Patent

(Image of Tracy Jong's Logo - Patent and Trademark law firm)

According to MSNBC, the United States Patent Office received 376,810 patent applications in 2004. According to the USPTO, about 65 percent of all patents submitted are approved. It usually takes about two and a half years for a patent to be processed.

We believe in the benefits of patent protection. However, it is important that clients are informed consumers. Armed with the knowledge about what options they may have, clients can make decisions about what protection strategies best meet their needs.

Inventors should appreciate that it may be easier to patent an invention than to market it. The world is not likely to beat a path to an inventor’s door offering bags of gold. Patents are just the first step in a long process to profit from an invention.

Can I file my own application?

Yes, however the USPTO strongly recommends that all prospective applicants retain the services of a registered patent attorney or patent agent to prepare and prosecute their applications. The preparation of an application for patent and the conducting of the proceedings in the USPTO to obtain the patent is an undertaking requiring the knowledge of patent law and rules, USPTO practice and procedures, as well as knowledge of the scientific or technical matters involved in the particular invention.

Patentability vs. Marketability

Something might be marketable (desired by consumers when offered for sale) but not qualify for patent protection. Many companies make fortunes on sales of unpatented items.

Something might be patentable (novel, useful and non-obvious) but not marketable to a mass of consumers.

As attorneys, we can help you assess and advocate before the United States Patent and Trademark Office that your invention is patentable. However, we do not have a crystal ball to determine if that patent will make a profit. Marketing involves many factors and you should seek, when appropriate, the advice of professional or expert consultants to assist you in this process.

What is the difference between my own patent search and one your office would perform?

In most cases, a self-search is limited to a free search of the United States Patent Office databases through the Patent Office website, freepatentsonline.com, Google Patents or another similar search engine platform. Other times it involves a search of the internet via Google, MSN, AltaVista or another search engine.

A search performed by our office includes a search of 22 “full text” (includes the entire patent) authorities around the world: Austria, Australia, Belgium, Canada, Switzerland, former East Germany, Germany, Denmark, European Patent Office, Spain, Finland, France, Great Britain, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Sweden, USA, and the World Intellectual Property Organization. Additionally, it includes 96 abstract and bibliographic collections for searching scientific and trade journals and extracted information from non-English patent authorities. Other advantages include some advanced searching tools in the paid search engines, analytic tools and translation capabilities of foreign language documents.

In most cases, a self-search is performed by searching “key words” in the patent databases. Our professionals are trained in advanced searching techniques that enable us to search specific patent classifications that apply to an invention. We are able to assess potential patentability issues for a given invention and related arts that may be considered by the Patent Office. We also are skilled in identifying appropriate patent nomenclature to perform more precise searches. For example, a screw may be called a “mechanical fastener” or a chair leg may be called a “supporting member.”

It many cases, a professional search will yield a broader search result. This may benefit you in the decision making process as to whether to seek patent protection, what competitors you may unknowingly have, or in crafting a patent application with a greater likelihood of being issued as a patent.

Why We Aren’t a “One Stop Shop” for Inventors

Invention company scams are everywhere. State Attorney Generals, the Federal Trade Commission, and the United States Patent and Trademark Office give public warnings about invention company scams on their websites. Inventors should be wary of compaies that promise to be a “one stop shop” to provide marketing, patent, product development, prototype creation, and other services.

We are not an invention company. We are a law firm. We provide legal advice and assistance to our inventor clients. As legal professionals, our expertise is in advocating for our clients in protecting their inventions and market share by procuring patents and trademarks. We do not promise that we can do things that are beyond our legal expertise. We do not market inventions. There are many reputable professionals that have expertise in developing marketing campaigns, developing packaging and other such activities. We encourage our clients to use the right experts at each step in their process.

What can I do with my patent?

  • Assign it (sell or gift it away)
  • License it ("rent" limited rights in it)
  • Create a joint venture to exploit it
  • Exclude others from making the product
  • Exclude others from selling the product
  • Exclude others from importing and distributing infringing goods
  • Use it as security or collateral to obtain funding
  • Bequeath your patent rights in your will
  • Deter competitors and increase market share

Or, there are always these uses:

  • Hang it on your wall and admire it
  • Smile that you  did not have to go on national television's American Inventor to obtain patent protection
  • Drop it in conversation at the cocktail parties and social gatherings
  • Use it to beef up your resume

After obtaining patent protection, inventors may need to form a business to develop or manufacture their product.  We can assist with incorporating or forming limited liability companies.  We can assist with licensing or assigning your invention to the new business entity; and counsel you in structuring the most suitable transfer for your situation.

In developing business ideas, inventors often need to retain consultants, hire employees, or meet with potential manufacturers or licensors.  We can assist with protecting your inventions and proprietary business information with confidentiality agreements, work for hire agreements, employee policy provisions/agreements and related issues.

In developing an invention, inventors often work in collaboration with investors, other inventors and others.  We can assist with joint venture agreements, co-inventor agreements and general counseling on these issues.

After acquiring intellectual property rights, you may need to consider how to transfer these rights in the event of death.  We can assist with will preparation that contemplates these unique issues.

After acquiring intellectual property rights, you may find it useful to leverage these assets for financing necessary to develop and manufacture your product. We can assist you with security instruments that pledge these assets or future revenue streams as collateral in these transactions.

Patent Rights

Myth: a patent gives the patent owner the right to make a product.

Patenting an invention allows the inventor to prevent others from making, using or selling his invention throughout the United States without the inventor’s consent.  This is distinguishable from the right of the inventor to make or use an invention. Conceivably, an inventor may obtain a valid patent and still not be free to manufacture and sell his invention without infringing on the rights of another valid patent or violating a law/regulation (FDA approval for example) or court injunction..

A competitor may hold a dominant claim and there may be no way to practice your invention without infringing the claims of the competitor. Your competitor's patent may preclude you from practicing your invention (i.e., no "right to use"). At the same time, your patent may be used to prevent your competitor from practicing your improvement (i.e., "right to exclude"). All is not lost, there may be cross-licensing opportunities for both parties.

Most commonly, inventors benefit from patent rights by selling the patent rights, licensing the patent rights (exclusively or non-exclusively) or acting as the exclusive manufacturer of the product.

Patents are valuable business assets that may be used as collateral for financing or may be liened by a mortgagor securing a debt. In some cases, patents act as a deterrent to potential competitors and as a marketing edge to provide customers and investors with a sense of “cutting edge” technology or limited monopoly on a market segment.

Making Money from Patents

Patents can yield financial benefits in a number of ways. Owners might receive royalty checks from licensing agreements. A patent owner may prevail in a patent infringement suit against a would-be competitor. A patent owner may sell the patent rights for a lump sum. They may sell a business that holds the patent (or exclusive licensing rights) for a handsome profit because of its limited monopoly position in the marketplace. A patent owner may be able to raise prices on his own product because his limited monopoly and the ability to exclude competitors in the marketplace for that product. A patent owner may be able to reduce prices on his own product and increase his market share because his limited monopoly on a manufacturing process gives him a significant economic advantage and cost reduction.

Scope of Patent Protection: The Patent Claims

Patents are a form of property. Let’s compare them to something more familiar – real estate. A real estate deed might give claim to a few square feet of space, or hundreds of acres. In the same manner, a patent might give claim to a narrowly defined invention or a broad–ranging invention. Broader patents are desirable, but they are harder to defend and enforce. Narrow patents, on the other hand, may be easy to design around. The goal is to find some point in the spectrum between both extremes.

Myth: the patent protects everything described in the text of the specification and depicted in the drawings.

As a deed defines the metes and bounds of real property, the claims define the metes and bounds of this intangible property. Claims must be read in view of the specification, and as such, the detailed description of the invention, in combination with the drawings, acts as a dictionary of sorts in defining the terms used in the claims. An objective test is applied of what one of ordinary skill in the art would have understood the term to mean.

While a disclosure may be written broadly, the claims may be drawn narrowly and thus will limit the scope of coverage to the claimed subject matter. As such, an alternative embodiment disclosed in the specification but not claimed cannot be the basis of an infringement claim.

The scope of the patent may also be limited by the enablement contained in the specification.

Let’s look at an example:

Description of a Preferred Embodiment

Figure 1 depicts a widget with a substantially triangular configuration comprising a first member 102, a second member 104 and a third member 106. First member 102 and third member 106 comprise a length of from about one inch to about 36 inches. Second member 104 comprises a length of from about one inch to about 12 inches.

* * * * *

Widget is desirably formed a plastic material. As used in this specification, plastic material shall mean a polyethylene composition.

* * * * *

I claim:

1. A widget comprising a first member, a second member and a third member wherein said first member comprises a length of about 8 inches, said second member comprises a length of about 8 inches, and said third member comprises a length of about 8 inches.

2. A widget as described in claim 1, wherein said widget comprises a plastic material.

Example 1

Potentially infringing product #1 is a three-sided widget made of polyethylene, each side being 12 inches long.

Simplified Analysis:

While the specification disclosed widgets with first and third sides ranging from about one inch to about 36 inches, the claim was directed to   first and third members with lengths of “about 8 inches.” Similarly, while the specification disclosed widgets with a second side ranging from about one inch to about 12 inches, the claim was directed a second member with a length of “about 8 inches.” Thus, there is no literal infringement of the first claim.

Example 2

Potentially infringing product #2 is a three-sided widget made of polypropylene, each side being 8 inches long.

Simplified Analysis:

This time, we will find literal and direct infringement of claim 1. However, while plastics are commonly known in the art to include a wide range of compositions, and a plethora of treatises may be provided to describe a wide rage of plastic materials, the specification defined plastics very narrowly to include only polyethylene compositions. As such, the claim will not be read to include polypropylene compositions, and thus, there is no literal infringement of claim 2.

Patent Types

There are two main types of patents issued by the United States Patent & Trademark Office (USPTO) - utility and design. (There are also plant patents.) Utility patents may be submitted as provisional or non-provisional applications.  Provisional patents may be followed by a non-provisional utility patent within one year of the filing date.

Provisional patents are often recommended for independent inventors early in the development process. There are several factors that make them a good option for some independent inventors. Since provisional patents do not require claims or formal drawings, they are less costly to prepare and file. However, as long as they are followed with a utility application within one year, they may claim priority to the earlier filing date of the provisional application. This allows the independent inventor to spread the patent application costs over the course of the year. Not surprisingly, this comes with a price. The examination of patent claims, and therefore issuance of an enforceable patent, is delayed by the same period.

During the year, inventors are encouraged to market or produce their invention with their patent pending. Many inventors discover that the invention is not the financial windfall they had envisioned and elect not to proceed with the utility application, thus having risked only a portion of the full utility application cost. Additionally, over the course of the year, many inventors continue to test and develop their invention. Modifications may be made after meetings with manufacturers or prototype developers. This additional data may be added to the utility application and be useful in preparing the claims, allowing the patent professional to focus claim coverage on the most likely commercial embodiments. It should be noted that any newly disclosed data may or may not be accorded the earlier filing date (depending on whether it was “enabled” in the original application), however, the originally disclosed material should be accorded the earlier filing date. In this case, there may be some claims in the applications with one priority date and other claims with a second priority date.

A utility patent protects the function of an invention.  Currently, the term of a utility patent is 20 years from the date of filing or priority.  For patents issued prior to June 8, 1995, the patent term is 17 years from date of issuance. Utility patents are usually more desirable than design patents because of the broader protection generally available to them. 

A design patent may protect a product manufacturer from “copycat” products that may have an inferior quality and detract from its reputation in the marketplace.  Under 35 USC 171, a design patent protects the overall appearance of an invention and is granted for any new, original and ornamental design for an article of manufacture.  The term of a design patent is 14 years from the date of issuance.  A design patent should only be chosen if the appearance of the invention is important, otherwise utility patent protection should be sought.

Why patent a design?

“I have worked hard to develop a good reputation. Putting the products side by side, consumers might be confused as to which is mine. They might buy my competitor’s product thinking it is mine. I want to prevent copycat devices from usurping my market share.”

Patentable Subject Matter

Patent law statutes broadly defines a patentable invention as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvements” to any of these types of inventions.

Establishing patentability is a legal art. An invention must be described in such a way that a meritorious argument can be maintained with the Examiner that the invention is novel and non-obvious. The Patent Examiner’s job is to locate prior art that can be used to establish that the invention is not novel, or is obvious in light of prior art. The skilled patent professional must describe features of the invention in ways that open the door to alternative basis for argument. For example, ranges of measurements (e.g. “side A comprises a length of from about 1 inch to about 12 inches”) are commonly used as well as relative measurements (e.g. “preferably, side A comprises a length of from about 50% to about 75% the length of side B and 10%-20% the length of side C”). Differentiation from the prior art is critical, requiring a combination of creativity and legal maneuvering based upon the disclosure. As such, highly creative, skilled practitioners have prosecuted patents to issuance (over frivolous application rules) for a method of covering a bald spot by combing hair over it and a method for swinging on a common swing set. Frivolous patents are not endorsed by this office, but the creativity of these practitioners is admired.

An inventor cannot receive a patent for perpetual motion devices, abstract ideas, laws of nature,  or unmodified naturally occurring substances or living matter.

An inventor cannot receive a United States patent for an invention publicly disclosed, used in commerce or offered for sale more than 12 months ago.  Public disclosure includes any sale, exhibit at trade show, or printed in a publication, with a few exceptions.

The term "process" is defined by law as a process, act or method, and primarily includes industrial and technical processes.  Process and Business Methods will be discussed in greater detail later.  The term "manufacture" refers to articles which are made, and includes all manufactured articles.  The term "composition of matter" relates to chemical compositions and may include mixtures of ingredients as well as new chemical compounds.  Genetically-engineered microorganisms and computer software-based inventions are newly covered subject matter qualifying for patentability.

Conditions for Patentability

Myth: the inventor needs to make a prototype before he prepares a patent application.

Myth: the inventor needs to scientifically explain how or why his invention works.

The USPTO does not require the inventor to propose a theory, or even understand, how or why their invention works.  The inventor is required to reduce his invention to practice.  This may be accomplished by actual reduction to practice, that is, to construct a working prototype, to receive a patent.  This may also be done by constructive reduction to practice.  The inventor must only be able to describe the invention in sufficient detail so it is enabled, that is, so that one skilled in the art may make and practice the invention from the disclosure within the patent without undue experimentation.

For example, an inventor might accidentally mix two liquids together and observe that the combination has super properties. These super properties have a useful application. In preparing a patent application, the inventor is not required to explain the chemical basis for these super properties, nor even identify what they are. The inventor is merely required to disclose how to make and use the invention, that is, how much of each liquid to mix together and critical conditions that may be pertinent (temperature, flow rates, pressure, agitation methods, etc.) and how to apply it in its useful application. He can describe the result he observed without having to propose a theory for its mechanisms.

Novelty (35 USC 102)

In order to be patentable, an invention must be novel. The USPTO will reject an application under 35 USC 101 if the invention was:

  • Already known or used by others in this country prior to the invention;
  • Patented or described in a printed publication in another country prior to the invention or invention by applicant;
  • In public use or on sale in this country more than one year prior to the date of the United States patent application;
  • Abandoned by the inventor;
  • Not invented by the applicant;
  • Applicant (including legal representatives and assigns) applied for a patent or filed an inventor’s certificate in another country more than 12 months prior to application in the United States;
  • Described in a United States published patent application by another prior to the invention or invention by applicant (PCT applications in English and designating the United States will be treated as United States national applications);
  • Described in a United States patent application of a granted patent by another prior to the invention or invention by applicant (PCT applications, even when in English and designating the United States, will NOT be treated as United States national applications);
  • Described in a United States patent filed by another prior to the invention;
  • Described in another inventor’s United States patent application that was published prior to the invention; or
  • During the course of an interference action, another inventor establishes that he or another inventor conceived of the invention in the United States prior to the applicant and did not abandon, suppress or conceal it and was diligent in reducing the invention to practice.

Non-obvious Subject Matter (35 USC 103(a))

An invention is unpatentable, if taken as a whole, and in light of the prior art, would have been obvious to a person having ordinary skill in the art to which the subject matter of the invention pertains.

For example, prior art widgets use a screw bolt assembly as a fastener. Inventor proposes to eliminate the bolt in favor of a threaded screw hole, citing advantages such as less parts, less manufacturing cost, a more functional “flush surface” at the location of the fastener and a more secure attachment of the respective parts. An Examiner might potentially raise an obviousness rejection, claiming that one of ordinary skill in the art would be aware of a variety of fastening mechanisms, particularly threaded screw holes, and it would have been obvious to substitute one in favor of the other. The inventor could rebut the Examiner’s position with a showing of “unexpected benefits” of the threaded screw holes.

Components of a Patent Application

The Manual of Patent Examination Procedure (MPEP) require an application for Letters Patent to contain:

  • Title of the Invention
  • Cross-reference to Related Applications, if any
  • Reference to Microfiche Appendix, if any
  • Brief Summary of the Invention
  • Brief Description of the Drawings
  • Detailed Description of Preferred Embodiment
  • Claims
  • Abstract of the Disclosure
  • Signed Oath or Declaration
  • Drawings

Customarily, most patent applications also contain a “Background of Invention” section with subdivisions for field of the invention and objects of the invention.

Specification

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention. (35 USC Section 112.)

Thus, the statutory requirements of the specification are:

  1. An adequate description (level of description varies by technology and desired breadth of claim scope)
  2. Enablement (enough information for a skilled person in the art to make it/use it without undue experimentation)
  3. Best Mode (also referred to as the preferred embodiment)
  4. Claims

The patent professional will work with the inventor to develop the specification and drawings, determine the most critical features to describe and depict, broaden the scope of the invention where possible to enhance the strength of the patent, and develop aggressive claims that are not likely to be rejected but will provide the maximum patent protection possible.

Drawings

Drawings will be required for most inventions. In process claims or software patents, these drawings may consist of standard industry flowcharts describing the steps. Formal drawings meeting patent guidelines will be required for utility and design patent applications to issue. Informal drawings may be used for provisional applications and in some cases, in the early stages of utility applications..

Patent drawings should illustrate the novel concepts and significant features of the invention.

Oath or Declaration

A utility or design patent application requires an oath or declaration from each inventor.

Fee

Fees depend, in part, upon the size of the entity with an ownership interest in the application. The United Sates PTO recognizes two classes of patent applicants: small entity and "other than small entity." In order to encourage inventions and the progress of science, the United States PTO generally charges only one-half of its fee to small entities. While this is an overstated generalization of the fee structure, it is a good rule of thumb for most filings.

Small entities include individual inventors, not-for-profit organizations and companies with less than 500 employees. (There are other restrictions, but these are the most defining elements.) Currently, a basic utility patent containing less than a total of 100 pages, 20 claims, 3 independent claims and no multiple dependent claims for a small entity pays a basic filing fee of $500. Additional fees will be incurred for lengthy applications, additional claims and other conditions. The current fee schedule is available on the USPTO official website. A basic provisional patent will incur a filing fee of $100 and a design patent will incur a basic filing fee of $205.

Who is an Inventor?

Myth: The overseeing department manager may be listed on the patent as an inventor even he did not directly contribute to the invention.

Myth: The business owner may be listed on the patent as an inventor if the inventor’s work was (1) done in the course of his employment, (2) while earning salary paid by the business owner, (3) at the facilities and with the materials and equipment owned or supplied by the business owner, and (4) the business owner pays all patent costs.

Inventors are those who conceived of the idea that is the invention. Those who merely helped reduce the idea to practice are NOT inventors (unless they contributed to conception of the invention in some way). Inventors do not need to work together on the invention at the same time, nor are they required to contribute the same amount or type of contribution.

Inventors must have contributed to at least one claim in the patent application in a substantial way. Thus, a skilled patent practitioner can selectively add or omit claims to tune the inventors to the desire of the client. The skilled patent practitioner can also craft the patent claim to include or omit various elements that affect inventorship with respect to each claim.

Someone who merely assists in reducing an invention to practice is a person who merely carries out the inventor’s inventive concept. For example, an inventor conceives of combining part A and part B. Inventor goes to Technician to help him configure the combination, determine the best fastening means, and to determine the most cost-effective materials. The Technician would most likely be found to be reducing the inventor’s concept to practice rather than as a co-conceiving inventor.

If an inventor is mistakenly named or omitted from the application, he may be later added or removed. Failure to name true inventors that rises to a fraud on the patent office in the procurement of a patent may be a ground for invalidating a patent.

Where a joint inventor does not apply, others may apply for a patent on his behalf. A person who has a proprietary interest in patent rights, or has been assigned such patent rights, may apply for a patent as an agent of the inventor upon a showing that inaction would cause irreparable damage. The PTO will issue the patent in the name of the inventor, not the applicant. Similarly, in a case where an inventor dies or is incapacitated, the inventor’s legal representative may apply for a patent on behalf of the deceased.

In theory, patents are developed and owned by individuals. Unlike other countries, corporations may not be inventors. In order to transfer patent rights to corporate entities, inventors must assign their patent rights to the corporation. Assignments, in certain circumstances, may limit future involvement of the inventor in the prosecution of the patent and any “child” cases.

To protect corporate assets, it is common practice for employees to sign an employment agreement at the time of their employment stating that all inventions (both patentable inventions and inventions that are not patentable but may qualify as trade secrets) and proprietary information related to the business of corporation and all inventions made with corporate time, materials or facilities, belong to the corporation. Even with no obligation to assign, an employer may be entitled to “shop rights” in inventions.

With limited exceptions, a patent application may only be filed by the inventor. Thus, someone who sees the invention of another would be precluded from filing a patent application based upon that invention. However, modifying and improving upon the “borrowed” inventive concept may establish inventorship and qualify for patent application filing.

Who owns the Patent? Some key points about Patent Ownership

Under the patent laws, an inventor owns the patent. Co-inventors have an undivided interest in the whole patent and may exploit it without consent or accounting to the other inventors. Inventor agreements may be entered to set forth the rights of co-inventors vis-à-vis one another.

Patents have the legal attributes of personal property. The inventors are the statutory patent owners and may assign the patent rights by an assignment to others. Notarization is recommended, but not required, for valid assignments. If all of the inventors assign all right title and interest in the patent to another, the title to the patent rights belongs to the assignee. If only one inventor assigns his rights, there may be a partial assignment. Prosecution proceeds with all partial assignees and inventors who have not assigned their rights.

Contractual covenants may impose obligations to transfer ownership from the inventor to another person or entity. This is common with employee inventors and their employers. (Businesses may not apply for patents, only individuals).  The employment agreements for R&D personnel, technical professionals, and executives often obligate the employee to assign patent rights to the employer. A “garage inventor” or “independent inventor” may be contractually obligated  to assign patent rights to a manufacturer for his new product in a technology transfer or sale transaction.  Graduate students are often required to assign inventions to an educational institution sponsoring the research. (Notably, if research is funded by a government agency, the government may have right to the invention even in the absence of a formal assignment.)

Assignments of patents must be recorded with the United States Patent and Trademark Office within 3 months of execution or they will be void as against bona fide subsequent purchasers. (There may, of course, still be liability as between assignor and assignee under state law.) An original or a certified true copy may be recorded. Assignments not in English will not be recorded unless accompanied by a signed translation. Conditional assignments will be regarded by the United States Patent and Trademark Office as absolute.  The recording of the assignment has no bearing on the determination of its validity or title to a patent or patent application.

As intangible property, patents may also be the subject of a security interest such as liens or pledged as collateral in financing transactions. Complex issues arise in foreclosure and bankruptcy proceedings.

Patent applications, even codified non-patented technical know-how (assignment not recorded at USPTO in this case), can be the subject of assignment. The patents do not need to be issued to be assigned. In fact, they may be assigned even before they are written. Future rights evolving from patent applications may also be assigned. These may include foreign patent filings, improvements on the invention, reissues and patent terms adjustments to name a few common inclusions in the bundle of rights assigned.

Ownership of a patent becomes important when enforcing the patent. All owners must join in an enforcement action. Hold-out partial owners may make unreasonable demands, and if not met, may license or assign their rights to the alleged infringer, impeding the ability to bring an enforcement action. It is prudent to have contractual obligations not only to assign, but also to require cooperation with enforcement or defense litigation.

Myth: a company owns the patents for inventions of its employees during the course of their employment

It is not uncommon for employers to not have assignment covenants in place. In some circumstances, courts can impose shop rights- essentially a personal, limited, non-exclusive, nontransferable, irrevocable, royalty-free license for an employer to use an invention developed by an employee in the course of employment or with business assets.

Patent ownership may be discovered, in most cases, with a review of the United States Patent and Trademark Office records and National Archives and Records Administration (NARA) (pre-1957 patent assignments). Assignments of pending, unpublished or abandoned applications can only be obtained (1) with written authority from the applicant, assignee, an attorney representing either party, (2) upon a showing of a bona fide prospective or actual purchaser, mortgagee or licensee, or (3) if referenced in another publicly available patent. However, since not all inventors, businesses and general practice attorneys know about the United States Patent and Trademark Office recordation of assignments, it may be wise to also check the County Clerk or state recording offices for assignments and security instruments. This has the added benefit of uncovering unknown encumbrances on the patent assets. The law of assignments is state law, and thus, should be handled in transactions as would be done with other assignments. For example, the unrecorded assignment is always a risk for attorneys to consider in transactions. First, a patent assignment is valid if filed with the United States Patent and Trademark Office within 90 days of execution. Appropriate warranties are recommended for this window of potentially valid assignments. While bona fide purchasers will not be affected by an unrecorded patent assignment, there may be contractual implications (breach) for the parties in cases of unrecorded assignments involving key business personal or inventor family members that may not be deemed bona fide purchasers.

One last issue for legal practitioners that arises with respect to patent ownership is the concept of defining the client. While the inventor is a key contact at the patent application preparation stage, in many circumstances the client is the assignee of the patent application. There are potential conflicts between the interests of assignor and assignee, or licensor and licensee, that must be considered in the course of working with the parties.

Myth: Co-owners of a patent share equally in the royalties or profits

Joint inventors have an undivided interest in the whole patent and may exercise patent rights without the consent of other joint owners. Additionally, there is no obligation to account to the other joint patent owners. Of course, contractual agreements between the joint inventors can limit these rights.

Duty of Disclosure

Patent law requires that any person substantively involved in the preparation or prosecution of a patent application and who is associated with the inventor or the inventor’s assignee has a duty to provide all material information that might be pertinent to a rejection of the application. This duty extends to each named inventor, each attorney or agent preparing or prosecuting the application, and those substantively involved in the preparation or prosecution process. The duty applies to individuals, not to their organization or company. The duty is owed to the United States PTO as long as the application is unissued and the claims to which the material information applies have not been cancelled or withdrawn. The duty requires disclosure of all information material adverse to patentability such as prior art, prior public sales and uses, offers to sell, prior invention by another and inventorship conflicts. There is no duty to disclose information favorable to patentability. Patent procedural rules impose an even broader duty of candor and good faith.

Material information is that which is not cumulative to information already in the record. It is also information that is inconsistent with applicant’s assertions. Individuals subject to the duty must disclose all material prior art or other information they are aware of at the time the application is filed or they become aware of during its prosecution. This includes co-pending applications by the applicant.

Disclosure by a pro se inventor, agent or attorney is made in writing to the United States PTO. Other individuals may satisfy their duty by disclosing the required information to the inventor, agent or attorney who in turn will disclose it to the United States PTO.

Manual of Patent Examining Procedure rule 2004 lists procedures to aid in compliance and disclosure. These are suggestions, not requirements.

With all of that said, the United States PTO does NOT investigate, comment upon, reissue or reject applications based on disclosure problems. A court is the best forum to consider disclosure problems and fashion an equitable remedy to fit the facts of the case. Error without deceptive intent, if averred in a reissue oath or declaration, may be corrected by the United States PTO.

Do I have to publish my nonprovisional utility patent application?

An applicant may request that the application not be published, but only if the invention has not been and will not be the subject of an application filed in a foreign country that requires publication 18 months after filing (or earlier claimed priority date) or under the Patent Cooperation Treaty. Publication occurs after the expiration of an 18-month period following the earliest effective filing date or priority date claimed by an application. Provisional and design applications are not published.

After I apply for a patent, does the world know about my invention?

Not until your application is published or issued. Patent applications are confidential at the early stages. Following publication (or referenced in another published patent or patent application), the application for patent is no longer held in confidence by the USPTO and any member of the public may request access to the entire file history of the application. To maintain secrecy, we encourage the use of confidentiality agreements. Should your patent application not publish or be issued as a patent, the technology may qualify as a trade secret.

Patent Publication: Is this Technology better kept a Trade Secret?

The benefit of patent protection and the limited monopoly granted in Letters Patent comes with a price. The inventor must contribute the public body of knowledge by sharing his technology. In furtherance of this objective, in the absence of an affirmative request not to publish, the United States PTO "publishes" utility patent applications (not provisional or design patent applications) filed on or after November 29, 2000 (including International applications). An application will not be published if an applicant makes a request upon filing the application certifying that the invention has not and will not be the subject of an application filed in another country, or under a multilateral international agreement, that requires eighteen-month publication.

An application may be published earlier than the end of such eighteen-month period at the request of the applicant. In exchange for the publication of a patent application, patentees may be able to obtain "provisional rights" in the way of a reasonable royalty during the period beginning on the date of publication of the application by the United States PTO and ending on the date the patent is issued. Thereafter, the patentees have nonprovisional rights to license their patents for royalties.

In some cases, companies elect to keep a technology as a proprietary trade secret rather than to obtain patent rights. There are two realties to obtaining a patent: (1) Once a patent term has expired, the technology would be in the public domain; and (2) Once the application has published, others may attempt to design around or improve upon the technology that was disclosed. This may diminish the economic advantage that may be derived from such technology.

Management may elect to forego patent protection and maintain the technology as a closely held trade secret. These business decisions must be made cautiously. First, once the technology is used in commerce for one year, patent protection may no longer be sought on the technology without new, novel and unobvious improvements. Second, a patent grants a “limited monopoly” to the owner, allowing the patentee to patrol and seek damages from infringers. However, a reverse-engineered technology that has no patent protection may leave open a small door for competitors to exploit.

These are true business decisions. They often involve inquiries such as:

What is the impact of publishing my proprietary technology?

  • Will I create a new market for accessories, increasing my own sales?
  • Will I be perceived as high tech to competitors, investors and consumers?
  • Will the patent have a deterrent effect on competitors?

My technology will be in the public domain after expiration of patent term.

  • What is the useful life and economic advantage of this technology?
  • In 20 years, will this still be a competitive advantage or cutting edge?

What if competitors design around or improve upon my technology?

  • Will I be perceived as the market leader (“the original”) in the technology?
  • Can I benefit from industry improvements myself?

Do I have a “first to market” advantage?

Right of Priority

Patents are often grouped into “patent families” wherein similar technology is disclosed.  The interrelationship between the members of this family may be described in terms of parent-child relationships.  For example, if – after the filing of an application for letters patent – the inventor wishes to file a second set of claims drawn to the same invention, then a child application may be filed which “claims priority” from the original application.  The priority claim is honored with respect to the subject matter that was disclosed in the parent application, provided the parent meets 35 USC 112 standards.

During the examination of the application, the Examiner will consider the “prior art” – the art that is “prior” to the filing date of the application in question.  If the priority claim is proper, the Examiner will use the filing date of the parent application to determine what is considered prior art.  If the priority claim is not proper, then the Examiner will use the filing date of the child application.  Should a critical reference appear between the filing of the parent application and the filing of the child application, such a priority claim may be the difference between receiving an allowed patent and receiving a rejection.  Generally, a priority claim must be perfected within four (4) months of filing the child application or within sixteen (16) months of the filing of the parent to which priority is being sought.

Generally, the term of a patent will run for twenty (20) years from the earliest priority date.  As such, child applications usually enjoy a progressively shorter term.  Certain types of priority claim do not diminish the patent term (see, for example, provisional priority).  In addition, certain types of patent applications, such as design applications, are not eligible to make priority claims.

Types of Priority Claims

Foreign 35 USC 119(a-d)

The applicant may claim priority from a patent filed in a foreign patent office if that foreign office is a member of the Paris Convention Treaty and the child U.S. application is filed within one (1) year of the foreign filing date.  The parent and child must effectively be the same invention and make the same claims with the same inventors.

Domestic – General

To claim priority to a second United States patent application, several requirements must be met.  Firstly, the parent application must be pending (i.e. neither abandoned nor issued) before the United States patent office.  Secondly, the parent application and child application must have at least one inventor in common.  Thirdly, for the claim to be honored, the parent application must meet 35 USC 112 standards (i.e. provide an enabling description, etc.).  Fourthly, the filing of the parent application must be complete – all fees and required signatures having been received by the patent office.  Additionally, the child application must explicitly request the priority claim, usually in the first sentence of the specification.

Domestic – Provisional 35 USC 119(e)

Claims to provisional patent applications are unusual in that they do not count against the patent term of the child application.  However, care must be taken to ensure the provisional meets 35 USC 112 standards, else the priority claim will be fruitless.

Domestic – Continuation/Divisional 35 USC 120

When a claim for priority is being sought, the applicant should consider whether or not to add “new matter” (i.e. improvements or expansions of the specification) to the application.  If the inventor has discovered a new and improved method for practicing the claimed invention, then the inventor may be required to include such improvements so as to comply with the “best mode” requirements of 35 USC 112.  However, if no new matter is added, then the child application may be referred to as either a “continuation” or “divisional” of the parent.  If the priority claim is granted, then the child application will have an effective filing date equal to the filing date of the parent application for purposes of determining what is, and what is not, prior art.  The term of any patent that results from the child application will run from the filing date of the parent.

Domestic - Continuation-in-part 35 USC 120

When the child application contains “new matter” then the claims of the child may be granted “split priority.”  Since priority is only granted for subject matter that is disclosed in the parent application, every claims must be evaluated individually to determine what its effective prior art date may be.  If the invention being described by the claim is patentable using the disclosure only of the parent application, then the filing date of the parent will be the effective filing date for that claim.  Conversely, if the child application is necessary to render the claim patentable (for example, to provide an enabling disclosure) then the effective filing date for that claim is that of the child application.  Although priority may be split on a per claim basis, the term of the patent is not.  The entire patent and all of its claims will have its patent term calculated from the earliest effective priority date.

Patent Prosecution

The process of “arguing” the merits of your application is referred to as “prosecuting” the patent application. This process typically takes from one to three years and is often similar to a negotiation with the patent office. A balance is reached between the limited scope of patent protection offered by the Examiner and the broader scope of patent protection sought by the inventor. This discussion is not intended to cover the full scope of patent prosecution practice, but to familiarize a non-patent professional with a typical prosecution scenario. It should be understood that additional and other actions may be taken by the United States PTO.

After filing a patent application, an Office Action from the United States PTO will usually be received within 18 to 36 months.  (Some art units are so overwhelmed with applications that it may even be 40-44 months.) Typically, the first review of the application by the United States PTO Examiner is sent to the applicant in the First Office Action. This may be final or nonfinal.

In some cases, the First Office Action on the merits is preceded by a Restriction Requirement from the Examiner. The Examiner may break the claims into distinct inventions and ask the inventor to elect one such invention for prosecution. The remaining claims may be immediately prosecuted by the inventor via a continuation application, or held in abeyance until the first application is allowed and prosecuted via a divisional application. Of course, the inventor may elect not to prosecute on the non-elected claims.

Typically, in the First Office Action, the Examiner will reject some or all of the claims of the patent under 35 USC 103 when the Examiner believes it would have been obvious to create your invention in view of the prior art located by the Examiner or disclosed by the applicant. Other typical grounds for rejecting an application include 35 USC 102 rejections for lack of novelty.

It is then necessary for the patent professional to argue that your invention is patentable based upon specified differences between the invention and the prior art cited by the Examiner.  Prior art may generally include other domestic and foreign patents (both published and unpublished), articles, thesis, conference papers, and other literature. Legal arguments and case law may be used to refute the Examiner's position.  A telephone or in-person interview with the Examiner may also be arranged to find agreement on any issues of dispute.

Typically, the Examiner responds to the inventor’s Reply to First Office Action with a Second Office Action. While this may be final or non-final, it typically is final. The examiner may reject all of claims a second time, indicating that the inventor’s arguments were not persuasive. The examiner may set forth conditions (in the nature of required changes) upon which a patent would be allowed for some of the claimed subject matter. The inventor may make the “suggested” changes and request the patent to be issued in accordance with the Second Office Action. Alternatively, the inventor may request continued examination and another opportunity to address the Examiner’s rejections. The inventor may also make improvements or revisions in his invention, addressing the issues raised by the Examiner, and file a continuation-in-part application requesting priority to the parent application. The new subject matter will not be granted priority if not enabled in the parent case and the application may have some claims with one prior art date and other claims with a second prior art date.

Once put in condition for allowance, the United States PTO will issue a Notice of Allowance. Upon payment of an issue fee (you have 3 months to pay) and attention to any formalities raised by the patent office, a patent will normally be published and issued within 3 months. These formalities typically include replacement of pending patent application or published patent application references with the issued patent numbers for any such patents that issued during the pendency of prosecution.

How to Protect an Idea during the Early Stages – Nondisclosure Agreements or Provisional Patent Applications

Nondisclosure agreements create a state law contractual obligation, and thus, contractual damages for breach. These fact-specific enforcement actions are often expensive and lengthy endeavors. The strength of a nondisclosure agreement is proportional to the specificity of the confidential information covered by the agreement. Whereas nondisclosure agreements are written fairly broadly, used alone, they may not offer the best protection to an inventor’s proprietary technology. In many cases, it is preferable to base a nondisclosure agreement on a filed patent application, including a provisional application. This creates a firm scope of the technology being disclosed, as well as potential federal causes of action for infringement on a patent that issues from such patent application or the utility application claiming priority to a provisional application.

Nondisclosure agreements are often used when a new concept is brought to a third party for manufacturability/marketability analysis or assistance in reducing it to practice. These meetings often become collaborative “think tank” sessions and it may become difficult to sort out which technology was brought in and which technology evolved as a consequence of the collaboration. Inventorship issues arise as well as disputes over ownership of the technology. A simple nondisclosure with broadly listed subject matter may not effectively assist in resolving these fact-specific conflicts. On the other hand, a filed patent application would be extremely helpful in establishing the bounds of the concept or invention prior to any collaboration or improvement.

It is important to remember that even “patent pending” indicates that an application has been made seeking a patent; it is not a guaranty of a patent being issued by the Patent Office. Additionally, provisional patent applications have no enforceable claims and may provide only limited protection if they are not converted to utility applications within one year. Thus, if a patent never issues as a result of an unpublished application (provisional applications, design applications, and utility applications with nonpublication requests and applications abandoned prior to publication), it may still be a trade secret. Once the “cat is out of the bag” without an NDA, it may be difficult to maintain it was a trade secret. Conservative practice would include the use of both provisional patents AND confidentiality agreements.

Patent Enforcement

Infringement of a patent consists of the unauthorized making, using, offering for sale or selling any patented invention within the United States. An individual may be an infringer if he "actively induces infringement of a patent" or sells a product knowing the same to be especially made or adapted for use in an infringement of a patent. In the later case, he shall be liable as a "contributor infringer."  Enforcement of this right is essential to protecting the exclusive market created by the patent issuance and protecting against encroachment upon those exclusive rights by competitors. Under the doctrine of latches, knowledge of a competitor's infringement, and failure to timely act, may preclude a company from later enforcing the patent against the competitor.

There were fewer than 800 patent infringement lawsuits in 1981, but that number ballooned to nearly 3,000 in the year 2003. At the same time, the likelihood the courts would rule for the patent-holder rose from 62% to 90%.

The claims of a patent define the scope of coverage against infringers. The broadest valid claim is utilized to determine infringement of the patent. The accused infringing product must literally "read" on every element of the broadest valid claim in the patent. The patent infringement will likely be on more than one claim in a patent. This is a stronger litigation position for the patent holder. In defense of the infringement allegations, the infringer may argue that the patent claims are invalid because of prior art, lack of enablement and other challenges to patentability. Should one or more claims be challenged (usually the broadest claims) the existence of other infringed claims (narrower claims) is a fallback position.

Description of a Preferred Embodiment

Figure 1 depicts a widget with a substantially rectangular configuration comprising a first member, a second member, a third member, and a fourth member. First member and third member comprise a length of from about one inch to about 36 inches. Second member and fourth member comprise a length of from about one inch to about 12 inches.

* * * * *

Widget is desirably formed a plastic material.

* * * * *

I claim:

  1. A widget comprising a first member, a second member, a third member, and a fourth member wherein said first member comprises a length of about 8 inches, said second member comprises a length of about 8 inches, said third member comprises a length of about 8 inches, and said fourth member comprises a length of about 8 inches .
  2. A widget as described in claim 1, wherein said widget comprises a plastic material.

Potentially infringing product is an 8.1 inch square composed of nylon 6-6.

Simplified Analysis:

The claim is drawn to a rectangular-shaped widget. One of ordinary skill in the art would recognize a square as a particular type of rectangle. One of ordinary skill in the art would recognize nylon 6-6 as a plastic composition. The “wiggle room” of “about 8 inches” is a fact specific analysis, but would potentially include a widget of 8.1 inches. The product is potentially infringing independent claim one and dependent claim 2 and thus, an infringement action may be viable. Consult your patent counsel!

When finding infringement on a utility patent, the meaning of the claims of the patent is determined by the trial judge as a matter of law. When the meaning of a claim is contested, many courts will hold a preliminary "Markman hearing" (considering expert technical and patent testimony) to resolve the meaning of the claim which defines the scope of the patent grant. Finding infringement on a design patent requires determining if an ordinary observer would be deceived by two substantially similar designs.

In determining the meaning of the claims, the judge will consider the claims, the specification, the prosecution history, dictionaries, learned treatises, and expert testimony. Inventor testimony may also be considered, but likely will have little probative value since his subjective intent is not legally relevant. Rather, an objective test is applied of what one of ordinary skill in the art would have understood the term to mean. Claims must be read in view of the specification, and as such, the detailed description of the invention acts as a dictionary of sorts in defining the terms used in the claims. There is no parole evidence corollary in patent law.

Where only insignificant differences exist between the elements of the claim and the infringing product, the Doctrine of Equivalents may be utilized to find infringement. The purpose of the doctrine is to catch unscrupulous copiers who make unimportant and insubstantial changes and substitutions which, though adding nothing,avoid the literal language of the claims.

For example,a patent recites “welding” to fuse two pieces together. A potential infringer uses nails in his design. The issue becomes whether nails are equivalent to welds. The analysis will turn upon whether welds were required to get the result intended by the inventor. For example, was a watertight seal necessary? The analysis may also turn upon whether the nails themselves were a significant improvement in the art.

Standing

In the absence of an agreement to the contrary, the burden of enforcing the patent right is on the patent owner. Once a patent has been assigned, the assignor, no longer having any property interest in the patent, has no right to enforce the patent against infringers. An assignee, as the party holding a property interest in the patent, may bring an infringement action against an infringer without the assignor joined as a party. An exclusive licensee generally has standing to bring suit for infringement of the licensed patent without joining the licensor as a plaintiff.

Exclusive licenses often contain a material provision that may place the burden of legal costs on the licensor, licensee or jointly to both. In the absence of an express covenant to the contrary, there is no obligation on the part of the licensor to protect the licensee against competition from infringers. Often, the duty is placed on the licensee to enforce his exclusive rights. The licensee maintains control over the infringement litigation in these cases. In almost all cases, even when the duty to litigate and the cost burdens are on the exclusive licensee, there is a provision requiring the licensor to assist in prosecution or defense.

Nonexclusive licenses generally place more control in the licensor.  The licensee requires an explicit provision in the license allowing the licensee to enforce a licensed patent, and the licensor must be joined as a plaintiff. The costs of enforcement should be addressed in the license, as well as the control each party has with respect to settlement, since the rights of both are likely to be affected.

The sole remedy for patent infringement is civil action brought in federal court. An action must be commenced by the patent owner. Co-ownership of patents poses a potential problem for enforcing patent rights against infringers. Absent an agreement to allow suit unilaterally, no single co-owner may sue a third party for infringement without the other co-owners' voluntarily joining the suit.  Appeals arising from an infringement action in federal district court, are statutorily venued in the Court of Appeals for the Federal Circuit (CAFC).

Notice Requirement

For an owner of a patent to receive damages in any action for infringement, there must be proof that the infringer had "notice" of the patent. Specific and actual notice to the accused infringer charging infringement of the patent is usually required and may be established by (i) marking the product, (ii) sending a cease and desist letter to the infringer, or (iii) filing an action for infringement.

Marking the product in the form of “Patent No. 5,432,594” provides notice to the public that the product is patented. By marking the product, the owner of the patent is able to receive damages from an infringer back to the date the notice was placed on the product, up to and including six years. Without the notice placed on the product or packaging, the owner of the patent can only receive damages if (i) he notifies the infringer of the infringement by sending a cease and desist letter or by filing a civil lawsuit in Federal court for infringement, and (ii) the infringer continues to infringe after the notice.

Sending a cease and desist letter to an infringer enables the accused infringer to bring a declaratory judgment against the owner of the patent in an unfavorable or inconvenient jurisdiction to the patent owner. Therefore, prior to sending a cease and desist letter to an accused infringer, the patent owner should consider filing an infringement action in a favorable jurisdiction to avoid being unexpectedly brought into an unfavorable jurisdiction.

Injunctive Relief

The patent owner may seek injunctive relieve against the infringing party since the court has the discretion to prevent violation of the rights secured by the patent "on terms as the court deems reasonable." The court will consider (1) likelihood of success on the merits (to be successful in a patent case, on the merits, the patent must be valid and infringed), and (2) irreparable harm. The Court of Appeals for the Federal Circuit has stated that irreparable injury must be presumed where validity and continued infringement are clear.

Damages

The patent owner may also seek monetary damages. Damages that may be recovered in patent infringement litigation include the patentee's lost profits or royalty-based damages.  If the patent owner is able to prove with reasonable probability his lost profits, then that amount is usually the measure of damages for the patent owner. If lost profits cannot be ascertained, then a reasonable royalty is the measure of the patent owner's damages together with interest and costs as fixed by the court. Punitive damages are also available. The court may make an award of up to three times the amount of actual damages when the infringement is determined to be willful.

Defenses to Infringement

An accused infringer may defend a charge of infringement by attacking the validity of the patent or claiming that there is no infringement at all because the accused product does not "read" on all of the elements of the broadest claim. He may also defend by asserting the expiration of the patent for term expiration or failure to timely pay maintenance fees.

In attacking the validity of the patent, an infringer may use prior art which was not considered by the United States PTO examiner to prove that the patented invention was obvious to one skilled in the art at the time of filing for patent protection. Since every patent is presumed valid, the burden is on the party seeking a declaration of invalidity. The accused infringer must prove by clear and convincing evidence with respect to every claim that his product reads on since the validity of a dependent claim is not determined by the validity of any previous claims.

What is a provisional patent application?

A provisional application, which was designed to provide a lower cost first patent filing in the United States and to give U.S. applicants parity with foreign applicants. Provisional application provides the means to establish an early effective filing date in a patent application and permits the term "Patent Pending" to be applied in connection with the invention. Provisional applications may not be filed for design inventions. The applicant would then have up to 12 months to file a non-provisional application for patent. The claimed subject matter in the later-filed non-provisional application is entitled to the benefit of the filing date of the provisional application if it has support in the provisional application.

What is PCT?

The Patent Cooperation Treaty (PCT) enables the U.S. applicant to file one application, "an international application," in a standardized format in English in the U.S. Receiving Office (the U.S. Patent and Trademark Office), and have that application acknowledged as a regular national or regional filing in any State or region that is party to the PCT.

Foreign Patent Protection

Most countries have patent laws, and a person desiring a patent in a particular country must make an application for patent in that country, in accordance with the requirements of that country.

The laws of many countries differ in various respects from the patent law of the United States. In most foreign countries, publication of the invention before the date of the application will bar the right to a patent (In the United States, a patent may be obtained if applied for within one year of publication). Most foreign countries require that the patented invention must be manufactured in that country after a certain period, usually three years. If there is no manufacture within this period, the patent may be void or subject to grant of compulsory licenses.

The Patent Cooperation Treaty (PCT) provides centralized filing procedures and a standardized application format for patents in its 124 member countries. Timely PCT application provides an international filing date in each country which is designated in the international application and provides a report of search of the invention. It also delays the time period for filing the national applications providing up to 30 months from the original U.S. filing date to file in any of the 124 member countries.

U.S. law requires that inventors with inventions made in the United States obtain a license from the USPTO before applying for a patent in a foreign country. Such a license is required if the foreign application is to be filed before an application is filed in the United States or before the expiration of six months from the filing of an application in the United States unless a filing receipt with a license grant issued earlier. Any denial of a foreign filing license is indicated in the filing receipt mailed to each applicant. This may be the case for example in circumstances where the inventor involved technology necessary for national defense purposes. The USPTO may order that an invention be kept secret. If the invention has been ordered to be kept secret, the consent to the filing abroad must be obtained from the Director of the USPTO during the period the order of secrecy is in effect.

Foreign Applicants for U.S. Patents

The patent laws of the United States make no discrimination with respect to the citizenship of the inventor. Any inventor, regardless of his/her citizenship, may apply for a patent on the same basis as a U.S. citizen. There are, however, a number of particular points of special interest to applicants located in foreign countries.

The application for patent in the United States must be made by the inventor and the inventor must sign the oath or declaration (with certain exceptions), differing from the law in many countries where the signature of the inventor and an oath of inventorship are not necessary. If the inventor is dead, the application may be made by his/her executor or administrator, or equivalent, and in the case of mental disability it may be made by his/her legal representative (guardian).

No U.S. patent can be obtained if the invention was patented abroad before applying in the United States by the inventor or his/her legal representatives if the foreign application was filed more than 12 months before filing in the United States. Six months are allowed in the case of designs patents.

An application for a patent filed in the United States by any person who has previously regularly filed an application for a patent for the same invention in a foreign country which affords similar privileges to citizens of the United States shall have the same force and effect for the purpose of overcoming intervening acts of others as if filed in the United States on the date on which the application for a patent for the same invention was first filed in such foreign country. This is the case, provided the application in the United States is filed within 12 months (six months in the case of a design patent) from the earliest date on which any such foreign application was filed and claims priority under 35 U.S.C. 119(b) to the foreign application. A copy of the foreign application certified by the patent office of the country in which it was filed is required to secure this right of priority.

If any application for patent has been filed in any foreign country by the applicant or by his/her legal representatives or assigns prior to his/her application in the United States, in order to claim priority under 35 U.S.C. 119(b) to the foreign application, the applicant must, in the oath or declaration accompanying the application, state the country in which the earliest such application has been filed, giving the date of filing the application. If foreign priority is claimed, any foreign application having a filing date before that of the application on which priority is claimed must also be identified in the oath or declaration. Where no claim for foreign priority under 35 U.S.C. 119(b) is made in the U.S. application, the applicant should identify in the oath or declaration those foreign applications disclosing similar inventions filed more than a year before the filing in the United States.

An oath or alternatively a declaration must be made with respect to every application. When the applicant is in a foreign country the oath or affirmation may be before any diplomatic or consular officer of the United States, or before any officer having an official seal and authorized to administer oaths in the foreign country, whose authority shall be proved by a certificate of a diplomatic or consular officer of the United States. The oath is attested in all cases by the proper official seal of the officer before whom the oath is made.

When the oath is taken before an officer in the country foreign to the United States, all the application papers (except the drawing) must be attached together and a ribbon passed one or more times through all the sheets of the application, and the ends of the ribbons brought together under the seal before the latter is affixed and impressed, or each sheet must be impressed with the official seal of the officer before whom the oath was taken. A declaration merely requires the use of a specific averment found in 37 CFR 1.68.

If the application is filed by the legal representative (executor, administrator, etc.) of a deceased inventor, the legal representative must make the oath or declaration.

When a declaration is used, the ribboning procedure is not necessary, nor is it necessary to appear before an official in connection with the making of a declaration.

A foreign applicant may be represented by any patent attorney or agent who is registered to practice before the United States Patent and Trademark Office.

Confidentiality Agreements

There are many “standard form” confidentiality agreements available. In general, these forms may “do the trick,” however, be sure that the recitals set forth the circumstances surrounding the disclosure and consideration is expressly set forth. Broad, inclusive definitions of confidential information are desirable, however, always be specific where possible, especially by referencing trade names, trade marks, service marks and patents. Consider including a provision that no license or joint venture is implied. Consider a provision discussing which employees have access and how employees of a business will be required to maintain confidentiality in handling confidential information.

Many standard agreements require oral conversations to be summarized in writing and notice of confidentiality to be sent to the receiving party. This creates a presumption that anything not put in the writing is not confidential. In working with independent inventors, my experience has been that this can be burdensome, is usually not done (or done adequately) and causes unintended waivers of confidentiality. Independent inventors believe that the signing of the confidentiality agreement is enough to protect them, despite all of the warnings and instructions you may offer during counseling. Even when an attempt is made to comply with the writing requirement for oral conversations, the writing may create litigation issues as to whether the written summary accurately reflects the conversation content. Consider a Presumption of Confidentiality provision:

The parties further acknowledge and agree that all information disclosed …shall be presumed by the parties to be the Disclosing Party’s Confidential Information …

Another issue I encounter is that survivability clauses in most standard agreements are ambiguous. It may be difficult to determine how long the parties are obligated to keep things confidential. Consider expressly defining the period, for example, with language requiring continued obligations:

  • during the period of the business relationship
  • two years after the termination of all business relationships
  • until the Confidential Information no longer qualifies as a trade secret
  • written notice that no longer must be kept confidential

Lastly, many standard forms to not contain language about equitable remedies for breach. This may make it more difficult to obtain a restraining order to prevent the other party from improperly using confidential information. Consider including provisions acknowledging the injunctive remedy and provisions to recover attorneys fees if you have to enforce the confidentiality agreement.

There are some general exceptions to what is deemed confidential information:

It is also important to note that these assets are also subject to other statutory transfers:

  • Corporate dissolution (to shareholders)
  • Bankruptcy (to trustee)
  • Perfected security interest (to secured creditor)
  • Credit judgments (to judgment creditor)

Some key points about Patent Licenses and Assignments

It is the document’s substance, not the document label, that defines the difference between an assignment and a license. A transfer of the entire ownership interest is an assignment while transfer of less than the entire bundle of rights is a license. Issues frequently arise with respect to reservations of rights, take-back provisions, field of use restrictions and the like.

Patent applications may be assigned. An assignment of a patent application carries with it the rights to common subject matter in future divisional or continuation “child” applications as well. Continuations and divisionals are patent applications filed on the same disclosure and contain no new subject matter, but contain new claims. However, the Patent Office records may not reveal such assignment if no one files a request for recordation of the assignment in the “parent” application in the file of the “child” application until issuance or post-issuance. Thus, it is prudent to assess the procedural history of a patent or pending application as well as its subject matter in determining the scope of assignment rights.

Contrarily, substitute or continuation-in-part applications are “child” applications that do not benefit from the assignment of the “parent” applications and require a new assignment to be executed and filed. Continuation in part (“CIP”) applications are patent applications that contain some or all of the disclosure of the “parent” application as well as new subject matter. (These CIP applications often draw claims to improvements or refinements of an invention during the pendency of the “parent” application.)

Provisional applications follow the same legal theory – the assignment of a provisional application carries with it ownership rights to common subject matter, but a new assignment is required for utility applications that contain subject matter that is not common to both.

Some key points about Employee Inventions and Shop Rights

There is no duty for general employees to assign inventions made in the course of employment arising from the employment relationship absent express employment agreement requiring assignment. Great Lakes Press v. Froom, 695 F Supp 1440, 1445 (W.D.N.Y. 1987) (“New York State Law and ‘Federal Common Law’ are in agreement on the general principle”) It is prudent to use clear, unambiguous written contracts of employment with obligation to assign inventions to the employer. In such cases, the inventor employee holds bare legal title in constructive trust for his employer.

In some cases, an employer may include an obligation to assign even after employment is terminated in so-called “holdover clauses” for inventions made during a reasonable period following employment. The test for reasonableness of holdover clauses includes factors such as:

  • Extends beyond apparent protection that employer reasonably requires
  • Prevents inventor from seeking other employment
  • Against public interest

The good news if you represent the employee with no employment agreement with an obligation to assign inventions, is that the employee has full unencumbered title to his invention if the employee was not hired to invent.

The good news if you represent the employer who has failed to use employment agreements with obligations to assign inventions, is that shop rights may be available for inventions by employees. Shop rights are implied in fact transfers of ownership rights where an employee was “hired to invent” or assigned the duty of devoting his efforts to a particular problem. However, shop rights will not be available for inventions made of the employee’s own initiative. With shop rights, the employee’s title is subject to employer’s personal, non–exclusive, non-transferable, irrevocable, royalty - free license.

Corporate managers may be held to be corporate fiduciaries with judicially enforced equitable transfer of intellectual property (“IP”) rights, even in the absence of a written employment agreement with an obligation to assign for inventions made during course of employment or related to employer’s business.

Potentially Patentable Inventions

  • Mechanical parts and devices
  • Chemical compositions
  • Processes for making these mechanical parts and devices (or chemicals)
  • Methods of using these mechanical parts and devices (or chemicals)
  • Intermediate products
  • Component parts
  • Manufacturing processes
  • Equipment/apparatus to make products, intermediates and components
  • Equipment/apparatus to perform processes
  • Methods of using products, intermediates and components
  • Improvements to processes
  • Improvements to apparatus or components
  • Software algorithms
  • Business methods
  • Ornamental, non-functional designs
  • Novel and useful applications of existing things
  • Novel and useful methods of doing business

Often, a patent is on a small part of a device, not on the whole machine. For example, a patent on a unique valve assembly or paper feed mechanism rather than an entire printer.

Improvements on small parts or processes are potentially patentable subject matter, as well as new configurations of existing parts. The key is “novel and nonobvious.” It is useful to counsel your client to make the following inquiries:

  • What are the problems associated with the existing devices or processes?
  • Have previous attempts to resolve these problems been made in the art, and if so, how have they been inadequate?
  • How specifically does my improvement address the problem?
  • Why was it not an obvious solution?
  • Does my idea result in significant cost savings in manufacturing the product?
  • Does my idea make the product more mechanically reliable?
  • Does my idea add or enhance a key feature or function (speed, size, etc.)?
  • In utilizing my idea, will my product be distinguishable over my competitor’s product in way that is attractive to consumers?

Cost-efficiency in manufacturing is a competitive advantage. Ways of producing a component may be patentable subject matter, including:

  • Use of different materials
  • Different process for producing (injection molding vs. cut-stamp-bend plastic parts)
  • Environmentally minded improvements in existing processes (less energy consumption, less waste, less toxic raw materials,etc.)

Start thinking about patents when your client mentions in conversation things such as:

  • “My widget simplifies the drudgery of this repetitive task”
  • “My widget allows me to do this task three times faster”
  • “My widget makes the task safer or more ergonomic for the worker”
  • “This widget has been around for 25 years and used by auto mechanics….it is not obvious and no one has ever tried to use it on printers/copiers, but it actually works great in this particular application”
  • “I have always seen widget A, but it does not have this great feature of widget B. If only someone combined the features of both into one superwidget…….”

Myth: You can not obtain a patent on something that incorporates someone else’s widget

Truth: patented widget A combined with my nonobvious and useful improvement is potentially patentable

Algorithm = patent

Same process could be carried out in C or C++, so you want to patent the algorithm and protect the architecture or strategy of implementation

Code expression = copyright

Code writing is an art – many people can write code for the same function, but some are more efficient than others, or more suited to particular applications

Patent Pending Status

While an application is pending at the United States Patent and Trademark Office, it is considered “patent pending.” It will be pending until it is abandoned by the applicant, receives a final rejection that is not responded to within the 3 or 6 month time period permitted, or is issued as a patent. It is important to note that the right to exclude does not attach until a patent is issued. However, a product may be marked “patent pending” to deter other competitors from investing in competing devices. In some cases, provisional rights may be granted before issuance of the patent.

Marking and False Marking

Once an application for Letters Patent is filed, the applicant is entitled and encouraged to mark the patented item as “patent pending.”  Once the patent application is issued as a United States patent, the Patent Act raises this to a duty to mark for issued patents.  See Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443, 46 USPQ2d 1001, 1006 (Fed. Cir. 1998), “The marking statute serves three related purposes: 1) helping to avoid innocent infringement…2) encouraging patentees to give notice to the public that the article is patented, and 3) aiding the public to identify whether an article is patented.”  Failure to mark a product or otherwise place an infringer on notice may limit the damages to the date of first notice.  See 35 U.S.C. 287.  This same section places a burden upon the patentee to ensure the patent holder’s licensees comply with the marking statutes.  The fact that the final product may be non-visible in its final state does not obviate the duty to mark such product.  To properly claim the “patent pending” status, the claims should describe the article so marked.  When the claims of the patent describe a process, there is no duty to mark. However, damages may nevertheless be limited to the date of first notice.

Penalties can be incurred for the false marking of products as patented or patent pending under 35 USC 292.  The statute authorized a fine of “not more than $500 for every such offense.”  False marking includes counterfeit markings, false “patented” marking, and false “patent pending” marking.  The statute further authorizes “any person” to file suit – the person need not show injury.  A claim of false marking must be supported by evidence of actual intent to deceive.

Section 292 is only invoked if, in fact, the underlying article is truly unpatented.  Thus, if multiple patents are listed, only one of which pertains to the marked article, the item is considered patented, and section 292 is not violated. 

Design Patents

Design patents may be available to protect surface ornamentation of an article of manufacture. They may also be available to protect the configuration or shape of an article of manufacture. (Of course, a combination of the two may be protected by design patent as well.) The focus is on protecting the pleasing aesthetic appearance of the article where such design is not dictated by functional considerations. To qualify for design patent protection, the design must be definite and reproducible, novel/original and non-obvious.

The same substantive and procedural rules apply to design patents. Full disclosure and definiteness is provided through the drawings. The drawings that accompany the specification typically include at least 7 drawings: each side of a cube and one of the article in use.

Infringement of a design patent occurs when another article of manufacture resembles the patented design so as “to deceive the ordinary observer who gives as much attention as a purchaser usually gives.”

Design patent protection may be available for portions of an article of manufacture. For example, design patents have been granted for the shank portion of a drill. For example, consumers may recognize and desire a unique design in an entire line of tool products. A confusingly similar design might detract from their identification of the desired product and cause them to select an inferior quality copycat design.

When we think of ornamental design, we generally thing of things of beauty. However, design patents are available for mechanical devices that “eliminat[e] [  the ] unsightly repulsiveness that characterizes many machines and mechanical devices which have a tendency to depress rather than excite the esthetic sense.” For example, concrete mixers have received design protection on this basis.

In some circumstances, design protection might be a viable alternative in cases where utility protection is not available because of novelty or obviousness reasons.

Things not eligible for design patent protection include things not intended to be visible in actual use, offensive designs and functional designs. The first factor has been the subject of litigation and the test that evolved was whether in some point of commercial life, design is a matter of concern. (Take for example, lingerie, garment hangers, tent pegs, inner sole for shoes and prosthetic bone implants – all things that are hidden from view during use.) In assessing functionality, it is critical to understand that it is the functionality of the design, not the article of manufacture itself. A key inquiry is whether there are several ways to achieve the function of the article.

Design Patents and Other Intellectual Property Protection

Design patent protection may complement and bolster trademark protection, unfair competition and trade dress protection. They involve similar concepts in the tests for infringement, but provide very different protection and enforcement means for the inventor. An inventor should seek the counsel of his attorney to evaluate the several options available and determine a strategy for protecting these property assets.

An inventor must elect between copyright and design patent protection because of the different terms of protection, different penalties for infringement, and different procedures for procuring protection.

Should I test market before I invest in a patent?

It is not recommended. Patent protection may be forfeited one year after the first public disclosure or offer for sale in the US, and immediately forfeited in some foreign countries.

Trade secret vs. patent costs

While trade secrets are relatively inexpensive to protect at the outset, their long-term maintenance costs may be relatively high in comparison with the expense of a patent.

Patents are like insurance

The reality is that decisions about patent protection have to be made while market potential is unknown or uncertain. They offer some measure of protection against the time and financial investment in marketing an invention. In many ways, protection you receive is often related to what you can afford in legal expenses.

Small Entity Status

The U.S. Patent and Trademark Office (USPTO) has a dual fee structure, one for Small Entities (defined below), and another for “other than a Small Entity.” If an entity that is other than a Small Entity pays its fees as if it was a Small Entity, then any patent that results or is maintained in that manner is deemed to be unenforceable for fraud on the USPTO.

37 CFR1.27 provides in pertinent part: (a) (2) A small business concern, as used in paragraph (c) of this section, means any business concern that: (i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify for small entity status as a person, small business concern, or nonprofit organization; and (ii) Meets the size standards set forth in 13 CFR 121.801 through 121.805 to be eligible for reduced patent fees. (Generally, less than 500 employees in the entity and all affiliated companies, combined.) (b) Establishment of small entity status permits payment of reduced fees. (1) A small entity, as defined in paragraph (a) of this section, who has properly asserted entitlement to small entity status pursuant to paragraph (c) of this section will be accorded small entity status by the Office in the particular application or patent in which entitlement to small entity status was asserted. Establishment of small entity status allows the payment of certain reduced patent fees pursuant to 35 U.S.C. 41(h) (1). (g) (1) New determination of entitlement to small status is needed when issue and maintenance fees are due. Once status as a small entity has been established in an application or patent, fees as a small entity may thereafter be paid in that application or patent without regard to a change in status until the issue fee is due or any maintenance fee is due. (2)Notification of loss of entitlement to small entity status is required when issue and maintenance fees are due. Notification of a loss of entitlement to small entity status must be filed in the application or patent prior to paying, or at the time of paying, the earliest of the issue fee or any maintenance fee due after the date on which status as a small entity as defined in paragraph (a) of this section is no longer appropriate. The notification that small entity status is no longer appropriate must be signed by a party identified in §1.33(b). Payment of a fee in other than the small entity amount is no sufficient notification that small entity status is no longer appropriate. (h) Fraud attempted or practiced on the Office. (1) Any attempt to fraudulently establish status as a small entity, or pay fees as a small entity, shall be considered as a fraud practiced or attempted on the Office. (2) Improperly, and with intent to deceive, establishing status as a small entity, or paying fees as a small entity, shall be considered as a fraud practiced or attempted on the Office.

Small Entity fees are generally one half of those of the regular USPTO fees. Patent applicants should strive to pay the lower fees where it is entitled to do so, but to pay the higher fees when failure to do so would prejudice the enforceability of the patents.

Benefits of Understanding Your Patent Families

Because of the limitations of two-dimensional paper, a patent family table shows only the patent and applications that are in the direct line of “priority” from the first filing. A review of the table will show whether a “tree” is highly branched, with many patents and applications sharing common roots of multiple applications.

This is important to understand for several reasons. One is that any legal or technical position taken in the prosecution of one patent application in the family affects the scope of the other patent within the family.

Another important reason is that the advantage of filing continuing applications (within the same patent family) is to limit (but not remove) the ability of the USPTO to apply an earlier application against the USPTO requires a “terminal disclaimer” to be filed in the later application, it considered by the USPTO to be an obvious extension of the earlier application.

A terminal disclaimer provides that 1) the terminal part of the statutory term of any patent granted on the later application, which would extend beyond the expiration date of the full statutory term of the patent or application forming the basis of the rejection is disclaimed, so that the patent terminate simultaneously; and 2) any patent granted on the alter application shall be enforceable only for, and during, such period that the legal title to said patent shall be the same as the legal title to the patent application forming the basis of the rejection.

This agreement runs with any patent granted on the later application and is binding upon the grantee, its successors or assigns. The separation or bifurcation of legal title to the patent disclaimed, and the patent in view of which it is disclaimed, results in the automatic unenforceability of the disclaimed patent.

37 CFR 1.321(c)(3) requires that a terminal disclaimer filed to obviate a nonstatutory double patenting rejection based on commonly owned conflicting claims include a provision that any patent granted on that application be enforceable only for and during the period that the patent is commonly owned with the application or patent which formed the basis for the rejection.... These requirements serve to avoid the patentable invention. In re Van Ornum, 686 F.2d 937, 944-48 (CCPA 1982).

Can’t I just sell my idea?

Maybe, but it is likely to be an uphill battle. Why pay for an unprotected idea that anyone else can copy?

Protecting your idea with a patent creates value for a potential purchaser. If a company purchases patent rights, they are buying an exclusive monopoly on the inventive concept for the term of the patent. They are the only entity that can make, sell, use or import a product embodying the inventive concept. Money the company invests in developing the product and bringing it to market can be recovered when the product has no competitors in the marketplace.

Inventors reap what they sow…the more they invest in developing and protecting the invention, the more value it has in the marketplace.

How do I tell if it is worth pursuing a patent on my idea?

  1. Identify if your idea is unique. Is there a similar product in the marketplace? You may search in stores, product catalogues, or US patents on USPTO.gov, Freepatentsonline.com or Google Patents.
  2. Assess potential patentability challenges. Make note of the closest products you discover and determine how your product differs, drawbacks of existing products, drawbacks of existing products, and benefits or improvements of your invention. Are these differences obvious when you consider existing products and technology?
  3. Consider a professional patent search (cost around $500).
  4. Determine the potential market for your product. How much profit do you estimate? Is it cost justified to protect that market? What will be your return on investment?
  5. Under nondisclosure agreement, “pitch” your invention to potential companies.

Procedures and costs for foreign filing of patent applications

Since each country has jurisdiction within its own borders, an inventor must file a patent application in each country where he wants to enforce his rights. Since the costs are high, an inventor may elect to strategically file for patent protection in only major markets, countries of major competitors, or major ports where international trade is transported.

Foreign patent filing may be done by direct “national filing” in each country where patent rights are desired. The European Patent Office can accept a single application for one or more European countries. A single “PCT” application can be filed to preserve rights in all countries who are party to the Patent Cooperation Treaty. In most cases, you must file these applications within one year of your first US application on the invention.

It is important to know that there are important differences between the U.S. patent system and the patent systems in foreign countries. In the U.S., we enjoy a one-year grace period for filing a U.S. patent application after public use, public disclosure, or offer for sale. In most foreign countries, you must have filed your U.S. patent application disclosing your invention on a non-confidential basis in order to avoid losing your foreign rights before you file a U.S. patent application. Foreign patent rights can be lost if you take your new product to a trade show, put it on a website, start using it in its intended use/manner or send it to manufacturers or promotion companies before you file a U.S. patent application. Then, for those countries which have signed the Paris Convention (notably not India and Taiwan), you have one year from your original filing date within which to foreign file your application (six months in the case of design patents).

You have several options. If you are only going to file in a couple of countries, you will probably want to file directly in those countries. In Europe, filing in the European Patent Office is often the most efficient route. If you want to file in many countries around the world, or don’t know which countries to file, then the Patent Cooperation Treaty (PCT) is preferable. You can preserve your foreign rights while you wait to see how the invention does in the market before you make a final decision and large investment. One advantage of a PCT application is that you are able to wait until search results are received from the international searching authority before having to spend large sums of money filing in many individual countries.

Filing a Patent Cooperation Treaty application listing most countries of the world costs about $3,000 - $4,000. (Application filing fees are $2,000 - $3,000 and included in this estimate.) No translations are required at this stage. Filing the PCT application buys up to 30 months time (24 months in some countries) and a search from the European, Japanese, U.S., or Korean Patent Office. After you have seen how your invention sells, and you have seen what prior art the U.S. Patent Office and the foreign search authority have found, you should be in a much better position to decide whether it is worth spending around $10,000 to file a European Patent Application or to file in other countries.

As a rule of thumb, you can expect that it will cost about $5,000 - $6,000 per country (plus translation costs) to obtain a foreign patent in addition to the cost of filing the PCT application.

Our office assists clients with foreign filing around the world. Our clients only need to interface with one firm who is familiar with their case and needs to meet all of their filing needs.

How does the Chinese Patent System differ from the U.S. Patent System?

All patent systems are created equal, right? Not really. Just as it is with most things, the Chinese patent system is different than the U.S. patent system. The U.S. patent system has been around for over 200 years while a systematic and enforceable Chinese patent system is rather new. In the U.S., a utility patent application must be examined, allowed and issued before the patent becomes enforceable. In China, there are two classes of utility patents - utility model patents and invention patents. Though a utility model patent protects the functionality of a device, it is however based a registration system and it does not require prosecution for it to be enforceable. There are relatively few of these patents that are filed outside of China and hence are available mainly in Chinese. Therefore, they can pose real problems for companies wishing to do business in China. A U.S. utility patent is similar to a Chinese invention patent in that the invention patent is granted based on an examination system.

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