Create, Consult, Control
News & commentary on intellectual property issues.
Jun092009 | Steve O'Donnell
Protecting your invention on the way to the patent office
I recommend to everyone that they contact a patent attorney as early as possible after they have an idea for a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. Of course, not everyone is going to do this. In the meantime, there are a couple things you should be doing or not doing to keep you from accidently losing your rights to your invention.
The most important, but maybe most difficult one to do is the SHUT UP! I don't mean to shout, but seriously, SHUT UP! The easiest way to lose your rights is to go around talking about or showing your invention.
35 U.S.C. § 102(b) bars the patenting of something that has been in public use or on sale for longer than a year before the application is submitted. The U.S. is the most liberal country as far as public disclosure of an invention goes, in other countries a public disclosure is most likely going to block a patent from being issued.
The real question is whether talking about your invention a “public use?” It can be. Certainly telling someone that you've invented a time machine is not giving anything away and won't bar your patent. Sitting down and describing enough about how your time machine works that someone else could build it might be enough to bar.
Section 2133.03 of the Manual of Patent Examination Procedures has a short overview of the requirements for “public use” under the statute. Some of these problems that can come up can be solved, or at least minimized, with the use of non-disclosure agreements and other precautionary measures. The downside with protecting yourself that way is that you might have to convince the patent office or a court that you did take the proper measures to protect yourself. A cheaper and easier way of ensuring that you don't have a 102(b) problem is to. . . SHUT UP!
Another problem that can occur if an inventor shares too much is that the person receiving the information might try to poach the invention and file their own patent. Unfortunately, there is no shortage of dishonest people and although the real inventor might be able to defeat such a fraud, that is an unnecessary expense that could have been easily avoided by keeping quiet.
Sometimes, it just isn't possible to keep the invention completely secret before an application is filed. It may be that public testing is needed, that some design help is needed or maybe that investment capital needs to be raised to pay for the patent application. In that case, tread carefully, and enlist a patent attorney to make sure that you are protected.
Jun042009 | Steve O'Donnell
The value of a patent application itself
In an earlier post I noted that there is a competitive advantage in the application itself, even if a patent never issues or if the final patent is so narrow that it can be easily designed around. What is this advantage and how can it be used to benefit your business?
The first advantage is somewhat tangential to the application. An application or narrow patent will count towards your business' intangible assets (assets that aren't. . . ahem. . . tangible, things that can't be touched). Increasing a business' assets will make it more attractive to lenders or investors, which in turn can mean increased capital available to take on the competition.
The other advantage is that is puts the competition on notice that copying the invention may be foolish. After an application is filed, the patentee has the right, under 35 U.S.C. § 292 to mark a product as “patent pending” or similar. This by itself alerts potential infringers that the product might be later patented, and they could face an infringement lawsuit if they copy the product. Also, because applications are held in confidence for the first 18 months after they are filed, the competitor has no way of finding out what the subject matter of the application is.
Consider you invent a gadget and, after consulting with your patent attorney, decide to pursue a patent on one small aspect of it, after filing, you can use mark it as “patent pending.” A competitor wants to copy it, but has no way of finding out what the application covers or its likelihood of issuing. Now, the decision to copy becomes more complicated because of the uncertainty and the possibility of being hit with an infringement lawsuit.
This same type of “persuasive protection” comes up again when the application is published 18 months after filing. Here, as was the case with the “square appliances” application, possible infringers have a better idea what the patentee is trying to protect, but still no idea if the patent will eventually issue or exactly what it might cover. Additionally, the possible infringer should also realize that there might be other related patent applications haven't been published yet (as can happen with a continuation application).
In the case where a patent has to be very narrow in order to get past the examiner, this still has value beyond the legal monopoly it grants the patentee. Possible infringers probably don't have the patent background to analyze the patent and discern what it covers, so they'll need to have their lawyers work on it and draft an infringement opinion. Depending on the complexity of the patent, even if it is rather narrow, these opinions can quickly turn into tens of thousands of dollars. That might be enough to either dissuade the possible infringer or bring them to the table for a possible license.
May152009 | Steve O'Donnell
Advantages of a local patent attorney
Should you choose a local patent attorney to prosecute your application? For the most part, it doesn't make a difference where your patent attorney lives, but many people do feel more comfortable working with someone near them.
Unlike many other legal practices, the location of your patent attorney is not critical. Patent law is a federal creature and not state-specific. Your patent attorney will not need to go to a local court to prosecute a patent. I know patent attorneys that have never met a client in person. Many more have at least some clients that they have never met in person. Similarly, your patent attorney doesn't even need to be located or licensed in your state. Your patent attorney only needs an internet connection; many applications are prosecuted without even a phone call between the client and the attorney.
On the other hand, there are reasons to work with a local patent attorney. Many people feel more comfortable working with someone they can look in the eye, even if they never actually do. Also, there is something to be said for keeping your local economy strong.
Whether or not you choose to work with a local patent attorney is up to you. There are advantages to hiring a local attorney, but they aren't critical.
May132009 | Steve O'Donnell
Are square appliances patentable?
Would you like a square toaster that was the same height as your square tv? Sure, we all would. That is the American Dream after all. James Dyson (the vacuum cleaner designer) wants to patent that. What is maybe more interesting to note is that even if the patent doesn't issue, the application itself gives some competitive advantage to the applicant.
US Patent application 20090095729, “Domestic Equipment Grouping” was filed in September of 2008 and recently published 18 months after filing as required by the American Inventors Protection Act of 1999 (Public Law 106-113; Manual of Patent Examination Procedure § 1120). Since the patent is still pending, we can't be sure that it will issue in the form that we can see now, or really, if it will issue at all. That question isn't so important for the purposes of this post. Rather, I want to point out again how ideas that most people wouldn't think of as inventions may still be patentable. For a related post, see this.
The abstract of the patent describes a group of domestic appliances that all have roughly the same dimensions and are generally cuboid. The useful advantage to this system is that the user can put the appliances together in a way that minimizes wasted space.
Is that patentable? I don't know. We'll have to wait to see what the examiner thinks. Is it a good idea? I think it is. I can see a practical and aesthetic advantage to having appliances of substantially the same dimensions lined on the counter. It isn't a terribly complicated idea and would be extremely easy for someone else to infringe. In fact, I would bet that if it sells at all, that there will be other companies more than willing to make their own appliance blocks.
By filing an patent application, Dyson Technology has done two things that will keep competitors out of the business of appliance blocks. The first is obvious, the patent might issue and if it does they'll have a legal right to keep infringers out of the marketplace. The second is a little more subtle: a patent might issue, and competitors know that.
I realize that doesn't sound very different, but with this publication, Dyson's competitors know that there is a patent pending and what it might cover. Dyson is therefore able to manufacture and sell their appliance blocks and those that might copy the subject matter know they could be left holding the bag if a patent issues. Under 35 U.S.C. § 154, infringers can be made to pay royalties for articles sold between the publication of an application and issuance of a patent. Also, if the patent issues, any infringing stock on hand when the patent issues would likely be worthless since Dyson could prevent it from being sold. If someone is tempted to infringe, they likely won't because of the risk that the patent will issue.
I hope you see that there are really two related competitive advantages to patents, one coming from having the patent actually issue, and another coming from the threat of possible issue. More on the advantage inherent in the application itself later.
*UPDATED* My post on The value of a patent application itself is here.
May012009 | Steve O'Donnell
Apple seeking to patent volume controls for browser windows
A recent publication from the patent office gives some insight into what might be coming in Safari and again demonstrates Apple's aggressive patenting scheme.
In November 2007, Apple filed a patent application entitled Web Browser Audio Controls. That application claims priority to a provisional application filed the month before. The application is still pending, but it was published 18 months after filing as required by the American Inventors Protection Act of 1999 (Public Law 106-113; Manual of Patent Examination Procedure § 1120). Since the patent is still pending, we can't be sure that it will issue in the form that we can see now, or really, if it will issue a tall. That question isn't so important for the purposes of this post. Rather, I want to point out again how savvy Apple is about protecting their intellectual properties.
As I mentioned earlier, the definition of patentable invention encompasses more than what most people realize. In the case of Apple's browser volume control publication 20090106657, Apple is seeking a patent covering volume controls embedded in individual browser windows and volume preferences for individual sites. The underlying idea is to be able to set volume for each window and to save preferences. For example, you could set your browser so that new sites opened at a very low volume, but your favorite streaming audio site could always open at a high volume. Also, interestingly, the volume controls aren't necessarily wedded to Safari so the eventual implementation might be something like a multi-browser plug-in or part of the OS.
Of note, again, is that there is no code in the patent application. Actually making and using the subject matter is left to a programmer.
It is a good idea. I wish I had thought of it. If you had this idea, would you have realized what you have, that it could be patented and possibly turned into a revenue stream? What have you thought of but disregarded because you weren't sure how to build a prototype? Don't let that stand in your way.
Apr302009 | Steve O'Donnell
Pending patent reform
It seems that every year there is a patent reform bill kicking around the capital, and this year is no exception. The biggest proposed change is moving the US from a first-to-invent to a first-to-file system. This change would put us into phase with most of the rest of the world, but it it not without it's problems.
Currently, if there are two applications for the same invention, the patent will go to the first inventor after the resolution of an interference proceeding. Proving that one is the first inventor can be an expensive, time consuming bother, but it can be done. Amended bill S. 515 would change that. If it becomes law in it's current form, then the winner of the race to the patent office would be the one to get the patent..
As reported by PatentlyO, the bill has been approved by the Senate Judiciary Committee and has been placed on the Senate Legislative Calendar. If it passes through the Senate and the House, then it will go to the President for his signature. You can watch the progress of this, and other bills via the legislative search engine Thomas (search for bill number S. 515)..
At first blush, this doesn't seem to be that bad of an idea. That is the way most of the rest of the world's patent offices work and it would eliminate the need for interference proceedings. Unfortunately, I fear that it will adversely impact small businesses and independent inventors..
Assume that a small business person (A) invents a widget in January but doesn't file an application until June, during which time the business person is test marketing the widget or looking for investors. If another person (B) happens to invent the same thing in April and gets an application on file in May, A may still be able to obtain the patent for the widget. At least that's how it is now. If the proposed changes become law, then A is shut out because he didn't move fast enough. There is a real risk that this would adversely impact first time inventors that aren't familiar with the patent process and might not have the money on hand to invest in obtaining a patent..
The new law will probably also increase the overall cost in patent office and legal fees to the inventor. No practitioner is going to sit on an application, or take longer than needed to draft it, but under the new law, very application will be a race. Practitioners will find themselves exposed to greater malpractice premiums due to the possibility that a slight delay may kill their clients' chance of getting a patent. That cost will be passed on to inventors. Inventors will also likely find themselves paying premium prices to have their attorney push their applications to the top of their docket. Additionally, since they can be filed faster than a non-provisional application, provisional patent filings will increase, causing inventors to pay additional fees that they wouldn't have otherwise needed to pay in order to preserve their right to a patent.
If this concerns you, contact your elected officials.
Apr292009 | Steve O'Donnell
What does it cost to get a patent?
That is the first question most first time inventors ask and the answer depends on a number of factors.
In trying to budget for a patent prosecution, the inventor and the prosecuting attorney need to estimate the fees that the patent office will require and what legal fees the attorney will require. The patent office fees can be found on the PTO's site here (effective May 1, 2009). The patent office is, of course, a governmental body and, like all other government bodies, feeds itself off of fees. Over the course of a utility patent's life, between the filing fee, examination fee, search fee, issue fee and maintenance fees, one can expect to pay over $10,000 to the patent office. For “small entities,” essentially independent inventors and small businesses, those fees, for the most part, are halved. Those fees also don't all have to be paid up front. The issue fee isn't due until the patent is ready to issue and maintenance fees are due at 3.5, 7.5 and 11.5 years after issuance. For a qualifying “small entity,” the upfront fees can be under $500.
Other than that, there are the legal fees that your attorney will require. Those can vary greatly depending on the subject matter of the patent. Those can range from a few thousand for a simple invention to well over $20,000 for a very complex invention.
The legal fees will also vary depending on the attorney you hire. A solo practitioner or small firm will have less overhead than a large firm paying a number of employees and maintaining an office occupying a few floors of prime real estate.
The effective cost of obtaining a patent will also depend on your tax situation.
Another thing to consider is the cost of not obtaining a patent. Without a patent, your invention could be poached by another to make money off of your hard work.
Consulting a patent attorney about protecting your inventions, as early as possible, is the best way of protecting yourself.
Apr282009 | Steve O'Donnell
What does the patenting process involve?
Although every case is different, it is good to have a general idea of what to expect when you're applying for a patent.
The first thing your attorney or agent will need to do is understand what you've invented. Obviously, the attorney needs to understand something before he can explain it to the patent office. Additionally, often an inventor won't fully appreciate the scope of the invention and It is part of the attorney's job to try to cover as much ground as possible. This process may require a face to face meeting, but more commonly it can be done with a phone call and some good drawing sheets. It is very common for a patent application to be prosecuted without the attorney ever meeting the inventor face to face.
The next thing your patent attorney or agent will likely do is a prior art search. That is a search for any patents or publications that disclose something similar to what you have. The search lets the practitioner and you know what aspects of your invention are already known so the application can be properly drafted, if it is decided that there is any thing left to patent.
The prior art search is optional, but is kinda silly to skip. It isn't rare for an inventor to find out that their invention has a near zero chance of succeeding during the prior art search. Finding that out at this point will save the inventor's time and money.
The search is never really complete. Since everything that has ever been published is prior art, one could spend their entire lives looking at everything that's ever been done. Of course, doing that is plainly stupid. When to stop a prior art search is within the discretion of the practitioner. At some point the return on investment becomes so low that it doesn't make sense to continue.
Following the prior art search, the next step is to draft the application. The application will need to describe the subject matter and specifically claim what the inventor's invention. How the practitioner approaches this will depend on the person, some engage the inventor in every step, others won't.
After the application is drafted and is approved by the client, it's ready to be submitted to the patent office. At this point, for the most part, it's in the hands of the patent office. When the examiner goes over it, a rejection or allowance will be sent out. If the application is rejected it can be amended and resubmitted or your attorney may made arguments to convince the examiner that the application is allowable without changes. If that doesn't work, there are other things the practitioner can do to try to keep the application alive, but that's another topic for another day. The process ends when either a patent issues, or the inventor and practitioner decide that all that can be done has been done and stop pursuing the application.
How long does this process take? The time from the initial call to the completion of the prior art search can take a couple weeks, depending on the subject matter. Drafting the application will probably take a couple weeks, but generally not more than a month. Once it is in the hands of the patent office, it's harder to estimate how long things will take. Most estimates are that it will be 18 months before hearing from the examiner for the first time, but that can greatly vary depending on the subject matter.
Those time frames are very rough guidelines. If you're nearing a critical date and you need to get something on file as soon as as possible, your attorney may be able to juggle his docket around and put together a package quite a bit faster, probably with an extra “rush job” premium. Also, the patent office will let an application cut into line in certain circumstances such as if the inventor is above a certain age or if there is already evidence of infringement. There is also a accelerated examination procedure available in some instances that puts a greater burden on the applicant at the start, but often results in final disposition within a year of filing. Talk to your patent attorney to decide if expedited examination makes sense for your application.
Very generally, for many inventions, the process is probably going to take two years so it is in your best interest to get the patent process started sooner, rather than later.
Apr242009 | Steve O'Donnell
What about those invention places that advertise during daytime TV?
We've all seen them, the commercials touting how some company will look at your invention and give you a report on on the estimated market for the invention and help you obtain a patent. They sound like a pretty good deal, but are they? Probably not.
I can't say that all of the invention companies are. . . <ahem> of questionable scruples or that there isn't one that will give you good value for your investment. I can say that I've never encountered anyone that was satisfied with what they got for their money. I have also never met anyone that received bad news from one of these companies. Sadly, I've also never met anyone that made any money with what they got from these types of companies.
I understand that someone might be skeptical that a patent lawyer might try to dissuade a potential client going to such a business. After all, if everyone did that, I'd have to find another line of work, so don't simply rely on my opinions. The United States Patent and Trademark Office has a brochure available that points out the most common warning signs that an invention company is shady. The office also collects complaints against invention companies and publishes them, as well as responses from the companies here. The FTC also has an alert concerning invention companies. Still unconvinced? The United Inventor's Association also has a list of publications cautioning people about the many scams that are used to prey on inventors.
Again, your milage may vary, but I wouldn't count on it. A better idea is to talk to a patent attorney to advise you before you contact an invention company.
Apr222009 | Steve O'Donnell
Are patent expenses tax deductible?
This post would have been better suited for a few weeks ago, but I'm fairly sure that we'll have another tax day next year. With that in mind, planning early makes the most sense. I am not a tax lawyer, and every situation is different, so the only way to get an answer you can rely on is to talk to your tax advisor. With that out of the way, generally, the expenses related to obtaining a patent are deductible as a business expense.
The following is only intended to give you a little background for when you speak with your tax professional. If you are a business, then your legal expenses to obtain a patent may be deductible in the year that they are incurred. Under 26 CFR § 1.174-2 the costs associated with obtaining a patent are deductible as a research and experimental expenditure. Further, such research and experimental expenditures can be either deducted in the year they occurred or they can be deferred and amortized. 26 CFR 1.174-1.
Your tax professional will be able to better advise you on the best way of lowering your tax burden and what the effective cost of getting a patent may be.
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