Patents: 3 Things You Need to Know
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According to MyIPO, a patent is an exclusive right granted for an invention, whether it is a product or a process for doing something new, or a technical solution to a problem.
In business, the process of idea generation and innovation is sparked by creative thinking and research conducted by the workforce within a company.
And whatever is developed — whether a system or a product — it is seen as capable of contributing to the company''s profits.
Patent law in Malaysia is contained under the Patents Act 1983, while the Intellectual Property Corporation of Malaysia (MyIPO) is the body responsible for registration and administration.
Did you know that patents are one of the elements contained within intellectual property?
The duration of patent protection rights is 20 years.
Do not take the issue of patents lightly as it can have a significant impact on your business.
Here are the things you need to know about patents:
The patent system grants exclusive rights to the person who creates the invention.
Have you ever heard the term ''intangible asset''?
When we talk about assets, they usually come in physical form — for example, houses, machinery, cash, inventory, land, buildings, and so on.
However, intangible assets are also a category under assets where they are not in physical form.
There are two types of intangible assets: indefinite (such as brand names) and definite (such as copyrights).
Brand names, patents, trademarks, and copyrights are examples of intangible assets.
For your information, intangible assets can have a significant impact on generating company revenue.
Intangible assets can be a symbol of a company''s value and the company''s long-term sustainability.
If you have an invention that you wish to patent, this is one of the first steps in protecting your intellectual property rights.
Yes, by patenting your intellectual property, you can be protected from any fraud and exploitation.
This protection is important to prevent third parties from taking advantage and to ensure that only you have the right to generate income from that intellectual property.
And the intellectual property belongs to whoever registers it first.
It can also prevent someone from profiting from the fruits of your hard work.
If you discover that a party has infringed on your intellectual property without your permission, you have the right to sue that party because you have the authority to do so as the owner of that intellectual property.
Patented inventions are actually creations that encompass every aspect of an individual''s or society''s life.
For example, Edison and Swan patented the electric light bulb.
Patents provide incentives and protection to inventors by giving recognition to their creativity and financial rewards for their creations.
At the same time, patents create space for the dissemination of new knowledge and stimulate innovation across industries.
This is because innovations will constantly be improved upon by competitors within the industry.
These innovations take into account quality assurance, human life, and the well-being of society.
In conclusion, this article will end with several case studies involving patent issues in business.
2015: Microsoft and Google feuded for five years over patent issues involving the Xbox gaming system and Motorola smartphones.
2016: Samsung won a patent appeal case against Apple in the patent war.
2016: Huawei sued Samsung for allegedly infringing smartphone patents.
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A patent is an exclusive right granted to an inventor to protect their invention from being copied for a specific period (usually 20 years). It is important because it provides incentives for companies to invest in research and development (R&D) — becoming a high-value asset that can increase a company''s worth.
Companies that hold strong patents have a competitive advantage because competitors cannot replicate their products. This protects profit margins and allows the company to set premium prices. Investors evaluate patent portfolios as intangible assets that increase a company''s intrinsic value.
Among the most well-known are the patent wars between Samsung and Apple that lasted for years, as well as the dispute between Microsoft and Google. Patent wars can cost billions of ringgit and affect the share prices of both companies involved — making it a risk factor that investors need to monitor.
Investors can check the number of patents owned by a company, the technology sectors covered, the validity period of patents, and the history of patent litigation. Companies with a strong and diverse patent portfolio typically have a stronger moat (competitive barrier) for the long term.
Understanding the value of patents in business helps investors identify companies with long-term competitive advantages — an important factor in fundamental analysis before investing.
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