Direct from the horse's mouth -> http://www.copyright.gov/circs/circ1.html#cr

In fact it may have been Melanie the one that provided this link back in the days.

Don't get to wrapped around with trying to decifer this. That's what lawyers do, and you could have two different outcomes from the exact same situation depending on which lawyer you have.

Quick example, you create a cool little product and sell a few. Somebody else on a different place creates the same little gadget, they have more money and a market for it so they patent it. You, "in theory", are not required to pay any royalties because you created your product without any apriori knowledge of the other product, and it was not created after the patented one. Even if it was after the patented one, if you can somehow prove that the idea was conceived before (or at the same time) as the other one you are good (again, it really depends on your lawyer).