IEEE Power Electronics Magazine - June 2014 - 8

Patent Reviews

by Art MacCord

Understanding Patents and other
Forms of Intellectual Property

he purpose of this column is to
help engineers better understand the issues associated
with patents and other intellectual
property (IP). However, this review will
not talk much about IP, because IP is
an exception to the general rule, and it
is useful to start with the general rule.
The general rule of our economy
is free enterprise and competition, so
a person (or company) may engage in
whatever kind of commerce he or she
desires to make a profit. Usually, that
person faces competition from others
with the same freedom, assuring customers that he or she will try to offer
good value (price, quality, and so on).
Competition disciplines the company
to be the best choice for its customer.
Without competition, the company
can raise prices, let quality deteriorate, provide poor service, and fail to
innovate and improve.
There are numerous exceptions to
free enterprise, such as regulations
for environmental protection and
food and drug safety, that limit what
companies can do, but, again, those
are exceptions. Unless an exception
applies, you can go into any business
you like and compete. Other notable
historical exceptions to free enterprise include communism, which
prohibits any private enterprise, and
socialism, which makes certain busi-

Digital Object Identifier 10.1109/MPEL.2014.2312279
Date of publication: 20 June 2014

IEEE PowEr ElEctronIcs MagazInE

grant monopolies. In the United States,
nesses the exclusive domain of stateCongress has passed laws prohibiting
owned businesses.
conduct that may harm competition
IP is another exception. IP laws
and result in the monopolization of a
provide property rights to their owner
market. These have been used to break
in limited segments of economic acup the Standard Oil Trust in the early
tivity. The essence of a property right
20th century and the AT&T telephone
is a right to exclude: the right to keep
monopoly in the 1980s.
others from engaging in commerce
Even in colonial times, it was unthat would invade that property right
derstood that new technologies needed
(i.e., competing at some level). The exincentives and nurclusionary aspect is
turing to become
analogous to a land
commercially viable.
owner's right to keep
The U.S. Constitution
The grant of exclusive
people off his or her
allows the Congress to
rights to new techland or to require
provide for patent and
nologies by way of
them to pay to be on
copyright laws to
patents was adopted
it, which is how we
in Old England and
came to call these
allow inventors and
Colonial America to
rights IP.
authors to have
encourage invention
The concept of IP
exclusive rights to
and the development
is distinct from that
their work for
of new industry. The
of a monopoly but is
limited times.
U.S. Constitution aloften confused with
lows Congress to proit. Monopolies have
vide for patent and
been features of ecocopyright laws to allow inventors and
nomic activity in the past. U.S. law is deauthors to have exclusive rights to their
rived from old English law, and before
work for limited times. One of the first
the founding of the United States, it was
laws adopted by that first Congress in
not uncommon for the English mon1790 was a patent law, meaning patent
arch to grant monopolies as privileges
laws have been in effect in the United
for favorite people. Those who were
States for almost 225 years.
excluded from the ability to engage in
Other forms of IP are also known,
these fields of activity because of the
including trademarks and trade serights granted to the privileged were
crets, and we will touch on them in fuunhappy, as were the customers who
ture "Patent Reviews" columns. A trade
had only one option to obtain the mosecret is a secret and primarily pronopolized product. Over time, enough
vides exclusivity to the person who is
unhappy people convinced Parliament
privy to the information, because other
to do away with the king's power to

z June 2014

Table of Contents for the Digital Edition of IEEE Power Electronics Magazine - June 2014