What Is a Patent?

A patent is the granting of a property right by a sovereign authority to an inventor. This grant provides the inventor exclusive rights to the patented process, design, or invention for a designated period in exchange for a comprehensive disclosure of the invention. They are a form of incorporeal right.

Government agencies typically handle and approve applications for patents. In the United States, the U.S. Patent and Trademark Office (USPTO), which is part of the Department of Commerce, handles applications and grants approvals.

Understanding Patents

Most patents are valid for 20 years in the U.S. from the date the application was filed with the USPTO, although there are circumstances whereby exceptions are made to extend a patent's term. U.S. patents are only valid in the United States and U.S. Territories. 

According to the U.S. Patent and Trademark Office, a patent can be granted to any person who:

Invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent, subject to the conditions and requirements of the law.

There are three types of patents:

  1. Utility patents cover anyone who invents a new and useful process, article of manufacture, machine, or a composition of matter.
  2. Design patents include an original, new, and ornamental design for a manufactured product.
  3. Plant patents go to anyone who produces, discovers, and invents a new kind of plant capable of reproduction.

Patents provide an incentive for companies or individuals to continue developing innovative products or services without the fear of infringement. For example, large pharmaceutical companies can spend billions of dollars on research and development. Without patents, their drugs and medicines could be duplicated and sold by companies that didn't research or invest the needed capital for R&D.

In other words, patents protect the intellectual property of companies to help their profitability. However, patents also serve as bragging rights for companies demonstrating their innovativeness.

How to Apply for a Patent

Before making a formal application, an applicant should research the Patent and Trademark Office's database to see if another person or institution has claimed a patent for a similar invention. The invention must be different from or an improvement upon a previous design to be considered for a patent. It is important for applicants to take care to maintain accurate records of the design process and the steps taken to create the invention. Enforcing the patent is up to the person or entity that applied for the patent.

To apply for a patent in the United States, the applicant submits specific documents and pays associated fees. Written documentation includes drawings, descriptions, and claims of the item to be patented. A formal oath or declaration confirming the authenticity of the invention or improvement of an existing invention must be signed and submitted by the inventor. After fee payment, the application is reviewed and either approved or denied.

Patents protect the intellectual property of companies and help ensure their profitability, but patents also serve as marketing for a company's innovation.

Patent Statistics

The USPTO receives more than 500,000 patent applications per year with just over 300,000 of them granted. The agency has over 11,000 employees, whereby approximately 75% of them are patent examiners while the remaining work in the legal and technical areas.

In June of 2018, the USPTO issued its 10 millionth patent. Many patents issued go to companies in the technology industry where Apple was granted 2,000 in 2018. Microsoft and Google were also granted patents. However, IBM typically receives more than any company in the U.S.—IBM was granted over 9,000 patents in 2017 alone as reported by CNN Money.

Key Takeaways

  • A patent is the granting of a property right by a sovereign authority to an inventor. 
  • A patent provides the inventor exclusive rights to the patented process, design, or invention for a certain period in exchange for a complete disclosure of the invention.
  • In June of 2018, the U.S. Patent and Trademark Office issued its 10 millionth patent.

Examples of Patents

One of the most notable patents in the past 40 years was the personal computer filed in 1980 by Steve Jobs and three other employees of Apple Inc.

King C. Gillette patented the razor in 1904 and was dubbed a "safety razor." Garrett Morgan was granted a patent for the traffic light in 1923. The patent for the television was issued in 1930 to Philo Taylor Farnsworth for the "first television system."

At age 20, Farnsworth had created the first electric television image and went on to invent an early model of the electronic microscope.