What if someone else invented with me (Co-Inventor Disagreements)?

When more than one person contributes to the conception of an invention, each person contributing will be a co-inventor of that invention on the corresponding patent application. The combination of all of those that contributed to the conception of an idea claimed in a patent is known as the inventorship of the patent or patent application. This article explains steps that can be taken to handle future situations where a disagreement arises between the co-inventors.

Inventorship
Inventorship cannot be negotiated. In other words, you cannot agree that someone that did not contribute to the conception of the invention is an inventor. Likewise, you cannot agree that someone that did contribute to the conception of the invention is not an inventor. If a person contributed to the conception of the invention claim in a patent application, that person must be named as in inventor.

Sometimes workman or engineers are hired to make a prototype of the invention. If the hired person only carries out your instructions for making the invention, then that person might not be considered an inventor depending on the circumstances.

Ownership
On the other hand, ownership of an invention can be negotiated and transferred. Therefore if one person conceived on the invention, and a second person provided funds to patent and commercialize the invention. The first person would be the inventor, but the second person could not be named as an inventor. Instead the first and second person could form a partnership, corporation, LLC, or other entity, where each person’s ownership interest could be divided in the entity and the entity could own the invention. Further, the first person could sell all of the right in the invention to the second person and then the second person would be the owner and the first person would be the inventor.

Joint Inventors
If there are two or more inventors, under the patent law, each inventor will own the patent jointly with the other inventors. However, under the law this allows each inventor to make, market, sell, license, or otherwise grant rights in the patent and receive moneys therefrom without splitting the funds with the other inventors. Further, the each inventor does not need to get permission from the other inventors to undertake such activities with respect to the patent.

Co-Inventor Disagreements
One problem arises, if all inventors are not in agreement. This can occur when one inventor is engaged with an company that has an interested in licensing or selling the product/service. They may be less likely to do a deal if they know that an uncorperative inventor could sell the same rights to that company’s competitor, in which case they would have to compete with that other company to sell the patented product. That competition would make the deal less valuable to either company than if they had no competition.

This is normally not a problem when all inventors are in agreement. However, it becomes a problem when inventors having a falling out or disagree about how the patent should be utilized. Further it is problem if one inventor wants to proceed forward with commercializing the invention and the other inventor no longer wants to participate. While at the beginning inventors maybe in agreement about how they intend to proceed, it can take between 3 and 5 years to obtain a patent and a lot can change during that time.

Legal Entity for Ownership and Invention Exploitation
Whenever there are more than one inventor it is best to form a legal entity in which the inventors own an interest (e.g. own shares). The ownership of the invention can be transferred to the legal entity. The internal operating documents of the entity can describe (1) the ownership interest of each inventor (and other non-inventors, if desired), (2) how the invention will be commercially exploited, (3) how disputes are resolved between inventors, (4) what happens if one or more inventors wants to proceed but other inventors do not, and (5) many other business considerations.

The legal entity formed can be a written partnership, a corporation, an LLC, or other entity. The legal entity provides the vehicle for owning the patent, making decisions with respect to the patent and its commercial exploitation, and dealing with situations where an inventor wants out of the business. Further the legal entity may be attractive to potential business partners and licensees because they would need to deal with one entity and not multiple inventors.

Therefore, forming a legal entity to own invention rights in an invention having multiple in inventors can lend clarity to the commercialization and decision making processes related to the invention and related patent application or patent.

Should I create a prototype before applying for a patent on my invention?

Prototyping_BreadboardYou are not legally required to create a prototype before filing a patent application. However, depending on your invention and the circumstances of your case, it may be beneficial to develop a prototype before filing a patent application, as explained below.

The U.S. patent laws do not require that you create or build your invention or otherwise create a prototype before filing a patent application. However, the law requires that your invention be described to the level of detail in your patent application where one skilled in the technical area of your invention (skilled in the art) can recreate your invention without undue experimentation by reading your patent application. It is best to to error on the side of more disclosure of details regarding the invention rather than less when writing a patent application.

Enough Detail
If you have a general idea about how your invention would work, but if you can’t describe how one important component of your invention would interact with another important component of your invention, then you may need to further engineer or prototype your invention before applying for a patent. On the other hand if you know for example your device needs a motor to operate certain components. But you are not inventing a new motor. And you know how those other components would interact with the motor, it may not be necessary to know all the internal details of the motor in order to proceed with a patent.

Further Inventing During Prototyping
It is well known that oftentimes when developing a prototype you will learn additional details about your invention and you may make changes and improvements during prototyping. There are at least two ways to deal with the possibility that prototyping will result in new details about your invention.

Multiple Patent Application Approach
The first is the most protective procedure. The first approach provides that you file a patent application on your invention before prototyping. The first application will record the details known that that time. Then prototyping proceeds. If additional details or changes are discovered or made to the invention during prototyping, then your patent attorney can evaluate whether a second application should be filed on the new material discovered or invented during prototyping. Further you can decide from a business perspective whether the new details are sufficient to justify the cost of a second application.

Prototype First Then Patent Approach
The second approach is to develop a prototype before filing a patent application. You will want to have any third parties that you work with to develop a prototype sign a nondisclosure agreement (NDA), because it is important that your invention be maintained as confidential before patent filing as explained here. After prototyping is complete, when a patent application can be prepared including any new details discovered during prototyping.

Evaluating Novelty of New Details
There are some details that might be discovered during prototyping that would not warrant a new patent application. Such details depend on your particular circumstances and invention. For example, if during prototyping you discover that the overall length of your invention should be longer than previously anticipated. That discovery might not warrant a new application. Generally the scaling up or scaling down of an otherwise scalable component that produces expected results from such scaling does not substantially impact the patentability of an invention or a feature. The exception to this rule is when the scaling was achieved when such scaling was not previously possible or thought possible in the relevant art. Your patent attorney can advise you whether any changes or invention that occurred during prototyping is likely to warrant inclusion in a second patent.

Conclusion
I often evaluate inventions to determine (1) whether further engineering is recommended before patenting or (2) whether it is recommended to file a patent application first. The approach depends on the particular circumstances of your invention and the extent to which the important details of your invention have been developed or might be further developed during prototyping.

Photo credit to flickr user Maciej Wojnicki under this creative commons license. The photo shows an electronic breadboard, which is often used to create and test prototype designs in the electronics field.

What is Prior Art?

In general, the US only rewards inventors that conceive of “new” ideas or inventions. To determine if an invention is “new” the US Patent Office (or a US Court) compares the invention to “prior art.”

In general, “prior art” consists of disclosures or events that occur before a person conceives of an invention, or in some cases before a person files a patent application. In the United States, this concept will change after March 16, 2013 under the new patent law (the Amercia Invents Act or “AIA”). Prior art is important because, if that prior art discloses or suggests the invention, then the invention is not considered new and the prior art disqualifies a patent from being granted on the invention.

Pre-AIA
For US patent applications filed before March 16, 2013, an inventor could “disqualify” some prior disclosures and events as prior art by showing that he conceived of his invention and worked on the invention diligently before the date of the prior disclosure or event, as long as the prior disclosure or event did not occur more than one year before the inventor filed his US patent application on the idea. This allowed an inventor to benefit from his invention without the inventor having to rush to file a US patent application, as long as he still filed promptly within one year from the first occurrence of the prior disclosure or event.

Post-AIA
For US patent applications filed after March 16, 2013, prior disclosures or events that occur before the inventor actually files his US patent application cannot be disqualified as prior art by the inventor unless the inventor can demonstrate that the prior disclosure or event was in fact derived from the inventor’s own work and the disclosure or event occurred less than one year before the inventor filed his patent application. Thus, under the new patent law, an inventor can disqualify a prior disclosure or event by another person as prior art if he can show that the disclosure or event was his own work, i. e., the disclosure or event was not independently created by the other person, and the disclosure or event occurred less than one year before his US patent application was filed. Also, be aware that this is the law in the US; in many countries any disclosure or event that occurs before a patent application is filed, even of the inventor’s own work, depending on the circumstances, can disqualify the patent application.

Examples of Prior Art
What types of disclosures could be considered as “prior art?” Any publication such as a brochure, a magazine article, a published patent or patent application, advertising, a web page, a college thesis, or instructions that accompany a product may be considered a prior art disclosure depending on the circumstances. The text of the publication may be in any language. The disclosure can be no language at all, just pictures. The publication can be located in any country of the world.

What types of events could be considered as “prior art?” A public showing of a product, a public or private offer for sale, a sale of a product, prior invention by another, a prior filed patent application, public use or commercial use of a product, or public knowledge of the invention are all examples of events that could be considered “prior art” depending on the circumstances.

Exceptions
There are exceptions to the above disclosures and events qualifying as prior art. For example, some public uses may be considered experimental under some circumstances. Some inventions by another person may not be prior art if the prior invention remained secret and was abandoned by the prior inventor. There also may be ambiguity in what is considered a “public” showing or use, or a “publication.” It is important to review particular details of the suspected prior art with a patent attorney.

What is a Patentability Search and Opinion?

PatentSearchThis article provides reasons why you should have a patentability search performed and addresses common questions regarding patentability searching and resulting patentability opinions. A patentability  search is designed to tell you the likelihood of obtaining a patent on your invention. The law does not require that you do a patentability search search (also known as a patent novelty search) before filing a patent application, however often a search is the right first step in the patent process.

When a U.S. non-provisional patent application is properly filed, an Examiner at the Patent Office will perform a patent search on the invention as set forth in the claims of the patent application to determine whether you should be granted a patent. So why should you have a patentability search performed if the Patent Office will do one regardless? A patent search is almost always recommended so that you can avoid the cost of preparing, filing, and prosecuting a patent application on an invention for which a patent is not likely to be granted or for which the business value of the patent may be limited due to the prior art. The results of a patent search can also be used by a patent attorney to draft a stronger patent application on your idea.

Purpose of the Search
The purpose of a patentability search is to determine whether and which of the details of your invention are new. Patents are only granted for new inventions. If a prior patent or patent application discloses each and every detail of your invention then you will generally not be able to obtain a patent on that invention—because the invention is not novel (e.g. new). A search is therefore designed to give you information about whether you are likely to obtain a patent on your invention.

If the patentability search results show that you are not likely to obtain a patent on your invention because each and every detail of your invention is disclosed in a prior patent or patent application, then you can avoid spending money for preparing, filing, and prosecuting the application. In this way, you can think of a search as insurance against the risk of not obtaining a patent after spending money preparing, filing, and prosecuting a patent application.

If (a) not all details of your invention are found during the search or they not found in one prior art reference and (b) assuming the unfound details provide a patentable improvement over prior art, then the question will arise whether it would be worth pursuing a patent on those details that were not found during the search. This becomes a business question for you to decide. The patent search assists in determining the scope of patent protection you could obtain (e.g. what aspects or details of the invention could be protected and what aspects could not be protected). Aspects that the search reveals could not be protected could be copied by competitors. Therefore you are in a position to determine whether it makes business sense for you to pursue protection on the aspects of your invention that could be protected by a patent.

Patentability Searching vs. Patent Clearance Searching
A patentability search is different from a patent clearance search or a non-infringement search. Patent clearance searches and non-infringement searches are designed to address whether the commercialization of your idea would infringe any patent owned by someone else. A patentability search is not designed to address whether the commercialization of your idea will infringe any patent owned by another. The references to searching in this article refer to patentability searching and not patent clearance searches and or non-infringement searches.

My Product is Not on the Market, Do I Need to Search?
Generally, yes. The fact that your product is not available in the market does not necessarily mean you will be granted a patent on that product. The sale of a product in the market place may be one way of determining whether an idea is new. However, the publication of an idea in a patent or patent application is another way to determine whether an idea is new. There are countless patents and patent applications at the Patent Office that disclose products that are not currently on the market. So even if your product is not on the market, it may be disclosed in a patent or patent application at the patent office. Therefore, a search is recommended even when the product is nowhere to be found on the market.

Why would there be a patent or patent application on an idea, but that idea is not found in a product on the market? There are numerous reasons why a patented idea is not found in a product on the market, such as (1) the patent owner did not have access to sufficient capital to develop the product, (2) the owner could not gain access to retail space or appropriate channels of trade, or (3) the owner could not gain sufficient publicity or consumer interest in the product, etc. So while a patent can provide a competitive advantage, a patent is no guarantee of commercial success for the corresponding product.

Can I Do My Own Patent Search?
Yes, but just like many other do-it-your-self projects, a professional may achieve better results than you would on your first try. However, you may like to perform patent searching on your own because you may identify relevant prior art references, which if such references disclose all the features of your invention, would enable you to avoid the cost of hiring a professional patent searcher. However, before concluding your invention is not patentable based on the results of your search, you should consult a patent attorney for advice as to whether under the law you would be able to obtain patent protection even in light of the prior art references you found.

You can search at the U.S. Patent Office website. However, presently only patents going back to 1976 are word-searchable at the patent office website. All patents are searchable by patent class. You can also search through other search tools, such as Google Patents.

In any event, even if your search results do not reveal any obstacles to seeking a patent, it is best to engage a professional patent searcher, such as a patent attorney or trained patent searcher, to perform a search as a professional patent searcher may uncover results that you did not find given the professional searcher’s experience, access to search tools, and knowledge of searching techniques.

Need for Explanation of Patent Search Results
It is important to understand before requesting a patent search, what you will receive when the patent search is complete. Will you be given a patentabiliy search with a patent attorney’s opinion as to the chances of obtaining a patent on your idea along with an analysis of the results? Or will you only be given a pile of patents and patent applications with no analysis?

While sometimes the results of a patent search might be apparent from the patent references themselves, often it is necessary to have a patent attorney explain what the patent search results mean. For example, after reviewing the patents and patent applications from a patent search you might come to the conclusion that your idea is not patentable because it is obvious in view of the results. However, the obviousness doctrine under the law is not synonymous with the common meaning of the word obvious and a patent attorney may have a different opinion that your idea could be patentable and may not be found obvious under the law.

Many low cost patent search providers do not provide an analysis of the search results but only provide you with a pile of patent documents and leave it up to you to figure out what they mean. We think it is important to obtain a patent attorney’s analysis of any patent search results.

Am I Guaranteed to Get a Patent After A Patent Search?
The short answer is no. Even if a patent search provides results that show a favorable position for the client to proceed with a patent application, non-public prior-art may still exist which could prevent you from obtaining a patent. Most U.S. Patent applications are secret or not publicly available for 18 months after the date that the patent application is filed. Some patents are not publicly available until, and if, the application issues into a patent. However, a patent application that was filed a month ago on the same invention as your invention, would not be discovered in a patent search today, but could be considered prior art that could prevent you from obtaining a patent on your invention.

This seems unfair. Why can non-public patent applications be used as prior art against my invention? The publication period and prior art effect reflects a balancing between informing the public of inventions in patent applications and some patent applicants’ desire to keep the applicant’s idea private before a patent is issued to prevent copying during the patent pending stage.

Even though a patent search cannot guarantee a patent will result from a patent application on the invention, a patent search is a reasonable step to ensure that publicly available prior art patents or patent applications do not exist that could block you from obtaining a patent on your idea.

Can the Results of a Patent Search Inform the Value of a Patent on my Idea?
The question of the value of a particular patent is a difficult question that is the subject of many different types of analysis. However, you should consider that a patent may have value in a number of ways, such as: (1) the extent that you can stop competitors from copying your idea, (2) the extent to which other companies will be interested in paying you for a license to make or use the technology of your patent, and (3) the extent to which customers, inventors, financial institutions, and others will be impressed by you having a patent in a way that is helpful to you.

With respect the first and second points above, a patent may be considered valuable to the extent that others cannot design around your patent and provide customers a similar product while not infringing your patent. A patent attorney will seek the broadest protection on your idea to reduce the possibility that competitors could design around your patent. However, a patent attorney cannot draft the claims in your patent that would cover the prior art. Therefore a patent search can inform you of how broad the scope of protection you could achieve by showing you what a patent on your idea could not cover. A patent on your idea could not cover the prior art. Therefore if the patent search reveals prior art which your competitors can use and which your patent can not cover, then you must consider whether the features of your invention that are not disclosed in the prior art are features which your customers would seek out or whether customers would be happy with the unprotectable features shown in the prior art. In other words, are the new features of your invention sufficiently important to customers, such that customers will seek those features from you as opposed to choosing features in the prior art provided by competitors? To the extent that the results of a patentability search assist in considering those questions, the search may be helpful in determining the business value that a resulting patent might provide. A patent is no guarantee of the commercial success of your idea, especially if customers are happy to use products having prior art features.

To illustrate this idea further, consider a scenario where a patent is analogized to a fence that is placed around a plot of land. In this analogy a patent is like a fence and the land within the fence is like your idea or invention claimed in a patent. The fence allows you to determine who can occupy or use the land and what they must pay for doing so. The fence is valuable to the extent that customers want to occupy or use your plot of land for the price you offer for access to the land. If the customers are happy to use alternatives such as competitors’ land or public land, then your patent is worth less than it would be if customers were unhappy with the alternatives and sought your land because of the features and benefits unique to your land.

Conclusion
A patentability search is generally helpful in determining whether you could obtain a patent on your idea. It is also helpful in determining the scope of patent protection that you might be able to achieve.

Freedom to Operate and Patent Clearance Searching & Opinions

PatentSearchA freedom-to-operate opinions involve an analysis of the results of a clearance or non-infringement patent search to determine whether a particular product, service, or group of products or services, if commercialized, would infringe patents owned by others, or stated another way, whether the client has the freedom-to-operate regarding the product or service at issue. This is different from a patentability search, which seeks to determine whether or not an idea is new and could be protected applying for a patent.

What is involved in a Clearance or Non-infringement Search?
A non-infringement search begins by first considering in what jurisdiction the product or service will be sold. For the purposes of this article we will consider the scenario where the product is sold in the United States. When the product will be sold or the service operated in a foreign jurisdiction, such as in Europe, foreign attorney’s assistance is likely necessary.

Next the search scope is determined by considering the features of the product or service at issue. Then a patent search is performed comprising the search scope previously determined. Then during the patent search relevant patents are flagged for further analysis.

The flagged patents are then checked to see whether they are expired due to age or due to a failure of the patent owner to pay a maintenance fee. Maintenance fees are due at 3 ½, 7 ½, and 11 ½ years after the patent issues. Expired patents generally cannot be infringed, except in the case that the patent owner timely petitions to revive a patent after failing to timely pay the maintenance fee. However, in such a case of revival, the law provides certain protections, called intervening rights, to someone that makes substantial preparations to manufacture, use, offer for sale, or sale while the patent was expired (after the 6 months grace period).

Patent Analysis
Of the flagged patents that are not expired beyond the grace period, a detailed analysis occurs to determine whether such patents pose an infringement risk to the product or service at issue. The detailed analysis involves interpreting the meaning of the claims and the terms within the claims. The interpretation includes reading the specification of the patent and reviewing the drawings. It can include reading the file history of the patent application that corresponds to the subject patent to determine whether anything that occurred during the prosecution (the interaction between the patent applicant and the Patent Office) of the patent application will shed light on the meaning of any terms in the claims. The interpretation may also include reviewing the prior art cited in the subject patent. Further steps may be taken during the analysis, such as, performing further prior art searching to determine whether prior art limits the scope of claim terms at issue.

The closer the patent claims are to the product or service at issue and the more ambiguous the claim terms are, the more time it is likely to take to determine whether the patent claims present an infringement risk.

Invalidity Search and Analysis
In some cases, the product or service does not avoid one or more claims of a patent after interpretation and analysis of the terms of those claims. In such cases, an invalidity analysis may need to be performed. An invalidity analysis seeks to determine whether the Patent Office made a mistake and granted the patent owner more protection that they had a right to in view of the prior art (e.g. previous inventions and publications). In other words, an invalidity analysis asks: did the Patent Office grant the patent owner protection over an idea that is not new? An invalidity analysis requires further searching or consideration of the prior art to determine whether claimed features in the patent are in-fact not new in view of that prior art.

Even if a patent attorney determines that one or more claims of a patent are invalid, there’s no guarantee that the patent owner will agree. Therefore proceeding forward with a product that would infringe a claim that a patent attorney has opined is invalid, still presents a risk that the patent owner will sue based on that patent.

Conclusion
A clearance search is used to determine whether you product is likely to infringe another’s patent. An invalidity analysis considers whether the Patent Office made a mistake and granted the patent holder more protection than they were entitled to receive. These steps can assist you in determining whether there is a patent risk in proceeding with the sale of a product or service within the United States.

How do I find my competitor’s patents or patent applications?

Often we are asked to find out whether a specific competitor has a patent or patent application that would cover (1) the client’s product or (2) a known product of the competitor’s. There are several approaches that can uncover patent or patent application information about a competitor depending on the circumstance. Information about the patent activity of a competitor my provide you with with information about your competitor’s planned activity before it is seen in the marketplace.

The Public Disclosure Patent Bargain
The bargain of a patent is that you provide information about your invention to the public—by describing the invention in a patent to the level that one skilled in the art could practice the invention—and in exchange the government grants you a time-limited monopoly on your invention. This way invention is encouraged through the monopoly to the inventor and technological arts and sciences are advanced by the disclosure of the invention to the public.

Therefore the content of a patent is publicly available information. In the United States, patent applications may also be public. Therefore it may be possible to discover a competitor patent application before it becomes a patent. As a result, publicly available patent information can provide you competitive business intelligence regarding your competitors.

The default rule in the U.S. is that patent applications are published 18 months after the earliest filing date. However, there are exceptions to this rule. For example, if the applicant requests non-publication or if the application is subject to a government secrecy order, then the Patent Office will not publish the application. Non-publication is not allowed if the applicant wishes to seek foreign patent protection.

A Known Number
If the patent number or patent application number is known then it is easy to retrieve the corresponding patent or patent application. For example to your type the number in the Patent Office Search Tool or the Google Patent Search Tool and retrieve the patent or patent application.

Unknown Number
In the case of a patent application, the patent application may not be known. This can occur because the competitor product is marked with “patent pending” but without any corresponding number. This can also occur if the product or literature is not marked. Further this can occur, if the client is not aware of a competing product or service from a competitor, but would like to know if there are any publically available patent applications that would inform the client what product development activities the competitor is undertaking.

There are several methods that might reveal a competitor’s public ally available patent information.

Assignee/Owner
An assignee search can be performed looking for any patent application that names the competitor company as an assignee (owner).

Patent applications are often filed in the name of the inventor rather than in the name of a company. Therefore it is possible that a company could file a patent application on behalf of one of its inventor/employees without identifying itself as the owner of the subject matter of the patent application. Further, it is possible that an owner might file a claim of ownership (record an assignment) after the patent application is published. In these scenarios, searching for the competitor company name at the patent office might not reveal a patent application that is owned by the competitor.

Inventor Information
Each patent application generally must name the inventor(s) of the subject matter of the patent. Therefore if the names of probable inventors/engineers associated with the competitor are known, then a patent search and patent application search can be performed looking for any patent or application that names those inventors or engineers.

When the competitor is a small company, it may be likely that the owner of the company will be an inventor. Therefore, a patent search can also be performed looking for any patent application naming the owner as an inventor. For more on identifying inventors see: How to Find a Competitor’s Patents or Patent Applications – Part 2.

Invention Subject Matter Searching
In addition to searching for the assignee and inventors, searching on the subject matter of the invention at issue can uncover patents or patent applications that are connected with the competitor company.

Conclusion
There are a number of ways to discover your competitors patent and patent application activity. Searches can be conducted of published patents and patent applications for certain assignee (owners) and/or inventors. Searches can also be conducted for patent documents having the subject matter of the invention at issue. These searches can provide competitive business information about the invention and product development activities of competitor.

Claims to Intermediated Financial Settlement Not Patent Eligible; Software Patents Still Alive

Alive_v_CLSBankThe U.S. Supreme Court issued its decision in Alice v. CLS Bank (June 19, 2014) touching on the patent-eligibility of software implemented inventions. The decision continues to allow patent protection for software innovation and technological solutions implemented with software. Therefore all software patents are not dead in the wake of this opinion, in fact, most survive under the USPTO’s interpretation.  However, this decision limits or eliminates, depending on the circumstances, the ability of one to obtain a patent covering a fundamental economic practice long prevalent in commerce that is merely implemented in a generic computer using generic functions without more.

The patents at issue in Alice were directed to using a computer to mitigate financial settlement risk, i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. The court found that all of  the claims at issue are drawn to “the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fail[ed] to transform the abstract idea into a patent-eligible invention.”

Mayo Framework
The court followed the two step framework presented in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U. S. ___ (2012), to determine whether the claims at issue were directed to an abstract idea. First, the Court determines whether the claims at issue are directed to a patent-ineligible concept (e.g. laws of nature, natural phenomena, or abstract ideas). If so, the second step is to determine whether there are additional elements in the claims that transform the nature of the claims into a patent-eligible application of the law of nature, natural phenomena, or abstract idea at issue.

Software is Still Patentable
The court asserted that the claims at issue in Alice did not improve the function of the computer itself, nor effect an improvement in any other technology or technical field. So at least software that does either of those things should be patent eligible. Further, the court acknowledged that it must tread carefully so that the rules about abstract ideas or other excluded subject matter do not swallow all of patent law. This is true because at some level all inventions use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas. The court continued to recognize that the application of a law of nature, natural phenomena, or abstract idea to a new and useful end remains patent eligible.

Method Claims
The Court first looked at the method claims in Alice. In the first part of the Mayo framework, the court found that the method claims were directed to the abstract idea of intermediated settlement. The Court cited a 1896 publication discussing the use of a clearing-house as an intermediary to reduce settlement risk.

In the second part of the Mayo framework–whether there are additional elements–the court found that “the method claims, which merely require a generic computer implementation, fail to transform that abstract idea into a patent eligible invention.” The Court stated that the “wholly generic computer implementation is not generally the sort of ‘additional featur[e]’ that provides any practical assurance that the process is more than a drafting effort designed to monopolize the [abstract] idea itself.” The Court found that the method claims at issue did not do more than instruct the practitioner to implement the abstract idea of intermediated settlement on a generic computer.

The Court noted that the method claims did not improve the function of the computer itself, nor effect an improvement in any other technology or technical field. The Court found that all the computer steps were “well-understood, routine, conventional activities previously known to the industry.” Further, the Court found that the ordered combination of the steps using a generic computer added nothing that was not already present when the steps were considered separately.

The Court found that the computer readable medium claims failed for the same reasons as the method claims and because Alice conceded that the computer readable medium claims raise and fall with the method claims.

System Claims
The systems claims fared no better than the method and medium claims. The Court discounted arguments that the system claims were not abstract because they included specific hardware configured to perform specific computerized functions (“… a data storage unit having stored therein information….”, “a computer, coupled to said data storage unit, that is configured to…”, “a communications controller”, etc). The Court found these items were “purely functional and generic.” The Court stated that “Nearly every computer will include a ‘communications controller’ and a ‘data storage unit’ capable of performing the basic calculation, storage, and transmission functions…” Therefore, the Court found that the hardware recited by the system claims did not offer “a meaningful limitation beyond generally linking the use of the method to a particular technological environment.”

The Court found that the system claims were no different from the method claims in substance. The court stated, “The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea.” The court stated that to interpret the method claims as patent-ineligible, but then interpret the system claims as patent-eligible would go against the Court’s previous precedent that section 101 should not be interpreted in ways that make patent eligibility depend on the patent draftsman’s art (e.g. the manner in which the claims are drafted).

Analysis: Generic Computer
Some have argued that  Court has imported the question of novelty, usually reserved for consideration under section 102 and 103, into the 101 patent-eligibility analysis under the second question: “whether there are additional elements in the claims that transform the nature of the claims into a patent-eligible application.”

The argument is that under the second step we must ask: are the additional components of the claim beyond the abstract idea old and well known? Whether something is old or well known if usually a questions determined under sections 102 and 103 by looking to see if the claimed subject matter is disclosed in the prior art or legally obvious in view of the prior art.

At least one commentator suggests that the court did not import a novelty test into the section 101 analysis, but instead presented a question of whether the claim does significantly more than state a fundamental principle connected with an instruction to “apply it.” The court said, “Stating an abstract idea while adding the words ‘apply it”’ is not enough for patent eligibility. Nor is limiting the use of an abstract idea “‘to a particular technological environment.” The Court said, “Stating an abstract idea while adding the words ‘apply it with a computer’ simply combines those two steps, with the same deficient result.” Therefore the reference to a generic computer not being enough is simply a recognition that Alice’s claim did no more than apply a old principle in a generic computer.

While the court provides that a generic computer is not enough to transform an abstract principle into patent-eligible subject matter, another commentator  notes that the court does not provide much guidance on what is enough.

Not Abstract: Technological Solutions
As yet another commentator noted, the Court provided in Diamond v. Diehr, 450 U.S. 175 (1981) that a process of curing rubber using a well known mathematical equation was patent-eligible not because it involved a computer, but because the claimed process improved an existing technological process. Therefore, inventions directed at improving a technological problem should not be found to be abstract under section 101.

The question arises, what is a technological problem? At least the areas of applied economics and finance, such as intermediated settlement, which provide a non-technical method of organizing human activity are excluded from the meaning of technological.

USPTO Interprets Alice
On June 25, 2014, the USPTO issued a memo to its patent examiners instructing how to apply the ruling in Alice to pending patent applications. The memo instructs examiners to follow the two step Mayo analysis. The memo provides these examples of abstract ideas referenced in Alice under the first step of Mayo:

  • Fundamental economic practices
  • Certain methods of organizing human activities
  • An idea itself
  • Mathematical relationships/formulas

The memo instructs that inventions are not patent ineligible simply because the invention involves an abstract concept. The application of an abstract idea in a meaningful way is patent eligible.

If any of the above abstract ideas are found in the claims, the Examiner must proceed to the second step of Mayo to determine whether the claim is nonetheless patent eligible because it has additional elements that amount to significantly more than the abstract idea itself. Examples of limitations that may be enough to qualify as significantly more when recited in a claim with an abstract idea include:

  • Improvements to another technology or technical field
  • Improvements in the functioning of the computer itself
  • Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment

The USPTO noted that limitations that are not enough to qualify as significantly more include:

  • Adding the words “apply it” (or an equivalent) with an abstract idea, or mere instructions to implement an abstract idea on a computer
  • Requiring no more than a generic computer to perform generic computer functions that are well-understood, routine, and conventional activities previously known to the industry.

Conclusion
While patent protection for software directed to fundamental principles of economics and finance without more is limited, patent eligibility for protecting software innovation and technological solutions implemented with software is still alive after Alice.

Start with a provisional or a non-provisional patent application?

Fork in the roadThis post is designed to explain the difference between a U.S. Provisional Patent Application and a U.S. Non-Provisional Patent Application. In addition this document will explain circumstances in which one might be preferred over the other.

You may think of the provisional or non-provisional patent application as two routes to obtaining a patent. The non-provisional route providing a one step start to the patent process and the provisional route providing a two step start to the patent process. Either route, when properly carried out, can result in a patent. The two-step provisional process will take about one year longer to receive a patent than the one step non-provisional route.

Non-Provisional Route
A U.S. non-provisional patent application is a patent application that when properly filed with the U.S. Patent and Trademark Office is placed in a queue, examined by a Patent Examiner. If the claims of the non-provisional patent application are ultimately determined by the Examiner to meet the legal requirements, the non-provisional patent application may issue into a U.S. Patent. Each non-provisional patent application should contain a title, a background of the invention, a summary of the invention, a detailed description of the invention, one or more claims, and drawings. Also an oath or declaration complying with the applicable rules is also required. A fee of about 530 dollars is also required (assuming you qualify as a small entity).

Provisional + Non-Provisional within 1yr Route
You can think of the Provisional route as providing a two-step start to the patent process whereas the non-provisional application route is a one-step start.

The first step in the Provisional Route is to file a provisional patent application. The inventor’s oath or declaration and claims are not required for a provisional application. The provisional application filing fees are lower (about $125 for a small entity). The provisional patent application must include a description of your invention.

To ensure that resulting patent claims receive the benefit of the provisional patent application filing date, we recommend that a provisional patent application be drafted in the same manner as a non-provisional application, except that claims need not be included in the provisional application. In addition we often draft at least some claims for a provisional application. If an application fails to provide an adequate description of the invention, this may negatively impact the inventors ability to obtain a valid patent.

The Patent Office will not examine a provisional application and will not issue a patent directly from a provisional application. Therefore, there is no such thing as a “provisional patent” only a “provisional patent application.”

So why would you proceed with a provisional application if it does not directly result in a patent? A patent can result from a non-provisional patent application filed within one year of the filing date of the provisional application, where the non-provisional claims the benefit of the provisional application. The filing of the non-provisional within one year is the second step of the two step process.

In order to retain the benefit of the filing of a provisional patent application, a non-provisional patent application that claims the benefit of the provisional application must be filed within one year of the filing date of the provisional application. If a non-provisional patent application claiming the benefit of the provisional application is not filed within one year of the filing date of the provisional application, then the benefit of the provisional application filing date will be lost.

The Provisional Route Takes Longer
The two-step provisional route takes longer than the 1 step non-provisional route. This is because the provisional application is never put in a queue at the patent office to be examined, only non-provisional applications are placed in the queue and examined.

Lets see how this works in the following example which compares the 1-step and the 2-step routes.

Non-Provisional – 1 Step Route
John’s attorney files a non-provisional patent application on January 1, 2012. The USPTO then places the application in the queue to be examined by a Patent Examiner. The average wait time until an Examiner examines a patent application is about 24 months. Therefore around January 1, 2014 an Examiner will being the examination process. Thereafter the Examiner will negotiate with John’s patent attorney, during what’s called patent prosecution. If the Examiner and John’s attorney come to an agreement on the scope of the claims in the patent application, the Examiner will allow the application to issue into a patent. The average wait time from the date of filing to the issuance of a patent is about 3 years. Therefore, if John’s case is average, he will be issued a patent around January 1, 2015 (3 years after the filing date). The resulting patent will have an effective filing date of January 1, 2012.

Provisional – 2 Step Route
Now lets look at a scenario where John first files a provisional patent application and then files a non-provisional application within one year. John’s attorney files a provisional patent application on January 1, 2012. The USPTO sends John’s attorney a filing receipt for the filing of the provisional but the USPTO does not place the provisional application in the queue to be examined by a Examiner. Remember provisional patent applications are not examined. John’s attorney places a reminder on his calendar to file a non-provisional patent application within one year of the filing of the provisional application. Before January 1, 2013, John’s attorney asks John if John wants to continue to pursue a patent on John’s invention. If John says Yes, John’s attorney prepares and files a non-provisional patent application claiming the benefit of the provisional application on or before January 1, 2013. Now the non-provisional application will be handled as described above in the one-step, non-provisional route, except the process starts one year later.

The USPTO now puts John’s non-provisional application in the queue to be examined by a Patent Examiner. In about two years, around January 1, 2015, an Examiner will being the examination process. Thereafter the Examiner will negotiate with John’s patent attorney during patent prosecution. If the Examiner and John’s attorney come to an agreement on the scope of the claims in the patent application, the Examiner will allow the application to issue into a patent. If John’s case is average, he will be issued a patent around January 1, 2016 (3 years after the filing date of the non-provisional application). The resulting patent will be giving the benefit of the filing date of the provisional application and therefore will have an effective filing date of January 1, 2012.

Therefore, as you can see each route results in a patent that has an effective filing date of January 1, 2012. However, the one step route results in a patent issuing a year earlier than the two step route.

Why Go the Provisional, 2 Step Route?
There are at least two reasons why one might choose the two-step provisional route.

Disclosure Needed Before Complete Development
Another reason the two step approach might be chosen is when disclosure is needed before the invention is completely developed. Often new products are developed on a deadline so that the product can be shown to a customer, presented at a trade show, or otherwise made available to the public. U.S. Patent law encourages the filing of a patent before certain events, such as a public showing or an offer for sale of invention. Therefore, if you are on a deadline to make an offer for sale or a public showing, but you believe that you will further develop the invention or you will add features to the invention within one year, a provisional application can be drafted and filed on the invention before any showing so as to provide the most protected approach.

Then if further developments are generated within the year of the first provisional application, additional provisional applications can be filed, and then the non-Provisional application filed within one year of the first provisional can claim the benefit of each of the provisional applications. Also, the new developments can be added to the non-provisional application filed on or before the one year date. The new developments will only be accorded a filing date when they are provided in a patent application. This approach reduces overall patent costs when products are developed over time when intervening offers of the invention or showing are required.

Cost Spreading/Shifting
The first reason is to reduce the up-front cost of filing a patent application and to spread the patent application cost over a year period. Lets take an example of a simple invention. A very simple invention might generally cost $3500 in attorney’s fees to prepare a non-provisional application. The filing fee for a non-provisional application for a small entity is about $530. Therefore the total cost of filing the application in a 1-step non-provisional route is $4030.

Now lets look that the two step provisional application route for the same invention. Lets assume that it cost $1500 in attorney fees to prepare claims for the invention. Since claims are not required in a provisional application the total attorney’s fees for preparing a provisional application on that invention would be $2000. The filing fee for a provisional application for a small entity is about $125. Therefore the total cost to file the provisional application on that same invention would be $2,125, which is $1905 less than the cost to file the non-provisional application. Therefore the up-front cost to file a provisional is less than the up-front cost to file a non-provisional.

However, a non-provisional application claiming the benefit of the provisional application must be filed within one year of the filing date of the provisional. Assuming there is no change in the invention and therefore no change in the application content at the time of preparing the non-provisional. Claims would be drafted and added to the content of the provisional application. The cost of drafting the claims would be $1500 (the cost not incurred above when writing the provisional application). The government filing fee for the non-provisional is $530. Therefore, the cost of the second step, filing the non-provisional application, is $2030.

Under the two step process, the cost of the application is split over a year’s time: $2,125 for the provisional application + $2030 for the non-provisional application, which totals $4,155. As you can see the two step process cost an additional $125—the cost of the provisional application— which is not incurred in the one step non-provisional process.

Therefore, in this example for a very simple invention, you can see that for the addition of $125 to the overall cost of the application, $1,905 can be reduced from the initial application cost and shifted about one year down the road.

Furthermore, if events develop during the time between the filing of a provisional application and the deadline for filing the non-provisional application, such that you do not want to proceed with patenting your invention, then $1905 is saved. This might happen if you determine the cost of commercializing your invention is more than expected or the market did not respond as expected to your invention. The two-step route gives you a year to determine whether a patent on your invention is worth further pursuing from a business perspective while keeping the initial application cost to a minimum. The foregoing cost represent a hypothetical example. Actual cost will vary depending on the invention and may not conform to the above example.

Should I Write My Own Patent Application (DIY Patents)?

DIY_PatentsYou may wonder whether you should write and file your own patent application (e.g. a DIY (do-it-yourself) patent application) or whether you should have a patent attorney file directly a patent application that you wrote. This posted explains why we generally don’t just file the documents you give us as a provisional patent application without review. However, client written materials are usually a good place for us to start.

Since there are few requirements that must be met for the USPTO to accept a document as a provisional patent application, there are a large variety of disclosures in provisional patent applications. Since the USPTO will not examine a provisional patent application, they will not scrutinize the level of detail provided in any document that is filed as a provisional application. Given this, there is a wide range in the level of detail among provisional applications that are filed. This can range from a back-of-the napkin sketch of an invention filed as a provisional to a full application that you would see filed as a non-provisional application.

As a general rule we only file provisional applications that look like a non-provisional application, except that the provisional might have fewer claims. We generally will not take client-drafted documents and file them directly without review and revision to meet our non-provisional application standard for the reasons explained below. We think this approach best serves our client’s patent needs.

Priority Date
First, the reason for filing a patent application is to seek a resulting patent or at least to hold open the opportunity to obtain a patent on an invention. Patents are only granted on inventions that are new. Therefore, one function of the filing of an application is to establish a priority date (filing date) of the application. The priority date generally establishes your rights in the invention as of the priority date (with some exceptions). Therefore someone inventing or filing a patent application after your priority date should have inferior rights to you. In sum, the priority date (the filing date) of your provisional application gives you rights in your invention superior to later inventors of the same invention.

However, in order for your invention (or subfeatures or functions thereof) to be granted the priority date of your provisional application the invention must be enabled and adequately described. If a court later finds that the disclosure of your provisional application was inadequate, you could loose the benefit of the provisional application filing date. If priority is lost with respect to all or a subset of the features of your invention, it would be as if the provisional application was never filed on those features. In other words, to gain a benefit from the provisional application, the provisional application must be drafted properly and completely.

In order to obtain a patent, a non-provisional application claiming priority to the provisional must be filed within one year of the filing date of the provisional application. If information must be added to the subsequently filed non-provisional application because the provisional application did not contain sufficient detail, a question will arise as to whether that new information will receive the benefit of the provisional filing date.

Example
Why does this matter? Lets look at a hypothetical scenario. Assume that you file your provisional application on A+B on January 1, 2012. Then you consult with an attorney and the attorney notes that you left out some important details in the description of your idea. Lets call those left-out ideas “C.” So the attorney prepares a non-provisional application having A+B+C and claims priority to the provisional application. The non-provisional is filed on December 12, 2012. If +C would not be known to one skilled in the art by reading your provisional application, then A+B will get the benefit of the January 1, 2012 but A+B+C will not.

Assume that on October 1, 2012, another inventor “John” files an application on A+B+C (John did not learn of the invention from you, but independently invented). Therefore, it is possible that inventor john will have rights to the invention A+B+C over you because he was the first to disclose the A+B+C combination in the patent application (certain exceptions to this might apply). This may be true even if you intend your provisional application to cover A+B+C, but did not provide sufficient detail. What is the likelihood that “John” the inventor would file an intervening application? It is impossible to know. However, if you are proceeding forward with business plans on your invention in reliance on the provisional application, you want to be sure that you can actually rely on it.

Important Details
The wording in a patent application, provisional or non-provisional, is extremely important. Often times in patent disputes after a patent is granted, attorneys are wishing that just one additional word had been added to the corresponding patent application at the time of drafting that would make the case or thankful that that word is not there, depending on which client (the patent owner or the accused infringer) the attorney represents.

Too much and Not Enough
While it is not impossible for a client to draft a provisional patent application that meets the description and enablement requirements–and we have on occasion seen a well drafted application prepared by a client–most times we find that after reading a client-drafted application we would not feel comfortable opining that the client-drafted application would meet the requirements. Often the client-drafted application says both too much and not enough at the same time.

The client filed application might say too much by making unnecessary admissions that could limit the scope of protection afforded over the invention in a resulting patent. It might say too little by not describing the invention, its various parts, and its operation in sufficient detail. Further, it might say too little by not describing the invention broadly enough and thereby leaving on the table subject matter that could have been claimed.

Will a one page write up and a drawing or two be sufficient, if filed as a non-provisional, to secure your rights? It depends on the circumstances, but usually more detail is needed. There are online service providers that will assist you in filing your documents as a provisional application, however, we think this do-it-yourself process may provide clients a false sense of security, or at least creates a such a risk when client documents are not reviewed to sure they meet the legal description and enablement requirements.

A Good Starting Point
This is not to say that the client should not draft a detailed description of the invention and provide drawings. Such client-written materials are usually a great place for us to start drafting a patent application. Often times a detailed description of the invention provided by the client can speed up the patent application drafting process on our end and can reduce the overall costs of preparing a patent application. Therefore we encourage clients to provide us with detailed information about the invention. However, for the reasons explained above we will generally not file that information directly as a provisional application, but instead we will use it as a starting point to draft an application that broadly protects the client’s invention and meets our standards.

What is Patent Pending?

When a patent application is filed with the United States Patent and Trademark Office (USPTO) covering a product, service, or portion of a product or service, the owner has patent pending status in the United States regarding that invention. Basically patent pending status means that a patent application has been filed in the United States. Patent pending status continues until the corresponding patent application is abandoned or until a patent is granted.

Patent pending status does not mean that the patent applicant will necessarily obtain a patent. It only means that a patent is requested through the filing of a patent application. It is possible that the USPTO will find that the subject matter of the patent application does not meet the requirements to be granted a patent. On the other hand, a patent application corresponding to a claim of patent pending may indeed ultimately received a patent.

The patent pending notice is designed to put the public on notice that an application on some aspect of the corresponding product or service has been filed and might result in a patent. Therefore the patent pending notice may be effective in deterring competition during the pendency of the patent application. This may be particularly true if the start-up and production costs of producing and or selling the invention are high. As a competitor might not want to heavily invest in producing and selling a product when there is a chance the competitor will need to shutdown that production when a patent is granted. However, it is also possible that competitors will try to compete during the patent pending period.