My understanding is this, that you can patent basically three things:

1.  An idea.  This would be an idea for an invention or product, say,
a better mouse trap.  In this case an original idea for catching mice.

2.  A process.  Generally this would be a manufacturing process but
could be something else.  Perhaps you have a special process for, say,
drying tea, that is faster and yet keeps all of the tea's flavor, for
example.

3.  An idea for an improvement on an idea or process.  Generally this
would be an idea for an improvement on an idea or process that is
already patented.  In this case the original patent holder retains the
rights to the original idea or process while you hold the rights to the
improvement.  If the original patent holder wants to use your idea for
an improvement, he has to get permission from you.  An example of this
would be, say, if someone manufactures mouse traps and you have an idea
for an improvement that makes the trap more sensitive (and perhaps at a
lowered manufacturing cost), you could patent this idea as such you
would retain rights for the improvement on the idea only.

Robbie mentioned earlier about licensing a patent.  This is done all the
time.  Most patent holders license their ideas in companies.  This is
because most inventors have ideas but are not in the position to go into
manufacture themselves.

Problems with patents:

Okay, so you got an idea and you patent it.  Great!  Now you have the
exclusive rights to that idea.  Then some unscrupulous person or company
starts using your idea!  Now what?

Well, if that person or company won't stop using your idea (or they are
not interested in licensing it and still continue to use it) then you
have to sue them.  This is of course at your expense (unless you win
the suit).  The patent office will not help you -- its up to you to
defend your patent.  What's more, in the patent you have to disclose
_all_ relevant details of your idea in such language that a person
with an similar background can understand and use (or build) your idea.
This presents a problem if some very large multinational company
decides to steal your idea.  They have more lawyers than you, and they
can keep you in court for practically forever if you can't afford to
defend your patent.  This does happen from time to time.

With this in mind, sometimes it is better to keep a low profile and
_not_ patent your idea, depending on what market your idea may fall
into.

The other problem with patents is that the application process is
lengthy and very expensive.  Unless you have what you think is a
sure-fire million dollar idea, in the long run when you factor in the
expense of applying for and later perhaps defending your patent it may
not be worth all the trouble.  Many small companies don't apply for
patents because of this.  Instead they keep the details of their
products secret and hope for the best.

Understand that I am not a lawyer.  What I say here is information that
I have gathered from the Internet and from general experience over the
years.  The standard disclaimer applies.

Ray Finch
Albuquerque, New Mexico