Patent law Summary

  • Last updated on November 10, 2022

Patents encourage and reward invention. In addition, patents promote the disclosure of inventions to the public, which in turn stimulates further innovation and economic development.

Businesses in industries ranging widely from manufacturing, biotechnology, and financial services to information technology, chemicals, and pharmaceuticals consider patents to be valuable assets that can enhance market share and provide an overall competitive advantage. Furthermore, the licensing of patents can generate significant royalties that can serve as an additional revenue stream for a business. A patent is a public privilege, granted by the U.S. government, that confers on an inventor the exclusive rights to use and control his or her invention. The government grants an inventor these rights in exchange for fully disclosing the invention to the public in a patent application. After the inventor files the application, it is subject to an examination process. If the invention meets the statutory requirements for patentability, the inventor is granted a patent. A U.S. patent confers on an inventor the right to exclude all others from making, using, selling or offering for sale, and importing into the United States the invention for twenty years, as measured from the date the patent application was filed.Laws;patentPatents

Historical Development

Magazine illustration from 1869 showing patent officers at work.

(Library of Congress)

By the sixteenth century, patent laws existed in Italy, France, Germany, the Netherlands, and England. In 1624, the English parliament enacted the Statute of Monopolies, which forbade monopoly privileges granted by the Crown, with the exception of patents. This law was the foundation of the English patent system, which served as the basis for patents issued by several of the American colonies. After the American Revolution, the states continued to issue patents, but this inevitably led to conflicts and confusion when multiple inventors were issued patents on the same invention by different states. During the drafting of the United States Constitution, the power to issue patents was delegated to Congress, by Article I, section 8, clause 8, of the Constitution.

Over the years, the U.S. Congress has enacted a series of patent statutes to define the requirements for patent protection and the exclusive rights of the patentee. The first patent statute was enacted in 1790, and it was quickly replaced in 1793. The Patent Act of 1790Patent Act of 1790 had established a system whereby an application for a patent on an invention was to be examined by federal government officials, including the secretary of state, to determine if it met the legal requirements. The 1793 statute abandoned this approach and created a registration system under which patent applications were not examined for compliance with the requirements for patentability. Instead, inventors simply registered their inventions and received a patent, leaving the federal courts to determine the validity of the patent if the inventor ever brought suit to enforce the patent.

By 1836, however, Congress had become concerned that the registration system had resulted in too many patents on inventions that were in fact not patentable. The Patent Act of 1836Patent Act of 1836 reinstituted an examination system and created the Patent Office to oversee this system. Congress superseded this statute with the Patent Act of 1870Patent Act of 1870, which retained the examination system and added the requirement that the applicant for a patent define the invention by way of written claims that specifically describe the invention in detail. Judicial treatment of patents changed dramatically during the Great Depression. The economic downturn and strong antimonopoly attitude of that era led to hostility to patent enforcement in the courts that finally ended with the onset of World War II and the need to develop new military technologies. In 1952, a new Patent Act was enacted, marking a significant overhaul of the U.S. patent system.

The 1952 Act

The Patent Act of 1952Patent Act of 1952 spells out the procedure and legal requirements for obtaining a patent. Once the invention has been built, the inventor may file an application with the U.S. Patent Office to obtain a utility patent protection for the invention. A patent application is a document that discloses the details and operation of the invention to the Patent Office. The central part of a patent application is the claims, which describe and delineate the scope of the invention sought to be patented. The language used in the claims to detail the invention becomes important in reviewing the prior art (everything publicly known before the invention) during the examination process and in proving infringement of the patent if it is subsequently granted.

Once a complete application is filed, it is assigned to a patent examiner knowledgeable in the field of technology for examination to determine whether the invention meets the standards for patentability. To qualify for utility patent protection, the invention must meet four distinct legal requirements, all of which were first included in the Venetian patent statute enacted in 1474. The invention must be of the type of subject matter that may be patented, and it must be useful, novel, and nonobvious.

The Patent Act defines the subject matter that may be patented to include any process, machine, manufacture, composition of matter, or improvement on any of these. The U.S. Supreme Court has explained that patentable subject matter consists of any product or process created by humans. Although the range of patent-eligible subject matter is quite broad, excluded from patent protection are laws of nature, natural phenomena, mathematical formulas, and abstract ideas. As such, a newly discovered mineral or chemical element, the law of gravity, natural phenomena such as tides or volcanic eruptions, scientific principles such as the law of thermodynamics, and abstract mathematical formulas are not patentable.

The invention must also be useful, not merely theoretical. An invention is useful if it is operable and has a practical purpose. As long as the invention is capable of performing its proposed function, it need not be the best or the only way of doing so. Accordingly, an invention lacks utility only if the invention is totally incapable of achieving some useful result or if it requires further research to identify or confirm a practical use or application.

In addition, the invention must be new; that is, it must be something that no one else, including the inventor, has publicly made or used before in the United States, or patented or described in a printed publication anywhere else in the world. The novelty requirement furthers the policy that a patent should not be granted for something previously invented or already freely available in the public domain. When the same device was previously known, used, or described in a printed publication before the date that the inventor claims to created the invention, the invention is said to be anticipated by the prior art.

Another aspect of novelty relates to how the inventor has used the invention and whether that use may lead to a loss of the ability to patent the invention. Even if an inventor was the first person to invent the subject matter claimed in the patent application, he or she will be barred from being granted a patent if the invention was patented or described in a printed publication in the United States or a foreign country, or in public use or on sale in the United States, more than one year before the filing date of the patent application.

Further, the invention must not be “obvious” to a person with ordinary skill in the art and who understands the technical field of the invention. Instead, it must represent a significant inventive “next step,” “leap forward,” or meaningful advancement in the current state of the technology. Under the Patent Act, the question is whether the invention would have been obvious to a person with ordinary expertise and knowledge in the pertinent field. If so, then the invention is not patentable. Thus, the nonobviousness requirement prevents new but merely routine or marginal variations on existing technology from receiving patent protection.

Finally, the patent application must adequately disclose and describe the invention and its preferred embodiment. The application must disclose a precise written description of the invention. The disclosure must be enabling in the sense of explaining how to make and use the invention. Finally, the disclosure must identify the best mode–inventor’s preferred way of making and using the invention. This requirement is based on the premise that full disclosure of technical information will spur further invention and innovation. Even if the invention meets all of the other requirements of patentability, if the patent application does not fulfill the disclosure requirement, the applicant will not be granted a patent. In a sense, therefore, the disclosure requirement represents part of a “bargain” between the government and inventors: full disclosure of the invention to the public in exchange for exclusive rights for a period of twenty years.


The late twentieth century witnessed a number of major developments in patent law and the patent system. One the most significant developments occurred in 1982, when Congress passed legislation creating a new federal court of appeals to hear all appeals from district courts involving patents. The purpose of this new appellate court was to bring more consistency to patent law and enhance the status of patents in an industrial economy. Another important development resulted from the membership of the United States in the World Trade Organization, which in 1994 concluded an international agreement among its members to bring greater international harmonization to patent law in the age of an increasingly global economy.

American patent law has also had to respond to new innovations in biotechnology and information technology, including the emergence of the Internet as a marketplace. During the 1970’s, the courts struggled with the issue of whether computer-related inventions were patentable. Some argued that computer programs were merely unpatentable abstract mathematical algorithms, but in 1981, the Supreme Court ruled that Softwaresoftware that applies mathematical algorithms to achieve a practical result was patentable. The decision proved to be critical to computer industry.

A second important Supreme Court decision in 1980 established that genetically altered living organisms were patentable, Genetic engineering;patent lawspurring rapid developments in the biotechnology industry. Likewise, responding to trends in agriculture and industrial designs for useful products, Congress enacted amendments to the Patent Act providing for plant patents and design patents. A plant patent confers the exclusive right to reproduce a new and distinctive variety of asexually reproducing plants. A design patent protects new, original, and nonobvious ornamental designs for articles of manufacture.

By the mid-1990’s, electronic commerce became a reality, as businesses recognized the potential of the Internet as a new market. The development of new methods of doing business online soon raised the issue of whether such business methods were patentable. Although traditionally the courts had been reluctant to extend patent protection to business models and systems, in a landmark holding the federal court of appeals responsible for reviewing patent cases ruled that such business methods were in fact patentable. As the scope of patentable inventions has expanded, the U.S. Patent Office has seen the number of patent applications dramatically increase and has continued to adjust its examination procedures accordingly.

Further Reading
  • Adelman, Martin J. Patent Law Perspectives. 2d ed. 8 vols. New York: Matthew Bender, 2002. Provides a detailed analysis of ongoing developments in patent law and an evaluation of the implications of these developments on patenting and patent law practice.
  • Durham, Alan L. Patent Law Essentials: A Concise Guide. 2d ed. Westport, Conn.: Praeger, 2004. A useful and concise guide to patent law basics and the patenting process intended for nonlawyers.
  • Merges, Robert P., and John F. Duffy. Patent Law and Policy: Cases and Materials. 3d ed. Newark, N.J.: LexisNexis, 2002. Contains the leading court cases on patent law and intersperses these with useful notes, illustrations, and references.
  • Mueller, Janet M. An Introduction to Patent Law. 2d ed. New York: Aspen, 2006. Provides a comprehensive summary of the law of patents and the patenting process, in addition to examples and practical illustrations.
  • Pressman, David. Patent It Yourself. 12th ed. Berkeley, Calif.: Nolo, 2006. A step-by-step guide through the patent application and examination process for nonlawyers.
  • Schechter, Roger E., and John R. Thomas. Principles of Patent Law. St. Paul, Minn.: Thomson West, 2004. Provides an understandable overview of the key concept and rules of patent law, along with an explanation of their underlying rationale and numerous hypothetical examples.

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