The most widely known proprietary law is a patent. A patent is a legal title which protects a technical invention for a limited period of time. A patent prevents others from exploiting the invention within the countries for which the patent has been granted. An invention is patentable when it is:
- commercially applicable
Items that are not feasible, such as a perpetual motion machine, are in general not patentable. Moreover, laws of nature, physical phenomena, and abstract ideas cannot be patented.
The invention should be described on the patent application form in such a way that a specialist can understand it. A prototype is not necessary to apply for a patent. The typical lifespan of a patent lasts for 20 years. Fees are higher if the patent is to be protected in a number of countries.
Patent protection is only one tool among many in a comprehensive business plan. However, in order to raise capital, an enterprise may have to protect its technology to prevent exploitation until the capital is raised and the business developed. Capital would be required to set up manufacturing and marketing operations, and patent and design rights should prevent competitors from exploiting the technology until such operations are active, and moreover, profitable.
For smaller companies, a patent can be used to take a new or improved product to other markets around the world. Smaller companies have many advantages over larger ones, particularly in their flexibility, and the existence of a patent strengthens its negotiating position with any potential licensees.