Company Patents: Everything You Need to Know
Company patents are patents held by a company — although patent applicants are individuals.3 min read
Company patents are patents held by a company — although patent applicants are individuals. Patent owners may assign applications to their own company or another company. In some cases, employees sign agreements upon being hired that assign any inventions they create in the course of their employment to the company, so patent rights go to the company as a result.
Licensing Patents: What It Means and Why Do It?
When someone licenses a patent, that patent owner gives permission to another entity (company or individual) to use, make, or sell the patented product. The involved parties agree to certain terms and conditions, which may include payment terms from the licensee to the licensor, the specific purpose for the invention, the location of activity, and the amount of time the license will last.
There are several reasons a patent owner may decide to grant licensing rights for an invention to a third party. Some of the reasons include the following:
- The owner of the patent might not have adequate facilities to manufacture the product, so he or she allows other entities to manufacture it in exchange for royalty payments.
- Sometimes, a patent owner might have the facilities to produce a product, but the facilities might not be big enough to meet demand. The owner may choose to license the patent to a third party in order to have an additional income stream.
- A patent owner might also want to focus on one geographic area, so he or she might grant a license to a third party that has interests in other locations.
By taking part in a licensing agreement, two parties can create a business relationship that benefits both. Licensors maintain their property rights to their inventions, which isn't the case if they sell or transfer the patent to a third party.
Why Are Patents Useful?
Patented inventions touch on every aspect of human beings' lives, from electric light inventions (patent holders include Swan and Edison) and plastic inventions (patent holder: Baekeland) to ballpoint pens (Biro is a patent holder). Even microprocessors fall under the patent umbrella (Intel is a patent holder).
When someone creates a novel invention, patents grant that person protection for their invention. With that protection comes the chance to enjoy financial rewards from the invention. Because the information in patents is publicly available, it helps to foster innovation and spread knowledge, which benefits society as a whole.
How Patents Help
When knowledge is made public, countless people can then use it at the same time. This is a benefit for the public, but it may cause issues when it comes to commercializing technical knowledge.
When such knowledge isn't protected, anyone can use the technical knowledge in inventions and not recognize the inventor's creativity or contributions. Because of this, inventors would be more likely to keep their inventions secret, particularly if they have commercial value. They might be discouraged from making their inventions public. This is why patents help: they give innovators limited exclusive rights so that they're more likely to make their innovations public.
When inventors know they have some protection, they're more likely to share their knowledge. They're also able to enjoy appropriate returns for their work.
When technical information in a patent is disclosed to the public, it gives incentive to competitors to try to improve upon the initial invention. It may also give them ideas for alternate solutions. All of this encourages more innovation, which contributes to the well-being of society and human beings' quality of life.
What Makes Something Patentable?
An invention must meet specific conditions in order for the inventor to obtain a patent for it. In general, it has to meet the following conditions:
- It has to have an element of novelty, or a new trait not already known in its existing field.
- It has to be non-obvious, meaning someone (with the average skill level) in the field it applies to couldn't obviously have come up with it.
- It must be useful.
Patents are very useful, not only for providing legal protection to the patent owners but also for fostering innovation. This helps to advance civilization, which is beneficial to people around the world.
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