Patents
PATENTS — PROTECTION FOR NOVEL INVENTIONS
So you think you're an inventor, you think you have a big idea. Whether it's how to keep grocery carts from rolling away in a hilly parking lot (my personal favorite), a new design of nose-haircutter, or a software system that automates a “business process,” if your idea actually is both “novel” and “non-obvious,” you could seek patent protection. If you got your patent, you would have the legal right to prevent others from making commercial use of your idea without your permission for a period from between 14 and 20 years, depending on the type of invention. You would then probably try and cut a lucrative licensing deal with a manufacturer for your product, and harvest royalty fees for the term of the patent. Drug companies are tremendous beneficiaries of this system. The difference between regular Prozac and a generic Prozac is absolutely nil, thus once Prozac loses its patent protection, a pharmaceutical company holding the patent stands to lose an awful lot of revenue, as generic producers flood the market with a cheap commodity.
As a patent holder, you enjoy the right of monopoly. This is very great power, as was demonstrated when Amazon was able to enjoin Barnes & Noble from using a “one-click ordering” system just as BarnesAndNoble.com was pushing for Christmas sales in 1999. The court granted the injunction on December 1, 1999, and it stayed in place until February, 2001, when the court dissolve the injunction, finding there was a substantial issue as to the validity of the Amazon patent. The behemoths settled soon after, on secret terms. So Amazon's patent was not perforated, it held Barnes & Noble back for two Christmas seasons, and probably sold Barnes & Noble a license for a healthy chunk.
One is tempted to assume that the primary things needed to obtain a patent are audacity and legal fees, and certainly the Amazon case brought many jeers and catcalls, calling into question how the USPTO could have issued a patent on such a simple concept in the first place. Then you have to ask yourself how Amazon got so much credibility with the court that they steamrolled Barnes & Noble. It's obviously all about legal strategy and implementing it at very high levels of effectiveness. Patent law, like trademark law, has gone from an unsexy field of legal practice to the cutting edge of the cutting edge, much in the same way that geeks became chic. In this field of practice, Online Media Law, PLLC provides referrals to skilled counsel in the field of patent law whenever important questions concerning this field of practice are raised in client consultations. No referral is made without prior client approval.
The following information is provided to help Members understand the scope of patent protection generally, so they can determine whether their inventions may be worthy of seeking patent protection. I cite the Amazon example because it is such a stark and monolithic reminder that, with a skillfully drafted patent application, great things can be accomplished.
PATENT FAQs
Do I need a lawyer to register a patent? Registering a patent is a long process that requires intensive interplay between the USPTO examiner and the applicant or their attorney. While I have heard of people obtaining patents without the assistance of attorneys, and have actually met one of these people, it seems a little bit like building a ship in a bottle — you know it can be done, you're just not sure if you're the person who can do it. However, if you are an inventor with a novel, clever way of performing a process, producing a product, a food or fabric design, recreational gear, sporting goods or computer peripherals, then acquiring the right to be the sole purveyor of the commercial products generated by your invention could be a very good idea. If you can't afford to retain an attorney, you can go it alone--others have.
How long do I have to apply for a patent? The triggering events for filing a patent application are the following:
1. Publication of a description of the invention
2. Use of the invention in public
3. Someone else's filing of a patent on the invention
4. Offering to sell the invention (even if no sale results)
Within one year of the occurrence of any of these events, a patent application must be filed or patent protection will be absolutely denied. Thus, the decision to take the invention to market, either to make sales or interest investors, could result in triggering events.
Please take note that this is the role only with respect to the USPTO. Patent protection in Europe is barred as soon as an invention is described in a publication if a patent application has not yet been filed. Because of the importance of international patent protection for products that have a global market, this issue must be considered.
If two patent applications are filed for the same invention, who gets the patent? In the U.S., the first to invent, but in most other countries and jurisdictions, the first to file for the patent. Sporting of us, isn't it?
Are there different types of patents? There are three types of patents: (1) utility patents, (2) design patents, and (3) plant patents. You can file a Preliminary Patent Application that will be sufficient to reserve your early filing date if it adequately describes the invention. Within one year after, you must file a formal patent application. Currently, applications for utility patents can be submitted online through the USPTO's “EFS” filing system. The application must describe how to make and use the basic invention, and distinguish the invention from all examples of “prior art,” that is, show how this is really your idea and not somebody else's. The patent application must also give a precise description, called “patent claims,” laying out which aspects of the invention deserve patent protection.
How long does it take to get a patent? The patent application may remain pending between one and three years, and usually requires the applicant to submit amendments. As you might imagine, eliminating the connection between a new invention and “prior art” can be quite challenging. Patent examiners are subject to being second-guessed by the courts on issues of either novelty or non-obviousness, and are often criticized for issuing “too many patents.” So they have every incentive to scrutinize applications closely. After the applicant overcomes all of the examiner's objections, the invention is approved for patent and the applicant pays a patent issue fee of $355 (or twice that for large companies). Keeping a patent in effect requires the payment of three additional fees during the term of the patent.
What does a patent provide me? If you obtain a design patent, you can happily enforce it for 14 years from the date of issuance. If you obtain a utility or plant patent, you'll enjoy 20 years of monopoly. Of course, that's 20 years in which to arrange for the manufacture, marketing, sale, and harvesting of profits from the commercial exploitation of your invention. Suffice it to say that at this point, you may find yourself dealing with some very large corporations. And cutting a licensing deal is going to be very important.
Is licensing a patent the right way to market my invention? The problem is, there is a conflict of interest between a licensor and a licensee. The patent holder is the licensor, and the manufacturer and marketer is the licensee. If you think about it for just a little while, you will realize that the licensee wants to spend as little as possible producing and promoting the licensor's product and get as much money as possible on that transaction. This may mean only selling the licensor's product through a website, where marketing costs are minimal but distribution is also limited. If your product is the type that will benefit from an ad in Oprah, or Architectural Digest, you'd like to know that the licensee has a budget and a commitment to buy those ads. This is especially important because the term of patent protection is limited, and once the golden years of monopoly are gone, if the idea has substantial value in the first place, lawful imitators will jump into the market as soon as patent protection is lost. Of course, if you had a really good idea, you will already have had problems from counterfeiters. If you negotiated well, your licensee will have taken up their responsibility to protect the patent via litigation. And patent litigation can be long and expensive.
Thus, extracting value from your patent may all come down to how well you negotiate your licensing agreement. Indeed, before you even bother to patent an invention, ask yourself the usual questions: Does anybody want this thing? How many people, and how much would they pay? Where would I advertise it, and to what types of purchasers? And you might ask yourself, “Is there an easier way to do this?”
Who owns an invention that is made during a period of employment — the boss or the employee? Unless the employee has agreed otherwise, the invention belongs to him or her. (The opposite of the rule applicable to works-for-hire in the copyright context.) If you hire people to invent things to solve your problems, you must use a special agreement found in the Legal Documents section, to secure ownership of patent rights to the invention.
Can I protect an invention some other way? As a practical matter, there might be a worthy alternative. It's called trade secrecy. But you get trade secrecy protection in precisely the opposite way you get patent protection. To get patent protection, you have to lay out the whole process in an application that becomes part of a government archive of information. That's considered the tradeoff. You get monopoly protection, but everyone knows what the invention is and how it works. But take Coca Cola for example. No one knows how to duplicate that taste except Coca Cola, because the formula is a secret. They hire CIA spooks to make sure it stays that way, probably. At any rate, it's the subject of our next section.
So you think you're an inventor, you think you have a big idea. Whether it's how to keep grocery carts from rolling away in a hilly parking lot (my personal favorite), a new design of nose-haircutter, or a software system that automates a “business process,” if your idea actually is both “novel” and “non-obvious,” you could seek patent protection. If you got your patent, you would have the legal right to prevent others from making commercial use of your idea without your permission for a period from between 14 and 20 years, depending on the type of invention. You would then probably try and cut a lucrative licensing deal with a manufacturer for your product, and harvest royalty fees for the term of the patent. Drug companies are tremendous beneficiaries of this system. The difference between regular Prozac and a generic Prozac is absolutely nil, thus once Prozac loses its patent protection, a pharmaceutical company holding the patent stands to lose an awful lot of revenue, as generic producers flood the market with a cheap commodity.
As a patent holder, you enjoy the right of monopoly. This is very great power, as was demonstrated when Amazon was able to enjoin Barnes & Noble from using a “one-click ordering” system just as BarnesAndNoble.com was pushing for Christmas sales in 1999. The court granted the injunction on December 1, 1999, and it stayed in place until February, 2001, when the court dissolve the injunction, finding there was a substantial issue as to the validity of the Amazon patent. The behemoths settled soon after, on secret terms. So Amazon's patent was not perforated, it held Barnes & Noble back for two Christmas seasons, and probably sold Barnes & Noble a license for a healthy chunk.
One is tempted to assume that the primary things needed to obtain a patent are audacity and legal fees, and certainly the Amazon case brought many jeers and catcalls, calling into question how the USPTO could have issued a patent on such a simple concept in the first place. Then you have to ask yourself how Amazon got so much credibility with the court that they steamrolled Barnes & Noble. It's obviously all about legal strategy and implementing it at very high levels of effectiveness. Patent law, like trademark law, has gone from an unsexy field of legal practice to the cutting edge of the cutting edge, much in the same way that geeks became chic. In this field of practice, Online Media Law, PLLC provides referrals to skilled counsel in the field of patent law whenever important questions concerning this field of practice are raised in client consultations. No referral is made without prior client approval.
The following information is provided to help Members understand the scope of patent protection generally, so they can determine whether their inventions may be worthy of seeking patent protection. I cite the Amazon example because it is such a stark and monolithic reminder that, with a skillfully drafted patent application, great things can be accomplished.
PATENT FAQs
Do I need a lawyer to register a patent? Registering a patent is a long process that requires intensive interplay between the USPTO examiner and the applicant or their attorney. While I have heard of people obtaining patents without the assistance of attorneys, and have actually met one of these people, it seems a little bit like building a ship in a bottle — you know it can be done, you're just not sure if you're the person who can do it. However, if you are an inventor with a novel, clever way of performing a process, producing a product, a food or fabric design, recreational gear, sporting goods or computer peripherals, then acquiring the right to be the sole purveyor of the commercial products generated by your invention could be a very good idea. If you can't afford to retain an attorney, you can go it alone--others have.
How long do I have to apply for a patent? The triggering events for filing a patent application are the following:
1. Publication of a description of the invention
2. Use of the invention in public
3. Someone else's filing of a patent on the invention
4. Offering to sell the invention (even if no sale results)
Within one year of the occurrence of any of these events, a patent application must be filed or patent protection will be absolutely denied. Thus, the decision to take the invention to market, either to make sales or interest investors, could result in triggering events.
Please take note that this is the role only with respect to the USPTO. Patent protection in Europe is barred as soon as an invention is described in a publication if a patent application has not yet been filed. Because of the importance of international patent protection for products that have a global market, this issue must be considered.
If two patent applications are filed for the same invention, who gets the patent? In the U.S., the first to invent, but in most other countries and jurisdictions, the first to file for the patent. Sporting of us, isn't it?
Are there different types of patents? There are three types of patents: (1) utility patents, (2) design patents, and (3) plant patents. You can file a Preliminary Patent Application that will be sufficient to reserve your early filing date if it adequately describes the invention. Within one year after, you must file a formal patent application. Currently, applications for utility patents can be submitted online through the USPTO's “EFS” filing system. The application must describe how to make and use the basic invention, and distinguish the invention from all examples of “prior art,” that is, show how this is really your idea and not somebody else's. The patent application must also give a precise description, called “patent claims,” laying out which aspects of the invention deserve patent protection.
How long does it take to get a patent? The patent application may remain pending between one and three years, and usually requires the applicant to submit amendments. As you might imagine, eliminating the connection between a new invention and “prior art” can be quite challenging. Patent examiners are subject to being second-guessed by the courts on issues of either novelty or non-obviousness, and are often criticized for issuing “too many patents.” So they have every incentive to scrutinize applications closely. After the applicant overcomes all of the examiner's objections, the invention is approved for patent and the applicant pays a patent issue fee of $355 (or twice that for large companies). Keeping a patent in effect requires the payment of three additional fees during the term of the patent.
What does a patent provide me? If you obtain a design patent, you can happily enforce it for 14 years from the date of issuance. If you obtain a utility or plant patent, you'll enjoy 20 years of monopoly. Of course, that's 20 years in which to arrange for the manufacture, marketing, sale, and harvesting of profits from the commercial exploitation of your invention. Suffice it to say that at this point, you may find yourself dealing with some very large corporations. And cutting a licensing deal is going to be very important.
Is licensing a patent the right way to market my invention? The problem is, there is a conflict of interest between a licensor and a licensee. The patent holder is the licensor, and the manufacturer and marketer is the licensee. If you think about it for just a little while, you will realize that the licensee wants to spend as little as possible producing and promoting the licensor's product and get as much money as possible on that transaction. This may mean only selling the licensor's product through a website, where marketing costs are minimal but distribution is also limited. If your product is the type that will benefit from an ad in Oprah, or Architectural Digest, you'd like to know that the licensee has a budget and a commitment to buy those ads. This is especially important because the term of patent protection is limited, and once the golden years of monopoly are gone, if the idea has substantial value in the first place, lawful imitators will jump into the market as soon as patent protection is lost. Of course, if you had a really good idea, you will already have had problems from counterfeiters. If you negotiated well, your licensee will have taken up their responsibility to protect the patent via litigation. And patent litigation can be long and expensive.
Thus, extracting value from your patent may all come down to how well you negotiate your licensing agreement. Indeed, before you even bother to patent an invention, ask yourself the usual questions: Does anybody want this thing? How many people, and how much would they pay? Where would I advertise it, and to what types of purchasers? And you might ask yourself, “Is there an easier way to do this?”
Who owns an invention that is made during a period of employment — the boss or the employee? Unless the employee has agreed otherwise, the invention belongs to him or her. (The opposite of the rule applicable to works-for-hire in the copyright context.) If you hire people to invent things to solve your problems, you must use a special agreement found in the Legal Documents section, to secure ownership of patent rights to the invention.
Can I protect an invention some other way? As a practical matter, there might be a worthy alternative. It's called trade secrecy. But you get trade secrecy protection in precisely the opposite way you get patent protection. To get patent protection, you have to lay out the whole process in an application that becomes part of a government archive of information. That's considered the tradeoff. You get monopoly protection, but everyone knows what the invention is and how it works. But take Coca Cola for example. No one knows how to duplicate that taste except Coca Cola, because the formula is a secret. They hire CIA spooks to make sure it stays that way, probably. At any rate, it's the subject of our next section.