Patents

If a business comes up with a new idea they can patent it. A patent aims to protect the inventor of a new product or manufacturing process. It allows a business to design, produce and sell a new invention while preventing competitors from copying it. New inventions can be protected for up to 20 years.

Obtaining a patent can be a lengthy process. To qualify for a patent the invention must be brand new - you cannot patent an idea that is already being sold. Checks are then made to ensure the invention is authentic. The patent is published 18 months after it has been applied, and then signed and sealed sometime after this. The developer must make annual payments to the Patent Office which become more expensive after the first four years. This is done to encourage businesses to produce the product or sell the rights to somebody else so they can make it.

The benefits to business of patents are:

• A higher level of sales.
• Reduced competition.
• Legal protection that encourages research and development.
• Higher profits that can be ploughed back into research and development.
• The industry benefits from technical information as a result of the patent.
• High risk research and development is encouraged.

The consumers also benefit from patents:

• New products lead to more choice and a higher standard of living.
• New and more efficient production techniques mean lower costs and therefore lower prices.

The major criticism of the patent system is that it leads to a legal monopoly (where there is only one business selling a product). This means that business may try to exploit customers by charging higher prices.

The table below illustrates some ideas that have been patented in the past.

It is up to the patent holder to enforce the patent if he or she believes it is being infringed. This can be an expensive legal process that can be hard for small businesses to fund.