m~ EMPLOYMENT AND
11 ECONOMIC DEVELOPMENT
A Guide To INTELLECTUAL PROPERTY PROTECTION
A Collaborative Effort
Minnesota Department of Employment and Economic Development
Merchant cGould
A Guide To INTELLECTUAL PROPERTY PROTECTION
This Guide is produced by the Minnesota Department of Employment and Economic Development (DEED), Small Business Assistance Office, Great Northern Building, 12th Floor, 180 E. 5th Street, St. Paul, MN 55101-1678.
The Guide is available to view or download at Small Business Assistance Office.
Telephone: 651 - 556-8425 | 800 - 310-8323 Fax: 651 - 296-5287 Email: smallbusiness @state.mn.us Website: Small Business Assistance Office
This guide is also available from Merchant & Gould, 3200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402
Telephone: 612 - 632-5300 Website: Merchant & Gould
Upon request, this publication can be made available in alternative formats by contacting 651 - 259-7476.
The Minnesota Department of Employment and Economic Development is an equal opportunity employer and service provider.
A Guide To INTELLECTUAL PROPERTY PROTECTION
Thirteenth Edition October 2015
A Collaborative Effort Minnesota Department of Employment and Economic Development and Merchant & Gould P.C.
Copyright © 1986, 1990, 1991, 1993, 1996, 2000, 2004, 2006, 2011, 2015 Minnesota Department of Employment and Economic Development and Merchant & Gould, P.C.
ISBN 1-888404-69-8
PREFACE
Innovation, invention and the process of translating ideas into products and services has been, and remains, a major factor in Minnesota’s economic growth. Indeed, in today’s world that process has even greater importance in light of concerns about national productivity and international competitiveness. This Guide is intended to serve as a primer for the inventor and entrepreneur on the protection of new ideas and the products which result from them. Like all publications of this kind, the Guide is not intended as a substitute for the advice of an attorney on the complexities of intellectual property law. Hopefully, it will help frame issues and concerns for discussion with private legal counsel as well as with investors, bankers, potential developers, and customers. Preparation of this work has been a collaborative effort between the Minnesota Small Business Assistance Office and the law firm of Merchant & Gould. A particular note of thanks must go to the original author David George Johnson, the longtime editor of this work Brian H. Batzli, and those individuals who have contributed to earlier editions: Lawrence Buckley, Hallie A. Finucane, Mark A. Krull, Michael L. Mau, Michael S. Sherrill, Janice L. Dowdall; and to Madeline Harris of the Minnesota Small Business Assistance Office.
Charles A. Schaffer Small Business Assistance Office
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TABLE OF CONTENTS
Preface.................................................……..........................….........i
Introduction..................................... ...............................................iv
Basic Types of Intellectual Property Protection................................1
PatentProtection.................................................................2 Requirements for Patentability....................................................3 Types of Patents and Length of Protection..............................6 Patent Application Components..................................................9 Examination of the Patent Application by the Patent Office.....11 The Examiner’s Incentives.........................................................13 The Examiner’s Expertise..........................................................14 Options Available after Receiving a Final Rejection...............14 Continuing Application..........................................................15 Continuation-in-Part.....................................................................15 Board of Appeals....................................................................16 Federal Court.....................................….................................16 Practical Considerations..............................................................16 Identical Inventions Developed Independently by Two Separate Inventors............................................................16 One Year Grace Period.........................................................18 Confidentiality.......................................................................19 Experimental Use..................................................................20 Patent Pending......................................................................21 Cost to Obtain Patent Protection.........................................22
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Patent Attorney Fees........................................................22 Government Fees.............................................................23 Enforcement of Patent Rights................................................25 The Patent........................................................................27 A Patent is not a Guarantee that the Patented Invention does not Infringe Other Patents......................................28 Time Required to Obtain Patent Protection...........................29 Finding Someone to Manufacture and Distribute Your Invention...........................................................................29 Summary................................................................................31 Trademark Protection....................................................................32 Reservation of a Trademark.......................................................34 Trademark Selection..................................................................34 The Federal Trademark Registration Process.............................37 Trademark Infringement............................................................39 Summary....................................................................................41 Copyright Protection......................................................................42 Fair Use......................................................................................44 First Sale.....................................................................................45 Duration.....................................................................................45 Summary....................................................................................45
Trade Secret Protection..................................................................47
Commonly Asked Questions Concerning Intellectual Property Protection..................................................................................49
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INTRODUCTION
This booklet has been prepared to familiarize the inventor, creator, or developer of a new idea with the basic legal framework that is available to protect that idea. More importantly, this booklet is designed to help the inventor decide which, if any type of protection is available for a particular idea, and whether such protection is worth obtaining. Protecting a new idea is often a difficult process. Some ideas and inventions simply cannot be protected, while others are eligible for only narrow or partial immunity from potential competition and imitation. Obtaining even minimal protection can often be expensive and time-consuming, and the ultimate result may be uncertain or even disadvantageous to the inventor. The decision to seek protection for a new idea should be approached with the same caution and skepticism you would bring to any other commercial transaction, such as taking out a loan or starting a new business. Just because a new idea may be eligible for some form of legal protection does not mean that the cost of obtaining and preserving such protection is justified from a business viewpoint. Although the final decision on protecting your idea can best be made by consulting a qualified attorney, you will be able to better select and communicate with an attorney if you already have some knowledge of the various types of intellectual property protection that are available. Even if you have yet to develop a new invention or concept, a general knowledge of intellectual property law can be
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helpful in avoiding the many problems that could easily jeopardize your idea in its early stages of development. Finally, many myths and misconceptions exist concerning the nature and value of patents, copyrights, trademarks, and trade secret protection. Many existing publications provide detailed information on how to obtain specific types of intellectual property protection. This booklet is not intended as an instruction manual for obtaining such protection, but is rather intended to assist the new inventor or product developer in deciding if and when such protection may be beneficial. Intellectual property protection is just one part of the successful marketing equation, and its true importancevariesgreatlyaccording to each specific product or idea. No one can predict with certainty if the cost of obtaining intellectual property protection is justified in a particular case, but hopefully this booklet will permit you to be more alert to the opportunities and pitfalls encountered by those seeking to legally protect and commercially exploit a new idea.
David George Johnson Attorney at Law
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Over the past fifteen years, there have been a number of changes in the U.S. patent, trademark and copyright laws. These changes reflect a growing worldwide consensus on the importance of intellectual property and a slow movement toward harmonization of each country’s laws in this area. Also, in September 2011, the U.S. Congress passed a number of significant changes to U.S. Patent Laws. Several changes take effect immediately, while the more sweeping changes will be phased in over the next several years. Accordingly, you should consult an intellectual property attorney for the current status of U.S. intellectual property laws.
Brian H. Batzli Merchant & Gould P.C.
Revisions made in 2015 include updates to this guide that reflect changes to U.S. Patent Laws that came into effect in 2012-2013 with the passage of the America Invents Act. These changes are an important step in harmonizing U.S. Patent laws with international intellectual property laws, and represent the most drastic change to U.S. Patent laws since the original Patent Act of 1952. Although not all nuances of these laws are described in this Guide, the revised Guide provides an up-to-date set of guideposts with which an inventor can assess whether, and when, to consult an intellectual property attorney regarding the best manner of protection of his or her invention.
Andrew J. Lagatta Merchant & Gould P.C.
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BASIC TYPES OF INTELLECTUAL PROPERTY PROTECTION
There are four basic types of intellectual property protection: patent, trademark, copyright, and trade secret, and each will be discussed in order.
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PATENT PROTECTION
The United States patent system was created to help achieve various socially desirable goals. By providing an inventor with an exclusive right to exclude others from making, using, or selling an invention for a limited period of time, a patent rewards an inventor for the time and effort expended in developing the invention, thereby encouraging further creative efforts. Also, most new inventions have uncertain commercial value, and the patent system provides a degree of protection from competition for a limited period of time, thus encouraging investment in new technology. Additionally, the patent system encourages inventors to make their inventions known rather than to maintain them in a state of secrecy, thereby increasing the amount of technological knowledge available to the public. Finally, the patent system helps to aid in the sale or transfer of technology both within the United States and in foreign countries, by giving a commercially tangible form to otherwise intangible ideas. At the outset of the patent discussion, it must be emphasized that the U.S. Congress passed a number of significant changes to U.S. Patent Laws in September 2011. The law is commonly referred to as The America Invents Act. Notable changes included by way of The America Invents Act include: • First To File System (rather than the U.S.’s previous first to invent system)
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• Post Grant Oppositions - Effective for patent applications filed on or after March 16, 2013 • Inter Partes Review • Supplemental Examination • Third Party Submissions of Prior Art These changes to U.S. Patent Laws, as well as a basic overview of the U.S. Patent Law system, follow. REQUIREMENTS FOR PATENTABILITY There are several major hurdles an inventor must overcome before patent protection can be obtained. First, the applicant for patent must be able to demonstrate that he or she has developed a new, useful, and not obvious process or product. Since a patent cannot be obtained unless the invention is new, the invention must not have been known or used by others in the United States or patented or described in a publication in the United States or any foreign country before the invention was made by the applicant. In addition, if the invention was patented or described in a publication anywhere in the world or in public use or sale in the United States more than one year prior to the date of filing the application, the patent will be denied. The invention must also be capable of some beneficial use, and cannot be “frivolous, fraudulent, injurious to morals, health or good order.” The invention must also not be obvious, which is the most common reason for Patent Office rejection. It may well be that the invention is something that has never before existed; but, if the Patent Office determines that a mythical person having access to all the available information concerning that particular field of technology would have “known” how to make the invention, then the invention is rejected as being obvious.
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A simplified example of an obviousness rejection is as follows: Suppose a person invents a coffee cup having a square rather than a rounded handle. It may be that such a product has never before existed. However, if the Patent Office finds that a square handle has been used previously on some other device, such as a suitcase, it may well determine that putting a square handle on a coffee cup would have been obvious to an imaginary person who is knowledgeable about all publicly available information. The invention must also fit into one of the categories of patentable subject matter. Thus, the invention must be new, useful, and non- obvious, and be either a: • Process; • Machine; • Manufactured article; • Composition; or • An improvement of any of the above. The term “process” means a process, art, or method, and it includes a new use of a known process, machine, manufactured article, composition of matter, or material. A process may also be defined as one or more steps or acts performed on materials to produce a result. An example of a process would be the use of DDT to kill insects. The term “machine” includes mechanical devices or combinations which perform some function and produce a certain effect or result. Examples of machines include carburetors, vacuum cleaners,
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and lawn mowers. A “manufactured article” refers basically to any product or thing made by industry or man. Examples of manufactured articles would be carpets, toothbrushes, and purses. A “composition” is matter formed by the mixture of two or more ingredients. Examples of compositions are drugs, insecticides, adhesives, and electroplating solutions. An “improvement” is an addition, simplification, or variation relating to an existing machine, process, manufactured article, or composition of matter. Several Court decisions have provided further guidance on subject matter which is included in the categories of patentable subject matter. For example, the Courts have determined that both software and certain types of business methods are patentable. Although software and business methods are currently eligible for patent protection, such protection is typically premised not on their being a “method” or “process” under the statute, but an underlying tangible result of that method or process. One test which is useful, but is not the sole test, is whether the claimed invention is tied to a particular machine or apparatus; or if the claimed invention transforms a particular article into a different state or thing. In other words, in addition to being new, useful, and not obvious, software and business method inventions generally must be (1) tied to a particular machine, or (2) include a transformation of a physical article or material from one state or thing into another. For example, a business method invention that involves the operation of processing steps on a computer may be considered patentable subject matter if the invention is specifically tied to steps performed by the computer, especially if that computer is specially-constructed for a particular purpose - because the inclusion of the computer ties the process to a particular machine. 5
If the software or business method invention does not include a particular machine or involve a transformation, it is possible that the invention could still be patentable, but the current laws somewhat disfavor these types of inventions and a patent may be difficult to obtain.
TYPES OF PATENTS AND LENGTH OF PROTECTION
The type of patent described thus far is known as a utility patent. The term of utility patents was changed after passage of the General Agreement on Tariffs and Trade (GATT) as follows: 1. For utility patents filed on or after June 8, 1995: Term of twenty years from the date of filing. However, see further details below. 2. Issued and enforceable patents which issued prior to June 8, 1995: The term of these patents is automatically modified to the longer of: (a) twenty years from the date of filing or (b) seventeen years from the date of issue. 3. Issued and enforceable patents which issued prior to June 8, 1995: The term of these patents is the longer of: (a) twenty years from the date of filing; or (b) seventeen years from the date of issue. When calculating the twenty (20) year rule, if the application relies on an earlier filed application, then the earlier application’s filing date is used.
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As indicated above, a twenty-year term from the date of filing (or priority date if earlier) is the current term of recently filed U.S. patents. The American Inventors Protection Act of 1999 introduced an opportunity to increase the term based on administrative and other delays on the part of the U.S. Patent Office. Any increase in the term is offset by delays by the applicant to engage in reasonable efforts to conclude prosecution. This new provision applies to all applications filed after May 29, 2000. Note that you cannot have a negative adjustment to the term (e.g., you cannot reduce the term to less than 20 years under the provision). Examples of delays by the applicant which will reduce any term extension are: • failure to file a response to a U.S. Patent Office Action within (3) months; • filing supplemental responses; and • using specific types of certificates of mailing. The list of delays is quite lengthy, but the common thread running through the delays is that responses to U.S. Patent Office inquiries must be made timely and thoroughly. A second type of patent is known as a design patent, which is available for anyone who invents any new, original, and ornamental design for an article of manufacture. In other words, design patents cover only the specific appearance of the article, rather than the concept of the article itself. Patents for designs are granted for a term of 14 years. Examples of articles for which design patents have been obtained are lamps, vases, and furniture.
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A third type of application, known as a “provisional application” is intended to provide a method for an applicant to gain an early U.S. filing date relatively inexpensively. For example, currently, the Patent Office filing fees for a provisional application are approximately $65 to $260. The life of the provisional application is one year from the date of filing and is non-extendible. During this time period, the application is not examined. Also, the twenty (20) year term of any patent issuing from the application does not begin to run (unless a direct conversion to a utility patent is made). Accordingly, so long as a regular utility application is filed claiming priority to the provisional application, instead of filing a direct conversion application, then the twenty year term is not affected by the provisional application. Like a regular utility application, the provisional application must list inventors, provide drawings (if necessary for an understanding of the invention), and comply with disclosure and best mode requirements, among others. No claims are required in the provisional application at any time, since that application is not examined. If the applicant wishes to maintain the benefit of the provisional application, a regular application must be filed while the provisional application is pending (e.g., before the expiration of the one-year life). In addition to adding claims and complying with other matters, the regular application must also include at least one inventor who was listed as an inventor on the provisional application. Although the pendency of the provisional application may not begin the twenty year term of a U.S. patent, the filing does commence the one-year Paris Convention priority period for filing foreign applications. Therefore, foreign filings must be filed
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by the first anniversary of the earliest provisional application. Because these are general rules, you should be sure and discuss the strategies, as well as the pros and cons, of filing a provisional application with your attorney before doing so. PATENT APPLICATION COMPONENTS A patent application can only be filed with the Patent Office by the actual inventor or his or her representative. The basic elements of a patent application are as follows: • A specification • An oath or declaration; • Drawings, when necessary; and • A filing fee. A specification is a written description of the invention or discovery that must clearly and concisely describe the manner and process of making and using the invention. It must be specific enough to enable a person who is knowledgeable in the particular area to which the invention relates to make and use the invention. In addition, the specification must describe the invention in such a way as to distinguish it from other previously known inventions. The specification should conclude with a claim or claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his or her invention or discovery. The claims legally define the patentable features of the invention. Each claim is a single sentence describing precisely what new, useful, and nonobvious features constitute the actual invention. The claims are the most important part of an application since the
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monopoly granted by a patent covers only the material appearing in the claims. An example of a claim for a type of billiard table having a novel cushion is as follows: A playing table comprising: a playing surface and a raised marginal edge portion surrounding said surface, said raised marginal edge portion having a longitudinally extending recess therein, and a cushion consisting only of a base disposed in said recess and a downwardly accurately extending cantilevered lip integral with said base and extending away from substantially the top of said base. Although, similar to the provisional application, a utility application need not include claims at the time of filing, it must include such claims shortly thereafter, since the claims are a primary portion of the application document on which examination is based. Furthermore, it is typically good practice to include claims in the original utility application filing to ensure that the claims are consistent with the specification and are of appropriate scope. The applicant is required to furnish a drawing of his or her invention when necessary for understanding the nature of the invention. In other words, if it is possible to draw the invention, a drawing must be included. As many drawings as are necessary to fully describe the invention are required. An oath or declaration must be signed by the inventor(s) and filed with the application, stating that the named inventor is believed to be the original inventor of the invention which is claimed. By signing the oath, the inventor acknowledges his or her duty to disclose any information known to or later discovered by the inventor which is relevant to the examination of the application by the Patent Office. The Patent Office also requires the submission of an Information
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Disclosure Statement by the applicant. An Information Disclosure Statement contains a listing of any patent publications and other information of which the applicant is aware and which is relevant to the examination of his or her application. An applicant must submit this document in order to comply with the duty of candor and good faith toward the Patent Office. Failure to do so could later enable another party to invalidate the issued patent.
EXAMINATION OF THE PATENT APPLICATION BY THE PATENT OFFICE
An application filed in the Patent and Trademark Office is assigned for examination to a group of patent Examiners having responsibility for the category of inventions to which the application relates. The Examiner is charged with making a thorough study of the application and all of the available public information pertaining to the subject matter of the claimed invention. It is the Examiner’s job to determine whether the invention is patentable as claimed, so the Examiner determines whether the invention is new, non-obvious, and useful. In addition, the Examiner determines whether the application complies with certain formalities and various other statutory requirements. After the initial examination is completed, the applicant is notified of the Examiner’s decision in a communication known as an “Office Action”. The Examiner may allow claims, reject claims, object to formal matters, or any combination thereof. If an Examiner allows a claim, it means that he or she believes the claim is patentable and that a patent should be issued incorporating that claim. If the invention is not considered patentable, or not
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considered patentable as claimed, the claims will be rejected, and the Examiner will give reasons and cite references to explain the decision. Examiners sometimes issue an objection, which is a refusal to allow a claim because its form is improper or because some other part of the application is defective. An objection, as opposed to a rejection, is usually easily overcome. As stated earlier, the Examiner will inform the applicant of the reasons for any adverse action taken on the application. He or she will also provide the applicant with any information or references on which the decision is based. If the Examiner’s action is adverse in any respect, and the applicant wishes to persist in the application for a patent, the applicant must reply to the Examiner’s comments and request reconsideration. In particular, the reply must specifically point out the supposed errors in the Examiner’s action and respond to every ground of objection and rejection. The applicant may choose instead to amend the application and state how his or her amendments avoid the references or objections raised by the Examiner. After a response is filed by the applicant, the application will be reconsidered, and the applicant will then be notified of the Examiner’s decision in the same manner as was done after the first examination. On the second or after any later examination or reconsideration, the rejection or other action may be made “final.” The applicant’s response is then limited to an appeal to the Patent Office Board of Appeals (in the case of the rejection of any claim), a petition filed with the Commissioner of the Patent and Trademark Office (in the case of objections or requirements not involving the rejection of any claim), or a continuing application (discussed below).
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THE EXAMINER’S INCENTIVES The Patent Office evaluates its patent Examiners primarily according to the number of applications they process. Examiners, therefore, have no incentive to spend very much time on any one application, as it is to their benefit to process applications as quickly as possible. The Examiner typically does not take the time to read and study an application at length. An Examiner usually does a quick search to discover all of the relevant patents and other public information pertaining to the claims in an application. The Examiner then typically sends the applicant a letter (Office Action) rejecting the claims as being obvious in view of the material he or she has discovered during his or her search. The applicant must then respond by carefully explaining and distinguishing each cited reference, thereby demonstrating to the Examiner that a patent should be issued. This routine saves the Examiner time since the applicant has spent his or her own time figuring out why the references cited by the Examiner are not particularly relevant – instead of the Examiner taking the time to do so. Thus, it is common that claims that are originally rejected by an Examiner may be frequently later allowed after the Examiner has had the opportunity to read the applicant’s response distinguishing the invention from the cited references. It should be noted that there are second-set-of-eyes quality checks at points in the prosecution to ensure a level of examination quality. Further, because Examiner time is at a premium due to the volume of patent applications to be addressed, it is often difficult for an Examiner to accurately identify differences between the claims and the references he or she locates that are deemed to be the closest “prior art” to those claims. As such, it is suggested that patent applicants view the examination process as a cooperative effort by the patent applicant and Examiner to (1) ensure that the Examiner has a full understanding of the invention, and (2) ensure the claims
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included in the patent application accurately capture the invention described in the patent application, and at an appropriate scope that does not encompass “prior art”. THE EXAMINER’S EXPERTISE Patent Examiners all possess some type of technical training, and a particular category of inventions is assigned to each examiner. Some categories are very narrow, and one Examiner, for example, may only handle applications based on the manufacture of electronic circuit boards. Such an Examiner will thus acquire a great deal of expertise on the subject of such circuit boards. However, some Examiners are assigned a broad category of inventions to examine. This is simply due to the fact that the inventions can only be divided up into so many categories. Hence, it is very likely that such an Examiner will be dealing at times with inventions with which he or she is not very familiar. Thus, part of the application process may necessarily include educating the Examiner as to the particular problems or advantages addressed by the invention to which the application relates.
OPTIONS AVAILABLE AFTER RECEIVING A FINAL REJECTION
Once an Examiner issues a final Office Action, patent applicants have limited ability to amend the claims of that application to distinguish those claims from the references cited by the Examiner. A number of responsive options are available to the patent applicant, depending upon that applicant’s view of the patentability of the pending claims that stand rejected by the Examiner.
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CONTINUING APPLICATION A continuing application is basically an original patent application that is refiled. The second application is entitled to the benefit of the filing date of the first application, and must be filed as a separate application before termination of proceedings on the prior application. Thus, after an applicant has received a final rejection, but before the examination proceedings have been terminated, an applicant can file a continuing application and start the examination process all over again. A continuing application is appropriate where the original application contained patentable subject matter but did not clearly identify or distinguish it from prior inventions. This procedure can be continued over several or more continuations, but it does involve the payment of additional fees by the applicant. The filing of a number of continuations may also significantly shorten the ultimate enforceable term of a resulting patent. A more streamlined continuation application is also available. This type of application is known as a Request For Continued Examination (“RCE”). While the fees are similar to a regular continuation application, the advantage is that an RCE application receives a more favorable placement in the Examiner’s queue and is examined again more rapidly. However, in order to file this type of continuing application, the Applicant must respond to each of the Examiner’s objections and rejections raised in the original application. CONTINUATION-IN-PART A continuation-in-part is an application filed during the lifetime of an earlier application by the same applicant, repeating some substantial portion or all of the earlier application and adding matter not disclosed in the earlier case. The continuation-in-part
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application is entitled to the benefit of the filing date of the earlier application as to the common subject matter. A continuation-in- part application is appropriate when a patentable improvement of the original invention is developed after the original application is filed. BOARD OF APPEALS After the claims in an application have been rejected twice, or after a final rejection has been received, an applicant may, upon the pay - ment of a fee, appeal the decision of the Examiner to the Patent Office Board of Appeals. Such an appeal is appropriate when the applicant feels that the Examiner’s rejection is clearly incorrect. FEDERAL COURT Any applicant dissatisfied with the decision of the Board of Patent Appeals may appeal to the United States Court of Appeals for the Federal Circuit. This is an unusual and expensive procedure that can only be justified for inventions having substantial commercial potential.
PRACTICAL CONSIDERATIONS
IDENTICAL INVENTIONS DEVELOPED BY TWO SEPARATE INVENTORS
One of the main changes adopted by the America Invents Act relates to determining how to award patent applications when separate inventors develop identical or similar inventions. Under prior U.S. law, patents were awarded to the first inventor(s) to in fact invent a particular new or novel invention, irrespective of when those inventors filed a corresponding patent application. As
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such, in isolated cases, an inventor may have invented his or her invention prior to a filed patent application on the same subject matter. During Examination, the inventor would be allowed an opportunity to establish his or her earlier invention by affidavits, or by institution of an “interference” proceeding, discussed briefly below. However, under the America Invents Act, patents are awarded to applicants on a “first inventor to file” basis. In other words, if two inventors independently conceive of an invention, the first-filed patent application will be awarded a patent, irrespective of whether the inventor listed on that application in fact conceived of his or her invention first. The first “true” inventor (i.e., the inventor of an earlier-conceived invention but who was not a first filer of a patent application) would be denied a patent. As such, it is increasingly important to file patent applications quickly after conception, to reduce the risk of subsequent inventors foreclosing patent rights. Inventors who believe that a first-filed application was not independently invented, but rather was derived from the inventive activities of that inventor, can now file a “derivation” proceeding that is heard by an administrative court of the U.S. Patent and Trademark Office. The derivation proceeding allows the inventor to prove, in a small-scale trial setting, that an earlier patent filer in fact derived the subject matter of a particular application from his or her own work, resulting in invalidation of that earlier-filed patent. The derivation proceeding generally requires documentary and/or testimonial evidence of the earlier patent filer’s’ access to the first inventor’s invention and subsequent similarity between the subject matter of the allegedly derived application and the subject matter to which that earlier patent filer had access.
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Under the prior U.S. law, an “interference” proceeding would be instituted in the Patent and Trademark Office when two or more inventors are claiming the same patentable invention. An interference was typically declared between two or more pending applications, or between one or more pending applications and one or more unexpired issued patents. Because under prior laws the first party to invent, not the first party to file an application, was entitled to receive the patent for the invention it was possible for a person with a later filing date to show that he or she was the first party to invent, and thereby obtain a patent. Even under the previous U.S. patent laws interference proceedings were rare. It is expected that such proceedings will become increasingly rare in coming years, as pending “first to invent” applications either are abandoned or issued as patents and are replaced with applications under the new “first inventor to file” laws. ONE YEAR GRACE PERIOD Under current and former Patent laws, an inventor has a grace period of one year (in the United States) in which to file a patent application. During that one year period, an inventor may place his or her invention in public use or on sale without losing his or her right to apply for U.S. patent protection. Under current U.S. Patent Laws, however, this one year grace period has become somewhat more limited. Under prior U.S. Patent Laws, a prior disclosure would not operate as prior art to the inventor if within a year of patent filing. However, under current laws, the prior art effect of such disclosures has changed. For example, an early disclosure can prevent others from directly copying an invention, since that early disclosure would be prior art or otherwise
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-- Furthermore, many foreign countries require that a patent application be filed before there is any public disclosure. Therefore, if foreign protection is desired, any existing U.S. grace period, even limited, may not be available. This is a very complex area of the law and so you should discuss this issue before any public disclosure occurs. CONFIDENTIALITY All U.S. applications filed after November 29, 2000, are published at eighteen (18) months from the filing date (or priority date if earlier). One benefit of the publication rule is that the applicant has “provisional rights” with regard to the published claims. This means that if the claims which eventually issue in the patent are “substantially identical” to those published, then additional damages may possibly be obtained against certain types of infringers for the time period between publication and issuance. enforceable in a derivation proceeding. However, such earlier disclosures may now also preclude the inventor from subsequently obtaining patents themselves on variants of that original disclosure, since it may act in some cases as prior art to those variants. As such, early disclosure should be carefully considered on a case-by- case basis, and avoided where possible. The main reason for not wanting to publish the application is that the invention will be disclosed and so cannot be maintained as a trade secret. After publication, the entire contents of the application, other papers and responses filed by the Applicant, and Office Actions by the Examiner, are made available to third parties. Also, third parties can then submit patents and other materials which they believe
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are relevant to the patentability of the application. While this latter issue sounds ominous, in fact it may be beneficial to the applicant since any resulting patent will be stronger having been issued over additional closely related patents and materials. For unpublished applications, no information concerning the application is given to anyone without the permission of the applicant except in special limited circumstances. If the applicant decides at some point not to continue the attempt to obtain a patent, the contents of the application will forever be kept in confidence by the Patent Office. It is only after a patent is actually issued that the information contained in the application is made public. For cases filed after November 29, 2000, there is still an opportunity to avoid publication. This requires certification by the applicant that the U.S. Application will not be filed in any countries outside of the United States. An applicant can change his or her mind, and file corresponding foreign applications, but the U.S. Patent Office must immediately be advised of this change. If the U.S. Patent Office is not advised within a prescribed time, the application will be considered abandoned. EXPERIMENTAL USE A patent will be denied if an invention was in public use or on sale more than one year prior to the date of application. However, there is an exception to this rule known as “experimental use.” The “experimental use” exception permits some public use of the product by an inventor in order to enable him or her to perfect the invention before applying for a patent. The exception does not apply to situations where the use or sale of the device is mainly for profit and commercial purposes and the experimentation is
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merely incidental. For example, market acceptance testing is not considered to be an experimental use. Any public experimentation should be no more extensive than reasonably necessary for the perfection of the invention. It is up to the Examiner to determine whether the scope and length of the experimental activity is reasonable in terms of the intended purpose of the tests and the nature of the subject matter involved. PATENT PENDING The words “patent pending” can be placed on an invention once the inventor has filed a patent application. After a patent issues, the patent number should be placed on the invention. Alternatively, the patent applicant can mark its product with a website address and then place the appropriate patent numbers at the website address thereby avoiding expenses associated with updated product labeling each time a new patent issues, and only requiring update of the website. Failure to mark the product with the patent number can lead to reduced damages when enforcing the patent. Accordingly, marking is strongly encouraged. There are also laws against improper marking. Therefore, care should be taken to only mark products covered by the patent and to remove the marking when the patent expires. In some ways, the words “patent pending” can be a more powerful deterrent to a competitor than the actual patent which later issues. When a competitor sees the words “patent pending” on a product, it has no idea what feature or features of the invention are being claimed in the pending patent application. Suppose for example,
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that the applicant places the words “patent pending” on a vacuum cleaner. The patent application may contain claims directed to a certain type of switch mechanism. However, a competitor would have no way of knowing this until the application publishes or the application issues as a patent in the case of a non-published application. The competitor might think that the applicant’s invention relates to the brush mechanism, the type of motor, or the hose assembly, and therefore, avoid copying any of these features. Once the application publishes or the patent issues, however, the competitor will be able to obtain a copy of the application or patent almost immediately. It can then determine exactly what the inventor has claimed as the invention. Once the competitor discovers that the application or patent applies only to the switch mechanism, for example, the competitor can freely copy the other features of the vacuum cleaner without worrying about possible infringement. Keep in mind that an inventor cannot prevent “infringement” of his or her invention until a patent issues. However, provisional rights described above (not to be confused with the provisional patent application) may apply in this situation thereby increasing the risk to the competitor. COST TO OBTAIN PATENT PROTECTION The expenses associated with obtaining patent protection fall into two general categories: patent attorney fees and government fees, both of which are discussed below. Patent Attorney Fees Patent attorney fees include the cost of (i) drafting the patent application, (ii) completing the necessary formal documents, and (iii) drafting responses to the Examiner’s Office Actions issued during
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the examination of the application. The cost of drafting a patent application, including completion of the attendant documents, is highly dependent upon the complexity of the invention, but typically runs between about $6,000 and $15,000. The cost of drafting a response to an Examiner’s Office Action depends upon the complexity of the Action but typically runs between about $1,500 and $3,000. The patent application may be allowed on the first Office Action which would, of course, eliminate the cost of drafting a response. Patent attorneys typically work on an hourly fee basis. Very few are willing to work for a fee contingent upon profits to be derived from the patented invention. Further, patent attorneys typically require the prepayment of a substantial portion of the application costs. Patent attorney fees can be eliminated completely if the applicant drafts and prosecutes the patent application himself or herself. The Patent and Trademark Office does allow an applicant to file and prosecute his or her own patent application, and various publications are available to assist those wishing to file their own application. Government Fees At the time of printing this edition, the government fees include (i) a basic filing fee of $280, a search fee of $600 and an examination fee of $720, (ii) an post-allowance fee of $960, and (iii) periodic maintenance fees which start at $1,160, and later escalate to $3,600 and finally to $7,400. Government fees may be reduced by one-half if the applicant qualifies as a “small entity” which is defined as (i) an individual, (ii) a business with 500 or fewer full-time, part-time and temporary employees (weighted average), or (iii) a qualifying non-profit organization or institution. Whether the invention is licensed to an entity that would not qualify as a “small entity” is also considered in the determination of the appropriate fees to pay.
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Additionally, the new 2011 Act establishes a “micro entity” designation that entitles that applicant to a 75 percent reduction in government fees. To qualify for micro entity status, the applicant must certify that he or she: • Qualifies as a small entity; • Has not been named as an inventor on more than 4 previously filed patent applications; • Did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding 3 times the median household income; and • Has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income. The basic filing fee is due and payable upon filing of the patent application. Several controllable factors such as the existence of more than 20 claims, the existence of more than 3 independent claims, the late filing of necessary attendant documents, etc., may increase the basic filing fee. The post-allowance issue fee is due and payable when and if the Examiner allows the application. The maintenance fees are due and payable 3-1/2 years after issuance ($1,600), 7-1/2 years after issuance ($3,600), and 11 1/2 years after issuance ($7,400). The indicated maintenance fees may be reduced by small entity and micro entity status if applicable. Failure to pay any of the government fees when due can result in abandonment of the application and/or patent.
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In summary, the total cost of filing and prosecuting a patent application typically runs between $7,500 and $20,000, and must be expended without any guarantee of success. ENFORCEMENT OF PATENT RIGHTS A patent entitles the patent owner to prevent others from making, using or selling the patented invention within the United States for the term of the patent. While others may make the patented invention outside of the United States, they are not permitted to sell or use the patented invention within the United States. Similarly, others are not allowed to make the invention in the United States for use or sale outside of the United States. By bringing a court action against an infringer, the patent owner may seek both an injunction against the infringer, and the recovery of monetary damages. The scope of the injunction, as well as damages will be determined on a case by case basis and should be adequate to compensate the patent owner for the acts of infringement. Generally the damages should not be less than a reasonable royalty for the use made of the invention by the infringer. An alternative to bringing an action against an infringer is to offer the infringer a license to make the patented invention. Such a license may include an initial base payment, as well as a royalty for each unit of the patented invention that the licensee would make, use or sell. A patent may have method, apparatus or product claims, or a combination of all three. If the patent includes apparatus or product claims, then other persons will be prevented from making, using or selling the specific apparatus or product. If method claims are
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