A Plethora of Patent Applications

Many entrepreneurs, seeking knowledge and thrift in cost, research the patent process online. Invariably, they come away with spotty information and even that is usually wrong. One area of confusion is the type of patent applications that are available.

This entry provides a list of some of the types of patent applications that entrepreneurs can come across:

• Provisional: these applications do not yield “provisional patents”. Instead, they are temporary patent applications that give a priority date for only so much as is actually disclosed and enabled in the application, and it is only good for one year. If a nonprovisional is not filed within that year, the priority date is blown. Many entrepreneurs seeking self-help damage or destroy whatever intellectual property rights they may have through ill-considered use of the provisional patent application procedure.
• Nonprovisional: these are regular patent applications, whether utility, design, or plant, that are examined by the Patent Office.
• International: these are various species of patent applications that can be Patent Cooperation Treating (PCT) applications filed at the World Intellectual Property Office (WIPO), or foreign applications, or regional applications.
• PCT international: these are international patent applications filed under the PCT with a WIPO Receiving Office. They are useful for countries that are signatories to the PCT.
• Foreign: these are applications filed in foreign countries.
• Regional: these are applications filed in foreign regions that have set up regional reviewing authorities, such at the European Patent Organization (EPO).
• Non-PCT international: these are foreign applications filed with Countries that re not signatories to the PCT.
• Utility: these are what mot people think of when they think of inventions. These are regular patent applications that are not filed as design (ornamental) patent applications or plant patent applications.
• Design: these are patent applications filed under the design patent application procedure and are for ornamental features of functional articles.
• Plant: these are patent applications covering organic plants (as opposed to, for example, factories).
• Continuation: these are applications that are filed during, and claiming priority to, a pending patent application.
• Continuation-in-part: these are continuation applications that include additional new matter.
• Divisional: these are continuation applications that essentially divide the original application into two different applications two cover two different inventions.
• CPA: these are patent applications, no longer in use, which essentially continued examination of the original patent application.
• Substitute: these are a misnomer in the sense that it is not a substitute patent application, but rather a substitute specification replacing the specification in a patent application.

Important note: This list is not comprehensive.

What's the bottom line?

Clients invariably ask how much it will cost to patent an invention. Sometimes the question comes after a lengthy explanation of patent law and the patent prosecution process. Sometimes it comes insistently by a first time caller, reluctant to disclose even their name. People want an estimate, a flat price, a round figure, a budget. Something that they can metricize and hang their hat on.

The short answer is: we don't know for certain. Patent application drafting and patent prosecution have so many variables, many of which are not under the control of the patent attorney, that any estimate is a guess at most. The most a patent attorney can ever do, if they are not negotiating a flat fee (or maximum/minimum), which has its own hazards, is provide an estimate of what the average in a particular area of technology has historically been.

Entrepreneurs however have the ability to manage costs based on choices they make. To explain this, it is necessary to understand some of the factors that go into cost:

(1)Prior art search: whether a prior search is ordered, and how extensive; whether the client wants the patent attorney to evaluate the prior art search results; whether the prior art search results will require a design around; whether the client wishes the patent attorney to start drafting the patent application prior to the prior art search results being returned.

(2)Stage of invention and production: whether the client has built a prototype or is working off unproven sketches; whether the client has made a production model; how complete is development of the invention; whether the client has a business plan.

(3)Complexity of invention and technology: what art area is the invention in—mechanical, electrical, computer science, material science, chemical, etc.; does it have multiple embodiments; how key is the invention to the business plan.

(4)The attorney fees per hour or per embodiment.

(5)How many inventors are there and are their relative contributions known.

(6)Whether the client is defensively applying for a patent application or offensively.

(7)Whether the client wishes to pursue foreign patent rights.

(8)Whether the invention is on the market now or has it otherwise been publicly used or made known to others not under a duty of confidentiality.

(9)Whether the client wishes to file a provisional or nonprovisional patent application.

(10)Whether other government agencies need to be involved (such as the FDA or the Department of Agriculture).

(11)Whether the invention implicates national security.

(12)Whether the invention is partially funded with Federal money.

(13)Whether the client is a small entity or a large entity.

This is not a complete list, but it does provide the entrepreneur with factors which can be used to help manage costs. Looking at the list, it should be obvious that entrepreneurs have a significant ability to manage patent costs especially in categories 1, 2, 3, 7, and 9. In short, if there is a prior art search, it will cost more. If there are multiple embodiments, it will cost more. If the client keeps adding to the invention, improving, and making changes, after the patent drafting has started, it will cost more. If the client wishes to pursue foreign patent rights, it will cost more. If the invention is incipient instead of developed, it will cost more.

One scenario frustrating both for the client and the patent attorney, is the client who comes in, very enthusiastic, who wants an estimate, but has not thought through any of these factors, and then makes multiple changes and adds embodiments after patent application drafting has started. The estimates then bear no relation to the work being done and the client gets a significantly higher bill.

Wise entrepreneurs, as mentioned in previous blogs, will make a comprehensive business plan. That plan should certainly include consideration of the above factors, at a minimum.

Who you gonna call? Part I-Patents

People frequently ask what factors should go into evaluating and choosing a patent counsel. Patent work can be broken down into several areas, including licensing, prosecution, and litigation, among others. A deep technical understanding of the underlying art may be less necessary for licensing and litigation, assuming people familiar with the technology are accessible.

For this post, we will deal with choosing a patent prosecution counsel.

Technical understanding. For patent prosecution counsel, the technical understanding becomes more important, but again dependent on the area. For mechanical inventions, being an expert in that field of mechanical endeavor is probably unnecessary so long as the patent attorney is qualified for mechanical patents. Specialized understanding gets to be more important depending on the sophistication of the art. Cryptological software inventions, for example, probably require a skilled CS person who also has qualification in upper level (i.e., beyond engineer level) mathematics. Pharmaceuticals require not only the biochemical understanding, but access to attorneys skilled in FDA approvals. Numerous examples of the different arts, some requiring only basic qualification, and others requiring specialized qualification, exist.

In regards to efficiency/billing, and also in regard to ability, other qualities than specialized knowledge can be equally or more important such as learning speed, wheel-spinning, and legal conceptual understanding. The speed of learning—there are electrical engineers who can learn quickly, and those who cannot. Since all inventions are by their essence new, novel, and nonobvious, there will be learning regardless of specialized knowledge. Wheel-spinning--there are highly technically qualified attorneys who can take forever to sit down and hammer out the applications. Some people need to take a break every twenty minutes for a water cooler chat. Some like to do an application a day. Legal conceptual understanding—if the highly qualified technician just does not get the fact that patents are ultimately read by non-patent attorneys, and non-lawyers, the product will suffer and may require redrafting requests.

Anyone looking to choose patent prosecution counsel should also determine whether the counsel they consider is stuck in the past or married to inflexible platforms for performance and billing. Is the counsel open to alternative billing structures. Is the counsel open to re-constituted staffing of projects. The old firm tradition of billing hourly, and then maximizing profit by staffing a case with junior level attorneys all answering up the chain to a senior attorney, may not always be the most optimum. Is the counsel open to billing structures that provide motivation for efficiency.

Thus, in terms of selecting counsel for patent prosecution, while some breakdown should be made for specialized arts, to maximize value and minimize unnecessary fees, the evaluator should design a selection process that includes: (a) identifying a pool of base qualified counsel; (b) winnow the most efficient by focusing selection not on degrees or industry experience, but instead on factors which identify and quantify learning curve speed, work energy and motivation, and availability of senior attorneys who are experienced not only in prosecution, but also who have done licensing and who have actually conducted jury trials; and (c) determining whether in this winnowed group the counsel understands, is open to, and able to provide different billing structures so that in-house counsel can price and budget prosecution work in perspective to its worth to the company.

How long until I have patent protection?

Inventors frequently ask how long will it take before a patent will issue. This seemingly straightforward question, however, is not so straightforwardly answered. First, you might not get a patent. Your claims might be rejected and you might decide to abandon the application. Or you might appeal to the Board of Patent Appeals and Interferences (which is becoming more frequent) and lose. Or you might seek further appeal at the Federal Circuit, and lose.

Second, depending on the type of invention for which you are seeking patent protection, the length of time it takes for the examiner to issue a first office action can vary widely. The closely followed patent blog, PatentlyO (http://www.patentlyo.com/), recently summarized in a table the average time to first office action by art area. For example, on average it takes 3.5 years for a first office action for business method patent applications, 3.2 years for computer networks, 2.2 years for machine elements, 1.9 years for amusement devices, and 1.7 years for manufacturing devices. Assuming a first office action allowance (a big assumption), you still would have to pay the issue fees and await issue, at least another 4 to 6 months. But most cases are not allowed on first office action, so there will be a second office action, and perhaps a request for continued examination, and then possibly the appeals mentioned above.

Third, much more rare, a secrecy order could get slapped on your patent, and you could be denied a patent entirely if granting a patent on your invention is considered a threat to national security.

When it comes to patenting, therefore, the old adage rings true: most people overestimate what they can accomplish in 6 months, and underestimate what they can accomplish in 5 years---that is, if they stick with it.

You dedicated What to the public?

IP entrepreneurs frequently run afoul of the one year bar, which dedicates perhaps a valuable invention, to the public. How does this occur? Section 102(b) of the Patent Act provides, all other conditions satisfied, as follows:

• A person shall be entitled to a patent unless— ...(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, ...

This is the one year bar. Sometimes, because of the “on sale” provision, it is referred to as the On-Sale Bar. There are two parts, first, the invention must be “ready for patenting”, i.e., the invention is at the stage where a patent application could be filed. Second, it must either be (a) described in a printed publication, (b) put in public use, or (c) put on sale. These are all gray areas and if you have to look closely at them, you might already be in trouble. The safest course is to keep the invention confidential until you are ready to go to market. At that stage, file a patent application, get the “patent pending” status, and go to market. Not vice versa.

How does anyone know? Can you just keep your barring public use or barring sale secret and still get a patent? There are two aspects to this, legal and moral. The entrepreneur needs to make the moral decision for themselves.

The legal aspect is straightforward. When you file a patent application, you sign a declaration, under Federal law (thus, willful violation of which could be a Federal crime), that you know and understand your duty to disclose all information material to patentability to the Patent Office. When you don’t do so, it is called inequitable conduct. If the Patent Office finds out, it can bar your patent. If a patent issues and a competitor finds out, it can invalidate your patent and open you up to liability for bad faith patent enforcement. Every year patents are invalidated based on inequitable conduct for failure to disclose. It is not a situation you want to be in, especially since there is an easy way to avoid the problem -- apply for patent first, and then market the product. Otherwise, you could end up dedicating your invention to the public.

Note, some countries/regions don't allow a one year grace period at all. An IP entrepreneur that considers international protection will want to check the countries he or she is interested in before doing an act that starts the clock ticking. There may be less time than the one year allowed in the US, or no time at all.

False Marking

IP entrepreneurs typically want to get, and should get, notification of their IP rights on their product, packaging, and marketing materials. The benefits are legion, from alerting people to the claim of right in the product, the product configuration, the product name, etc., to utilizing the advertising benefit of claiming a patented, trademark registered, or copyrighted creation. For patents, failure to properly mark can preclude the patent owner from getting any damages at all from an infringer. So to, the means for marking can be legion, from Patents: "pat. pending", "U.S. Pat. _", "U.S. Des. Pat. _", "U.S. Plant Pat. PP_", to Trademarks: (TM), (R), (SM), to Copyrights: (SR), (PA), (C), among others.

But marking has its flip side. To avoid a claim of false marking, there must be, as an absolute floor, a reasonable belief that the product marked as "patent pending" is actually the subject of a legitimate patent application, that a product marked as "U.S. Patent _" is actually covered by claims of a validly issued and unexpired patent, that a mark with the (R) subscript is actually registered by the U.S. Federal government, and not by a state or foreign country.

Where this floor is not met, the penalties can be stiff. For false marking of a patent, a Federal statute imposes a fine of $500 per product, and the suit can be brought by anyone, even if you don't have a dispute with them. False marking can also constitute unfair competition and violation of trade laws.

In short, marking laws can be complex. To do it properly, the IP entrepreneur must make sure to toe the mark.

Happy Fourth of July!

To celebrate the Fourth of July, I'll give you a quick primer on the Constitutional bases for Federal intellectual property protection.

Patents and Copyrights derive directly from the United States Constitution. Our Founders wrote into the Constitution the Patents and Copyrights Clause which reads:

• "The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

From that sprang the Patent Act and the Copyright Act, and all laws related to them.

Trademarks, however, were overlooked by our Founders, and are protected by the Constitution only indirectly, through the Commerce Clause, which reads:

• "The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"

From that authority, Congress ultimately created the Federal Lanham Act governing Federal trademark rights.

Happy Fourth!

Spell it Out

Sometimes it is tempting to sell, or attempt to sell, an invention without filing a patent application for it. This can be budget wise and economical. But it is also very dangerous. The Washington case in Oliver v. Flow International, 137 Wash. App. 655, 155 P.3d 140 (2006), exemplifies some of these dangers. Oliver sold his invention to Flow for $150,000 plus royalties. Flow never filed any patent application on the invention and never sold any products under the invention, and consequently there were no royalties. Oliver sued for failure to commercialize the invention and file patent applications on the invention which duties he claimed were implied by the contract and the reason for the royalty language. The Washington court ruled that there was no such language in the contract, and the court would not imply that duty. Thus, Oliver lost. Not discussed was that due to the one year “on sale” bar of patent law, because Flow never filed a patent application, the invention became dedicated to the public. The bottom line, if you want the contracting party to have a duty, such as to commercialize or seek a patent, you need to spell it out. Oliver could have included language that Flow was required to make verifiable concrete efforts to commercialize the invention. Oliver could have included language spelling out who had obligation to file and prosecute patent applications and maintain them. Olive could have required milestones relating to commercializations and sales such that if the milestones weren't being met the invention reverted back. But, as the case shows, if it isn't spelled out, it might not be enforceable.

Double Duty

Any business that gains a competitive edge from a custom software engine may wish to consider a multi-faceted IP protection plan. Software can be the subject of a patent, the subject of a copyright, and in some cases, the subject of a trademark (or trade dress) for a unique user interface. Engineers frequently seek patent protection on a new device, but almost invariably focus on the electrical, circuit or mechanical aspects, never considering (or perhaps considering too “soft”) protecting the unique code that runs the new widget. But the original expression in code is just as copyrightable as the novel and nonobvious useful process of code is patentable. From an enforcement perspective there is almost no richer or worse type of suit to prosecute or defend. Software code can be the hardest to convey to a judge or a jury, even without throwing in the impenetrability of patent law and claim construction. Similarly, the copyright law surrounding code and user interface protection is literally (small copyright joke) a patchwork quilt.

Small Changes and Big Realities

Isn’t it true that competitors need only make a small change and get around a patent? If so, then why should I get a patent? This is a common refrain, mistaken both in its premise, and in pragmatic reality. For patents, a small change is neither here nor there. Is the competitor’s product within the terms of any claim in the patent? That is the question. If a small change is within the terms or, in many cases, is the equivalent of the terms, then a case for patent infringement may exist.

That is the analysis on the merits. But the real analysis is on the economics.

Patent litigation is unbelievably expensive. More so for defendants, in most cases, then plaintiffs (for reasons that will be the subject of other blog entries). A defendant receiving a cease and desist letter faces an economic wake-up call. When the defendant takes it to the patent lawyer, the lawyer often will require a seemingly gargantuan retainer fee and monthly litigation budget. For most small, and even medium sized, defendants, making a patent infringement defense is not practical, and in many cases not possible. A small change (or even not so small) to a product can still nevertheless come within the terms of a patent claim, allowing a patent holder to terrify, in many cases into submission, a defendant who cannot meet the sticker price for a defense. The threat or even reality of a patent infringement lawsuit can be effective at keeping the competition in line. But, the patent owner has to be willing to enforce it.