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 

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 
          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.

             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 

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

                           ---- end budget ----
                                 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

     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 <--------------------------
   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 ---   
                             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.  
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 
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 
     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 
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 

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 --


                          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 
       I. PATENT:
           Patent files can be searched by:
             Key Words, (all fields, including references)
             Product classification
             Assignee  (owner)

             Assignee,  if any
               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 
         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 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
         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).

           Trademark files can be searched by:
             Key Words and/or artistic design
             Product classification (goods and services)
             Assignee  (owner)
             Full description,  index to published reference in Gazette.
         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.
         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



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 

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 

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 

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 

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 

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 

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 

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 

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.

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