Why Do Patents Expire?

By Christopher Faille

A patent is an exclusive right to make use, sell and distribute an invention, extended to an inventor or his assignee. In the United States there are two distinct sorts of patents: utility and design. Utility patents have a term of 20 years that begins to run on the filing date of the pertinent application. Design patents have a term of only 14 years, but the term begins to run from the date of issue. A utility patent is a right to the way a particular invention works and is used. A design patent, on the other hand, is a right to the ornamental aspects of the article. Both types of patent may be granted on the same invention.

Innovation

The underlying policy consideration in patent law is the desire to stimulate innovation. On the one hand, patent rights create an incentive to innovators. On the other hand, allowing too many patent rights,or allowing them in perpetuity, may backfire, obstructing innovation. After all, every innovator must build upon what has come before, and in large part an innovator builds upon a common body of knowledge. It is to preserve that common knowledge, and to lessen the thicket of overlapping existing claims, that all patent rights have limited terms.

Competition

A related policy consideration involves consumer welfare. After all, patents by definition limit competition. It is essential to the consumer welfare that competition be the rule throughout an economy, and that monopoly with its attendant pricing power be the exception. Term limits on patents are one way of producing this result.

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Maintenance Fees

Some patents terminate for the quite prosaic reason that the owner does not pay the maintenance fee. Maintenance fees apply only to utility patents, and are due 3 1/2, 7 1/2 and 11 1/2 years after the original grant. They may not be paid more than six months in advance, when the "window" opens. The size of the maintenance fee is subject to adjustment by the patent office each year.

Expiration and Revival

At the end of the half-year payment window, a half-year grace period begins. The patent remains in effect and the patent owner may pay the fee during this time. But if the fee has not been paid at the end of that grace period, the patent does expire. A patent that has expired for that reason may be revived if the nonpayment was unintentional or unavoidable.

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The Disadvantages of a Provisional Patent
 

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