What Happens When a Patent Expires?

Patents are powerful tools inventors can use to protect their innovation. However, patents don’t last forever, and it is important for inventors to understand why patents expire and how to prepare for it.

When a patent expires all the rights granted to the patent holder expire with it. The holder can no longer prevent others from making, using, or selling the invention. License agreements to collect royalty payments from the patent are no longer enforceable. The invention then passes into the public domain so that anyone can use it.

When Do Patents Expire?

There are three ways for a patent to expire:

  • The patent has reached the end of its legally prescribed life.
  • Maintenance fees on the patent were not paid.
  • A court finds the patent is invalid.

Utility and plant patents have a maximum life of 20 years, and a design patent has a maximum life of 15 years. The life of a patent begins ticking when the application is filed. The patent office takes two years on average to approve an application, so inventors have even less time to make use of a patent than its maximum life. When the life of a patent runs out it expires automatically. Other issues may cause a patent to expire earlier.

To keep a utility patent alive, the holder must pay maintenance fees according to the fee schedule. [1] Fees are due at 3.5 years, 7.5 years, and 11.5 years. Late payment can be made within 6 months of the due date. If maintenance fees are not paid on time, the patent expires.

Plant and design patents do not require maintenance fees.

A patent can also expire if a court of law finds it invalid. Say that someone starts making a product that looks a lot like your patented invention. You sue them in court for infringing your patent. The other person may claim that your patent is invalid and should not have been granted. The court will then review the Patent Office’s decision to grant the patent. The court has the authority to invalidate the patent if they determine that the Patent Office made a mistake by granting the patent. Additionally, the U.S. Patent and Trademark Office has the authority to review (but rarely does) their own decision to grant a patent and may revoke the patent.

Can Patents Be Renewed?

A patent can only be renewed under limited circumstances.

A patent that expires because it has reached its maximum lifespan cannot be renewed. A patent that expires due to an unintentional failure to pay maintenance fees may be reinstated. The holder of the patent must petition the Patent Office to reinstate the patent. The holder must pay the maintenance fees, pay a petition fee, and submit the correct form explaining why failing to pay was unintentional.

The decision to invalidate a patent by a court of law can always be appealed to a higher court, all the way up to the Supreme Court. If the higher court determines that the patent is not invalid, it may be reinstated.

What about if you make an improvement to your patent?

If you improve your invention, you can get a patent on the improvement. You can file either a standalone patent application OR file a continuation in part (CIP) application.

A CIP application gives the new application the same filing date as the old application. A CIP application may make it easier to get a patent because it gives the new improvement an earlier priority date. On the other hand, the CIP for the improvement would expire on the same day as the original patent. A standalone patent for the improvement would have a new expiration date based on when the new application was filed.

Consequences of a Patent Expiring

The holder of a patent loses all their patent rights when it expires. They can no longer prevent others from copying their invention, can no longer collect royalties, and the invention enters the public domain.

Intellectual Property Enters the Public Domain

When the invention described in an expired patent enters the public domain, anyone and everyone can do whatever they like with it. Take for example the combustion engine. After the initial patents on the first combustion engines expired, auto-makers emerged all around the world mimicking this technology. Today even hobbyists build their own engines. No one can prevent anyone else from making a combustion engine because that invention has entered the public domain.

Competitors Can Use Your Design or Idea

The inventor must describe the best method of how to make and use their invention when they file a patent application. When a patent is granted, this information is published and publicly available. When a patent expires competitors can look at your patent, make an exact copy of your invention, bring it to the marketplace and you can’t do anything to stop them.

Royalties Payments End

A common practice to make money off a patent is to allow another company to use your patent in exchange for royalty payments. While the patent is valid, the company will make, market, and sell your invention and pay you a percentage of their profits. When that patent expires, you are no longer able to prevent the company from freely using it, and therefore cannot force that company to pay you royalties.

What to Do When a Patent Expires

There are many strategies companies use to prepare for patent expiration including: pre-emptive generic launch; layering innovations; and standard adoption. A patent attorney with understanding of your unique situation can help plan your best patent expiration strategy.

Pre-Emptive Generic Launch & Price Drop

Companies may introduce a generic into the market before their patent expires. This pre-emptive generic launch takes up market share of a competitor’s product before they can enter the market. If a company can successfully take up the entire market for a generic product before the patent expires, they may never have competition. Similarly, companies will drop the prices of their product when the patent is close to expiring. Setting the industry standard pricing low may make profit margins less attractive for possible competitors.

Layering Innovations

This occurs when the original patent holder is granted additional patents for improvements to the base product. In essence, the company makes its own product obsolete by touting an upgraded version and therefore extends its monopolistic profit stream.

This occurs when the original patent holder is granted additional patents for improvements to the base product. In essence, the company makes its own product obsolete by touting an upgraded version and therefore extends its monopolistic profit stream.

Companies layer their innovations by continuously upgrading their product and filing new patents on the improvements. By the time the first patent expires the upgraded product makes the original obsolete. Take for example the cell-phone industry. Apple has improved the iPhone so much that by the time the first patent expires in 2024 no one would buy the outdated original iPhone.

Line-extensions (New Application/Utility)

Line-extensions occur when a company files another patent for a new application of an invention they have already patented. By finding a new application for their invention, companies can monopolize a completely different market. Say a company gets a patent on a new type of lightweight glass to be used in construction. Several years into the life of the patent, they find that this glass is highly sensitive when used for displays in touch screens. The company could file a new patent for the use of their glass as a touch screen. The company moves from dominating the construction glass industry to the display glass industry.

Standard Adoption

Once a product becomes an industry standard it can be difficult for competitors to get consumers to switch over to a different product. This is frequently the case in the software industry. When Microsoft’s Excel program came out users became comfortable with the interface. Switching would require learning how to use a whole new program and files may not be compatible with the program everyone else is using. This leaves little to no room for a competing spreadsheet software to be adopted.

Trade Secrets

A trade secret is information that has economic value because it is a secret. Inventors are required to explain the best way of making and using their invention when applying for a patent. However, some best practices are developed after a patent has been granted. Imagine you find the only known cost effective way of manufacturing your invention. By keeping this a trade secret, you may be the only person able to make a profit manufacturing your product long after the patent expires.

Copyrights

Some forms of intellectual property may be protected by both patents and copyrights. Copyrights protect artistic expression while patents protect ideas and inventions. Software code is protected by copyright while the function of the code is protected by a patent. Copyrights last for the entire life of the creator plus 70 years after their death. It is possible to control artistic aspects of your invention long after a patent expires through copyright law.

Brand Recognition

Trademarks indicate the source of a good and last as long as the trademark is in use. Companies may invest heavily in marketing their trademark to develop brand recognition. If a consumer feels comfortable with a brand name product, they may never switch over to a cheaper generic product when the patent expires. The original patent for the drug ibuprofen was granted in 1962 but the public still refers to the product as Advil. By developing strong brand recognition through a trademark means that consumers now go to the store looking for Advil, not ibuprofen.

Decrease Production

When companies are not able to find an effective way to continue their market dominance after their patent expires, they may choose to decrease production and or drop the price. With new competitors entering the market with copies of your product, demand for your product decreases. Rather than fighting the competition, companies will decrease production or drop the price to meet the new demand requirements for their product.

Navigating strategies to prepare for patent expiration requires an understanding of the patent system, business law, and the market of your product. It is always advisable to consult a patent attorney about methods of protecting your intellectual property to prepare for patent expiration.

How to Tell If a Patent Is Expired

A published patent has an anticipated expiration date written on the front page. This is the longest possible date that a patent can last. Because patents can expire before their maximum life span it is important to always check if a patent is still active. Each government keeps a public record of their patents which shows if they have expired. Google Patents is a searchable database of all patents in the world provided by Google with an easy-to-use interface. Patent databases allow the user to search by patent title, inventor name, patent number, current owner of the patent, and technological field.

Why Do Patents Expire?

Patents expire to promote innovation. The purpose of the patent system is to encourage technological development. A patent is a great incentive for people to innovate and develop new ideas. On the other hand, allowing patent holders to stop others from using this invention can prevent further development in that field. A government must strike a balance between encouraging innovation and stifling it. For patents to encourage innovation without holding it back, they must eventually expire. Each country determines how long a patent they grant lasts, and each can change that duration. Currently most governments grant utility patents for 20 years.

Sheldon Brown

Sheldon received his training of the patent system at the United States Patent & Trademark Office. He works with universities and consultants to provide analytics and guidance for technology commercialization from patents.

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Sources:

  1. USPTO (2021, June 25) USPTO fee schedule. Retrieved from https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule