With provisions of the America Invents Act beginning to roll out, it is a good time to review the overall patent process. Here we review the early stage from conception to filing the application.
An inventor’s idea should be matured to the point where it has been built or described in sufficient detail that it can be built in order to file a patent application. This early stage is also a useful time to perform a search to help determine how close the invention is to related techniques that already exist. It is also important for inventors to understand certain patent laws during this stage to secure a filing date for the patent application that avoids bars to potential patent rights .
“With the new laws, particularly the ‘first to file’ rule, it is important to keep track of your disclosures and to move forward with your filing sooner rather than later,” says Alan Brandt, an associate with Fay Sharpe LLP.
Smart Business spoke with Brandt and associates Namit Bhatt and DeMarcus Levy about considerations to be mindful of during the initial phase of the patent process up to the point of filing the application.
When is an idea 'ready for patenting'?
There is a difference between conceiving an idea and being ready to file a patent application. You are ready to file if you have built a prototype of model of the invention or when you have written a description with enough detail to practice the invention. The stage at which your idea is 'ready for patenting' is called reduction to practice (RTP).
RTP includes two forms: actual and constructive. Actual RTP means that the inventor has built and used the invention for its intended purpose. Constructive RTP occurs upon the filing of an application with a detailed description of the invention.
What is eligible for patent protection?
The patent statutes define four categories of subject matter eligible for patent protection -- process, machine, article of manufacture and composition of matter.
- Process – an act or series of acts or steps.
- Machine – a tangible thing with parts and/or a combination of components.
- Article of manufacture – an article produced from raw materials or assembled from components.
- Composition of matter – a chemical compound or mixture of ingredients.
The invention is defined by the claims of a patent application. A machine is defined by apparatus claims, while a process is defined by method claims, an article of manufacture by apparatus claims and a composition of matter by chemical claims.
There are some exceptions to the statutory categories, which are rooted in a premise that basic tools of science and technological work are not eligible for patent protection. These include laws of nature, physical or natural phenomenon, scientific principles and abstract ideas, which are disembodied concepts, or mental processes without specific applications or structural limitations.
How does the invention relate to the 'state-of-the-art'?
The common misconception among inventors is that the novelty of the invention must be a broad, game-changing advancement of technology. Such advancements are indeed patentable. However, incremental changes or minor improvements can also be patentable.
Novelty is one requirement for patentability of an invention. To satisfy the novelty requirement, an existing technique must not include every aspect of the invention; if it does, the existing technique is said to anticipate the invention. Another hurdle to patent protection is obviousness. In order to be non-obvious the invention must not have been obvious to a person who works in same field at the time of the invention.
A patent search can be performed prior to moving forward with a patent application to get a better understanding of how the invention relates to the 'state-of-the-art.' Performing a search is not required, but is useful in identifying, for example, related existing techniques that never made it to the storeroom shelf. The search can help avoid expenses for a patent application in which the invention is unexpectedly close to some search result. The search can also ensure that inventors are aware of features of the invention that currently exist and features that are more likely to be deemed novel.
What actions by a patentee can bar patent protection of the invention?
An invention can be barred from patent protection by a public disclosure. In the U.S., there is a one-year grace period in which to file a patent application after public disclosure of an invention. In some countries, there is no grace period and public disclosure is an immediate bar to patent protection. Public disclosures can include describing the invention in a printed publication; putting the invention on display or in public use; and offering to sell the invention or including it in a product release.
How should filing the application be coordinated with actions that can otherwise bar patent protection?
Ideally, a patent application is filed prior to the earliest planned public disclosure of the invention. This preserves potential patent protection in all countries. If the invention has already been publicly disclosed, the patent application must be filed before the expiration of the country’s grace period. For example, in the U.S., there is a one-year grace period after public disclosure. In some countries, there is no grace period. The American Invents Act implements a 'first-to-file' system which acts as an incentive for inventors to file patent applications as soon as possible in order to establish priority over another inventor filing a patent application for a similar invention.
Alan Brandt, DeMarcus Levy, and Namit Bhatt are associates with Fay Sharpe. Reach them at (216) 363-9000 or firstname.lastname@example.org.
Insights Legal Affairs is brought to you by Fay Sharpe LLP
U.S. patent law is going through some changes with the implementation of the America Invents Act (AIA), and these changes could affect businesses.
“The biggest change is that in the past, a patent would be awarded to the first to invent and under the AIA, it is now the first to file,” says Tim Nauman, a partner with Fay Sharpe LLP.
The transition represents a big change in U.S. patent culture because the first to invent system in the U.S. was viewed by many as beneficial to entrepreneurs. If you were the first to invent, you could fight for the patent regardless of how quickly someone else filed for it. However, under first to file, some say it is now the one with the most resources who gets to the patent office first who wins.
Smart Business spoke with Fay Sharpe partners Joe Dreher, Eric Highman and Nauman about how changes to U.S. patent law will impact businesses when they take effect in March 2013.
What benefits come with the change in the patent law?
The U.S. was historically the only country that issued patents under first to invent, so this harmonizes U.S. laws with those in other countries. People want consistency; they don’t want to deal with different laws in each country.
Also, the determination of who invented first was sometimes a complicated process, called interference, which the Patent Office or federal District Court would undertake in the event of a dispute over who came up with an idea. The new system eliminates that administrative or court proceeding with regard to this issue, which created some uncertainty for businesses
What can companies do to stay competitive, given the changes to the law?
Ideally, if you think of an idea today, file it today. But while there is no quicker process to getting an invention application on file and established, reality would tell you that this probably isn’t going to happen.
Companies are accustomed to having their employees/inventors fill out an invention disclosure form that they then submit to an internal review process. But that takes time. So under the AIA, the best thing to do is file a provisional patent application as quick as possible and flesh out the internal review details later so as not to get beat to the Patent Office.
While that takes care of the early part, filing multiple provisional applications is just as important because as the idea transforms into a marketable concept, it can change. As the development process goes forward, there could be other features that need to be filed in much the same way as the first. If you haven’t described all of those features in the original filing, you can potentially be second to someone who has.
What’s the difference between a provisional and a nonprovisional application and which is preferred?
In the U.S., provisional patent applications can serve as a basis for garnering an early filing date. It establishes a reliable priority date for “first to file” purposes, but a patent won’t be issued from it. Rather, a nonprovisional patent application must be filed within one year from the earliest provisional application. It is the nonprovisional application that is searched and substantively examined by the U.S. patent examiner. The official fees for nonprovisional applications are more than twice as expensive, so it makes sense to file multiple provisional applications quickly and at a lower rate.
However, there are competing concerns of getting the provisional application filed quickly and getting it filed with sufficient detail. It’s important to get as much detail as possible in the provisional application(s) because only that which is disclosed in a provisional application is entitled to the priority date. If there isn’t enough detail in the application to make the invention work, it may not qualify for patent protection.
Does public disclosure by the inventor impact rights to a patent?
The best approach is to file a detailed provisional application before the product is made public or file as soon as possible after the disclosure. If the application is not filed before public disclosure, the inventor still has one year from such disclosure to file a patent application in the U.S. However, under the AIA, this one-year grace period is subject to someone else filing modifications or variations ahead of the inventor’s patent application on what has been disclosed. There is a risk that businesses might suffer from a false sense of security thinking that they don’t have to file their patent application immediately because of public disclosure. Therefore, if the disclosure has occurred, file the detailed provisional application as soon after as possible.
Foreign filing considerations may also come into play. If you file for a patent application in the U.S., you have one year in which to file in a foreign country with the benefit of your first filing date. However, if you publicly disclose your invention before you file your patent application, you destroy your patent rights abroad. So, public disclosure before filing is not advisable if you are going to file for a patent in another country. Filing a provisional application prior to public disclosure preserves the potential of getting foreign patent rights.
What should companies do ahead of enactment of the new laws?
Under the current law, you can go back and prove an earlier invention date. For applications filed under the new law — beginning March 16, 2013 — it’s first to file, which means you can’t go back before your initial filing date to prove earlier invention.
Before AIA takes hold, finish all of your provisional applications and, in some instances, convert existing provisional applications with added features/subsequent development work to nonprovisional applications by March 15, 2013 so you still have the benefit of the first to invent law.
Tim Nauman, Eric Highman and Joe Dreher are partners at Fay Sharpe. Reach them at (216) 363-9000.
Insights Legal Affairs is brought to you by Fay Sharpe.
Determining who can lay claim to an invention under patent law can be difficult. In the U.S., the key factor is contribution to the conception of an invention.
“Reduction to practice is typically irrelevant for purposes of determining inventorship,” says John M. Ling, a partner with Fay Sharpe LLP. “Rather it is conception that is the threshold criterion for determining inventorship.”
Smart Business spoke with Ling about inventorship and idea conception.
How is conception defined and determined?
Simply, it is who had the idea. When one or more parties were tasked with solving a problem, and they arrive at the solution to the problem, then the invention is born.
A person who contributed to the conception is an inventor whereas a person who did not is not. Merely being in the room when the idea is born is not enough.
There is also an oath and declaration that is signed when the patent application is filed. The patent office will presume that anyone whose signature is on that document is an inventor.
It’s a good strategy to memorialize conception. If a couple of engineers in the R&D department conceive of an invention at a meeting, it’s a good idea to get them to draft a paragraph or two describing the invention in broad strokes, sign and date it, and have a department manager sign and date the document as a witness.
What has to be done to prove creative contribution?
It seems counterintuitive that conception could be a joint endeavor. But the doctrine of joint inventorship permits multiple parties to claim inventorship on a patent application, so long as they contributed to the conception of the claimed invention.
Inventor A bounces an idea off inventor B, who has an idea to help improve the first idea. If that’s what ends up being claimed in the patent application, they are co-inventors.
The claims are a series of short paragraphs at the end of the application that describes succinctly and specifically what the inventor believes he has created. For example, there might be 20 claims in a patent application, and if inventor A conceived and contributed to claims one through 19 and inventor B only contributed to claim 20, inventor B is still a co-inventor.
It should be noted that if claim 20 is deleted or otherwise amended to remove the subject matter that inventor B contributed, then inventor B should be removed as an inventor. Conversely, if someone should have been named as an inventor but was not, that person should be added. If the correct inventors are not listed on a granted patent once it has been issued by the patent office, a door is opened for third parties to attack the validity of the patent. But as long as that error occurred without deceptive intent, the patent holder has a right and opportunity to correct the inventorship listed on the patent.
What steps should an inventor take before collaborating with another party?
In cases where an inventor has conceived an invention but wants to collaborate with a second party, such as an engineering firm to help reduce it to practice, it is recommended that the inventor work with patent counsel to file a provisional patent application for the invention before any collaboration takes place. That provisional application can be seen as a placeholder. It gives you a filing date for your invention, and then you have 12 months to file a non-provisional conversion application.
If collaboration alters the invention slightly, and as a result the collaborator wants to be listed as an inventor, the inventor has the provisional application to fall back on. It provides a measure of protection for them. That approach will mitigate inventorship ambiguity down the road and help determine the fruit of the collaborative efforts, as opposed to the original inventor’s contribution.
Also, as a result of the recently passed America Invents Act, the U.S. will become a ‘first inventor to file’ country on March 16, 2013, meaning that the first inventor to file a patent application for a given invention is entitled to the patent once it issues. Presently, an inventor filing in the U.S. has a one-year grace period from an earliest date of disclosure of the invention to file an application therefor. Unlike other first to file countries, that grace period will be retained when the U.S. becomes a first inventor to file country on March 16, 2013, in order to protect inventors from having their own inventions used against them as prior art. However, filing provisional applications (or even a full non-provisional application) early and often remains the best strategy for obtaining an early filing date and protecting your invention.
What are shop rights?
Shop rights are an implied license that permits an employer to use but not sell a patented invention of an employee when the invention was made within the scope of that person’s employment but with the financing and/or resources of the employer.
We recommend employers have their employees sign an employment contract that includes an assignment clause whereby the employee is required to assign to the employer his or her interest in the invention produced as a result of the employee’s employment.
That means if an employee is hired to improve fuel efficiency and he files for a patent on improving fuel efficiency, the assignment clause ensures that the patent rights belong to the employer. However, if the employee files a patent application for a spoon handle with a unique bend in it, that is likely not within the scope of his employment.
Absent such a contract and the assignment of the invention to the employer, the courts will typically analyze the circumstances of how the invention was made to determine whether the employer has a right to use the invention, and they will look at whether the invention falls into the scope of the employee’s employment, and whether the employer provided funding, tools, or resources, without which the inventor would have been unlikely to make the invention.
In those cases, the employer may have shop rights, despite the lack of contractual obligation on the part of the inventor to assign the rights to the employer, but it should be noted that those rights are generally nontransferrable. The shop just gets to use the invention — it can’t sell or license it or obtain any of the other good features that come with patent protection.
John M. Ling is a partner with Fay Sharpe LLP. Reach him at (216) 363-9000 or email@example.com.
In today’s global marketplace, many U.S. companies have the desire to claim a position at the forefront of innovation. However, if your company is developing innovative ideas, it also has a higher level of exposure to the risk of patent or copyright infringement.
“A lot of companies think they have the coverage for this exposure, but they really don’t,” says Phil Coyne, a vice president with ECBM Insurance Brokers and Consultants. “Copyright and patent infringement coverage is usually limited in a standard commercial general liability policy, if it is included at all.”
By taking steps to protect your intellectual property, you can achieve an offensive position within your market, and use those protections defensively to keep others from encroaching on your market.
Smart Business spoke with Coyne about how to protect your patents and copyrights.
Why is patent and copyright infringement important?
With the increasing use of the Internet, e-commerce, technology and a global marketplace, and with many companies using these tools for their advertising and sales, there is a higher exposure to patent and copyright infringement claims.
Companies need to protect themselves from these exposures because infringement claims can have several negative consequences for a business. First, costly lawsuits can be avoided and, second, a copyright infringement claim can do irreparable damage to a company’s brand and its reputation with customers.
Is there coverage available for patents and copyright?
The simple answer is yes, but it is a little more complicated than that. While many companies may believe that they have coverage under their standard commercial general liability policies, that coverage is very limited in nature.
To trigger coverage for copyright infringement, an insured must first demonstrate that the injury occurred during the policy period and that it arose in conjunction with its advertising activities. The typical policy has an intellectual property exclusion, and there is not coverage for patent infringement.
In response to the exposure and gap in coverage in this area, the insurance industry has developed various policies. There are specialized policies available for coverage of copyright infringement outside of your advertising activities. There are also specialized policies available for patent infringement.
Examples of these policies are:
* A defense and indemnity policy that is designed to cover claims brought against an insured for its activities regarding use, distribution, advertising and/or sale of its product. This type of policy usually covers the insured’s liability for defense costs, damage awards and settlement payments. Defense costs typically erode the limits of coverage.
* Infringement abatement coverage. This type of policy covers the insured’s costs in bringing and prosecuting litigation against alleged patent infringers. Infringement abatement policies typically cover 75 to 80 percent of the litigation costs but do not cover liability for judgments or damages. Also, the insurer will share in any recovery achieved.
* Patent defense only, or patent infringement defense costs reimbursement, is a type of policy that provides coverage for an insured’s defense costs in patent litigation but does not provide for damage awards against the insured.
How can a company ensure that its patents and copyrights are protected?
There are two main steps companies must take. First, analyze this additional risk and exposure. Second, have an internal companywide intellectual property compliance program. If you do not have one already set up, begin developing one immediately. These programs will enable companies to do two very important and necessary jobs in the risk prevention process — both safeguard their intellectual property and help ensure that they do not infringe on the intellectual property rights of others.
What do companies need to know about an intellectual property compliance program?
There are four aspects of an intellectual property compliance program that companies should strive to understand and implement.
First, it should consist of a clear statement of the company’s policies and procedures regarding intellectual property and its use and development.
Second, it is necessary for personnel to have a clear understanding of their responsibilities and duties.
Third, a successful property compliance program needs a formal training portion to help employees learn about these issues.
And finally, the company must continue to monitor and update its program and all related procedures.
Are there any legal changes businesses should be aware of?
Congress just passed the America Invents Act effective Sept. 16 that is supposed to speed up the U.S. Patent and Trademark office so that the U.S. will be more aligned with the international marketplace regarding patent applications. Even though the process has been streamlined and this law is designed to try to eliminate cases of litigation and patent law, it could cause a potential increase in the number of claims as companies rush to file claims to either take advantage of the old law or the new law.
Phil Coyne is a vice president with ECBM Insurance Brokers and Consultants. Reach him at (610) 668-7100 or firstname.lastname@example.org.