Patently Ridiculous

A series of more or less recent articles points to a troubling trend at the U.S. Patent Office. On January 5, 2009, PatentlyO reported a plummeting reversal rate at the Board of Patent Appeals and Interferences (BPAI). On January 8, 2009, PatentlyO reported a soaring appeal rate at the BPAI. The BPAI is the review board that reviews examiner rejections of patent application claims. Add to this state of affairs the troubling statistics, again reported at PatentlyO, showing a long wait time before the Examiner even gets to an office action. Similarly, the significant lag at the BPAI to even reach a decision on the merits, averaging 542 days (1 2/3 years), causes concern.

What does this mean? One conclusion is that there is a general belief that there are too many questionable Examiner rejections and that the only way to get a fair review is to appeal to the BPAI--hence, the soaring appeals. But because appeals are now sought more frequently, instead of after serious consideration, more questionable appeals are being filed--hence the plummeting reversal rate. And in both scenarios, it will be a long time before a decision because of the double lag times imposed upon Applicants by the Patent Office. The dedicated IP entrepreneur should increasingly expect to be "patent pending" for quite some time.

Naming your business

Picking a business and/or product name can be tricky. The more a name describes the product/business the more the name is not protectable. Pick a generic name and get instant recognition--but anybody else can use the name also. Building a reputation into an unusual nondescriptive name takes time and effort, but usually yields a more protectable name. But don't choose a name chosen by somebody else because then you risk trademark infringement/dilution liability. These precepts making choosing a name difficult. Nolo recently published an article on "Picking a Winning Name for your Business" which discusses some of these issues, and others.

Would you care if someone copied you?

Clients always downplay their product or their mark. It's not patentable, I didn't invent the wheel, anybody could do it. A simple question changes the mind: "Would you care if someone copied you? --copied your GUI (graphical user interface), your software engine, your product name or your company name." If you would care, then it is worth protecting. Whether talking about infringement, counterfeiting, misappropriation, et al., the normal term is "copying". When phrased that way, most people do care if their work is copied. That's where IP audits and business plans come in. IP audits review the business and see what IP protection may be needed, and the current state of the IP protection, among other things. It includes a review of employment agreements, shareholder agreements, vendor agreements, products and product names, websites and web engines, processes and procedures. What is your IP, how is it protected, how much protection can you afford, and which IP is at the core of your businesses profit-making? Once the IP is identified and the state of protection determined, budgets can be set. Of course, none of this matters if you don't care if someone copies you.

So I'm an inventor, what now?

You have invented the new widget. You have decided to seek patent protection. What now? Does the money just come when the invention is patented, or the application is filed? Does corporate America send you green mail when you notify them of your impending rights? Not hardly.

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.

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.

Design Patents reinvigorated

Design patent holders will be thrilled withe new decision by the Federal Circuit in Egyptian Goddess, Inc. v. Swisa, Inc., _ F.3d _ (Fed. Cir. 2008), making enforcement of patent protection for design patent owners less onerous. Design patents protect the ornamental features of functional articles. Previous to the Egyptian Goddess decision, the test for infringement was (1) substantial similarity from the perspective of an ordinary observer, and (2) the accused device contains the same points of novelty as the ptented design. The second test required claim construction in words of the graphic ornamental features and was used for appeals, hearings, and other purposes in defense of a design patent infringement suit. The Federal Circuit in Egyptian Goddess did away with the point of novelty test, thus easing the burden on patent holders in proving infringement. Since design patents are often easier to obtain, and less expensive, than utility patents, this is a significant boost to the small business ip entrepreneur.