Wednesday, December 17, 2008
Tuesday, November 25, 2008
Patent attorneys are frequently asked for direction on how to take the invention from the patent stage to the market stage, but the fact is, patent attorneys are generally not business people and have little, or no, marketing and product development sense. Ultimately, the inventor turned budding entrepreneur either needs to be a business person, including marketing and financial savvy, become such a person, or hire/partner with such a person.
But first things first. How to go from invention to product. If you can, make a prototype. If you cannot, make a drawing. Here, the patent application can come in handy because if your patent attorney was sharp, he or she would have made sure there would good drawings to help support the patent application. Nice perspective, exploded, and/or perspective-in-use drawings can pay dividends, not just in understanding the invention, but in explaining what you want to a product developer. Remember, a picture is worth a thousand words. In either case (preferably after a patent application is filed), take the prototype or drawings (with serial number, title and filing date redacted) to the relevant professional for commercial product speccing (and make sure you use a very good, attorney vetted NDA). Who is the relevant professional? That depends on the art area. There are tons of plastics, machine shops, rotomolders and design shops around, many providing services specifically to inventors. If you need help, start with the Inventor's Digest magazine which has a host of ads and classifieds from such professionals, and which also has useful articles. You can also go to your State small business center. In Washington, the State has several Small Business Development Centers with certified business specialists whose very purpose is to help and point you in the right direction. The U.S. Small Business Administration has similar services. Public universities and community colleges also have business departments that can usually send you in the right direction. But there is no getting around the fact that you are going to have to use some elbow grease, make calls, and attend meetings. Remember Edison's adage: Genius is one percent inspiration and ninety-nine percent perspiration. This applies equally to entrepreneurship.
Tuesday, November 18, 2008
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.
Thursday, October 9, 2008
- 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.
Tuesday, September 30, 2008
But protecting IP rights, and defending against claims of infringement, should not be a game solely for the rich. A new type of court is needed that significantly reduces the cost of enforcement. Some have called for a specialty U.S. Patent Court, somewhat like the U.S. Tax Court or the U.S. Court of Federal Claims, for handling all suits for patent infringement. But that doesn't resolve issues involving the 7th Amendment where a right to jury is guaranteed. Perhaps what is needed is a Federal small claims IP court, where people can plead patent and IP cases under a certain threshhold and get accelerated treatment, reduced discovery, and other procedure saving features. Some simple ways to reduce costs in IP litigation are: (1) mandatory, nonwaivable initial disclosures, and (2) combining summary judgment with Markman hearings or, where thare are no summary judgment motions, combining trial with Markman hearings.
Whatever the solution, the small business entrepreneur needs to be able to protect its intellectual property, and needs to be able to defend itseld against claims of infringement, neither of which are effectively being provided under the current IP enforcement framework.
Thursday, July 3, 2008
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.
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.
Wednesday, May 21, 2008
Tuesday, May 20, 2008
Tuesday, May 13, 2008
First, intellectual property is subject to wide variations of valuation. Never take the seller’s word for it. Proven sales or established licensing rates help. Experts exist to give a fair market appraisal, to the extent that it can be done, for intellectual property.
Second, intellectual property can disappear. Patents and trademarks can be invalidated or rendered unenforceable. Copyright registrations can be invalidated, and/or the copyright protectable expression can be found to be non-existent.
Third, ownership is rarely clear cut. Ownership where employees or contractors are involved can be a nasty mess requiring tracing back through each person and each agreement to determine what, if anything, was effectively assigned, what was obligated to be assigned, or what might be hanging out free and clear. Like buying the cow, when buying intellectual property due diligence can sometimes show that the milk is free.
Monday, May 5, 2008
The American Inventor’s Protection Act requires invention promotion firms to disclose in writing to the inventor the following: (1) the number of positive and negative evaluations of inventions the invention promoter has given over a five-year period and (2) the success of the invention promoter’s customers in receiving net financial profit and license agreements as a direct result of the invention promotion services.
Not all invention promoters are “bad”. Some are reputable and may perform a useful function. The Patent Office keeps track of complaints filed against invention promoters. The Federal Trade Commission (FTC) also keeps a record of its enforcement actions against invention promoters—just type “invention” in the FTC search engine to see FTC press releases related to invention promotion firms and enforcement actions. Additionally, the FTC has an information website explaining invention promotion firms as well as a useful “consumer alert”.
Please post any comments regarding experiences with invention promotion companies.
Tuesday, April 29, 2008
Virtually every state protects trade secrets using some form of the Uniform Trade Secrets Act. Common law also gives some protection to trade secrets. Theft, or misappropriation, of trade secrets can also implicate the Federal Economic Espionage Act.
But trade secrets are only protectable if they are maintained as secret, and that includes the requirement that (a) the information is not easily available to competitors, and (b) reasonable precautions are used to maintain secrecy.
Customer lists are frequently claimed to be trade secret, but in many cases the customer and contact list is as easy to discern as looking in a known industry directory, or typing a well phrased Google(R) search. On the other hand, some customer lists are not accessible that easily and can only be created over time using sources not readily available. In such a case, the list may well qualify as trade secret...but only so long as reasonable precautions are used to maintain it. Is the information let out to people who are not under a written obligation of confidentiality? Is the information laying on a desk that members of the public or frequent vendors walk past? Do employees have a written obligation of confidentiality? Is the information on a computer connected to the Internet that has only the most rudimentary of security protections? Do the customers know each other and do that they know that they are all customers of the entrepreneur? These things factor, sometimes dispositively into the question of whether reasonable precautions are being used.
One easy self assessment is to ask the following questions. For (a), is the nature and reason for the trade secret status easy to state. For (b), are the precautions taken to preserve secrecy well documented and do they include documentation on the items just listed. If either of the answers are "no", then trade secret protection is not being well established and/or maintained. But don't tell anybody that, it'll be our secret.
Friday, April 25, 2008
Tuesday, April 22, 2008
Marks are placed on a spectrum of protectiveness defining what must be done to make them protectable, i.e., are they inherently distinctive, distinctive only after acquiring secondary meaning, or never distinctive. While generic marks immediately identify the product, they are not protectable in most jurisdictions. Fanciful or arbitrary marks can be immediately protectable, but they give no information about the product whatsoever, so have no immediate marketing bump. A choice must be made then, whether to seek little or no protectability with a generic or highly descriptive name, little or no immediate marketing bump with a fanciful or arbitrary name, or somewhere in between. Once that choice is made, the question becomes whether someone else has the name for the same or related good, which would interfere with the ability to get protection for the entrepreneur, and open the entrepreneur up to trademark infringement or dilution liability.
How does an entrepreneur navigate these shoals? First, make the choice of whether to seek immediate marketability using a descriptive or generic name, or to go with a name less immediately marketable but more immediately protectable. Second, conduct a trademark clearance or name availability search. Third, if a name is chosen that is potentially protectable, and a search reveals no conflicting uses, decide whether to seek formal registration of the mark. Choosing a mark, like growing roses, can be thorny, but when grown correctly, be just as sweet.
Friday, April 18, 2008
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.