Case 2A Patent Matter (10 marks) In the machine industry, a lot of technological advances are taking place. Thus, whenever one company announces a new development, some of the first customers are that companys competitors. The later will purchase the machine, strip it down, examine the new technology and then look for ways to improve it. The original breakthroughs always are patented by the firm that discovers them, even though the technology is soon surpassed. Several weeks ago, Jim Pareti completed the development of a specialized lathe machine that is 25 percent faster and 9 percent more efficient than anything currently on the market. This technological breakthrough was a result of a careful analysis of competitive products. Until I saw some of the latest developments in the field, Jim told his wife, I didnt realize how easy it would be to increase the speed and efficiency of the machine. But once I saw the competitions products, I knew immediately how to proceed. Jim has shown his machine to five major firms in the industry, and all have placed orders with him. Jim has little doubt that he will make a great deal of money from his invention. Before beginning production, however, Jim intends to get a patent on his invention. He believes his machine is so much more sophisticated and complex than any other machine on the market that it will take at least four years to develop a better product. By that time, I hope to have improved on my invention and to continue to remain ahead of them, he noted. Jim has talked to an attorney about filing for a patent. The attorney believes that Jim should answer two questions before proceeding: How long will it take the competition to improve on your patent? (2) How far are you willing to go to defend your patent right? A part of the attorneys comments was as follows: It will take us about three years to get a patent. If during this time, the competition is able to come out with something better than what you have, we will have wasted a lot of time and effort. The patent will have little value because no one will be interested in using it. Since some of your first sales will be to the competition to catch up, this is something to which you have to give serious thought. Second, even if it takes four years for the competition to catch up, would you be interested in fighting those who copy your invention after, say, two years? Simply put, we can get you a patent, but I am not sure it will provide you as much protection as you think.

In light of the above, answer the following questions. (a) Given the nature of the industry, how useful will be a patent be to Jim? Explain (5 marks) (b) Suppose, Jim does get a patent, can he bring action against infringers? Will it be worth the time and expense? Why or why not? Explain (5 marks)