Contents: I. BUDGET II. INTELLECTUAL PROPERTY PROTECTION IN THE U.S. PATENT OFFICE III. Steps to Patent and/or Producing a Product IV. Other uses for a the patent and trademark files V. An article on software and other patents DISCLAIMER: This document is not intended to be "Legal Advice". Author is not an attorney The document is anecdotal for your consideration. Seek competent advice before using any of it. Author accepts no responsibility of any kind, including, consequential, and/or incidental losses incurred from its use. ============================================================================== --- BUDGET --- Patent Office fees shown are for SMALL ENTITY. Double for businesses not qualifying as a "small business". Fees and prices for estimation only. Verify before sending. 1. File Disclosure Document with Patent Office (PTO) $10 (filing optional, writing it has its own justification) or file a Provisional Application. $75 (A provisional must meet USC112 requirements to be effective. Know the advabtages abd limitations of a provisional application if you use this proceedure.) (see Drawings and Specification below) 2. Patent Search (optional, recommended) Professional Search $360 min Self 0 P.R.E. $0 - 200 Note: A search is to see if there is a reasonable probability of having a patentable idea. Often only a small part of your idea is patentable. In any case, the PTO will do a search so you should spend only enough to avoid obvious non-patentable claims in your application and to provide information for the "Background of Invention" paragraph. 3. Prepare Drawings and Specification. attorney = $2000 - 10,000 Get fixed fee contract if you can. P.R.E. = $400 - 700 self = $0 Drawings: Must be accurate and complete, but not necessarily pretty and to exact specification for submission at filing. Good drawings are required AFTER the PTO notifies you that a patent will issue. Specification: Follow the example of one or more recent patents on a similar subject. Get help: Good Patent-it-yourself books available. About $45 Visit library. A patent agent or attorney can be used as a resource to review and guide you. If he will do it, it should not be too expensive. Do not pay much more than the application fee. Buy MPEP from the Patent office, about $100, or get a computer copy from PTO bulletin board or Internet. http://www.uspto.gov Note: Once you file your application, no substantial changes can be made in content of either the text or the drawings. Editing, clean-up, etc, ok. Claims can be changed, but only if the text supports the changes. However, you can revise and refile (+ another filing fee) with only a potential loss of possible rights. 4. File the Specification with the PTO (small entity = ) $385 4a. Or file a Provisional Application, accepting it limitations $75 then file a regular application within 1 year.. $375 5. Office Actions There are no additional charges for the office actions. But, if you miss the time deadlines, 1st $55 there are fees for extension of time. Big fees. 2nd $195 Note: It is common practice for attorneys to dawdle 3rd $465 and cause extension fees to be levied, which 4th $735 they charge back to YOU. Be sure that any contract with them requires THEM TO PAY THE FEES, NOT YOU. 6. Submit acceptable drawings when notified that a patent will be granted. 7. Pay Issue Fee to PTO, if the patent is granted. $645 8. Every 4 years pay Maintenance Fees to PTO. $510 Patent is canceled if the fees not paid. $1025 $1540 ---- end budget ---- =========================================================================== INTELLECTUAL PROPERTY PROTECTION IN THE U.S. PATENT OFFICE By Bruce Ross, PE An Engineer, not an Attorney April, 1996 Fees listed herein are for 1997. Many were raised in October 1996. There are 4 programs within the U.S. Patent Office that offer various levels of registration and/or protection of your idea. 1. Disclosure Document Program. 2. Design Patent application and patent. 3. Provisional Utility Patent Application. 4. Utility Patent Application and patent. Disclosure Document Program: Filing Fee $10 "Quality" or formality of papers. Must be a good description, if it is not described, it is not disclosed. Describe how to make and use. May be hand drawn. Ink or Xerox copies. Not necessary to be in "patent" format, but best if it conforms with USC112 in content. May (should) have alternate designs, uses, background, competition, anything slightly relevant. Hint: more than one invention can be piggy backed onto one disclosure. Other papers: Only a letter requesting filing under the Disclosure Document program. On oath. No proof that the invention works. No small entity document. Protection: Not much. None against infringers. It does provide a clear date of conception and/or reduction to practice in the United States (or NAFTA country). Since the US dumped 200 years of precedence as a first to invent country in favor the European practice of first to file (thanks to GATT treaty), the value of a disclosure document is diminished, but not zeroed. Other: Filing with the PTO is recommended. The PTO is a third party of impeccable repute and is neutral. PTO keeps disclosure documents for only 2 years. Your copy is still valid, but not backed up at the PTO. The same legal protection is available if it is filed with your (any) attorney or a friend, however, PTO filed documents can be drawn into a patent application for reference and as an antecedent for changes that might be needed in a later patent application. Design Patent: Filing Fee $155 (small entity). Requires proper format and all the filing documents, Oath, etc. Protection: Appearance only. A design patent is only for the shape, appearance, and decoration of an item. Its utility, how it works, and things not visible from the outside are not included or protected. Note: the utility of a design patent may infringe on some other patent, and if the utility of your invention can be packaged in another case, you are NOT protected. Can use "patent pending or Patent applied for" while the application is pending, and "Patented" during the life of the patent. Term 14 years. Provisional Utility Patent Application: Filing Fee $75 (small entity) Requires specification and drawings in conformance with USC112. Does not require Oath, Claims, References, summary, abstract. Specification should, but it is not required, be in "legal style" print, ie. typed 1 1/2 or double space with line numbers and proper Patent margins. Does not require all parts of a regular application. Should have alternate designs, uses, background, competition, anything slightly relevant. Hint: more than one invention can be piggy backed onto one application. All will get a filing date, but only one can be in each of any subsequent patent application(s) based on the Provisional. Caution. If any patent issues, all of the provisional and any other communication with the PTO will become a public document. Protection: Obtains a filing date, which, since GATT, is the important date in establishing priority over other inventors of same or similar invention. Can use "Patent Pending or Patent Applied For". A provisional application is very similar to a patent disclosure in every way except that it comes with a valuable filing date, foreign filing license, and constitutes a "filing" for enabling sale of product without losing foreign patent rights. Provisional application does not protect against an infringer prior to issue of the actual patent. Term 1 year. Utility Patent Application: Filing Fee $385 (small entity). Requires full formal filing if all papers in PTO acceptable form. Protection: Application permits the use of "Patent Applied for or Patent Pending" marking while the application is pending. Privilege is lost if a) the application is abandoned, ie, no patent is issued. b) the patent issues. Then mark "Patented". An application does not protect against infringers during the pending period. When Issued: Permits the patent holder to control "make, use, and sale" of his invention as described in the CLAIMS. Term: 20 years from date of application if periodic maintenance fees are paid. Note: actual term is usually from 15 to 19 years depending on how long it takes to process the application. The above is a summary of the patent products offered by the US Patent Office. It is not to be considered as definitive or construed as "Legal Advice". Before acting upon the above information, the inventor is cautioned to consult competent advice or inform himself on the subjects. Trade Secret: A trade secret is just what the words mean, and it is up to you to protect your secret by whatever means available to you. However, a patent by custom and statute is a disclosure of your invention. The application must disclose what you consider (at the time of application) to be your best design and "how to make use" and when (if) a patent issues, the knowledge disclosed is made public. Furthermore, when the patent expires or is abandoned, the public can use it at will. At this time, an application is held in confidence by the PTO both during the examination and forever thereafter if the application does not result in a patent. There are some exceptions, but these are generally under the control of the applicant. Thus, an invention for which a patent is not issued may be continued as a trade secret. The problem with trade secrets is that many can be broken by legal means such as reverse engineering of the product sample acquired through the regular channels of commerce. (A sample or information provided to another either free or at discount for other purposes carries with it an implied "don't copy" instruction. BIG WARNING <-------------------------- A BILL WAS INTRODUCED IN THE 1996 HOUSE OF REPRESENTATIVES BY PATRICIA SCHROEDER AND OTHERS TO HAVE THE PATENT OFFICE ---> PUBLISH PATENT APPLICATIONS DURING THE EXAMINATION PERIOD (at 18 months pending) <---. They claim (falsely) that this is required by the GATT treaty. It has been purported to Actually be is at the request of JAPAN. The bill is dead for 1996, but watch for it to reappear next year. Already 200 years of US practice and experience has been dumped in favor of the way it is done in Europe and Japan using the GATT treaty as an excuse. More is on the way. Keep in touch with your elected representatives about your concerns and stories of how your business will be affected.. ----------------------------- Effect of "Patent Pending": 35USC Chapter 28 & 29 are the statutes on infringement and within them is a paragraph providing for penalties for falsely using "Patent Pending". No specific statute positively provides for the use of the term "Patent Pending" or an equivalent. "Patent Pending" per se carries no clout, but is a warning to any infringer that when the patent issues, they may be shut down and lose all investment in product development and inventory. There are other useful ramifications from marking "patent pending". [file: protect.doc] ---- end ---- ============================================================================== --- STEPS TO PATENT --- AND/OR PRODUCING A PRODUCT Before significant money is expended on the development and marketing a product several serious questions must be answered. 1. Is there a market of sufficient size willing to pay the price required to recover the costs development, production, and distribution? More simply, "Will it make or lose money?" 2. Is the product likely to infringe on an existing valid patent? 3. Does anyone else have a right to your invention or to interfere with your business? In particular, your employer, business partners, and/or your ex-wife. 4. Is the product public domain or is it patentable? The first must be answered "YES" and the second should be "NO", but if it turns out that there IS a possibility of infringement, that knowledge and the cost of dealing with it (pay royalties, ignore and risk lawsuit, etc) must be factored into the #1 decision. Answer #3 needs evaluation. Others' rights usually are conferred via employment agreements, which may be either in writing or unwritten, or common law. Old common law conferred absolute ownership on ALL of an employees output. This has been considerably eroded by modern court decisions and varies from state to state. Washington labor statutes limit the employers' rights. Non-compete and proprietary information clauses may impose operating restriction. Answer #4 does not involve legal entanglements if your invention is discovered to be in the public domain (non-patentable). If it appears to be patentable, the costs of preparing and filing the application (absolute minimum about $365 application fee + $600 issuing fees) and must be considered. You can go into business without a patent or may wait up to a year before applying for a patent. If you do not patent, you may be in business, and no one else can patent your idea, but someone may copy it and compete. Cost/benefit analyze will show that there are good reasons for patenting and good reasons for not patenting. It is a business decision and each inventor has his own criteria. STEPS: The sequence of some of the following steps may be exchanged. 1. Innovation or invention is conceived. 2. Invention is reduced to practice. The details are worked out. Models usually made. Notes and notebook should have been kept up to date. 3. Write up the invention as descriptive you can be to be a disclosure document for the Patent Office. Note: this is also an excellent exercise in organization of your idea and is one of the best methods to communicate your idea to those who you employ to assist you, especially your patent attorney or agent. The disclosure document may in any form, but may be in the general form of a patent application and thus is the first draft of your patent application. The disclosure document is not an application. It can contain errors in fact, speculation, "blue sky" ideas, non-patentable ideas, and anything remotely relating to your invention. I recommend that you be as expansive as practical to cover your bases. Some may be useful later as an improvement. The disclosure can serve as a proof that you thought of it then. Most of these must be purged in the actual application. 4. File the disclosure with the Patent Office. 5. Do a patent search of active patents (since 1975 are in computer files) and the patents referenced in any patents close to your idea. 6. Analyze both the texts and the CLAIMS of those found close to your idea. Infringement is based on the concept that your idea matches the CLAIMS set forth in an active patent. If you find an infringement potential, consult an expert about its probable danger and how to deal with it. Public domain is defined if the idea is or has been in use unpatented, been described in any format including expired patents, text books, magazines, advertising material, etc. Being described in the text of an active patent may also create public domain if the description is not included in the claims. 7. Prepare and file your patent application in the format prescribed by the US Patent Office. Drawings may be "informal" at submission and be put into exact prescribed form later during the examination process. 8. Patent Office will examine your application and it usually will draw considerable criticism. These are called Office Actions and are normal and to be expected. Just methodically work through the objections and directions from the PtO. Talk to the Examiner by telephone. 9. If you meet all the objections, you will be notified that your patent will be allowed and the issuing fee is due. 10. The Patent Issues. HooRay! 11. At prescribed intervals, the patent comes up for renewal. Failure to pay the renewal fees will result in forfeiture of the patent into the public domain. Each of the above may be done by the inventor and there is considerable help available in guide books and by professionals. You may represent yourself before the Patent office, or be represented by a Patent Attorney or a Patent Agent. Patent Attorneys are law trained, and have passed both the State bar and the Patent bar. They must have a science, preferably an engineering degree. Only a few attorneys meet this requirement. However, there is no requirement to make a showing of technical understanding, competence, or achievement. Few have practiced any engineering or even been involved in the design, production, or distribution of a product. Patent Agents are also science trained and have to pass the same Patent bar. They can represent you before the Patent Office, but not in the civil courts, such as in an infringement suit. Most agents are experienced engineers, or other science specialists such as biochemists, etc, or ex-Patent Office examiners. An important distinction between an Agent an Attorney is that in using an attorney, you are employing, and paying for, talent and skill that is superfluous to obtaining a patent. None of the talents or law practice of an attorney is required to represent you before the PTO, and for those business needs that you would generally use an attorney for (ie, licensing, contracts, infringement suits, etc) NONE require the patent bar, any attorney is licensed to perform them. Lastly, when you use an attorney for your patent work, you also get the "attorney attitude, hubris, ethos, fee structure, and way of doing business". If you decide to go the do-it-yourself route, I urge you to retain a patent agent or attorney as advisor, especially to review the application and for guidance in responding to Office Actions, especially if your examiner is one of the crabby ones. A poorly drawn application can be rejected or result in a virtually useless patent. Interestingly enough, an application can be cleaned up and refiled several times, often as many as 20 times, for less than the cost of attorney fees to do the work and represent you once. Occasionally, even an attorney will botch an application. More likely, they might dawdle and cause late fees to be levied. Some (most?!) attorneys bill these attorney-caused fees to the client. Inventor filed patent applications have one other advantage. The Patent Office MUST provide CONSTRUCTIVE help to the inventor when asked to do so. Not so when an attorneys and agent files an applications. There is one downer, It appears that some PTO Examiners prey on the ignorance of inventor-applicants and act arbitrary and bullish to get the application dropped. This is because they are under pressure to clear their docket. Having an application dropped is easier and quicker than properly examining and issue. It is also more "profitable" for the PTO, especially when the 1/2 price discount for an individual inventor is applied. Fortunately, most examiners are great people. -- END STEPS -- ========================================================================== --------------------------------------------------------------------------- OTHER USES FOR SEARCHES OF PATENT AND TRADEMARK DATA BASES AND DOCUMENTS MAY 1996 Patent and Trademark searches turn up a remarkable set of references and information related to the invention or product being searched for the usual purposes. This observation opens the concept that these readily available public resources can be used for intelligence gathering. Most prominent of these is a list of others who may be in business closely related to yours. A valuable bit of knowledge for your business plan, managerial expertise, business development, marketing, technical knowledge, or employment research. I. PATENT: Patent files can be searched by: Key Words, (all fields, including references) Product classification Inventor Assignee (owner) Addresses Find: Title Classification Abstract Inventors Assignee, if any Attorney References other patents technical articles Each hit will lead to all of the data associated with the revealed patent. Some data bases are more complete than others, necessitating a look at paper references such as the GAZETTE or Full Patent Document. At present, Patent files are available in computer searchable form only back as far as 1975 and then only the abstract text, not full text. There are some full texts for more recent years. Valued Inferences: Inventors and Assignees: Obviously these are or have been in business related to your invention. They may be potential licensees of your new invention, new partners, or they may be competitors. They may have ideas on marketing you can use. You may find out from them that your hot new idea has already been applied for or has been sold without patent. Their market experience, their successes and failures, may apply to your invention or business. You think that MegaX Company may be interested in your invention. Search for patents assigned to MegaX, if the inventors are in different states than MegaX, it may indicate that MegaX buys outside patents. Note, only assignment, not licensing shows in a search. Also contact the attorney listed, he may know of licensees and the current address of the inventor, or may be an employee of MegaX. (get address and telephone number from PTO or or "PTO Manual of Registered Agents and Attorneys" at your library, or PTO on internet at http://pto.gov or PTO bulletin board 1-703-305-8950). Most individual inventors fail in the business of exploiting their invention for a large number of reasons. Their knowledge from success/failure is likely to be a value to you. They may have determined which large companies will and which will not consider offers from outsiders, and who is likely to be a shark. 2. Classifications and key words: Key words cut across all classifications, and if not restricted, will give hits from all data base fields. Often this results in thousands of hits. Use classifications and field limiters to reject the bulk of useless stuff and/or permit the use of broader key word combinations. Similarly, classifications bring up thousands of hits, use key words to winnow. Some subjects are best found by word searching the reference fields. Medical stuff is one. Cold Fusion is obviously one of these. For some reason, the words "Cold Fusion" are never used in the titles or abstracts. However, the references abound with various references to it and to the original discoverers, Pons and Fleichmann, who have no patents. Often the trade uses some different wording than you might use to describe an idea. Examination of the data usually will disclose some of these. 3. References: References lead to other leads. References to technical publications constitute a bibliography for your invention. Obscure references and private correspondence may not be readily available from the usual sources. However, the application file for issued patents is public record and copies of any or all references can be obtained from the PTO. There is a copy charge. Searching by Patent # will also bring up all patents making reference to the patent of interest. What a way to amass a background file! 4. Abstract and full text: Abstract is primarily used to reject or tag for further consideration. State of Art data (actually 2 to 3 years old) Who 's who. Often other references are mentioned in the full text. Get patent copies at some libraries or from the PTO ($3 ea). II. TRADEMARK: Trademark files can be searched by: Key Words and/or artistic design Product classification (goods and services) Assignee (owner) Find: Full description, index to published reference in Gazette. Classification Assignee 1. Keyword searches: Key words can be for either the mark or for the product class by number or by word description. 2. Owner searches What activities is a company into? Good for job searching. Valued Inferences: Trademarks are associated with real businesses, although some of them may have failed since the mark was issued. Trademarks are issued in relation to the product classifications with which they are registered. These are according to the Manual of Classificaton of Goods and Services. The inferred information is similar to a the patent data, but is broader based as novelty of product is not required to get a trademark. It covers both products and company logo marks. III. OTHER SOURCES: Libraries, trade publications, and catalogs often have cross references between the trade names of products and the supplier. These usually are specialized lists. Their value is that many of these names are not trademarked. Lists like this are often published by Universities and the States. Local libraries usually have copies of publications by State Departments of Labor and Industries and Universities. They may be available on some computer media, probably CDROM. Many libraries have CDROM equipment for patron's use. Many libraries and individuals have access to the Internet. The amount of information available on the Internet is staggering, but it is poorly organized. Good resources are the Library of Congress, Patent Office, Several Universities, Some State offices, NASA, Lots of U.S. Government locations. --- end --- of "Other Uses" ======================================================================= Article on Patenting Software Georgia Computer Law Section Newsletter - Summer 1994 TECHNOLOGY PATENT ISSUES IN THE 90's THE PERSPECTIVE OF A NON-LAWYER --------------------------------------------------------------------------- James L. Alberg, the Senior Vice President, General Counsel & Secretary for Dun & Bradstreet Software spoke to the Computer Law Section at the June 9, 1994 Breakfast Meeting. The following information is his outline on that topic. I. To the extent it matters - are Software Patents "Good" or "Bad"? A. For software patents to be "good" they must accomplish some socially useful purpose. Arguably, to be "good" their positive effects must outweigh their negative effects, especially when compared with the other available methods of intellectual property protection. B. It is clear that society benefits from technological change - society as a whole profits from the introduction of new technology to a far greater extent than the individuals or businesses responsible for the innovations themselves - i.e. the social return is greater than the inventor's return. C. Patents were created as part of a social contract. 1. In order to encourage innovation, and investment therein, the inventor was given the exclusive right to practice his invention (or, at least, to exclude others from doing so) for a limited period of time - currently 17 years. 2. The consideration for this grant is that the inventor must publicly disclose the "best mode" of his invention. Thus when the limited time was over the invention was free for all to practice. 3. Power to grant patent rights granted to Congress by Section 8, Clause 8 of the Constitution. D. With respect to software, at least, the publication of the idea so that the public can practice it at the end of a 17 year period is of no practical use since a generation in the software industry is perhaps 3 years - imagine the state of the art in 1966 now coming into the public domain. E. Thus if software patents are "good" public policy, their effect must be to encourage invention and investment more so than their negative effects. Given that the peak useful period of software is coincidentally around the period of time it takes to get a patent issued, patents tend to issue near the end of the idea's useful life. Thus it would be hard to imagine a person being more likely to engage in inventing and related investment based on the possibility that a patent will protect his idea near the end of its useful life. Indeed, everyday experience shows that software developers have not been encouraged to increase their invention and investment by the relatively new trend towards the issuance of software patents. In fact it is unheard of for anyone in this industry to wait for patent issuance to commercialize an invention. F. On the other hand, the existence of software patents, and the knowledge that a commercialized product can be prospectively violative of a to-be-issued-but-still-secret patent, tends to create uncertainty and instability in the marketplace. The effect of this, as any economist knows, is to increase the cost of capital which discourages investment. G. So. Disclosure of the idea is of no practical benefit, patents tend to issue near the end of the idea's useful life, and their existence discourages investment. The net of all of this I believe is that one cannot help but conclude that patents for software are bad social policy. H. A very interesting contrary analysis appears in Anthony Clapes' article The Soft Revolution: Economics, Intellectual Property and Software Development in the Spring, 1994 Newsletter of the Computer Industry Committee of the Section of Antitrust Law of the American Bar Association (Vol. 1 No. 1). II. Does it matter? A. No. B. Whether you think software patents are "good" or "bad", you ignore them at your own peril. Accordingly one needs a strategy on how to deal with patent issues, which can only be developed based upon an understanding of some patent basics. C. What about the client who says: 'Isn't this hypocritical? How can you take advantage of a system which you believe to be bad social policy?' Questions of social/economic policy are merely policy questions, not moral imperatives, establishing the ground rules upon which commerce is conducted. You can disagree with an economic social policy and yet you must deal with the reality of the marketplace. It is not "wrong" to be opposed to, for instance, the Investment Tax Credit and yet still take it on your tax return. III. Patents are fundamentally different from copyrights and trade secrets. A. To violate a third party copyright or trade secret you must have had access to it. 1. Thus by controlling the materials used you can avoid infringement. 2. It is an absolute defense to copyright infringement that you had no access - unless there is copying there is no infringement. B. Copyrights are also limited to the expression of the idea, not the idea itself. 1. Thus you are free to appropriate any idea from a copyrighted work. 2. While the line between expression and idea is not a clear one, the recent trend has been away from strong copyright protection for computer software (Computer Associates v. Altai), i.e. the line is moving toward software concepts being considered ideas, unprotected by copyright. C. To obtain a copyright you need only establish a minimal amount of creativity (that is why white pages listings and other 'raw' compilations are not copyrightable (Feist)). D. The owner of a trade secret has an even greater burden - to enforce the trade secret (s)he must establish a duty on the recipient's part (usually contractual), the owner's use of due care, and the competitive value of the secret (i.e. that competitors don't know it and that the owner has a competitive advantage from having it). E. To infringe a patent, on the other hand, you may be blissfully unaware of its existence. 1. Thus to prove infringement of a patent you need not establish access. From the patent owner's perspective this means it is easier to enforce. 2. On the other hand it is much harder to avoid infringing others' patents. The usual way to avoid infringement is to do a patent search. a. This is relatively easy for a new dishwasher with hundreds or even a few thousand parts, but is virtually impossible for software with millions of lines of code; b. Since U.S. patent applications are secret until the patent issues and a typical application takes 20 - 30 months to prosecute any search will miss recent inventions; c. The law almost discourages doing a search. You may find a patent as to which you do not have a clear answer as to whether you infringe on which appears to be invalid. However if you are later found to be infringing upon a patent as to which you had actually notice you become a 'willful' infringer liable for treble damages and attorney's fees. This tremendously ups the ante. IV. Patents Generally. A. A U.S. 'utility' patent is the right to exclude others from making, using, or selling the claimed invention in the United States. 1. Exclude is key term. A patent does not grant you the right to do anything - there may be other patents required to practice your invention. B. Product or process must be useful, new or novel, and unobvious - one skilled in the relevant art based upon technology available at time of invention would not be expected to have come up with it. C. Timing rules complicated - basically 1 year from first sale or disclosure of the invention in U.S. Absolute novelty rule elsewhere (i.e. you can't have disclosed or sold it), but you can bootstrap on U.S. filing. U.S. grant based on first to invent, overseas first to file. D. Takes about three years in U.S. from filing to grant. Currently patents are valid for 17 years from grant, regardless of how long prosecution takes - even if 20 years. Under recent (January 1994) U.S. Department of Commerce/Japanese patent protocol the U.S. is committed to going to 20 years from date of application - this will require congressional action. E. U.S. applications are secret until granted. Overseas applications are published, usually 18 months after filing. F. Cost of prosecution usually $15,000 to $25,000 in outside counsel fees for U.S. Overseas applications incremental cost $3,000 to $7,000 for EC, same for Japan, particularly under recent protocol where errors in Japanese translation will not be fatal. G. Owner of patent is employee/inventor. Be certain your employees have contractually assigned all work-related inventions to their employer (but watch for state laws (particularly in California and Minnesota) limiting employer's rights and requiring certain notices. H. Owner of patent has presumption of validity. It is for defendant/infringer to establish invalidity of patent - usually for failure to disclose prior art. Novelty/obviousness are rarely grounds for cancellation. 1. In "old" days about 50% of patents were found invalid when appeals went to the "regular" United States Courts of Appeal; 2. New Court of Appeals for Federal Circuit has been heavily pro-patent. Now about 80% found valid. There is effectively no appeal from this Court - with a recent exception the Supreme Court views the CAFC as the subject matter expert and since there can no longer be conflict between the circuits sees little reason to grant cert.; 3. Can ask for "re-examination" by Patent & Trademark Office. a. This is generally avoided as the District Courts tend to treat a re-examined patent as being almost inviolate. I. There are some maintenance fees on patents. J. No obligation to enforce patent, but laches does set in at some point. K. About 1,400 patents infringement actions are brought each year, up 26% from 10 year average. V. Patent System is currently broken. A. Examiners have little experience in software (until recently had to have engineering degrees). B. Examiners have had little access to 'prior art'. C. Result has been a number of ill conceived patents. 1. Patents exist on (stop time - start time) x hourly rate = wages; windows; red-lining text comparison features; all expert systems with knowledge engines; pull down menus; and electronic spreadsheets. D. Hope for the future. 1. Patent examiners may now have computer science degrees. 2. Industry establishing Software Patent Institute to provide prior art. a. Based on Biotechnology model; b. General consensus by both those for/against that this should improve the situation. 3. The PTO has been holding hearings in California and Washington regarding the desirability of software patents. 4. New Commissioner seems to have a real interest in the problem. E. Due to built in lag time patents applied for years ago are only now showing up as enforcement actions. 1. Microsoft reportedly apply for dozens of patents/year. 2. Waiting to determine if there is a problem by the time it hits the radar screen is too late. 3. To some degree this should change if US/Japan deal followed through. VI. OK, You've Identified The Problem - What's The Solution? A. Initially it appeared that having a portfolio of software patents was a strictly defensive weapon (a 'gun'). You didn't get software patents because you really wanted them but, rather, as a defensive strategy (something to trade). B. The something to trade strategy fails against those who seek to use their patents only as a revenue tool - i.e. Refac. 1. As an aside one significant improvement which should be made in patent law is to require the inventor to either commercialize a patent (or license it to one who will commercialize it) as a condition to seeking enforcement. C. Given that others in our industry did not seem to have a strong patent portfolio there was little need to trade. Every indication is that the number of software patents being applied for and issued is steadily. One recent estimate is that their are 20,000 software related patents outstanding. D. After Computer Associates v. Altai's weakening of software copyrights patent protection for software looks more desirable. E. Additionally others in the industry are building their portfolios. Example $20,000,000 payment by MicroSoft to IBM. Example purported MicroSoft strategic patent initiative. F. Regardless of whether you think software patents are good, bad, or evil, one needs to recognize that they are there, that others have them. We need to come to grips with the reality of software patents. G. Unlike most insurance where, in hindsight at least, you can tell if you made the right decision, you may never know if having a patent portfolio was beneficial. VII. What should a developer be doing? A. Begin program of identifying and patenting inventions 1. Need a program to identify patentable ideas 2. Need to recognize: a. Average developer thinks software patents are 'bad', will not be inclined to cooperate; b. Average developer will find dealing with patent lawyers boring and time consuming; c. Average developer may find assignment of invention to employer unseemly. 3. Need to begin to educate development management world-wide on desirability of patents, need to identify and prosecute patents. 4. Many successful companies recognize/reward employees with patented ideas. 5. A Critical Success Factor is to find Patent Counsel who can communicate with developers, not just lawyers and businesspeople. This is a special talent. Look for high rates of data exchange. 6. Could begin monitoring competitor's patent applications, particularly at European Patent Office. B. In-bound software. 1. All in-bound software distribution arrangements must contain strong patent indemnification and representations but recognize that as between you and your customer it is your problem. a. There are still business people who think that because they are indemnified they are somehow immune from liability 2. Many software companies and their counsel take the position that patents are too uncertain to indemnify against. They are right, but that misses the point. What you are doing is allocating economic risk and the party receiving the royalties should bear the risk. C. Third party patents. 1. General consensus is that doing searches is impracticable. a. Too many things in software to do effective search - do you want to spend as much on patent lawyers as developers? b. Problem of finding arguably infringing patent and not obtaining license with attendant risk of treble damages, etc. The Biggest risk of 'ostrich' practice is injunction. 2. Evaluate and settle claims as cheaply as possible (while holding your nose). In many cases a one-time license can be purchased for far less than litigating. In fact, that is precisely the strategy of many patent claimants. Copyright 1994. Dun & Bradstreet Software Services, Inc. The views expressed herein are those of the author and are not necessarily those of D&B Software. ---- end ---- ========================================================================= This document is a largely-plain text file. Downloads are readable by ordinary non-webber-geek real people right in your own word processor or file viewer such as LIST.COM from http://www.shareware.com is one of the best.Home page = http://www.seanet.com/~bross -- for much more information about patents, patenting, and business.
To the US Patent Office's home page.
Provisional Applications, a Bargain
For $75 you can mark your product "Patent Pending" and preserve foreign
patenting rights without having to assert that it incorporates an actual
Be SURE to include a RETURN ADDRESS. Either in the box or in the body of the request.
Last Revision Dec 6, 1996
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