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The Aftermath of Patent Expiration: Understanding the Implications

Home / Blog / Patent Drafting & Illustrations / The Aftermath of Patent Expiration: Understanding the Implications

Introduction 

Patents are effective tools that innovators or inventors can utilize to safeguard their work. Nevertheless, patents expire, so it’s critical for creators to comprehend why this happens and how to get ready. All the rights given to the patent holder expire along with the patent when it does. The holder is no longer able to restrict the creation, application, or sale of the invention. Agreements to obtain royalties from the patent under license are no longer enforceable. The invention subsequently enters the public domain and becomes freely usable by everyone. The power to sue third parties for violating a patent is predicated on the fact that patent rights have a finite lifespan. Therefore, it may be a good idea for inventors and other patent owners to determine when their patents will expire. This will depend on when their patent application was filed and what kind of patent they were granted. 

Table of Contents

How long do patents last? 

As every patent has a life cycle that depends on the country where the patent is filed or the type of patent. For example, a utility patent has a life of 20 years, and a design patent has a life of 15 years (Design patents issued from applications filed before May 13, 2015, have a 14-year term).  

There are a total of three ways by which a patent expires.   

  • The patent’s legally mandated life has come to an end A design patent has a maximum term of 15 years, whereas utility and plant patents have a 20-year lifespan. When the application is submitted, the patent’s lifespan starts. The period that inventors have to use a patent is much shorter than its maximal life because it typically takes the patent office two years to approve an application. When a patent’s life expires, it does so automatically. 
  • The patent’s maintenance costs were not paid- A utility patent holder is required to pay maintenance fees in accordance with the fee schedule to keep the patent active. For example, there is a fee after 3.5 years, a fee after 7.5 years, and a fee after 11 years as maintenance fees to prevent a patent from expiring. There is also an extension of 6 months in the payment of maintenance fees by giving a certain amount as a late fine. If these maintenance fees are not paid during the assigned period, the patent will expire. Patents on plants and designs don’t need to be maintained. 
  • The patent is declared invalid by a court- A patent may also expire if it is ruled invalid by a court of law. Imagine someone starting to produce something that closely resembles any patented invention. Then the original owner can file a lawsuit against them for violating the patent. The opposing party can assert that the patent is invalid and that it shouldn’t have been approved. The Patent Office’s choice to grant the patent will next be evaluated by the court. If the court decides that the Patent Office erred in awarding the patent, they have the power to invalidate it. Additionally, the U.S. Patent and Trademark Office has the power to cancel a patent and examine its own decision to grant a patent. 

Strategies by Companies When a Patent Expires 

  • Innovations in Layering- When new patents are given to the original patent holder for modifications to the original product, this happens. By promoting an updated version of its own product, the firm essentially renders its own product outdated, and so increases the size of its monopolistic profit margin. Businesses regularly enhance their products and file fresh patent applications for the upgrades, layering their discoveries. The improved product renders the original product outdated by the time the first patent expires. Let’s take the example of a mobile phone. A company manufactures cell phones and has patents regarding them. The normal life of patents is about 20 years, and accordingly, they sell their product in the market for about 15-18 years. As after the patent expires, the technology also becomes older. To make a product that uses technology from 15 years ago is not a good idea. 
  • New Application Filling– New application filling occurs when a business submits a new patent for a different use of an already patented invention. Businesses might control a different market by finding a new use for their invention. Let’s take the example of a glass manufacturing company. The company makes transparent, thin, and lightweight glasses for LED and LCD televisions. The company found that its glasses are also good for touchscreen mobiles. So, the company may file new patent applications according to touch screen glasses for mobile phones.    
  • Dropping Prices for their Products – Businesses may release a generic before their patents run out. A business may never face competition if it is successful in capturing the entire market for a generic product before the patent expires. Similarly, businesses will reduce the cost of their goods as the patent nears its end. Low industry standard pricing may deter potential competitors by making profit margins less alluring. 
  • Making Technology a Standard- To make regular profit from patented technologies, a company will try to make their technologies a standard so that the users are more familiar with and adopt them easily. Whenever some competitor company will make a similar product after the patents of the original company expire, at that time, the original product has already captured a good market, and its use is very familiar to users. So, nobody will be interested to buy a new similar type of product. Let us take an example of any Microsoft document tool, like Excel or Word. Everyone is now familiar with it, and they regularly use it. So, if a similar type of product will come into the market nobody will buy or use it. Because at present time all are familiar with original Microsoft tools.

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