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.

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.