Why is Patent Protection Granted for 20 Years?

Patents and Patent Terms

“Invention” refers to a technological solution to a particular issue. A patent is a document that establishes a legal situation in which the patented invention can typically only be exploited (manufactured, used, sold, or imported) with the owner’s consent. Patents are granted to applicants by government offices once they are examined and found to have fulfilled all the requisite registration criteria.

Twenty years is the typical patent length allowed by the majority of jurisdictions. Significant international harmonization of patent terms across national laws was provided by the implementation of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). Article 33 of the TRIPS Agreement provides that “The term of protection available [for patents] shall not end before the expiration of a period of twenty years counted from the filing date”. Consequently, in most patent jurisdictions, the term of patent is 20 years from the filing date of the application. While there are exceptions of longer patent terms in some countries under specific circumstances, 20 years can be considered the norm.

Why is Protection Granted for 20 Years?

The rationale behind the term being set as 20 years is related to economics of innovation. Innovation as a whole is good for the welfare of a society. Firms and innovators can innovate their product by themselves (to differentiate themselves from others or reduce the production cost) or can be incentivized by the society. In a society with no patent rights, incentives to innovate are low. If one firm innovates their product, others can just replicate the innovation for free. The Research and Development (R&D) expenditure thus becomes redundant for the innovative firm.

If patent length is finite, firms will compete to produce a better product by improving on the existing patented product since they only have about 20 years and then the patent rights would expire. On the other hand, if the patent length is infinite, the firm which had a patent on one of its products will sit on its invention till someone invents a better/cheaper substitute. This will lead to lower effort from the firm which has at least one patent. Therefore, a finite patent length is better than an infinite patent length.

A 20 year term also ensures that after a reasonable period of exclusivity the invention enters the public domain, allowing others to use it without restriction, which creates a balance between fostering innovation and public good.

Innovation vs. Public Good

Patents benefit inventors by providing them with legal protection of their inventions. However, patents also benefit society by providing public access to technical information about these inventions, and thus accelerating innovation. Due to the possibility of substantial financial benefits for their ingenuity and diligence, this limited exclusivity period encourages innovation.

Patents provide an atmosphere that encourages technical development by giving exclusive rights. Innovations in a variety of sectors, including information technology, engineering, and medical, are the result of innovators’ drive to push the envelope of what is feasible. These developments improve people’s quality of life and tackle important issues, which advances society as a whole.

Patent law also takes into account situations where a patentee cannot or will not use their protected invention. Compulsory licensing refers to situations in which the government grants itself or other interested parties the authority to produce and market a patented innovation without obtaining the patent holder’s prior approval. This measure ensures that critical innovations, especially those essential for public welfare, are accessible when needed. A compulsory license is, in short, a legally established provision that permits certain individuals or organizations to utilize a patented invention without the patent holder’s consent, provided that a royalty or equitable remuneration is paid to the patent holder as compensation.

In such critical times, the enforcement of mandatory licensing regulations was deemed essential to address the crisis in the public interest. By allowing the production and distribution of patented medicines or vaccines at lower costs, compulsory licensing serves as a mechanism to reconcile the interests of patent holders with the greater goal of public welfare. This encapsulates the role of patents in balancing the advancement of innovation with the overarching need to safeguard the health and well-being of society at large.

Conclusion

In conclusion, patents play a pivotal role in fostering innovation while ensuring societal progress and public welfare. By granting inventors exclusive rights for a finite period, patents incentivize creativity and investment in research and development across various fields. This exclusivity drives technological advancements, improves quality of life, and addresses critical societal challenges. At the same time, the disclosure of patented innovations accelerates knowledge-sharing and further innovation.

However, the balance between protecting intellectual property and addressing public needs is crucial, particularly in situations like public health crises. Mechanisms such as compulsory licensing ensure equitable access to essential products like life-saving medicines, reflecting the commitment to public interest without undermining the incentive to innovate. A 20-year patent term strikes a balance between rewarding inventors and eventually allowing their innovations to enter the public domain, ensuring a harmonious interplay between innovation, economic growth, and societal well-being.

Author: Antas Deep, Legal Intern at PA Legal.

In case of any queries, kindly contact us here.