Patent Laws' Fall from Grace-Part III-A Graceless Mess

President Obama signed the Leahy-Smith America Invents Act ("2011 AIA") into law on September 16, 2011, making the largest change to patent law in half a century. The last whole sale change to patent law was the 1952 Patent Act. That act provided for the one year statutory bar related to inventions on sale, printed publications, and public use--also known as the one year grace period.

The sea-change represented by the 2011 AIA, is felt keenly in the change to the one year grace period. Simply put, it is no longer clear what falls within the one year grace period, or whether it is even available at all.

The 2011 AIA states in pertinent part that there is NO grace period with a highly complicated, and currently un-interpreted, exception:

"§102. Conditions for patentability; novelty

"(a) NOVELTY; PRIOR ART. A person shall be entitled to a patent unless—

"(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention;...

***

"(b) EXCEPTIONS. …(1) … A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—

"(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

"(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

This “exception” to an exception inserts a lot of ambiguity into the one year grace period. What is the difference between “the disclosure”, the “claimed invention” and “the subject matter disclosed”? What is a “public disclosure”? What does it mean that the disclosure can be “by another who obtained … directly or indirectly from the inventor”?

For example, does the “disclosure” or the “subject matter disclosed” have to be enabling (within the meaning of 35 USC Sec. 112) in comparison to the eventually “claimed invention”? Is a “public disclosure” of the “claimed invention” or of the “subject matter”, or “other”? And is the “public disclosure” the same thing as a “patent[]”, “printed publication”, a “public use”, a product “on sale”, or something “otherwise available to the public”? What is covered by the category of a disclosure “by another who obtained…indirectly from the inventor”? Does this cover illicit acts? Breaches of non-disclosure agreements?

It took the Supreme Court over 10 years to substantively rule on key sections of the 1952 Patent Act. If it takes over 10 years to get clear and final guidance on the questions above, inventors will be in a state of limbo until after 2022. This guarantees years of litigation and attorneys’ fees. A graceless mess indeed.

Patent Laws' Fall from Grace-Part II-A Foreign Lack of Grace

The one year grace period provided in U.S. patent law for at least the past half century never coincided with foreign patent law. In short, there is, and remains, a lack of a clear foreign grace period. Some countries provide the same one year grace period (prior to the most recent change in September 2011), but for different activities, other than offer for sale or public use. Some countries offer a grace period for offers for sale or public use, but for a shorter time period. Some countries offer no grace period. Keeping up with all the different countries and their differing, or nonexistent, grace periods can be a momentous task---among other things, other countries pass and modify laws the same as our country--so to a certain extent, a moving target aspect exists.

This complexity was somewhat mitigated, but also exacerbated, by the international treaty that provided that filing a foreign patent application within one year of filing a domestic patent application (and claiming priority to the domestic patent application) allowed the foreign application to have the effective date of the domestic patent application, i.e., one year earlier.

The result of that treaty was the creation of two one year bars. The US public use/offer for sale one year bar, and the foreign patent filing claiming prior to the US patent application one year bar. but the foreign patent application may not have the same grace periods that the US patent application enjoyed, so even though the foreign patent application was filed within one year of the US patent application (and claimed priority to it), the foreign application may still be invalid if the inventor engaged in public use or offers for sale within the one year prior to filing the US patent application, even though the US patent application would not be invalid. Confused enough? It's like a bizarre Rube Goldberg machine.

As a general rule, with many exceptions that your patent attorney will have to research, do NOT rely on the existence of any foreign grace period.

Patent Laws' Fall from Grace-Part I: The Golden Age

For at least half a century, U.S. patent law provided a fairly clear one year grace period from public use of, or offer for sale of, a utility invention before a patent application on the invention was required to be filed. In other words, the inventor could publicly use and/or put the product for sale on the marketplace and not lose any domestic patent rights, so long as the patent application was filed within 365 days of the very first time the use was public or the product was offered for sale. The consequences for violating this grace period were lost of patent rights--the invention became dedicated to the public and free for all to use.

This strict grace period was enforced after-the-fact. The inventor was required to swear in a declaration, under penalty of Federal criminal law, that the inventor would disclose all material information to the patent office--public use or offers for sale more than year before filing the application being clear material information.

If the inventor didn't tell the patent office, no one was the wiser--until litigation erupted and the inventor tried to enforce the patent in an infringement suit. Then a well funded defendant with a competent legal team would investigate every nook and cranny, interview friends and relatives, and quite possibly turn up the undisclosed public use or offer for sale. The patent would likely be held invalid, and the inventor might even have to pay the defendant's gargantuan legal fees. Thus were the strictures of the one year grace period enforced.

That was then. The Leahy-Smith America Invents Act signed into law on September 16, 2011 changes all that, as discussed in the following posts.

Article on Innovation Financing Security published in Vancouver Business Journal

http://www.mrpatents.com/Innovation_financing_security___Vancouver_Business_Journal[1].pdf

Search Me: IP Searches in Brief

Intellectual property practice is rife with searches. We list below the more common searches that the entrepreneur will come into contact with or have occasion to use.

PATENT SEARCHES. There are different types of patent searches depending on what is being searched for.

Novelty or Patentability Searches. These searches help to answer the question: Can I get a patent on my invention. These searches encompass all prior art, whether dead, invalid, US or foreign. These searches typically only answer the first of the two main patentability questions, that is, whether the invention is novel in light of the prior art. The second question, much more murky, is whether the invention is obvious in light of the prior art. These searches cannot definitively answer that second question, but can give guidance to a patent professional, and perhaps suggest design around tactics.

Infringement Searches. Infringement searches are also called Right-to-Use Searches, Clearance Searches, or Freedom of Operation Searches. Whether you wish to get a patent or not, you will wish to know if producing and marketing your invention may infringe the claims of someone else’s patent. These searches are more narrow, because you don’t care about dead or expired patents, the relevant date range is the last 20 years, and if you are only interested in the US market, you don’t care about foreign patents. These searches are also more narrow than novelty and invalidity searches in that you only care about patents, not other types of prior art. Like invalidity searches, these searches focus on individual claims of patents.

Invalidity Searches. Invalidity searches seek to answer the question: Was the patent issued erroneously such that it should be invalidated. These searches, which focus on individual claims in a patent, are typically more time consuming than a novelty search. The focus is on finding prior art that existed before the patent application was filed, and which was not cited to or considered by the Patent Office during the examination of the patent application. Just like novelty searches, invalidity searches are not limited to patents and patent applications, but anything which may be prior art, such as an industry report, or pre-existing apparatus, or trade journal article.

State-of-the-Art Searches. These are very different types of patent searches. The point of these searches is to allow researchers and developers to see what is the current state of development in a particular field of endeavor.

TRADEMARK SEARCHES. Also called Trademark Clearance Searches and Name Availability Searches, this type of search is performed to see if a name is appropriable for use as a trademark, both from the perspective of eligibility for registration and from the perspective of avoiding using someone else’s mark. These searches typically search not only State and Federal trademark and corporate name databases, but also yellow pages, phone books, and the Internet, among other sources.

COPYRIGHT SEARCHES. Copyright searches are often the hardest of all searches to be confident about. You can search titles and authors at the Copyright Office, and you can do Google, Google/Scholar, and Google/Book searches. There also exist specialty libraries for various types of artists that can and should be checked, such as for music and the visual arts. But any type of search will necessarily omit huge swaths of published material that simply (a) has not been registered for copyright (even though it is copyrighted) and/or (b) has never been put on the internet.

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.