Author Name:   chetan sharma

Significance of Patent for technological companies and impact on their financial documents

Significance of Patent for technological companies and impact on their financial documents

Significance of Patents

# Meaning and characteristics of Patents
# Objective of Patent Act
# Inventions not patentable
# India signed international treaties and their benefits
# Types of patent applications
# Procedure of filing patent application in India and at International level
# Top 10 companies with maximum number of patents in the field of technology and impact of obtaining patent in their financial documents
# Profit in the financial documents of the companies after obtaining patents.
# Challenges for obtaining patents
# Significance of obtaining the patents

Meaning of Patent And Its Characteristics

Definition - “Patent" means a patent for any invention granted under the Indian Patent Act 1970;

Meaning of Invention
“Invention” means a new product or process involving an inventive step and capable of industrial application.

Basic ingredients of product to be Patented
A. Novelty – The patent should be an invention.
B. Useful – Capable of industrial application.
C. Non Obvious – The invention is not capable to be thought by the prudent mind.

Laws dealing with Patents in India
Indian Patent Act 1970 as amended till date.
Patent Rules as amended till date.

Jurisdiction
Patent in granted by the Indian Patent Office which is administered by Controller General of Patents, Designs & Trade Marks (CGPDTM). Indian Patent Office functions from four locations only viz. Kolkata, Delhi, Chennai and Mumbai.

Objective And Salient Features Of Indian Patent Act

Invention must fall into any of the statuary classes:-
1. Processes
2. Machines
3. Manufactures
4. Composition of matters and
5. New uses of any of the above
# Both product and process patent provided.
# Term – 20 years.
# Examination on request.
# Both pre-grant and post grant opposition.
# Publication of application after 18 months with facility of early publication provided.
# Substantially reduced time lines.

Inventions Not Patentable

1. An invention which is frivolous or which claims anything obviously contrary to whole established natural laws.
2. An invention the primary or intended use or commercial exploitation of which could be contrary to public.
3. The mere discovery of a scientific principle or the formulation of an abstract theory.
4. The mere discovery of any new property or new use for known substance or of the mere use of known process, machine or apparatus unless such known process result in a new product or employ one new reactant.
5. A substance obtained from mere admixture resulting into aggregation of properties.
6. Mere arrangement or re-arrangement or duplication of known devices each functioning independently.
7. A method of agriculture or horticulture.
8. Any process for the medicinal, surgical, curative, prophylactic or other treatment of human beings or animals.
9. Plants and animals in whole or any part in whole or any part thereof other than micro organism but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals.
10. A computer programme per se other than its technical application to industry or combination with hardware
11. A mathematical method or business method or algorithms.
12. A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions.
13. A mere scheme or rule or method of performing mental act or method of playing game.
14. A presentation of information.
15. Topography of integrated circuits.
16. An invention which, in effect is traditional knowledge or which is an aggregation or duplication of known properties of traditionally known component or components.
17. Invention relating to atomic energy.

 

India Acceded/Signed Following Patent Treaties:-

1. Patent Co-operation Treaty
2. Paris Convention
3. Budapest Treaty
4. TRIPS Convention (full form of trips to be added)

Benefits of Signing Treaties

1. Unification of laws around the world.
2. Benefit of obtaining patent in any of the contracting states. irrespective of nationality.
3. Spreading awareness of IPR and its issues around the world.
4. Increase Foreign Direct Investment (FD) from developed countries.
5. Protection of rights around the world.
6. Contribution to national economy.
7. Promotes research and development.

National And International Applications For Grant Of Patent In India

1. Ordinary Application, i.e., an Application which has been filed directly in the Indian Patent Office.
2. Convention Application
3. PCT Application
4. Divisional Application, which can result from division of a Patent Application.
5. Patent of Addition, which may be filed subsequent to the Filing of an Application for Patent, for an improvement or modification.

Filing of A Patent Application – Points To Remember

A patent application shall be filed on Form-1 along with Provisional /Complete Specification, with the prescribed fee as given in First Schedule at an appropriate office.
Patent Application can be filed directly any of the Contracting States.

However, a provisional specification cannot be filed in case of a Convention Application.

Normal fee shall be applicable for applications containing upto thirty pages in specification and upto 10 claims. If the specification exceeds thirty pages or claims are more than ten in number, additional fee as given in First Schedule is payable.

 

Stages to Be Followed In Obtaining Patent In India

STAGES OF FILING INTERNATIONAL APPLICATIONS THROUGH PCT ROUTE

 

File PCT application

 

International Search Report and opinion

 

International publication

 

File demand on international preliminary examination (Optional)

 

International preliminary report on patentability (Optional)

 

Enter national phase

Ranking of the top 10 technology companies with the most international patent applications in 2015 and highest market share in the industry after obtaining Patents
 

Value of Patent/Trademark Impacting In Millions in The Financial Documents of the Companies

Profit After Tax of The Companies (Income In Million)

Current Challenges In Obtaining Patent In India
# Obtaining Patent at national or international level is expensive.
# Always needs a specialist or Patent Attorney.
# Long list of pending litigation.
# Lack of check on infringement.
# Minor improvements in product is not entitled for patent.
# Lack of infrastructure and personal for handling the patent applications at patent office.
# Huge pendency of patent applications.
# Lack of awareness and knowledge for obtaining patent in society.
# No government initiative to motivate people for innovation.
# Compulsory licensing.

Significance of Obtaining Patents
# Promote Research, development and innovation.
# Society and environmental development.
# Increase foreign direct investments.
# Built reputation in market and increase the confidence of investors.
# Unification of laws all over the world.
# Gives rights to prevent others from copying, selling, distribution and importing of goods.
# you can license your patent for others to use it, or sell it, as with any asset. This can provide an important source of revenue for your business. Indeed, some businesses exist solely to collect the royalties from a patent they have licensed.
# Solutions to the biggest challenges.
# Patent is a business asset.
# Right to sue on infringement.

The author can be reached at: advchetansharma@legalserviceindia.com

ISBN No: 978-81-928510-1-3
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