Create, Consult, Control
News & commentary on intellectual property issues.
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.
Apr152009 | Steve O'Donnell
When should I talk to a patent attorney?
In the previous post I briefly dealt with the need to file an application within a year of public disclosure. That year is the outer limit and just like everything else, the longer you put off dealing with something, the more you are risking.
The US has a unique patent law that allows an inventor a year to “test the waters” and determine if a patent is needed. Generally, in the rest of the world, if the invention is made public before an application is on file the inventor is barred from obtaining a patent. This provision of US law can be used by an inventor to, among other things, find a patent attorney, find some venture capital, test market their invention and consider whether they really need a patent or not. Unfortunately, reliance on this year can add unnecessary expense and bother to obtaining a patent. Even worse, if pending amendments to the law go through, relying on the year to test the waters might let someone else patent the same invention, even if you really were the first to invent it.
The chance of someone else inventing the same thing as you increases with the amount of time you let lapse after your initial invention. If that happens, and the other inventor is faster at getting something on file, you may find yourself in a battle to determine which of you really was the first inventor. These “interference” proceedings can stretch on and exhaust both your patience and your pocketbook.
Currently, you can prove prior invention by evidence such as a detailed notebook showing that you had a fully developed invention at a certain time. Of course, it will add a thick layer of expense and annoyance to prove to anyone that you are the one that really was the first inventor and deserving of the patent. There is a pending change to the law, that if passed, will remove even that expensive and annoying possibility. If that happens, then the first inventor to file an application will be able to patent it. A prior inventor will be shut out if he didn't file his application earlier, even if he really invented the subject matter earlier.
Bottom line: “Eureka!” should be immediately followed by “I gotta call a patent lawyer.”
Apr092009 | Steve O'Donnell
I invented something, now what do I do?
Many inventors unwittingly ruin their own chances of getting a patent by not keeping their mouth shut. In the United States, the first offer for sale or public use of an invention starts a one-year clock ticking. During that year, you can file a patent application. If you miss that year, you are barred from obtaining a patent. That may sound draconian, but it's actually the most generous such law in the world. In other countries, a public disclosure prior to filing can immediately bar an inventor from getting a patent.
What kind of activities will start the one-year countdown? The answer to that is a little more involved than you might think. If you try to sell your invention or let someone use it without any obligation on their part to keep it secret, that is going to start the one-year clock ticking. If you use the invention yourself openly (where there isn't a reasonable expectation of privacy), you've started the clock. If you use the invention around others, but only in situations where you have a reasonable expectation of privacy, the clock won't start. If you use the invention publicly, but that use is experimental, you also haven't started the clock. There, clear as mud..
Like most legal questions, what activities will or won't start the clock may differ depending on the exact situation, so global statements are difficult to make. If you're not sure if the clock is ticking, assume it is and talk to a patent attorney as soon as you can, at the very least a few months before the one-year clock runs out. If you're wrong and the clock hasn't started, you've lost nothing. If you don't think the clock has started and it has, you may run into the one-year bar and lose any chance you had to get a patent.
Apr062009 | Steve O'Donnell
What is an invention?
Ideas that can be protected with a patent go beyond what you may think of as an “invention.” In this post I'm going to look at two patents for inventions that could easily have been overlooked by an inventor that isn't as patent savvy as Apple or Google.
The first of these I mentioned in my prior post. It is Apple's US Patent No. 5694151 (If you click the “Images” button at the top of the screen you'll be taken to the actual patent and not the HTML version) for a “method and apparatus for providing visual feedback during manipulation of text on a computer screen.” This patent is one of a family of patents that are noted on the first page under “Related U.S. Application Data.” If you look at that section, you'll notice that the earliest application in the family was filed in 1992, which is why Figure 1 shows what looks like a Mac Classic.
The subject matter of these patents concerns what a person sees on their computer screen when they are moving text. In very general terms, the patented inventions describe a click and drag system where the text being dragged visually tracks mouse position. This tracking text replaces or augments a carat that shows where the text will be inserted. Is that an invention? Is it useful? The Patent Office thinks it is. In fact, Apple has received five patents covering similar subject matter.
The second patent I want to point out received a bit of press when it issued. It is Google's Patent No 7346839 for “information retrieval based on historical data.” This patent protects ways of ranking documents (SEO). The first of the 53 claims covers (paraphrasing) a method of generating a ranking score for a document based on different data such as the phrases in the document, how old the document is, the amount of traffic the documents gets, etc.
More important than what is in the patent, however, is what is missing. There is no disclosure of how scores for each datum is calculated or how those scores are used to determine a website's ranking. Google successfully patented a scheme that may or may not be used to determine page rank without giving away exactly how Google's page ranking system works.
The message I'm trying to convey is that subject matter that many wouldn't consider an “invention” may be patented. Perhaps more importantly, if you take a look at both patents, you'll notice that neither contains any code. It is not necessary to describe every detail, but it is necessary to describe an invention in enough detail to allow any person skilled in the relevant art to make and use it. In the context of these inventions, the “relevant art” is programming, presumably a person skilled in programming could build each of the above inventions even though the patent doesn't disclose the code. Similarly, a new idea for a mechanical or electrical invention may be patentable, even if the inventor doesn't have the materials or skill to build it.
Do you have an idea?
*N.B. The Apple and Google patents described above issued before the USCA's Bilski decision. Although I think both are sufficiently “tied” to a computer to satisfy the Patent Office, I'm sure there are those that disagree. Hopefully the Supreme Court will take up the issue and clarify the standard for process claims.
Mar272009 | Steve O'Donnell
Do you have hidden intellectual property?
The thing you immediately notice when looking at any large company's intellectual property profile is that it is massive. Big companies know that the demand for their products will diminish as they become obsolete, but that new products will come out of their ideas.
Their patenting procedure is to obtain patents on every idea they can, even if they don't have immediate plans to do anything with the idea. It may be years before the company is ready to do anything with their patent, if that time even comes. Even if the company has absolutely no intention to do anything with the idea, they will patent it so that they can either prevent a competitor from using that same idea or license the patent to their competitor, creating a passive revenue stream. If nothing else, a patent is an intangible asset on a balance sheet.
Many smaller companies or novice inventors think that patents only cover big, important inventions, things that are game changers. In reality, many, if not most patents, cover small innovations. Often, these innovations aren't even for what most people would consider inventions. The inability to recognize when something should be patented results in a missed opportunity. Too many inventors have lost control of their intellectual property because they never sought patent protection only to have their inventions taken by a larger company that can do a better job at marketing.
No one realizes the importance of a wide patent portfolio better than Apple. A quick search of the Patent Office finds 2531 patents assigned to Apple. Although some of these cover things that fit into most people's definition of an invention (such as their 7508662 patent for a heat dissipating device handle), a number of them cover things that people might think of as clever, but be surprised to learn that they're patented inventions (such as Patent No. 5694151 for a “Method and apparatus for providing visual feedback during manipulation of text on a computer screen.”
In the following posts I'm going to select some patents covering inventions that could easily have been overlooked by the inventor and try to help you identify what intellectual property you have hiding in plain sight.
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