"A patent is a property right in inventions, that is, in devices or processes that perform a “useful” function.11 A new or improved mousetrap is an example of a type of device which may be patented. A patent effectively grants the inventor a limited monopoly on the manufacture, use, or sale of the invention. However, a patent actu¬ally only grants to the patentee the right to exclude (i.e., to prevent others from practicing the patented invention); it does not actually grant to the patentee the right to use the patented invention." (http://mises.org/books/against.pdf)
"Broadly speaking, Intellectual Property Rights (IPR) are a set of legal rules used for regulating the use of "creative work". Intellectual property is divided into two categories: Industrial property, which includes inventions (protected by patents) and Copyright, which in general terms covers literary and artistic works.
Whereas copyright laws are designed to protect the expression of the content, patents protect the content itself and grant a monopoly over its use. (http://www.choike.org/nuevo_eng/informes/4517.html)
A patent is a legal certificate that gives an inventor exclusive right to prevent others from producing, using, selling, or importing an invention for a fixed period (usually 20 years). Legal action can be taken against those who infringe the patent by copying the invention or selling it without permission from the patent owner. Patents can be bought, sold, hired, or licensed. A patent application must satisfy the patent examiners that the invention is:
- useful (i.e., have industrial application): ideas, theories, and scientific formulas are not sufficiently useful or industrially applicable to be patentable;
- novel: the invention should be recent and original, but perhaps most importantly it should not already be known (in the public domain). In most countries (except the USA) the patent is awarded to the first person to apply, regardless of whether this person was the first to invent;
- non-obvious or must involve an inventive step: not obvious to a person skilled in the technology and more inventive than mere discovery of what already exists in nature (such as a gene with no known function). The invention must be disclosed to the patent examiners in a detailed way that would enable a skilled technician to make and use it. In the case of an invented process, the patent can cover a non-obvious way of making something already known (i.e., previously invented or discovered). In the case of an invented product, the non-obvious/inventive step requirement does not require it to be made by a novel method.
In order to clarify the legal scope of the patent, the inventor provides a list of claims, which the examiner will accept, modify or reject as invalid. These claims may cover any of the following:
- A product: such a claim will cover any use of the product including those as yet undiscovered. For example, a new drug patented as a cure for cancer may later be found to cure heart disease; the patent will cover this new use.
- A use: such a claim will cover a specific use only. Thus, it would cover the above drug only as a cure for cancer and not for any uses that are found later. In some countries new uses of existing inventions are patentable. If the patent on the existing invention is still valid, the owner of the newer patent will have to acquire a license from the owner of the earlier patent in order to exploit his or her invention.
- A process: such a claim will protect the process when used with any product, but would not protect a product that could be manufactured by that process but was not.
- A product-by-a-process: such a claim would cover only those products made by the process described in the application. Therefore, it would cover the drug, but only when made by a specified process.
It should be noted that a patent may include claims of two or more of these categories. But whether the patent covers a product, a process, a use or all of these, the invention normally must have a physical embodiment or its application must be capable of leading to one.
Not all inventions that meet the above conditions can be protected by patent. In many countries, computer programs and business methods cannot be patented at all. And in some countries certain inventions may be unpatentable because they are deemed to be immoral or contrary to the public interest. In part the differences in national patent laws are due to the fact that each country prefers to define what inventions may be patented in accordance with its perceived national interest. But there is a trend towards standardization of national patents laws, and many common exceptions to patentability are likely to disappear in the next few years.
It can easily take over 2 years to obtain a patent from the day that an application is filed at the national patent office (the priority date), and it sometimes takes much longer. The patent office carries out a search to ensure that the invention really is new and non-obvious. When it is satisfied that this is so, the application is published - in those countries where publication is done before issuing the patent - and an in-depth examination follows. In the case of an invention derived from a natural product, the examination might include the obligation to deposit a specimen. There is no such thing as a world patent so it is usually necessary to file a different application in each country. However, a number of international agreements (such as the Patent Cooperation Treaty) simplify this process by requiring a single application to be prepared. In the case of the PCT, this application is then submitted to a receiving office from where it is distributed to national patent offices designated by the applicant. In Europe, an institution known as the European Patent Office carries out the examination on behalf of countries that are signatories to the European Patent Convention." (http://www.iprsonline.org/guide/index.htm)
"Whilst its defenders maintain that patents are important to give incentive for innovation and offer a means to finance research and development activities, groups in the South protest that it is unfair to extend the same criteria to developing countries who cannot compete at the same level. The possibility for countries to decide their own national patent laws allows them to define what inventions may be patented in accordance with its national interests. However, there is a trend towards standardization of national patents laws and the WIPO expects many common exceptions to patentability to disappear in the next few years.
Under the auspices of the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO), there has been a drive by industrialised nations to extend the patent regime to new fields and to strengthen its presence in existing ones. This presents obstacles to developing countries not only in developing new technologies, but also in accessing essential resources, with the result that their peoples are denied basic human rights.
The impacts of patents reach from access to essential medicines, caused by inaccessible prices and the denial of generic equivalents, to food security, resulting from seed patents. Furthermore, even where commitments have been made within the WTO in favour of developing countries, bilateral agreements which oblige signing parties to implement higher IPR standards (known as "TRIPS plus") are being increasingly established, creating further difficulties." (http://www.choike.org/nuevo_eng/informes/4517.html)
Are Patents really an obstacle to Open Hardware-based Peer Production?
"In my opinion, it is not patents, but rather the world-view and perception of the requirement of patents for protection and capitalization/royalty recovery that is the problem. It is true that patents can be a problem where lawyers companies are funding the patent filing and enforcement of every possible idea that can be thought of. This is one reason why I release code ASAP.
In my opinion, the biggest obstacle for small businesses to join physical economies of peer production is *not* patents. Instead, it is a lack of basic literacies of how to operate sustainably in physical economies of peer production.
Most of the concepts people have of "business" are framed in examining and developing their businesses as entities apart from the natural and human systems the business is a part of. Most of the models people know are centered around earning revenue. Knowledge is not widespread related to sharing, co-creating and sustaining commons, cooperation, open license, collaboration, etc. Many people do not understand how "business" works wherein you may be balancing selling some things, and giving some things away for free, sharing and trading, etc all from the same production activity.
Even among emerging projects that are released under an open license, it is not common to see the projects managed in a way that makes it accessible for other designers/builders to contribute effectively (although this is changing. It takes more effort to implement this in physical production projects. Tangible Bit and SKDB will help with this.)
Plus, in the case of businesses, I know from first-hand experience that it is tough for many businesses to adopt open source technology for general production that does not meet safety and basic regulation requirements. In open+pario community, we are offering to collaborate on research in helping physical projects meet these requirements
Key Books to Read
- "Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What to Do About It" (Princeton, 2004). 
- Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk 
- Ten Myths about Patents
- Extensive policy related material on patents can be found here at http://www.choike.org/nuevo_eng/informes/72.html