Patents – What are they?
A patent is a legal right to keep others from making, using or selling an invention. A patent does not of itself give the owner the right to use the patented invention. For example it is quite possible for someone to patent an improvement on someone else’s patented invention. To use the improvement, the inventor of it would need a license from the owner of the basic invention.
This legal right is granted by a government for a limited period of time. If one goes back several hundred years (before modern patent systems came into existence), patents were exclusive rights(monopolies) granted by a monarch. The patent was sometimes granted in recognition of new technology, other times it was granted to influence trade and still other times the monarch granted the patent simply in exchange for a fee (it was one way the monarch had of collecting money outside of taxation). However, from the seventeenth century onwards, these monopolies granted by monarchs were viewed as being undesirable, except where the monopolies were granted to encourage the development of a new industry or technology. The patent granting process was taken away from the monarch and made a normal governmental function. The first patents in the United States were granted by many of the states prior the adoption of a federal patent statute in 1790. The first patent examiners were the Secretary of State, the Secretary for the Department of War and the Attorney General. The Secretary of State at that time was Thomas Jefferson, who took a personal interest in inventions and examined patent application in considerable detail. The result was that few patents were being granted, so Congress passed a new Patent Act in 1793 which provided for the registration of patents without examination.
In 1836 Congress formalized the patent granting process by establishing the United States Patent Office which was given the responsibility of examining patent applications for the quality of the underlying inventions. The Patent Act in the United States has undergone several revisions over the years, with recent major revisions in 1996 to implement the results of the Uruguay round of GATT negotiations, in 1999 and in 2011 to make a number of significant changes that will bring U.S. law closer to that of other countries.
Today, almost every government in the world grants patents. For more information, see Patents are of National Origin and Protecting Inventions Internationally.
Patents protect inventions by prohibiting the manufacture, use or sale of products embodying inventions or made by inventive methods of manufacture without the permission of the patent owner. Patents can only be obtained by filing a patent application with a governmental agency. In the United States, that agency is the United States Patent and Trademark Office (USPTO). In most countries, the agency which handles patent matters also handles trademark matters.
Do Patents make Sense?
The patent system has undergone much criticism in recent years, largely as a result of difficulties in dealing with new technologies in the form of computer software and biotechnology where some of the early patents that were granted were very broad in scope and the U.S. Patent and Trademark Office had inadequate resources to deal with inventions of these types. Further problems arose when significant numbers of patents started to be granted for non-traditional inventions, such as those relating to business methods. Although criticisms remain, for the most part, these issues have been addressed for new inventions. However, since patents last for twenty years from filing, patents granted before the improvements were implemented are still in effect and attract press coverage.
There are two sides to this question: I. Do patents make sense for us as a society and II. Do patents make sense for you or your business?
I. Do patents make sense for us as a society?
Perhaps the writer of this article is prejudiced in favor of patents, since the writer has spent many years protecting inventions of clients, both while in private practice and as part of an in-house corporate patent law department. However, it seems to your writer that it would be altogether a different world without a patent system.
Patents encourage research and development of ideas and concepts, most of which improve our quality of life and provide us with gainful employment. Patents are granted by governments in exchange for making a meritorious invention public. Once an invention is made public, others can improve upon it by making further inventions. Since it often takes a great deal of money to establish and operate a research organization, private industry needs encouragement to engage in research. The patent system is one source of such encouragement, since if a valuable invention is made and patented, the owner of the patent can either collect a royalty from other users of the invention or exclude others from using the invention. Either way, the owner of the patent can reap rewards for having taken the risk of making the investment necessary to make inventions in the first place. Moreover, the very making of the invention provides employment to inventors, engineers, blue collar workers, salespeople and so on.
The Patent System is not the only form of such encouragement. Other sources of encouragement include: (i) governmentally sponsored research programs and (ii) the lead time a company obtains by being first to the marketplace. Both of these sources of encouragement currently exist side by side with the Patent System, but the writer believes that the Patent System is the best source of encouragement. Considering governmentally sponsored research programs, the U.S. government sponsors much research and often ends up owning the resulting patent rights. But such research usually occurs in relatively narrow fields of particular governmental interest, such as defense, space exploration, and the like.
Inventions also give a manufacturer a lead time over its competitors, but the lead time is often not long enough to recoup the investment made in the invention in the first place. The lead time is often about six months or so, and there are not many technologies for which the cost of making a significant invention can be so quickly recouped. If a six month recoupment were the only encouragement for making research-inspired inventions, such “inventions” would be limited to marketing gimmicks as opposed to real technological advancement.
If you favor technological advancement (and since you are reading this on the World Wide Web, chances are you do), then you will likely be a supporter of a patent system, since the alternatives do not and cannot provide sufficient encouragement in a wide range of technological fields. Think about it. The countries which have strong technological bases tend to have strong patent systems as well. Countries which are technologically weak tend to have weak patent systems.
II. Do patents make sense for you or your business?
Good question! As noted above, patents encourage research and development. If your business has nothing to do with research and development, then you may think it is not very likely that you will need the services of a patent lawyer. However, that is not necessarily true. A lot of people make inventions, but they just do not always realize it. They recognize problems and their solutions. If they keep those solutions to themselves and do not commercialize them, they get no reward for having come up with a solution. However, rewards are there for those who commercialize their innovations, and those rewards can increase if those people decide to patent their innovations. Just as people unknowingly make inventions, inventions are also made in industry without anyone taking notice until it is too late. Many wonderful inventions have been made which were not appreciated as such at the time the invention was made, and the merits of the invention was only recognized after products embodying or using the invention were placed on sale. Time is of the essence in the world of patents. If you publicize, commercialize, offer for sale or use an invention before a patent application is filed, you may well find that the invention has been placed in the public domain by such actions. But the actions which place the invention in the public domain can differ between countries. Thus, a certain action will bar an invention in one country while another action will bar the same invention in a different country. This topic is discussed in greater detail below.
It is also worth noting that patents are very popular and are becoming more popular with time. In 2012 the USPTO granted over 253,000 patents and China granted over 216,000. In 2012, eight companies each received over 2,000 US patents: IBM, Samsung, Microsoft Corporation, Canon, Toshiba, Sony, Panasonic, and Hon Hai Precision Industry.
Given the fact that patents are not inexpensive to obtain, the fact that these major companies and, indeed many other companies, are willing to put forward the necessary investment to obtain US patents speaks rather eloquently to the value of patents.
Patents come in Different Types
Since these World Wide Web pages are not intended to be a treatise on patent law, we shall limit the discussion here to the three most common types of patents: Patents of Invention, Design Patents and, in some countries, but not the United States, Utility Model Patents:
Patents of Invention are probably the most important type of patent. Such patents are commonly referred to as simply “patents,” but they are referred to as Patents of Invention in this article to differentiate them from the other types of patent discussed below. Patents of Invention protect new technology and how new technology works. For example, if you make an improvement to an internal combustion engine, a computer, or a can opener, you would most likely seek a Patent of Invention. Patents of Invention can protect such divers things as articles of manufacture, new chemical compounds and methods of making things.
Design Patents (often referred to outside the United States as Design Registrations) protect how things look. For example, if you design a new case for a handheld computer and want to protect that new design, then you would seek a Design Patent. Design Patents protect the appearance of articles, while Patents of Invention tend to protect how the articles function or how they are made. Considering that new handheld computer again, a Patent of Invention might protect that which is inside (for example, a new microprocessor or a new hard drive mechanism) while the Design Patent might protect its outside appearance. But do not carry this analogy too far, since things which go inside other things can still qualify for Design Patent protection while things you can see can qualify for protection by a Patent of Invention. The true distinction is that a Patent of Invention protects functional aspects of a product (or a process of making a product), while a Design Patent protects ornamental aspects of a product (such as its shape and appearance). Traditionally design patents have been regarded as being narrow in scope because what is protected has to be very similar to what is shown in the patent. However, the fact that in many countries, including the United States, one can obtain protection for particular features of the article being claimed rather than the entire article can in fact result in very useful protection, as witnessed in the “smart phone patent wars”. For such protection to be possible all that is required is that the features are essentially ornamental and not dictated by the function that they are to perform.
Utility Model Patents are akin to Patents of Invention and in some countries they are called Petty Patents. The United States does not grant Utility Model Patents. However, they are quite popular in other countries and in some countries the number of Utility Model applications which are filed approaches and even outstrips the number of applications filed for Patents of Invention. Utility Model Patents protect functional aspects of products. Utility Model Patents have historically been unavailable for the protection of the processes of making product. They differ from Patents of Invention in a number of ways and there is no general rule for distinguishing Utility Model Patents from Patents of Invention other than by the fact that the period of patent monopoly for a Patent of Invention is longer than for a Utility Model Patent. In some countries, Utility Model Patents have a lower standard of inventiveness associated with them. In yet other countries, Utility Model Patents have more lenient novelty rules. In still other countries, certain classes of products are (or were) deemed more appropriate for Utility Model protection. The long and the short of it is that Utility Model Patents tend to protect the same sort of technology as Patents of Invention, but generally offer a shorter period of protection for one reason or another. In some countries you can get both a Utility Model and a regular patent on the same invention, and the Utility Model can then be important since it often goes to grant faster than a Patent of Invention.
First to File versus First to Invent
Today, Patent Systems around the world are based on a First to File System. Simply put, that means that the first party to file a patent application on a patentable invention gets the patent. The second to file party gets nothing. Thus, once an invention has been made, you are in a pure race to the patent office with anyone else who might have made the same invention.
The United States patent system was, until March 16, 2013, a First to Invent System. As a result of the 2011 legislative changes, this, however, changed for applications filed on or after March 16, 2013 when the United States adopted a “first inventor to file” system. The arguments in favor of the first to file system are certainty and lower cost (because you cannot get embroiled in a fight over who invented first when the only question is who won the race). The argument in favor of the first to invent system is protection of the small inventor who cannot afford to file a patent application right away. The small inventor will, however, continue to be protected to some extent after March 16, 2013 in that any disclosure of his or her invention he or she makes during the year prior to filing the patent application will be discounted when considering whether the invention is new at the date of filing. Some, but not all other countries provide for such “grace periods,” but not all for the same length of time. Europe and China provide no such general grace period.
Many inventions are worthy of international protection. That means that patent applicants must take steps to comply with both systems. Countries subscribing to the First to File System require the applicant to be the first party to file a patent application, while the United States causes the applicant to keep records regarding the making of the invention (for use in the event that the inventor becomes involved a subsequent proceeding – called an Interference in the United States – in which another party seeks to prove that they were really the first party to make the invention in question or that another applicant derived the invention from them). Although with the change to “first inventor to file” interferences will die out after a transitional period, record keeping will continue to be important in the case that someone else claims to have made the same invention. Because the law still requires that to obtain a patent, rights must originate from a true inventor and not someone who derived the invention from someone else, being able to prove when an invention was made and who was told about it will still be important.
While the United States was a First to Invent Country, inventors were typically required by their employer or in-house patent department to keep certain records with respect to the conception and making of inventions. The information is stored in the event an Interference is declared, so that the respective inventors will have documentary evidence regarding the making and development of the invention. Indeed, an Interference can be declared long after the patent issues, and this will continue to be the case for inventions where applications were originally filed prior to March 16, 2013 so the information should be stored for many years.
The types of information which should be retained are discussed below:
1. Engineers should keep a permanent record regarding their inventions. Historically engineers have been encouraged to keep a notebook which is preferably permanently bound and has numbered pages. At the bottom of each page a place should be set aside for at least two other* engineers (or other persons skilled in the technology) to sign the pages indicating when they read and understood their contents. This corroboration by other skilled persons is very important – the law is suspicious and does not trust the inventor’s memory regarding when the invention was initially conceived or further developed. The inventor’s memory, notes and records must be corroborated by others who understand the technology. Also, all persons to whom knowledge of the invention will be communicated, including those who corroborate the invention and indeed make the invention, should be subject to a duty to keep the invention secret. The reason for this is that in many countries, a patent application must be filed before an invention is publicly disclosed and the disclosure of an invention to a person who has no obligation to keep it secret can have the legal effect of placing it in the public domain.
2. Good recordkeeping remains important even in a first to file environment to make sure that if there is a dispute as to whether another applicant derived the invention from you, all relevant facts can be proved. Retain copies of other documents which evidence the progress of the invention. For example, source code listings, schematics, diagrams, print outs, photographs, business plans, receipts for purchases of items used in developing the invention, employee records, employee wage payment records, calendars, and the like should be retained. If it becomes necessary to evidence prior invention, then you will want to have documents which provide clear and convincing corroborated evidence of the conception of the invention, its development into prototypes and later commercial products and the diligent efforts made in bringing the invention to fruition.
* The other persons should be skilled persons working on other projects. The law not only does not trust the memory of an inventor, it does not trust the collective memories, notes and records of co-inventors. If the persons who sign the notebook come from other projects, then chances are you will overcome this problem. If they all work on the same project, then you could be in for a very difficult time. We suggest having at least two other persons sign the notebooks because the question of who invented first may only surface many years after the fact. The more people who can testify regarding the making of an invention, the better chance that at least one of those persons will be available years later.
Deadline Dates for filing a Patent Application
If you delay too long to file a patent application, the invention enters the public domain and you will be forever barred from obtaining a valid patent for that invention. The rules regarding the deadline dates for filing patent applications are complex and therefore only some general principles are set forth here which should be borne in mind. In most countries a patent application must have an effective filing date which predates the public divulgation of an invention. In some countries (including the United States), national grace periods are available which permit you to delay the filing of a patent application. However, if you take advantage of such national grace periods, you will very likely sacrifice potential patent rights in many other countries, including most of the major industrialized countries outside the United States. If you have any questions regarding the deadline date for filing a proposed patent application, we strongly urge you to consult with a patent lawyer knowledgeable in these matters before any public divulgation of the invention occurs and even before an offer to sell is made. Here are our guidelines:
1. File the Patent Application as Soon As Possible – The First to File System puts a premium on obtaining the earliest possible filing date.
2. File Before you Make Any Public Disclosure of the Invention – In many countries a patent cannot be lawfully obtained if the invention has been made public before a patent application is filed. This is true, for example of most countries in Europe and in China.
3. When Necessary, Obtain Signed Nondisclosure Agreements – If you must disclose the invention to third parties before filing a patent application, make sure that the disclosure is pursuant to a written confidentiality agreement and enter such an agreement only with parties you have good reason to trust. This is important because if they breach the agreement (by, e.g., publicly disclosing the invention) that can make obtaining a patent more difficult, if not impossible. If they do breach, consult a lawyer knowledgeable in these matters immediately. Also, your employees should be reminded periodically of their obligation to keep inventions secret and the employee agreements which you utilize may well be one appropriate place for your employees acknowledge their obligation in writing.
4. File Foreign Patent Applications within the Priority Period established by the Paris Convention – Take note of the fact that the grace period under the Paris Convention is one year for Patents of Invention, but only six months for Design Patents. As an aside, you should take note of the fact that divulgation of an invention before filing a convention application at the EPO (and perhaps in other countries as well) can still give rise to considerable problems in certain situations.
Prior Art & Prior Art Searching
Generally speaking, prior art is technology which predates the filing of a patent application on an invention. If the prior art renders an invention obvious to a person skilled in the relevant technology, either a patent cannot be obtained, or if a patent did issue (erroneously), then the issued patent is treated as being invalid. However, just as Patents are of a National Origin, so too are the rules concerning just what constitutes prior art. As such, that which is prior art in one country may not be prior art in another country. The rules are so complex that hundreds of pages could easily be used to deal with this topic. Thus, this is not an appropriate forum to delve into this subject in detail. If you have any question regarding just what is prior art, you are encouraged to engage the services of a Patent Lawyer knowledgeable in this matter.
In most countries, a patent application will undergo Substantive Examination during which time an Examiner at the Patent Office concerned will make a decision as to whether or not the invention is patentable in view of the prior art uncovered during the course of the examination process. The prior art, which is cited by or to the Examiner, will usually be restricted to published materials. While prior uses of an invention or public verbal disclosures of an invention can also be prior art to an invention, the Examiner seldom has knowledge of such events. But the Examiner does have a library (or other data base) available which can be searched for prior art publications.
An applicant for a patent will sometimes commission a prior art search before making a decision to file a patent application. The reason for doing the search is to try to uncover any relevant prior art documents. One possible outcome of a prior art search is a decision not to bother with filing a patent application if the prior art uncovered by the search indicates that the technology does not appear to be particularly inventive.
There are several things which applicants for patents should realize in connection with prior art searches:
1. Prior Art Searches are not Perfect – Humans are not perfect and since prior art searches are performed by human searchers, prior art searches are similarly not perfect. Even though searchers often have the aid of a computer, the searchers must tell the computer what “terms” are to be searched. So whether a search is done manually or with the aid of a computer, the search is subject to human frailties. Furthermore, looking for prior art can be a bit like looking for a needle in a haystack – sometimes it pops out at you and other times it can take a great deal of digging to uncover. Additionally, searchers are often given a budget of expenses within which they must operate, and thus they do not have the luxury of chasing down every possible lead. Thus, when a prior art search is done, a searcher will likely uncover representative prior art, but there is a reasonable chance that the most relevant piece of prior art will not be discovered until after a patent application is filed. Moreover, in many countries, prior filed patent applications are considered to be prior art even though they have not yet been published. Of course, the searcher has no way of discovering the existence of an unpublished prior application. However, publication or issuance of another party’s patent application will likely occur in time for the Examiner of your patent application to consider the relevance of such documents to your invention.
2. Prior Art Searches are not always done – Different clients have different policies concerning whether or not prior art searches are performed. As a general rule, larger corporations are less likely to have prior art searches performed than are smaller corporations or individuals. Large corporations file large numbers of patent applications, and they are often willing to run the risk that prior art uncovered by the Examiner will render the invention unpatentable. They realize that such a risk is inherent, since No Prior Art Search is Perfect. Also, since they file so many patent applications, they have a pretty good idea about the prior art which exists before they file. On the other side of the coin, smaller corporations and individuals who file few patent applications tend to request prior art searches since they desire some level of comfort regarding the patentability of their inventions before they invest in a patent application, even though they are aware that No Prior Art Search is Perfect. At least the prior art search can tell them when not to bother with filing a patent application, even though it is no guarantor that a patent will eventually issue.
3. Obligation to cite relevant prior art to the Patent Office – While there is no obligation to perform a prior art search before a patent application is filed, once such a search is performed, there may be an affirmative obligation to cite the prior art uncovered in the search (and any other prior art of which the parties are aware) to the Examiner in charge of the patent application. The United States Patent and Trademark Office and a few other patent offices (including India and Israel) impose an affirmative obligation to bring relevant prior art of which the applicant (or their attorney) is aware to the attention of the Examiner.
4. Different types of Searches can be commissioned – The type of prior art search discussed above is usually referred to as a Novelty Search. More exhaustive searches of the prior art can be commissioned. For example, Validity Searches may be commissioned when a party seeks an opinion of counsel regarding the validity of another party’s patent. Such searches can be very exhaustive (and thus rather expensive). Indeed, several different searchers can be commissioned to search the prior art available at different patent offices or even at technical libraries. Another type of search is called an Infringement Search which may be commissioned before a party introduces a new product (or before they even consider opening a plant to produce a new product).
Filing a Patent Application
A patent application is generally prepared by a Patent Lawyer or Patent Agent. In the United States, a Patent Lawyer is an attorney at law who is qualified to practice law and who has also qualified to practice before the United States Patent and Trademark Office (USPTO). A Patent Lawyer often has an undergraduate degree in engineering, chemistry or physics. A Patent Agent is non lawyer who has qualified to practice before the patent office in the country in which he or she resides and usually has a similar undergraduate education to that of a Patent Lawyer. A Patent Attorney is a lawyer in the United States and often a non lawyer in other countries.
An application for a Patent of Invention is a very complex document to prepare. While lay persons can draft and file their own patent applications in many countries, it is not advisable to do so if the invention has any real value. The reason for this is simple. It can take years to become proficient at preparing patent applications. A novice is not likely to prepare a suitable application. But a lay person can make the Patent Lawyer’s job easier (and thus less costly) by providing very clear descriptions of the invention.
A patent application includes a detailed description of the invention and claims which set forth the breadth of protection which is being sought. Drawings depicting the invention are required if the invention is of the type which can be depicted by drawings (and most inventions, particularly those outside the chemical arts, can be depicted by drawings).
A patent application is a complex document and thus it cannot be prepared instantaneously. Indeed, it may take weeks (or even months) to prepare. Since a patent application is not awarded a filing date until it is effectively deposited with the patent office concerned, you must give your Patent Lawyer, Patent Attorney or Patent Agent sufficient time to (i) prepare the application and (ii) allow the inventor(s) to review it thoroughly before it is actually filed.
Procedures at the Patent Office
The procedures which will be encountered at the patent office vary from country to country. Generally speaking, after a patent application is filed it will encounter the following procedures:
1. Examination for Formalities – The patent office first checks to make sure that no parts of the application appear to be missing, that the application is presented on the correct size of paper and is correctly typed, that the requisite fees have been paid, that the documents have been signed, etc.
2. Publication of the Application – In most countries, patent applications are published 18 months after their effective filing date.
3. Request for Substantive Examination – After completing the Examination for Formalities and Publication, the next step is Substantive Examination, which is explained below. However, in many countries you will not get to step 4 until a Request for Substantive Examination is filed together with the requisite governmental fee. In some countries the Request for Substantive Examination need not be filed for several years. In other countries, this step is skipped (the United States skips this step), or it comes up shortly after the patent office publishes a Search Report (see, e.g., Procedures at the EPO) in which the most relevant prior art initially found at the patent office concerned is noted. The prior art found at the patent office usually comprises previously published patents and patent applications, but can also include other sources of prior technical information, such as technical journals and publications of learned societies. If a Request for Substantive Examination is not filed by the deadline date for doing so, the patent application will be considered as having been withdrawn. In some countries the Request for Substantive Examination can be filed belatedly (if it is filed within a grace period and a requisite additional fine is also paid).
4. Substantive Examination – In most countries, the inventiveness of the invention is reviewed by a Patent Examiner (an employee of the patent office who is experienced in judging the inventive merits of patent applications). The scope of protection for the invention is measured by the claims in the application. The scope of these claims often needs to be changed during substantive examination in view of prior art found by the Examiner or cited in the Search Report or cited by the Applicant. This stage is often referred to as Patent Prosecution and generally involves the filing of amendments to the patent application and/or arguments in response to Official Communications issued by the Examiner. If a response to an Official Communication is not filed by the deadline date for doing so, the patent application will usually be considered as having been withdrawn (i.e. abandoned).
5. Allowance and Issue – Assuming the Examiner agrees that the patent application, to the extant amended during Substantive Examination, claims a meritorious invention, the Examiner will recommend the application for allowance and a patent will issue (or grant), provided that additional official fees are paid at this stage. If the fees are not paid, the patent application will be considered as having been withdrawn (i.e. abandoned). If you are unable to convince the Examiner that the invention is meritorious, the Examiner will finally reject the application, and your recourse is to appeal the Examiner’s adverse decision to a higher authority, typically an appeal tribunal at the patent office. You cannot sue for infringement of a patent application – it must first mature into a granted patent; however, in a number of countries you can collect reasonable compensation, after the patent grants, dating back to the date on which publication of the application occurred.
6. Reexamination/Opposition/Review – In many countries it is possible for a third party to oppose the grant of a patent within a period of time set by the patent law of the country concerned. In such countries the patent office issues an official notice indicating that a patent is being (or will be) granted on a particular invention and inviting third parties to oppose the grant of the patent within some fixed time period. Third parties can file an Opposition against the grant of the patent, setting forth their reasons why a patent should not have been granted (in countries having post-grant oppositions) or should not be granted (in countries having pre-grant oppositions). The third party often brings to the attention of the patent office additional prior art which was not found during Substantive Examination. The applicant for the patent can respond to the opposition and amend the claims to overcome the additional prior art being cited by the third party. The patent office then decides whether the application, as further amended, still claims a meritorious invention. Reexamination is a mechanism whereby the patentee or a third party can request the Patent Office to carry out a re-examination of the patent and is useful if new prior art comes to light. Since September 2012, the United States has also provided for review of granted patents by the Patent Trial and Appeal Board based on challenges filed by third parties
7. Taxes – Since a patent and/or a patent application are considered to represent a property right, a tax is charged periodically by the patent office concerned. These taxes are known by various names, including patent maintenance fees and patent annuities. In most countries the taxes come due annually on the anniversary of the filing of the patent application. In the United States the taxes come due at 3.5, 7.5 and 11.5 years after the date of issue of the patent. While we shall not get into how the U.S. politicians came up with those intervals, one cannot help but wonder if they wanted to test the mettle of computer programmers who write the software which tracks the payment of such taxes! In any event, if the tax is not paid timely the invention enters the public domain.