hanging a picture on a wall using a screw while there is prior art hanging on a wall using a nail, there would be a lack of inventiveness. Screws and nails are similar and it would be obvious to try the other. A different thing would be a method to hang a picture on a wall using a picture frame that creates zero gravity. 

This brings us to enabling disclosure. The above example of a zero gravity picture frame and the method of using it to hang a picture on a wall would be patentable so far. However, if the patent application does not explain how such a frame works  in a way that enables others to build one themselves (advancing society), the patent application lacks enabling disclosure and thus cannot be granted. 

If the patent application checks the boxes of novelty, inventiveness and enabling disclosure, a patent will be granted, this is the same for software and artificial intelligence (AI) patents. Essentially, such patents will be valid for 20 years and a yearly fee will have to be paid to keep it "alive" (again, there are a lot more details in reality). The applicant of the patent can go against others that infringe said patent.

Patents not only protect inventions, they also serve as bargaining chips in case there are disputes between companies (Apple versus Samsung for example), they might increase the value of the company, something that might appeal to startups, they can be sold and bought and even enforced if the holder is not producing any of the protected goods, and many more. 

The "little brother" 

A utility model is essentially a patent with some decisive differences. Utility models are not available in every country, China, Japan and Germany are among the countries that have them and each country handles the registration of such utility models differently. Some have a substantive examination, others don't. As I am a German patent attorney, we'll take a German utility model as an example. 

Essentially, an application for a utility model is almost identical to a patent application, but less stringent.  In Germany you cannot apply for methods (so the zero gravity picture frame would not be eligible) and after a rough check that the invention is enabling, the utility model will be registered. There is no substantive examination as with a patent. Whether a utility model fulfils the requirements of novelty, inventiveness and enabling disclosure is unclear until it is "used". So until the moment the applicant goes after somebody else and this somebody attacks the validity of the utility model in defence, or somebody directly attacks the validity because it seems necessary, only then the above requirements will be checked. 

So why then utility models at all? Seems a bit unsafe and unsure! With a utility model, the applicant can quickly and inexpensively get a registered and gain "real" IP-rights, and  in some cases due to the different systems of utility models, it might even be more stable than a patent. There is one further decisive difference: the utility model usually has a validity expiry date that is considerably less than a patent – in Germany it is max 10 years.

The above is merely an attempt to explain the considerably difficult subject "patents & utility models". It certainly is no legal advice – if you want to know more contact the attorney of your trust.

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