Create, Consult, Control
News & commentary on intellectual property issues.
Jul072010 | Steve O'Donnell
What happens to patents when a company closes.
A couple days ago someone found this blog by searching for “what happens to a patent when a company goes out of business,” which is surprising, because I don’t recall posting on that. At least it’s less disturbing than the time this blog was found by someone searching for “how to seduce a swan” (I hope they were looking for this.
So, what happens to a business’ patents when the business closes? The answer is pretty close to what you’d hear if you asked “what happens to a business’ copy machine when the business closes?” Patents are property, intellectual property, and even though they differ from physical property in certain ways, in many ways they’re the same.
A closing business can do any number of things with a patent. It could assign or license it to someone, the patent could be part of the company’s assets in a bankruptcy reorganization or liquidation; it could auction it off or dedicate it to the public; the patent could also be left to expire on its own.
The “expiration” is probably what people mean when they ask what happens to patents when the owner goes out of business or dies. For a patent to remain in force, periodic maintenance fees need to be paid to the government. Whether this is for a laudable reason, such as prompting the early public dedication of unused patents or if it’s just another way that the government can extract money from people is a question you can mull over later.
Currently these fees are due at 3.5 years, 7.5 years, and 11.5 years after the patent issues. The cost of these fees increases with each payment. The first maintenance fee is $980, the second is $2480 and the third is $4110 for a large entity and half that for a small entity. I’ve never thought of it before, but those are some strange amounts. If anyone can explain them to me, please leave a comment.
If those fees aren’t paid, the patent expires prematurely. If they are paid, a utility patent will normally expire 20 years after its filing date.
So I guess the answer to the question is closer to that for “what happens to a business’ car when it closes?” Not unlike a car, a patent can be sold, transferred, etc. Also, if a patent is left to languish and isn’t maintained it can be irretrievably lost.
If you’re concerned about a patent, the best thing to do is to have a patent attorney research the patent’s file and determine the best course of action.
Jun292010 | Steve O'Donnell
Bilski didn’t change much except my dinner plans
I (and every patent lawyer) have been anxiously awaiting the Supreme Court’s decision in Bilski, which should have given us a handle on when business method and software patents were patentable. The decision came down yesterday, and the Court punted.
Most patent attorneys had expected J. Stevens to write the opinion and guessed that it would tamp down on the patentability of business method and software patents. J. Stevens didn’t write the majority, and the opinion didn’t really change anything, or leave us with a clear indication of when business methods or software were patentable or not.
For the last few months I had some thoughts on what this post should be, I expected some softer rule than what the Fed Cir had stated, but we didn’t get a rule, only a dodge.
I anticipated a flurry of analysis and writing today and planned on picking up dinner while coming home from getting my kids at daycare to free a few more minutes for drafting. Since the Court didn’t give me much to work with, I decided that rather than trying to expound on a narrow ruling that gives little or no guidance, I instead will just write about what I made for dinner last night since the Court was kind enough to free me from my expected burden. So, here it is, Green Curry Macaroni and Cheese:
This recipe was based on Alton Brown’s Baked Mac & Cheese and inspired by Roger Mooking’s Curried Mac & Cheese.
Baked Green Curry Macaroni and Cheese
ingredients
1/2 pound elbow macaroni
3 tablespoons butter
3 tablespoons flour
2 tablespoons green curry paste
3 cups milk
4 teaspoons coconut extract
1/2 cup yellow onion, finely diced
1 large egg
12 ounces provolone
1 teaspoon kosher salt
black pepper
fresh Cilantro
directions
1. Preheat oven to 350 degrees F.
2. In a large pot of boiling, salted water cook the pasta to al dente.
3. While the pasta is cooking, in a separate pot, melt the butter. Whisk in the flour and keep it moving for about five minutes. Make sure it's free of lumps. Stir in the milk, onion, and curry paste. Simmer for ten minutes.
4. Temper in the egg. Stir in cheese and heat till melted. Season with salt and pepper. Fold the macaroni into the mix and pour into a 2-quart casserole dish.
5. Top with cilantro for service.
Notes: the curry paste container says to use 4T per can of coconut milk. . . which would translate to about 6T for this recipe. I find that to be waaayyy to hot, so I went with a third of that (and it's still pretty spicy, and I'm a guy that drenches pizza with hot sauce). I considered using coconut milk instead of milk+extract but I was concerned that the recipe needed the protein in the milk. . . plus, coconut milk is pretty fatty and there's already a bunch of fat from the cheese. I went with provolone because it’s a mild cheese and wouldn’t compete with the curry paste. The mix is very wet before it goes into the oven, but firms up nicely during the bake. When it was still hot from the oven, the curry spiciness was stronger than I anticipated, but as the dish sat, the spiciness mellowed yet was still very flavorful.
And no, this recipe isn’t patented.
Apr072010 | Steve O'Donnell
You probably don't want a provisional patent application
A number of “inventor assistance” services tout a provisional patent as a low-cost way of obtaining some degree of patent protection. Although a provisional is a little cheaper at the start, many people will wind up paying more in the long run than if they instead focused on a non-provisional application.
As I said before, I usually think of patents as consisting of two parts: the claims and everything else. A provisional patent is the “everything else.”
When I draft a patent, I start with what I consider the two hardest sections: the claims and the summary. The claims are tricky because they define the covered invention in as precise language as possible; the summary is tricky because it’s the “quick read,” plain language summary of the claims.
The claims are written for an intended audience of other patent lawyers and federal judges; the summary is written for potential infringers to read and hopefully come to the conclusion that a license makes better business sense than defending a lawsuit.
The rest of a patent is the foundation for the claims to stand on, and just like how like the visible portion of a building isn’t going to last without a solid foundation, patent claims will collapse if they’re not supported.
To carry that analogy a bit further, just as it doesn’t make sense to build a house without first considering the foundation, it doesn’t make sense to build a foundation without knowing what you’re going to build on it. For that reason, it doesn’t make sense to draft a provisional patent application without knowing what the claims are going to eventually look like.
If one does opt to file a provisional application there is likely going to be some degree of work duplication when, a year after the application is filed, a patent attorney has to refresh his memory on the subject matter of the application and then move to drafting claims. There are also going to be filing fees associated with the process that could be avoided by not first filing a provisional application.
Certainly there are reasons to file a provisional application, sometimes the initial few hundred dollar savings in filing fees demands the course. Other times there can be a looming statutory deadline that requires an application to go out the door before someone can sit down and draft a polished application. In other situations, it might make strategic sense to have a broad provisional on file for a year before deciding what aspect(s) of the invention should be patented. Whether a provisional application is the best route for you is something to discuss with your attorney, just don’t get attached to the idea, because odds are that it isn’t.
Feb052010 | Steve O'Donnell
Infringe? It’s a business decision.
A common question all attorneys get is “am I gonna get in trouble for this?” For some things your attorney will be able to give you a decent answer. . . “yes, that’s a really dumb idea” or “no, that’s fine,” but much more common is a more stereotypical lawyer answer of “it depends.” For intellectual property questions, I usually dredge up middle school algebra.
Every decision can be made with the help of an equation. Let’s say your burning question is "should I hit this guy at the bar that keeps looking at me?" The left side of the equation might be:
“(chance of me losing the fight)*(chance of me landing in jail)”
The right side of the equation might be “(how much would I love to pop this guy?)*(chance that the girl at the end likes macho jerks)”
If the left side of the equation is greater than the right side, not hitting the other guy is favored. Now, of course, you can’t know the real values of any of the variables, but you can estimate. If there is a chance that they guy is really looking at someone else or just has a facial tick, and he’s a 300-lb monster sitting next to his buddy the cop, well, stay seated and order another drink. If he’s obviously being a jerk, you’ve got 40lbs on him, there are no cops around, and you know the girl likes macho jerks, the equation favors popping him. Unknown variables are also in play: maybe he’s a ninja, or an android, or a ninja android. You can’t know everything, but the more information you have, the better your decision making process will be.
It’s similar to questions I get all the time concerning intellectual property. Only a fool would make an uninformed decision. Even a gambler willing to risk big is only going to do so after evaluating the chance of losing with the possible payoff.
It’s part of my job to identify and flesh out what variables are in play. If the question involves using an image for a blog post from and there is a plausible fair use argument, that’s one thing; if the question involves making and selling t-shirts with Mickey Mouse on them, that’s a much different equation.
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