Category: Patents

Why File for a Patent?

On By MarlinIn PatentsLeave a comment

It can take several years and cost thousands of dollars to obtain a patent. So, why should you go to this expense and effort, and take on the additional risk that a patent may not ever result from it? Well, there are many good reasons to obtain patents. The more substantial ones (in my opinion) are listed below. However, if none of these apply to your situation, or in your opinion do not justify the time, expense and risk involved, then it may be that patents are not for you.

Reason #1:    Prevent a competitor from practicing the invention

A patent is a grant of a bundle of rights with respect to an invention, and the most widely known of these rights is the right to exclude others from practicing the invention as claimed in the patent. A company that hires engineers or scientists to conduct research and development, prototypes and tests products, and successfully establishes a market position does not want its innovations to then be copied by its competitors. It is the market exclusivity a patent provides that many times justifies spending the effort and capital it takes to bring innovations to market.

Reason #2:    Revenue from sale of application or patent

Once a patent application has been filed, even before a patent has been granted, ownership and title to the application can be assigned and transferred to another party. This is just one of several ways that an application or patent can be a source of revenue to an inventor, applicant or patentee. For example, an individual inventor may not have the resources necessary to prototype, test and market an invention, but the inventor can still profit from the invention by selling an application or patent covering the invention to another party. As another example, a company can monetize all or part of its patent portfolio by selling applications or patents that cover discontinued product lines, or are directed to markets that the company is not interested in.

Reason #3:    Revenue from licensing application or patent

It is quite common for a company to license its applications/patents to other parties, event to direct competitors. The company receives royalty payments in return for the licenses, and so this is another way in which the company can reap a monetary reward for its innovation efforts. Cross-licenses can result from infringement litigation between competitors, if each party has an application/patent covering an invention that the other party wishes to practice.

Reason #4:    Revenue from infringement litigation

If an infringer refuses to cease infringing a patent, and is unwilling to obtain a license under the patent (or the patentee does not wish to offer a license to the infringer), then litigation may become a necessity to force the infringer to stop infringing, and/or to obtain compensation for the infringing activity. Thus, this is another way in which a patentee can obtain revenue from its patents.

Reason #5:    Enhance business valuation

The perceived value of a technology-based company is greatly enhanced by a robust patent portfolio. Stated differently, a company looking to acquire another company will typically pay more, if the target company has its innovations well covered by broad patents that protect its market position. On the other hand, a company that does not protect its innovations can quickly lose its market position, and will therefore have a lower perceived value.

Reason #6:    Enhance business reputation to customers

Customers will view a company that regularly obtains patents as being technologically advanced and able to offer creative solutions to their problems. In fact, companies in various industries are ranked yearly by their technological strength, and numbers of patents obtained figure prominently in this ranking. A company’s patent portfolio is a testament to whether or not it is on the cutting edge, or merely a “me too” player in the market.

Reason #7:    Enhance personal reputation to employers

Similar to the manner in which customers favorably view companies with robust patent portfolios, employers also favorably view prospective employees who are named as inventors on a number of patents. All else being equal, would you rather hire an individual who has a proven track record of innovation, or an individual who does not?

Reason #8:    Product or service sales

A patent is an effective sales tool, because it tells a prospective customer that the product or service has met all of the requirements for a patentable invention—it is new, useful and innovative. Many customers will understand a patent as a certification or “seal of approval” by the government that issued the patent. In some cases, a customer will pay more for a product or service that is patented, than for an unpatented product or service.

Reason #9:    Ego

Of course, ego is not necessarily a bad thing. We all have a sense of pride when we receive an award for a notable accomplishment. Because patents are awarded only for inventions that meet rigorous standards, inventors are justifiably proud to be named as such on issued patents.

What Goes Into A Patent Application?

On By MarlinIn PatentsLeave a comment

You may be surprised to learn that the basic requirements of a patent application are fairly simple. A patent application must describe what an invention is, how it is made and how to use it. For a method, the “how it is made” portion should describe how steps of the method are performed. In addition, a patent application should include a declaration by the inventor that the application was made by, or authorized by, the inventor. And, of course, there are fees to be paid to a government patent office.

The inventor’s declaration is a simple form available from the patent office. The patent office will also be happy to tell you what fees to pay and how to pay them. That just leaves the description of the invention and how to make and use it. So, why are patent applications expensive, and why can’t you do it yourself?

The main reason is that, although the basic requirements of the description are relatively straightforward, it takes years of experience to understand how to properly draft a patent application so that it complies with numerous laws and regulations, and so that it broadly protects an invention. Although just about anyone with an appropriate technical background and writing skills could produce a description of the invention (for example, in the form of a typical operating manual), it takes specialized expertise in patent law to produce a quality patent application.

The description typically has several parts. Those parts are the detailed description, one or more claims, and one or more drawings. Drawings are not always required. For example, if the invention is a method or a chemical composition, it may not be necessary to include drawings with the patent application. However, the vast majority of patent applications do include drawings, and it is a best practice to include drawings (even if not absolutely required), since they aid in understanding what the invention is, and how it is made and used.

The detailed description and the drawings typically describe at least one example (also known as an “embodiment”) of the invention. It is a best practice to describe at least two examples of the invention, so it is clear to anyone reading the description that the invention is conceptually broader than any particular details of the described examples. In fact, that principle (the invention itself is more than just the details of the described examples) should be stated in multiple different ways throughout the description, because courts have a tendency to limit a patent’s claims to the details of the described example (and particularly so when only a single example is described as being the invention).

The claims are the most important part of the patent application. The claims define the scope (the “breadth”) of the invention to be protected by a patent. My preferred practice is to draft the claims first, so it is clear in my mind how the detailed description and the drawings should support the claims and their scope, without including unnecessary details of the described examples. Although the claims might be only a small portion of the text of a patent application, in my experience they take a majority of the time to draft the patent application, because they result from a lengthy focused consideration of differences between the inventor’s new concepts and what has previously been done by others. In addition, claims are written in an arcane style (for example, each claim must be written as only a single sentence, even for very complex inventions) and must comply with a variety of complex rules, so it takes a substantial amount of time to perfect the claims.

Some types of patent applications have fewer requirements. A design patent application (known in some countries and regions as an “industrial design” application) does not require a detailed description Drawings included with the application essentially comprise the description, since they illustrate the claimed design. For this reason, design patent applications are typically much less expensive than a normal utility patent application.

A provisional patent application does not require an inventor’s declaration or any claims (although it is a best practice to include at least one claim), and formal requirements are much more lenient for a provisional patent application. However, it is not recommended to skimp on thoroughness of the description in a provisional patent application, since the description must support the claims of an eventual patent, if priority to the provisional application is to be valid. If time and budget constraints allow, a provisional application should be drafted with as much care and attention to detail as a non-provisional application, keeping in mind that the provisional application will be pending for only one year, after which the provisional application’s description must support the claims of the subsequent non-provisional application, in order for the claims to be entitled to the benefit of the provisional application’s filing date.

Patentability Searches

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There are, in general, four “stages” of legal services typically provided for a Client in a patent procurement effort. In sequence, these stages are: (1) conducting a patentability search and rendering a preliminary patentability opinion, (2) preparing and filing a patent application, (3) prosecuting the patent application, and (4) handling formal patent issuance if the application is allowed.

In the first stage, the goal is to determine with some confidence whether an invention is actually patentable, in order to better decide whether continuing with the patent procurement effort is justified. Note that the term “patentability search” is sometimes substituted with the term “novelty search,” to highlight the fact that no search can in fact be used to determine with certainty that an invention is patentable. At most, a search can reveal that an invention is not novel, or it can reveal that there is a high likelihood the invention will be considered obvious by a patent examiner.

For a typical patentability search, the invention is reviewed and summarized, focusing on its most commercially important and assumed novel features. Then, a search is conducted in an attempt to locate reference documents that relate to or disclose the features of the invention. The reference documents can include patents and published patent applications, technical treatises, scientific journal articles or any other type of publications.

The references can then be reviewed and compared to the invention, in order to form a preliminary opinion regarding the potential patentability of the invention. This opinion will inform the decision as to whether the costs of preparing and filing a patent application for the invention should be incurred.

Performing a patentability search prior to preparing and filing a patent application is useful for at least two reasons. First, the uncovered references give a good “snapshot” of the general level of prior art that bears upon whether, and to what extent, patent protection may be available for the invention. Second, having a knowledge of the general content of the relevant prior art before preparing an application enables drafting of patent claims having proper scope (that is, broad enough to capture the full extent of the invention, without encompassing the known prior art).

While conducting a patentability search is usually quite desirable, the law does not require such a search. Some applicants choose to dispense with the search altogether. This, of course, saves on legal fees and any out-of-pocket expenses associated with the search, but it also does not obtain the benefits of the search.

In any event, a patent examiner will perform a search as part of examining the patent application, and the examiner may uncover particularly relevant prior art. Thus, although conducting a patentability search does not guarantee that a particular invention is patentable, it tends to lessen considerably the possibility that the costs of preparing and filing a patent application will be incurred for an invention that is not patentable.

Small Entity Status

On By MarlinIn PatentsLeave a comment

Certain fees paid to the US Patent and Trademark Office for a patent application or a patent can be reduced by 50% if the patent applicant or patentee is a “small” entity. But what does it mean to be a small entity?

Actually, a person or entity does not necessarily have to be “small” in size, worth or income in order to qualify for small entity status. For example, a person could have a yearly income of millions of dollars, a university could have billions of dollars in endowments, and a business entity could have hundreds of employees and earn millions or billions of dollars in revenue each year, and each of these could still possibly qualify for small entity status. Thus, small entity status should be viewed more as a way of singling out certain applicants or patentees for preferential treatment, than as a way of identifying those that are most deserving of financial advantages because they are “small.”

There are three categories of applicants or patentees that can qualify for small entity status. These categories are: persons, small business concerns and nonprofit organizations.

A “person” is an individual (a human being) that is an inventor or a person to whom the inventor has transferred some rights in the invention. Thus, to qualify for small entity status, a person must trace his/her rights in the invention back to the inventor (or one or more co-inventors). There are no limits on the person’s yearly income or total wealth.

A “small business concern” is a business entity having no more than 500 employees. There are no limits on the business entity’s yearly revenue or total assets.

A “nonprofit organization” is an educational institution (such as a university or other institution of higher education), or an organization (such as a nonprofit charitable, religious, scientific, community support, disaster relief, animal protection or environmental organization) that would be tax-exempt under certain provisions of the Internal Revenue Code. Again, there are no limits on the organization’s yearly revenue or total assets, but net earnings cannot flow to a shareholder, and the organization’s activities cannot include certain political activities (such as influencing legislation or supporting a candidate for office).

For each of the above categories, there is a requirement that rights in the invention to which the application or patent is directed have not been assigned, granted, conveyed or licensed (and is there is no obligation to assign, grant, convey or license) to another party that does not qualify for small entity status. Thus, a party that otherwise qualifies for small entity status loses that qualification if the party grants or licenses rights in the invention (or is under an obligation to do so) to another party that does not qualify as a small entity. Exceptions are provided for cases where the rights in the invention are granted or licensed to a US governmental agency.

If there is any uncertainty as to whether an applicant or patentee qualifies for small entity status, then small entity status should not be asserted. Improperly paying reduced fees can result in invalidity of a patent, and so the reduction in fees is definitely not worth the risk of an inappropriate assertion of small entity status.