What is the difference between product patent and process patent?

Importance of intellectual property

Knowledge is the most important factor that is driving development in the new era; says Joseph Stiglitz and Bruce Greenwald in their book 'Creating a Learning Society'. An iPhone can be produced with around six thousand rupees in terms of material cost. But its price is nearly Fifty five thousand Rupess because there is big royalty payments to large number of inventors who have invented its different components.

This means it is not the traditional factors of production like land, labour or capital that creates value in a modern economy. It is knowledge – which is embedded in the form of invention. Invention is an intellectual property. To protect inventors, governments give intellectual property rights to them. Patent is the intellectual property right for inventions. On the other hand, Copyright is the intellectual property right for writing books etc.

Patent is the most powerful intellectual property right as inventions have tremendous industrial applications and thus scope for getting big money. Every country will have an intellectual property regime comprised of laws and institutions that facilitate inventions and other intellectual works. For patent, there will be a patent system that includes the Patent Act. Basically, patents are of two types – product patent and process patent.

Product patent and process patent

A patent is defined as a statutory privilege granted by the government to inventors, and to other persons deriving their rights from the inventor, for fixed years, to exclude other persons from manufacturing, using or selling a patented product or process. Hence a patent can be for a process or for a product.

There is strict divergence between product and process patent regimes. The developed countries follow product patent system. On the other, process patent system is preferred by the developing world. The two systems are known for their different levels of protection to inventors.

Under a process patent, the patent is granted for a particular manufacturing process, and not for the product itself. Any other person can produce the same product through some other PROCESS, modifying the various parameters. The implication is that there will be more than one producer for the same product because of the possibility of different process for the manufacturing of the product.

Weakness of the process patent regime is that it gives less protection for the inventor. There is high tendency for competitors to reengineer the original invention by discovering a new process with less strain and investment. Benefit of process patent regime is that it reduces the element of monopoly.

In the case of product patent, it is an exclusive right given to the original inventor of a product. This means that no other manufacturer can provide the same product through the same or any other process. The implication is that there will not be a competitor for the producer as it is the product which is patented. Product patent system gives higher level of protection to the inventor as there will not be any other patent holder. TRIPs follow the product patent regime.

India’s 1970 Patent Act allowed only process patent before it was amended in 2005 to comply with WTO’s TRIPs provisions under which there is only product patents.