The Reason for Patents

The most basic definition of a patent is an exchange between an inventor and the government representing the people.

The inventor has something of value that is needed by the people. That thing of value is the knowledge to construct something innovative that doesn't currently exist. The government, representing the people, wants to elicit that knowledge from the inventor so that everyone can have access to the innovation.

An inventor may not be so willing to just give up the knowledge gained through hard work, however. This isn't apparent with all inventions, but consider a formula, such as the recipe for Coca-Cola, invented by John Pemberton in 1886. Rather than tell us how to make the soft drink, Dr. Pemberton decided to keep the recipe a secret so that only he could make it and profit from the invention. The result? The formula for Coke is a "trade secret". Rather than the recipe being in the public domain, where it could be commoditized and sold inexpensively, instead there is only one source for Coca-Cola which keeps the price artificially high.

Instead, Dr. Pemberton could have sought a patent for his invention from the government. In exchange for a disclosure of the formula, the U.S. might have awarded Dr. Pemberton the exclusive right - a monopoly - to make Coca-Cola for a period of 17 years. But at the end of that period, the rights would pass into the public domain, meaning that anybody could make and sell the product.

Another invention at about the same time was the common breakfast cereal, Shredded Wheat, invented in 1893. A patent was applied and granted for the machinery that made Shredded Wheat biscuits for the cereal. The manufacturer enjoyed a monopoly on the sale of Shredded Wheat, after which time the rights to manufacturer the cereal passed into the public domain. (That's not all - in a landmark trademark case, the right to the name "Shredded Wheat" was held to have passed into the public domain at the same time.) Today, you'll see multiple makers of cereal called Shredded Wheat at the grocery store, but there's only one Coca-Cola. The difference? The Shredded Wheat company got a patent, enjoyed their monopoly, and now anyone can make it. But Coca-Cola was and continues to be held as a trade secret, so only the Coca-Cola company can make it (or license it to bottlers, as the case may be).

This illustrates the basic bargain embodied in a patent. In exchange for the inventor telling us how to make the invention, so that we can all benefit from the knowledge and work that went into the new finding, the inventor is granted a time-limited exclusive right to "practice the invention" (in other words, to make it, sell it, use it, etc.). This basic concept informs several tenets of patent law. For example:

- It is in the interest of the government to get the knowledge into the public's hands as quickly as possible. To facilitate that, the government forces inventors to apply for their patents within one year of public disclosure or sale. Otherwise, the right to a patent monopoly is lost. An inventor can't extend the monopoly period by selling the product until a competitor also figures out how to make the product, and then filing for a patent on the invention.

- If a central part of the exchange is the inventor's knowledge about how to make the invention, then that information has to be disclosed in the application in sufficient detail to allow the rest of us to do so. Patent applications can be rejected for lack of specificity. How much detail is required? In general, a person having ordinary skill in the art must be able to use the information disclosed in the application to practice the invention. There's even an acronym here that patent practitioners throw around: "PHOSITA". If a PHOSITA would understand how to make the invention after reading the contents of a patent if it were to issue, then there is sufficient content in the application.

As an inventor, if there's an aspect of patent law that seems unfair or hard to understand, always go back to the basic bargain between the inventor and the U.S. government: the monopoly rights in exchange for the rest of us receiving information about how to make and use the invention. Remember, as an inventor, you don't get awarded a monopoly just for being clever and innovative. You are giving something to your country, but in order for that to be a fair exchange, you have to be giving something of value to receive a monopoly. That means something that nobody has ever invented, and a disclosure of it in sufficient detail that we can all eventually have it.