3.3 Patents

3.3.1 What is a patent?

A patent is a type of legally registered IP protection applicable only to innovations that are inventive (i.e. not obvious to one skilled in the relevant field) and useful, including devices, methods, processes and substances.

The patent application process is explained later in this training. A patent application is ‘pending’ while it is formally considered for grant.

When granted, a patent provides exclusive rights (a monopoly) to use, manufacture and market the IP-based products or services in the jurisdiction of the registration (e.g. Australia). In each jurisdiction, to be granted these rights, a separate patent application must be made; global patents do not exist. The term of a standard patent is 20 years. Pharmaceutical patents can last up to 25 years.

Patents are the most legally robust and therefore valuable type of IP protection, partly because they cover inventions, but also because the patenting process requires precise definition of the IP to underpin the legal rights.

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Patent specification

In exchange for the monopoly rights, the patent applicant must fully disclose the IP and the best way known to implement it. This information, known as the patent specification or description, is published by the registering agency (e.g. IP Australia) before the patent application is fully examined. This disclosure can stimulate more innovations that benefit society.

It can be advantageous to include relevant information in the specification that is additional to the mandatory requirements, as explained below.

Patent claims

In addition to the specification, the applicant must provide one or more claims that precisely define the features of the invention for which the patent grant is sought, with only one invention per application. These claims are examined by the registering agency for validity as patentable IP. Allowance may take many years in some jurisdictions and claims are often rejected.

IP rights apply only to granted claims and not to the patent specification. However, all claim features must be included in the specification, although they may be expressed differently (including by use of figures). Adding potentially claimable content to a specification after it has been filed is not permitted.  Consequently, specifications often contain substantial additional information to accommodate claim amendments or additions that may later be required to pass examination.

Patent challenge

A commercial competitor (for example) may challenge the validity of patent claims before, or at any time subsequent to, grant of the patent.

Patent assertion or enforcement

After grant, the IP owner may assert, or enforce, his/her legal rights against a perceived transgressor of one or more claims. Rights may be asserted back to the patent application date (excluding provisional applications – see below), which could be many years before the grant date. Such proceedings are outside the role of the registering agency (e.g. IP Australia).

When is a patent a good protection option?

Patents are an appropriate type of IP protection when:

  • prior art searches show that the IP is sufficiently inventive that it is likely that a patent will be granted
  • the IP scope is sufficiently broad to prevent competitors readily circumventing granted patent claims by using existing alternatives to the IP, and
  • the IP value is sufficiently high to justify the expense of patenting.

Disadvantages of patents:

  • a patent is by far the most expensive type of IP protection
  • the patenting process has significant timing constraints
  • prospects for each patent application to be granted are uncertain

the patent examination process often relies on the ongoing availability of the IP creators to respond to technical questions or rejections.

3.3.2 The patenting process

The typical patenting process in a university is:

  1. The IP creator makes a confidential disclosure of the IP to the university’s TTO, tentatively defining the IP.
  2. With support from the TTO, the IP creator conducts a prior art novelty search. If the result favours it, a prior art inventiveness search follows. The results of these searches may induce the creator to redefine the tentative IP.
  3. The TTO contacts a patent attorney, who drafts a patent specification, preferably with claims, based on information provided by the IP creator. The IP creator reviews the draft and may suggest amendments.
  4. Under instruction from the TTO, the patent attorney files a patent application and the specification with the Government registering agency for the desired jurisdiction (e.g. IP Australia). This sets the critical ‘priority date’; any information disclosed after this date is not prior art in respect of this IP and cannot be used to invalidate its patentability. Under international agreements, a patent application in any jurisdiction sets the priority date in almost all jurisdictions.

    A patent is ‘pending’ when filed but not yet granted or abandoned.

    Three filing options/phases exist and are usually taken in the order shown below, though the first two are not mandatory. Separate filings for the same specification can exist simultaneously in two or three phases when two or more jurisdictions are desired.

    1. Provisional application
      Claims are not mandatory because they are not examined in this phase. This is the lowest cost option for establishing the critical priority date, and it may be used to defer subsequent phases and costs by up to 12 months. By that time, one or both types of non-provisional (‘complete’) applications, B and/or C below, must be filed, or the application must be abandoned, or recommenced (‘rolled over’). Unlike B and C, legal rights are not enforceable retrospectively to the filing date if a patent is eventually granted.

    2. PCT (International) application
      All major jurisdictions are signatories to the Patent Cooperation Treaty (PCT). A patent is not granted for a PCT application, but in all jurisdictions that later grant national/regional patents, legal rights are enforceable retrospectively to the PCT application date. Claims are mandatory in a PCT application and a preliminary examination of the claims occurs, which defers the deadline for the national/regional application by 18 months, i.e. a total of 30 months if added to A. Although it adds slightly to overall costs, deferment of the high national/regional costs is often desirable.

    3. National/regional application
      This must be filed in the desired jurisdiction, and separate applications must be filed if protection in several jurisdictions is desired. Claims are mandatory. Choosing this option alone is the fastest way to obtain a patent, subject to examination. If A and/or B are bypassed, costs overall are slightly less, but the major costs are not deferred.

      For more information about jurisdictions other than Australia, visit http://www.wipo.int/directory/en/

  5. The IP owner may now or later disclose the IP (through publication in an academic journal, for example) but should exercise caution if the IP is still evolving with ongoing R&D.
  6. The content of the application is published by the registering agency about 18 months after its priority date. If an application is meanwhile abandoned or cancelled, it is not published. This gives IP owners some time to abandon the application if they wish to maintain secret IP.
  7. In the national/regional phase, the claims are examined for patentability. The IP creators are usually required to assist the patent attorney to respond if claims are rejected or questioned. The applicant may amend the claims. Several rounds of examinations are common. This stage of the process, the prosecution, may take several years: 3-5 in Australia and the USA, 5-7 in Europe, 10+ years in less developed countries.
  8. If a patent is granted, no further changes to the claims are allowed. The grant is made public so that competitors may challenge the patent’s validity.
  9. Maintenance fees must be paid throughout the term of the patent (20 years) to prevent it lapsing. In Australia, these are payable annually.

3.3.3 Patent costs

Patenting is by far the most expensive type of IP protection. For example, a single patent granted and maintained for 20 years in Australia, USA and four countries in western Europe will typically cost AUD140000 to 250000 (in 2018). It will cost significantly more if any appeal against rejection is required, or if currency exchange rates change adversely.

In the absence of support from an industry partner (indicating that the commercial viability of the IP is poor), a university will probably not proceed to the PCT and/or national/regional phases of the patent application.  This imposes significant time constraints on all involved due to the limited lifetimes of provisional patent applications and PCT applications (12 and 18 months respectively).

Typical costs for a single patent, including attorney fees and government fees, excluding university in-house costs (e.g. for prior art searches) and any litigation, are:

PhaseDetailApproximate cost (2018 AUD)
Provisional $ 6,000
PCT $ 16,000
National/regional Initial filing and exam fee$5,000 (Australia)
$9,000 (USA)
$14,000 (European Patent Office)
National/regional Prosecution and grant $6,000 to $20,000 (Australia)
$11,000 to $50,000 (USA)
$20,000 to $76,000 (EPO, including validation in four typical countries in western Europe)
National/regional Maintenance fees total for 20 year term$11,000 (Australia)
$15,000 (USA)
$27,000 (EPO, 4 countries)

Quick quiz – Q1: To cut costs, a single patent application can be made to protect multiple inventions owned by the same applicant. True or false?

INCORRECT: Try again.
CORRECT: Separate patent applications are required for each invention.

Quick quiz – Q2: Patent rights cannot be asserted (enforced) against a competitor until the patent is granted. True or false?

CORRECT: However, once granted, the rights can be asserted retrospectively to the filing date of a PCT or national/regional phase application.
INCORRECT: Try again.

Quick quiz – Q3: When granted, a patent applies to all the invention’s features described in the specification. True or false?

INCORRECT: Try again.
CORRECT: Legal IP rights apply only to the granted claims which may not contain all the features in the specification. However, the specification of a granted patent is a public disclosure of features of the invention, which prevents anybody from successfully patenting those features afterwards.

Quick quiz – Q4: A PCT (international) patent application eliminates the need to apply for patents separately in each jurisdiction of interest. True or false?

INCORRECT: Try again.
CORRECT: Separate national/regional applications in each jurisdiction of interest are mandatory. In all PCT jurisdictions, a PCT application sets a single filing date from which patent rights, when granted, can be asserted.