Inventors are commonly the target of scams, so much so that the USPTO has issued specific guidance, invention promotion companies are subject to mandatory disclosure requirements, and Congress has passed a law prohibiting "Improper and deceptive invention promotion". The World Intellectual Property Organization has issued warnings about fraudulent bills being sent for various fees (and has even asked for suggestions from the public as to methods for stopping these schemes).
These schemes range from truly pernicious (e.g. "pay us $50,000 in advance and we promise you success") to borderline silly ("Congratulations on your newly issued patent. We are offering a one-time-only set of coffee mugs and a framed certificate for a low payment of $200."). However, they all have one thing in common: They exploit the natural affinity an inventor has for anything to do with her invention.
It is notoriously difficult for independent inventors to see every invention as anything short of an amazing innovation that the world need only see to fall in love with. With my 170th United States patent issuing in a few weeks, I find it shocking that my legal training (Harvard no less), my tens of thousands of hours of IP development, marketing, and strategy experience, and my experience in licensing and sales do little to make it easier to abandon inventions that logic says are no longer good investments. In my opinion and experience, inventions themselves serve as a "receptacle for personality", making abandoning them tantamount to giving up on a part of yourself.
If abandoning them is unduly difficult, the drive to be overprotective of them is unduly powerful. The powerful role inventions play in the development of an inventor's feelings of self-worth is a bug in human programming, and one that bad actors now regularly exploit. If humans were software, the inventor's almost parental love of his own inventions would be an unpatchable zero day exploit. Like a true zero day exploit, inventors are almost all unaware of the problem, and even if aware, are often unable to eliminate it.
The best thing an inventor can do is to get advice from a dispassionate third party. An attorney familiar with intellectual property and licensing can be a fantastic resource to this end. While there is no substitute for legal advice (and the following is not legal advice), here are some quick tips, inventor to inventor:
(1) The only time it is ok to pay money to somebody up front before a patent issues is if they have a long track record and good, third party references. Even so, I would only pay money up front to an IP lawyer, an experienced inventor, a collaborator, an employee, or a technical writer. These are all people who can help you figure out whether to continue to invest in the invention and/or help you develop and dimensionalize the invention.
(2) If somebody promises to get you money for an invention you haven't filed for a patent on, that is a huge red flag. There are some programs that are legitimate (for example, the Invention Development Fund), but these are few and far between. Even for legitimate programs, be sure to read and understand the terms of the deal, since they may not work for you. Remember this: A pending patent is worth little in the vast majority of cases. Investors are often risk averse, so unless they are a company staffed to the hilt with patent lawyers and experienced patent strategists, a legitimate company is going to apply an inordinate discount to the price -- if they are willing to pay anything at all. Again, if you don't talk with an attorney or advisor very familiar with the IP market, you are probably going to lose money.
(3) Legitimate patent brokers do not charge you up front. Period. They get paid by taking a percentage of the deal price. There may be exceptions (though I haven't encountered them), but ask whether you would be willing to pay a real estate broker their commission up front, without any promise that the sale would even happen. Despite the America Invents Act's negative effects on the value of patents, patents remain a property right and paying up front means you are paying in advance somebody to try to sell your property.
(4) It is very flattering to get letters congratulating you on your invention -- so much so that whenever a patent issues, the inventor can expect to get half a dozen letters attempting to exploit that flattery. Whether they tout a non-existent customer for your patent if you only advance them a few thousand dollars, or whether they try to sell you a $1 ceramic mug for $50 because they've emblazoned it with your patent number, you must view these letters with the highest level of skepticism. I have literally never made a penny, or seen a legitimate opportunity, in any unsolicited letters sent directly to me. However....
(5) Sometimes letters are sent to your patent lawyer of record. A company willing to send a letter to the lawyer expects the contents of the letter to be scrutinized with a protecting eye. I have been presented with legitimate opportunities in unsolicited letters sent to my IP lawyers.
(6) Patents are an unusual thing, expensive to obtain and imprinted with the personality and dreams of the inventor. In their best incarnation, they are world-changing ideas worth hundreds of millions of dollars. However, the best incarnation is rare, like finding a gold nugget in your backyard rare. Many inventors think their invention is the exception, so important and valuable that the rules don't apply to them. Those inventors are playing with fire. Get professional advice. Get an IP lawyer and an IP consultant on board. Better safe than sorry.
(7) If you have a question about whether a bill is legitimate, call relevant patent office to confirm it. Make sure you are calling the right office (do *not* use the number they provide on the bill -- look up the number yourself).
(8) Very few inventors are able to generate valuable IP without the help of a patent lawyer. Just hire one. Don't assume that an expensive lawyer, or a lawyer from a giant firm, is the best choice. Patent lawyers are quirky, and the great ones often prefer less formal work environments. I've gone from small firm lawyers to big firm lawyers and back. You need to find a lawyer you trust, you get along well with, you communicate well with, and you can afford.
Monday, September 12, 2016
Wednesday, August 31, 2016
Mistakes Inventors Make When Dealing With Patent Lawyers
As an inventor with well over 150 issued U.S. Patents and a Harvard Law degree, I have a unique perspective on the inventor/lawyer relationship. I understand the frustration that patent lawyers feel when the inventor doesn't understand that patent lawyers aren't magicians, patent law is in flux, and that fees should be paid even for a patent application that doesn't end up getting a patent issued. I understand the frustration that inventors feel when their patent lawyer doesn't seem to understand the business reasons for the invention, the role the patent application plays in the inventor's business, and the cash flow issues that face start-up companies (and, increasingly, internal budget limitations for patent activities even at large companies).
This post explores the inventor side of some of the more common mistakes and misunderstandings that impair the inventor/lawyer relationship.
1. Patent lawyers are not magicians:
The most common mistake inventors make is thinking that handing an invention and a big check to a lawyer will magically make a patent issue. Bad patent lawyers will get you a patent nearly every time. Good patent lawyers will tell you when you are throwing your money away. I know this sounds counterintuitive, but as described in more detail in mistake 5 ("The name of the game is the claim"), getting a patent that covers only a tiny, valueless corner of your invention is a great way to incur costs without any corresponding benefit.
Here are some things that inventors should understand (and that good lawyers will explain):
a. Your invention must be patent-eligible (see point 2 below). Some fantastic inventions (like a finding a new antibiotic in a soil sample) are simply no longer patentable; others fall into the vast grey area of patent-questionable subject matter. Your patent lawyer may call this "101" (after the code section) or "Alice" (after one of the cases interpreting 101).
b. Your invention must be novel, meaning that nobody has done it before even if doing it for the reason you are doing it is not obvious. A refusal to issue a patent on this basis is called a 102 rejection, and "is established only when a single ... reference discloses ... each and every element of a claimed invention." (RCA Corp. v. Applied Digital Systems, Inc., 221 USPQ 385, 388 (Fed. Cir. 1984). For example, erectile dysfunction drugs were initially developed with blood pressure control as a goal. If a patent for one of those drugs never mentioned erectile dysfunction, it would nevertheless prevent a later inventor who independently developed the same drug for erectile dysfunction from getting a patent.
c. Your invention must not be obvious. This means that a patent can be rejected if it combines known things in a way that people of ordinary skill in the area of your invention would do. A refusal to issue a patent on this basis is called a 103 rejection.
There are other patentability requirements, but a failure to meet all three criteria will prevent you from getting a patent. A good patent lawyer can amend the claims or argue against the reasons for rejection, but sometimes the only way to get a patent allowed is to modify the claims so significantly that they no longer hold commercial value. A bad patent lawyer can also amend the claims or argue against the reasons for rejection, but is willing to destroy the commercial value of the patent claims in order to do so.
Bad patent lawyers view their job as getting to where they can call you and say "your patent application has been allowed". Good patent lawyers view their job as bringing net financial benefit to the inventor, and that sometimes means calling the client and saying "it is very unlikely we can get claims issued that are worth what they will cost to obtain."
2. Patent law is in flux:
Over the past ten years, patent law has undergone massive changes. These changes left a lot of patent law as a grey area. The two big changes are:
(a) The America Invents Act created several new administrative procedures to challenge the validity of a patent. The standard for validity in these procedures is different from the standard that courts use, and this different standard makes these administrative procedures much more likely than a court would be to invalidate a patent. While a recent Supreme Court case has affirmed that the differing standards of review are correct, the patent community is still working through the implications. For example, some judges will stay a case pending resolution of one of these administrative procedures; others will not. Some patentees have adopted the (costly) strategy of keeping an "open continuation" on file in case they are not allowed to amend their claims during these procedures. A cottage industry has grown up around these procedures, including companies with the primary mission of filing patent challenges and investors who short stock of patentees and then file challenges.
The end result is that U.S. patents are harder to enforce than ever before, and even a patent not being asserted can be challenged in a very costly administrative proceeding. This makes getting patent prosecution right, and structuring the claims correctly, is more difficult and more important than before.
(b) Subject matter eligibility is enormously underdefined. The Supreme Court has taken several cracks at clarifying patent eligibility over the first half of this decade (for example, 2010's Bilski case, the 2012 Mayo case, the 2013 Myriad Genetics case, the 2014 Alice Corp. case), but as Judge Linn of the Federal Circuit observed (in a concurrence), the law is now murky enough that even a "truly meritorious" invention that had "never been done before" and that "effectuated a practical result not previously attained" can, and sometimes must, be defined as patent-ineligible. Judge Linn concludes by noting that "[b]ut for the sweeping language in the Supreme Court's Mayo opinion, I see no reason, in policy or statute, why this breakthrough invention should be deemed patent ineligible."
I have personally had numerous conversations with patent examiners who have unanimously (if off the record) complained that the judicial and patent office guidance is so poor that they often are left to guess as to what courts would consider patentable subject matter.
If you do not discuss with your lawyer the implications of the current state of patent enforceability and patent eligibility, you are setting yourself up for enormous unexpected costs and disappointing results. There are strategies that can be employed to deal with these issues, but they need to be deliberately pursued.
3. Costs and fees need to be treated differently:
Patent lawyers are often flexible about how quickly they are paid. While this is an issue that should be discussed in advance, it is not uncommon for startups to experience big fluctuations in cash flow and to be slow in paying down legal bills. However, the legal bills really contain two elements: Fees and costs. Fees represent time spent by the attorneys, and attorneys may be willing to defer some of those. Costs are actual dollars paid by the attorneys to the Patent Office on behalf of the client, and a failure to timely reimburse those costs is very frustrating and troubling to the attorneys.
4. Pushing your lawyer to get a patent issued can backfire:
You came up with a great invention. You spent a lot of time writing it up. You paid your lawyer a lot of money. It is tempting to pressure your lawyer to get a patent issued. As described in section 5 below, not all patents are created equal.
By way of example, imagine that you invent a way to store more data on a magnetic drive by storing the data in trinary mode (off, weak, strong magnetic storage) instead of the normal binary mode (off, on). The patent examiner responds to your filing with prior art showing exactly what your invention does. Your patent application probably contained a few commercially impractical variants. For example, while most hard drive surfaces use a cobalt-based alloy, imagine that you also disclosed using a gold platter covered with an alloy. The gold platter is heavier and far more expensive, so there is no commercial value. However, if you push your patent lawyer hard enough, they may amend the patent claims to require that the trinary storage be implemented on a cobalt-covered gold platter.
Instead of abandoning the application (or finding commercially valuable variants in the application), the lawyer under pressure to get something -- anything -- issued is likely to spend the money on the office action response, and have you spend the money on an issue fee (and probably a continuation application) when the costs of doing so far outweigh the likely benefits.
I recommend approaching your patent lawyer (and even the patent examiner, during an interview) with the goal of getting a commercially valuable and strong patent issued. It is better to tell your lawyer (and the patent examiner) that you would rather have no patent than one that is probably invalid and/or probably valueless.
5. The name of the game is the claim (and winning the game requires your active participation):
While the body of the patent is becoming increasingly important, Giles Rich's (former Chief Judge of the Federal Circuit) observation that "the name of the game is the claim" is still a powerful one.
A lot of the hullabaloo over "overbroad" patents can be traced to a fundamental misunderstanding about the difference between what the patent describes and what it claims. The claim describes the legal property right that the patent grants. It is literally impossible to infringe a patent without infringing a claim of the patent. The claims are the only part of the patent that may be legally enforced.
It is very common for a patent application filed just after invention to claim things that are either unpatentable or commercially not viable. The important thing to remember is that your patent lawyer is not an expert in your invention and is not running your business. Despite this, many inventors count on the patent lawyer to manage what should be claimed, how the claims should be amended, and when a continuing patent application should be filed to claim additional matter.
This is the single most important place where your input is needed. Ask yourself "if I get the claims issued the way they are written, is my business protected?" If the answer is no, you need to get your lawyer on the phone and help them draft claims that do protect your business.
6. You must do examiner interviews:
As part of the patent application process, you are allowed to ask the patent examiner for an interview. You should do this as frequently as possible. If it is just your lawyer, the examiner, and papers, it is very easy for the examiner to respond in a mechanical way. By contrast, an interview lets the examiner ask questions, better understand the invention, and work cooperatively to find patentable subject matter. As with all human interactions, an interpersonal interaction has the added benefit of making the patent application something that matters to a specific, known person and more than simply an abstract exercise.
7. Your lawyer can influence the validity of your patent, even a decade after issuance:
It is important to maintain a good relationship with all of the named inventors and all of the lawyers who have worked on a patent application. One common defense to patent infringement is "inequitable conduct", an allegation that materials relevant to patentability were intentionally withheld from the patent examiner. If such an allegation is made, your relationship with your lawyer may suddenly become very relevant.
8. An issued patent is the start of the journey, not the end:
When my first issued patent arrived, I was not sure what to do next. I had focused for so long on getting the patent issued that I treated it as if the issued patent would arrive with a check in the envelope. It does not. Having received more than 150 patents since then, I have a much better idea. However, the one thing that remains true is that a patent does not magically create money.
You can use a patent to maintain a competitive advantage, you can license a patent, you can sell a patent, you can use it in a cross-licensing way to settle patent litigation -- in short, there are a lot of things that are possible when the issued patent arrives. However, none of them are self-executing. You will need a plan to get from issued patent to financial return.
Lawyers and IP consultants can help you figure out what the next step is.
This post explores the inventor side of some of the more common mistakes and misunderstandings that impair the inventor/lawyer relationship.
1. Patent lawyers are not magicians:
The most common mistake inventors make is thinking that handing an invention and a big check to a lawyer will magically make a patent issue. Bad patent lawyers will get you a patent nearly every time. Good patent lawyers will tell you when you are throwing your money away. I know this sounds counterintuitive, but as described in more detail in mistake 5 ("The name of the game is the claim"), getting a patent that covers only a tiny, valueless corner of your invention is a great way to incur costs without any corresponding benefit.
Here are some things that inventors should understand (and that good lawyers will explain):
a. Your invention must be patent-eligible (see point 2 below). Some fantastic inventions (like a finding a new antibiotic in a soil sample) are simply no longer patentable; others fall into the vast grey area of patent-questionable subject matter. Your patent lawyer may call this "101" (after the code section) or "Alice" (after one of the cases interpreting 101).
b. Your invention must be novel, meaning that nobody has done it before even if doing it for the reason you are doing it is not obvious. A refusal to issue a patent on this basis is called a 102 rejection, and "is established only when a single ... reference discloses ... each and every element of a claimed invention." (RCA Corp. v. Applied Digital Systems, Inc., 221 USPQ 385, 388 (Fed. Cir. 1984). For example, erectile dysfunction drugs were initially developed with blood pressure control as a goal. If a patent for one of those drugs never mentioned erectile dysfunction, it would nevertheless prevent a later inventor who independently developed the same drug for erectile dysfunction from getting a patent.
c. Your invention must not be obvious. This means that a patent can be rejected if it combines known things in a way that people of ordinary skill in the area of your invention would do. A refusal to issue a patent on this basis is called a 103 rejection.
There are other patentability requirements, but a failure to meet all three criteria will prevent you from getting a patent. A good patent lawyer can amend the claims or argue against the reasons for rejection, but sometimes the only way to get a patent allowed is to modify the claims so significantly that they no longer hold commercial value. A bad patent lawyer can also amend the claims or argue against the reasons for rejection, but is willing to destroy the commercial value of the patent claims in order to do so.
Bad patent lawyers view their job as getting to where they can call you and say "your patent application has been allowed". Good patent lawyers view their job as bringing net financial benefit to the inventor, and that sometimes means calling the client and saying "it is very unlikely we can get claims issued that are worth what they will cost to obtain."
2. Patent law is in flux:
Over the past ten years, patent law has undergone massive changes. These changes left a lot of patent law as a grey area. The two big changes are:
(a) The America Invents Act created several new administrative procedures to challenge the validity of a patent. The standard for validity in these procedures is different from the standard that courts use, and this different standard makes these administrative procedures much more likely than a court would be to invalidate a patent. While a recent Supreme Court case has affirmed that the differing standards of review are correct, the patent community is still working through the implications. For example, some judges will stay a case pending resolution of one of these administrative procedures; others will not. Some patentees have adopted the (costly) strategy of keeping an "open continuation" on file in case they are not allowed to amend their claims during these procedures. A cottage industry has grown up around these procedures, including companies with the primary mission of filing patent challenges and investors who short stock of patentees and then file challenges.
The end result is that U.S. patents are harder to enforce than ever before, and even a patent not being asserted can be challenged in a very costly administrative proceeding. This makes getting patent prosecution right, and structuring the claims correctly, is more difficult and more important than before.
(b) Subject matter eligibility is enormously underdefined. The Supreme Court has taken several cracks at clarifying patent eligibility over the first half of this decade (for example, 2010's Bilski case, the 2012 Mayo case, the 2013 Myriad Genetics case, the 2014 Alice Corp. case), but as Judge Linn of the Federal Circuit observed (in a concurrence), the law is now murky enough that even a "truly meritorious" invention that had "never been done before" and that "effectuated a practical result not previously attained" can, and sometimes must, be defined as patent-ineligible. Judge Linn concludes by noting that "[b]ut for the sweeping language in the Supreme Court's Mayo opinion, I see no reason, in policy or statute, why this breakthrough invention should be deemed patent ineligible."
I have personally had numerous conversations with patent examiners who have unanimously (if off the record) complained that the judicial and patent office guidance is so poor that they often are left to guess as to what courts would consider patentable subject matter.
If you do not discuss with your lawyer the implications of the current state of patent enforceability and patent eligibility, you are setting yourself up for enormous unexpected costs and disappointing results. There are strategies that can be employed to deal with these issues, but they need to be deliberately pursued.
3. Costs and fees need to be treated differently:
Patent lawyers are often flexible about how quickly they are paid. While this is an issue that should be discussed in advance, it is not uncommon for startups to experience big fluctuations in cash flow and to be slow in paying down legal bills. However, the legal bills really contain two elements: Fees and costs. Fees represent time spent by the attorneys, and attorneys may be willing to defer some of those. Costs are actual dollars paid by the attorneys to the Patent Office on behalf of the client, and a failure to timely reimburse those costs is very frustrating and troubling to the attorneys.
4. Pushing your lawyer to get a patent issued can backfire:
You came up with a great invention. You spent a lot of time writing it up. You paid your lawyer a lot of money. It is tempting to pressure your lawyer to get a patent issued. As described in section 5 below, not all patents are created equal.
By way of example, imagine that you invent a way to store more data on a magnetic drive by storing the data in trinary mode (off, weak, strong magnetic storage) instead of the normal binary mode (off, on). The patent examiner responds to your filing with prior art showing exactly what your invention does. Your patent application probably contained a few commercially impractical variants. For example, while most hard drive surfaces use a cobalt-based alloy, imagine that you also disclosed using a gold platter covered with an alloy. The gold platter is heavier and far more expensive, so there is no commercial value. However, if you push your patent lawyer hard enough, they may amend the patent claims to require that the trinary storage be implemented on a cobalt-covered gold platter.
Instead of abandoning the application (or finding commercially valuable variants in the application), the lawyer under pressure to get something -- anything -- issued is likely to spend the money on the office action response, and have you spend the money on an issue fee (and probably a continuation application) when the costs of doing so far outweigh the likely benefits.
I recommend approaching your patent lawyer (and even the patent examiner, during an interview) with the goal of getting a commercially valuable and strong patent issued. It is better to tell your lawyer (and the patent examiner) that you would rather have no patent than one that is probably invalid and/or probably valueless.
5. The name of the game is the claim (and winning the game requires your active participation):
While the body of the patent is becoming increasingly important, Giles Rich's (former Chief Judge of the Federal Circuit) observation that "the name of the game is the claim" is still a powerful one.
A lot of the hullabaloo over "overbroad" patents can be traced to a fundamental misunderstanding about the difference between what the patent describes and what it claims. The claim describes the legal property right that the patent grants. It is literally impossible to infringe a patent without infringing a claim of the patent. The claims are the only part of the patent that may be legally enforced.
It is very common for a patent application filed just after invention to claim things that are either unpatentable or commercially not viable. The important thing to remember is that your patent lawyer is not an expert in your invention and is not running your business. Despite this, many inventors count on the patent lawyer to manage what should be claimed, how the claims should be amended, and when a continuing patent application should be filed to claim additional matter.
This is the single most important place where your input is needed. Ask yourself "if I get the claims issued the way they are written, is my business protected?" If the answer is no, you need to get your lawyer on the phone and help them draft claims that do protect your business.
6. You must do examiner interviews:
As part of the patent application process, you are allowed to ask the patent examiner for an interview. You should do this as frequently as possible. If it is just your lawyer, the examiner, and papers, it is very easy for the examiner to respond in a mechanical way. By contrast, an interview lets the examiner ask questions, better understand the invention, and work cooperatively to find patentable subject matter. As with all human interactions, an interpersonal interaction has the added benefit of making the patent application something that matters to a specific, known person and more than simply an abstract exercise.
7. Your lawyer can influence the validity of your patent, even a decade after issuance:
It is important to maintain a good relationship with all of the named inventors and all of the lawyers who have worked on a patent application. One common defense to patent infringement is "inequitable conduct", an allegation that materials relevant to patentability were intentionally withheld from the patent examiner. If such an allegation is made, your relationship with your lawyer may suddenly become very relevant.
8. An issued patent is the start of the journey, not the end:
When my first issued patent arrived, I was not sure what to do next. I had focused for so long on getting the patent issued that I treated it as if the issued patent would arrive with a check in the envelope. It does not. Having received more than 150 patents since then, I have a much better idea. However, the one thing that remains true is that a patent does not magically create money.
You can use a patent to maintain a competitive advantage, you can license a patent, you can sell a patent, you can use it in a cross-licensing way to settle patent litigation -- in short, there are a lot of things that are possible when the issued patent arrives. However, none of them are self-executing. You will need a plan to get from issued patent to financial return.
Lawyers and IP consultants can help you figure out what the next step is.
Monday, June 20, 2016
Cuozzo v. Lee: IP Protection Gets More Complicated
The Supreme Court handed down a decision this morning in Cuozzo v. Lee.
Two questions were before the court:
(1) Is the decision to institute "inter-parties review" ("IPR") appealable?
(2) Is the Patent Office allowed to continue to use the Broadest Reasonable Interpretation as the standard of review?
They answered both questions "yes" (with some nuances). This has some implications for IP strategy.
First, the newly passed federal trade secrets statute continues to be an attractive alternative to patents. As the courts and Congress continue to chip away at patents (sometimes with a rock hammer, other times with a jackhammer), patents become less attractive and simply keeping your discoveries and inventions secret becomes more attractive.
Second, while the Court leaves open the possibility that some extraordinary circumstances, such as a constitutional question, may merit review of the decision to institute IPR, it holds that ordinary questions about the propriety of an institution decision may never be appealed. The only possible upside for inventors is that it is very likely that a similar conclusion will be drawn with regard to the denial of a request to institute review. The upshot is that patent holders with valid and infringed technology can expect infringers to continue the practice of filing a request for IPR and asking the Court to stay any infringement lawsuit pending the patent office's administrative (IPR) proceeding.
Third, the standard for IPR is substantially tougher on the patentee than the District Court standard is. In District Court, the patent claims are interpreted according to their ordinary meaning, and are presumed valid in the absence of "clear and convincing" evidence to the contrary. By contrast, in an IPR, the patent claims are interpreted as broadly as reasonably possible (meaning that much larger amounts of "prior art" are available to invalidate the claims). Making this uphill climb even steeper is the standard of review in IPR: A claim is invalid if the challenger shows it to be invalid by a preponderance of the evidence.
What the Court does not recognize (although it constituted an inordinate amount of the oral argument in the case) is that the USPTO rarely, almost never, allows a patentee to amend or narrow the claims during inter-parties review. This is contrary to the original process of getting a patent, where the patentee can amend dozens of times (if they want to spend that kind of money on requests for continued examination) in response to a negative decision by the examiner.
Best practice for a patent portfolio now includes keeping a live continuation (a continuation is a second patent filing, usually made right before the issuance of the first patent filing). This significantly raises the cost of inventing. To explain why, an example is useful:
Imagine that I file a patent disclosure describing a method of doing A, B, and C, and I also disclose doing those things in conjunction with any combination of steps D-Z. I get a patent for a method of doing A, B and C, with dependent claims covering D, E and F. I then let the patent issue without a continuation. It turns out that somebody else reads my patent and begins to infringe by doing steps A, B, C and Z in combination. Since my claim on A, B and C is infringed by A, B, C and Z (since infringement constitutes doing all of the steps in the issued claim), I sue. The infringer files for IPR and the patent office determines that that it is barely more likely than not that A, B and C are disclosed in the prior art and invalid. I apply to the patent office to narrow my claim to also require Z (which is not disclosed in any of the prior art that the patent office used to find the A, B and C claim invalid), and they refuse (they do refuse amendments in almost all cases). My patent is now invalid (where a District Court would have found it valid) and I have no right to narrow it even though I invented the combination of A, B, C and Z.
This unfair outcome can be easily avoided by a wealthy inventor who can afford to keep a live continuation on file, preserving the right to obtain a narrowed claim (such as A, B, C and Z) in the continuation, even after the IPR killed the parent. However, without an open continuation, the patent is simply gone and the infringer gets to use my invention for free.
Here are the take-aways:
(1) If you can choose between trade secret and patent, choose trade secret. Congress has substantially strengthened protections for trade secrets even as it substantially weakened protections for patents. This means that some great innovations will become unavailable as building blocks for a next generation of innovations (because those building blocks will not be available to the public), but regardless of whether it is good public policy, it is good strategy.
(2) If you do file for a patent (for example, because the technology can be reverse engineered), make sure to file dependent claims that are narrow enough to survive even the most stringent review and keep an open continuation on file.
(3) This impacts only the United States. For inventions where there is a foreign market, it continues to be good strategy to file foreign. At minimum, Germany makes sense as the biggest economy in the EU. The cost of a full blown international filing can easily exceed $100,000, so it becomes a bit of a game of kings.
(4) Hire a patent lawyer and an IP strategist. Patent law is moving so quickly that only those able to leverage expertise and experience have a reasonable shot at good IP protection.
About the author: Gary Shuster is an inventor and IP strategist and an attorney at Coleman and Horowitt, where his patent lawyer, Sherrie Flynn, also works.
About the author: Gary Shuster is an inventor and IP strategist and an attorney at Coleman and Horowitt, where his patent lawyer, Sherrie Flynn, also works.
Monday, October 19, 2015
The Rate of Invention is Staggering
I just received my 150th issued US patent.
That kind of landmark tends to trigger a look back.
My first patent was number 6,756,879 and my 150th was patent number 9,166,974 -- meaning 2.41 million patents issued between my first and my 150th. To get a sense of the accelerated rate of innovation in recent years, it is worth pointing out that more than 25% of all US patents ever issued have issued in the mere 11 years that passed since my first one issued in 2004.
That kind of landmark tends to trigger a look back.
My first patent was number 6,756,879 and my 150th was patent number 9,166,974 -- meaning 2.41 million patents issued between my first and my 150th. To get a sense of the accelerated rate of innovation in recent years, it is worth pointing out that more than 25% of all US patents ever issued have issued in the mere 11 years that passed since my first one issued in 2004.
Friday, October 9, 2015
TPP Intellectual Property Chapter Leaked
Wikileaks has released the intellectual property chapter of the current draft of the Trans-Pacific Partnership agreement.
This agreement addresses how member nations deal with trademarks, copyrights, utility patents, plant patents, drug and medical patents and drug approval, and trade secrets. I'm sure in the coming days we'll see a lot of analysis as to how these changes will impact IP law.
This agreement addresses how member nations deal with trademarks, copyrights, utility patents, plant patents, drug and medical patents and drug approval, and trade secrets. I'm sure in the coming days we'll see a lot of analysis as to how these changes will impact IP law.
Monday, September 28, 2015
Can you patent an invention just to prevent the world from using it?
Eric Goldman blogged about a case where a person purchased a copyright to an unflattering photograph of himself with the intention of using copyright law to make the photograph disappear from the internet. Eric writes "Due to the decisive appellate ruling and the district court’s stinging rebuke and fee-shift, the results of this lawsuit should deter other people from buying up copyrights to manufacture a right to forget."
Copyright law is different from patent law in one critical respect: There is no (normally) no First Amendment right to practice an invention, whereas there is a First Amendment right to publish specific expressions of ideas, even verbatim, for certain purposes. As a result, the Copyright Act provides a four factor test (nature of use, nature of work, amount of work copied, marketplace impact) that functionally creates an exception large enough that copyright law and First Amendment law can co-exist.
The other part of the case that Eric blogged about is the implied public policy issue. Eric writes that "copyright law principally serves as an economic policy by protecting creators' ability to recoup the investments they make in generating new works that have value to society." I agree with Eric's implication that what made this an easy case to decide was that the copyright holder was using copyright law to censor, rather than enhance, the body of work available to the world.
Put another way, the basis of all copyright and patent law is found in Article 1, Section 8, Clause 8 of the Constitution and grants legislative power to Congress as as follows: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries".
So there it is. I suspect that a constitutional argument, rather than a statutory one, would also have prevailed against an effort to bury content using copyright law -- burying content does not "promote the Progress of Science and useful Arts". This is an even more powerful constitutional argument when the First Amendment is considered.
The argument is significantly weaker when it comes to patent law, because preventing use of a technology under patent law can be used to promote technological progress. For example, if I held a patent that covered varying internet connection speed based on the sender, I could insist on net neutrality simply by seeking injunctions against anybody who favored some senders over others. Of course, this is made all the more complex by the Supreme Court's decision to make injunctive relief harder to obtain in patent cases. Nonetheless, I suspect that at some point, courts will face the question of whether it is unconstitutional (or patent misuse) to use a patent, with no economic benefit to the patent holder, to simply prevent a disliked technology from being used at all.
Copyright law is different from patent law in one critical respect: There is no (normally) no First Amendment right to practice an invention, whereas there is a First Amendment right to publish specific expressions of ideas, even verbatim, for certain purposes. As a result, the Copyright Act provides a four factor test (nature of use, nature of work, amount of work copied, marketplace impact) that functionally creates an exception large enough that copyright law and First Amendment law can co-exist.
The other part of the case that Eric blogged about is the implied public policy issue. Eric writes that "copyright law principally serves as an economic policy by protecting creators' ability to recoup the investments they make in generating new works that have value to society." I agree with Eric's implication that what made this an easy case to decide was that the copyright holder was using copyright law to censor, rather than enhance, the body of work available to the world.
Put another way, the basis of all copyright and patent law is found in Article 1, Section 8, Clause 8 of the Constitution and grants legislative power to Congress as as follows: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries".
So there it is. I suspect that a constitutional argument, rather than a statutory one, would also have prevailed against an effort to bury content using copyright law -- burying content does not "promote the Progress of Science and useful Arts". This is an even more powerful constitutional argument when the First Amendment is considered.
The argument is significantly weaker when it comes to patent law, because preventing use of a technology under patent law can be used to promote technological progress. For example, if I held a patent that covered varying internet connection speed based on the sender, I could insist on net neutrality simply by seeking injunctions against anybody who favored some senders over others. Of course, this is made all the more complex by the Supreme Court's decision to make injunctive relief harder to obtain in patent cases. Nonetheless, I suspect that at some point, courts will face the question of whether it is unconstitutional (or patent misuse) to use a patent, with no economic benefit to the patent holder, to simply prevent a disliked technology from being used at all.
Tuesday, September 22, 2015
"Poor man's patent" and "Poor man's copyright": The Tooth Fairies of the IP World
There is a common misconception that an inventor or author can protect their intellectual property by mailing a copy of it to themselves. These are sometimes called a "Poor Man's Patent" or "Poor Man's Copyright". I will address each in turn (note: IP law varies greatly from country to country; I am writing only about the United States).
Poor Man's Patent:
What is a "Poor Man's Patent"? As an ehow.com article describes it, "a poor man's patent is simply, just a postcard you send through the United [States] Postal Service. Just print a copy of the product you designed on it. Address the postcard to your self [sic]. Once it comes back stamped by the postal service it is a 'Poor Man's Patent.'" The article takes it one step further, suggesting that a "better way to get a patent is to go to Lulu.com. Download a picture of your product. Then make a calendar, T-shirt, coffee mug whatever they offer. You design what [it] is you want and printed on it copyrighted by your name and date. You pay for it. Then Lulu.com sends your design on the product you chose, this is a legitimate patent plus it is copyrighted and no one else can steal it." Do not under any circumstances attempt to "patent" something this way. It doesn't work. The Chicago Tribune nailed it in a 1985 article: a "poor man's patent [is a] term most appropriate in the sense that the inventor who relies on such protection is virtually assured of remaining a poor man."
(1) Can I legally prevent somebody from doing what I invented?
(2) Can I keep doing what I'm doing?
(3) Can I stop somebody else from getting a patent on what I'm doing?
While some materials, like the ehow article referenced above, are clearly and obviously wrong in some material ways, even well researched materials -- even recent court cases -- can become wrong or misleading very quickly. Any reference materials more than a few months old should be assumed invalid as to at least some points. The law is changing that rapidly (a big case came down last week from the Federal Circuit on a 6/5 vote about whether delay in enforcing rights waives patent damages). The speed of change is such that relying on anything other than a lawyer (or, if you can't afford one, at least careful reading of current USPTO materials) is likely to lead to mistakes.
One advantage of Fresno I've found as an inventor is that there is at least one excellent patent lawyer (the one I use), and I suspect there are others. Moving my patent work from two large LA law firms to her in Fresno has resulted in large cost savings (Fresno is simply a better priced legal market) and there has been no compromise on the quality of the work.
Poor Man's Patent:
What is a "Poor Man's Patent"? As an ehow.com article describes it, "a poor man's patent is simply, just a postcard you send through the United [States] Postal Service. Just print a copy of the product you designed on it. Address the postcard to your self [sic]. Once it comes back stamped by the postal service it is a 'Poor Man's Patent.'" The article takes it one step further, suggesting that a "better way to get a patent is to go to Lulu.com. Download a picture of your product. Then make a calendar, T-shirt, coffee mug whatever they offer. You design what [it] is you want and printed on it copyrighted by your name and date. You pay for it. Then Lulu.com sends your design on the product you chose, this is a legitimate patent plus it is copyrighted and no one else can steal it." Do not under any circumstances attempt to "patent" something this way. It doesn't work. The Chicago Tribune nailed it in a 1985 article: a "poor man's patent [is a] term most appropriate in the sense that the inventor who relies on such protection is virtually assured of remaining a poor man."
To understand why this approach is totally ineffective, we must first understand what a patent is. A patent is not the right to do anything. If I had a patent on a better way to break into bank safes, I would not then have the right to break into bank safes. Instead, a patent is the right to exclude others from practicing a patented invention, and to obtain damages in court if somebody does practice a patented invention without permission.
These rights only arise in the US once specific claims are issued by the US patent and trademark office. Before the 2011 America Invents Act, the United States awarded patents to the first person to invent, even if somebody else beat them to the patent office. Under this old regime, there was a tiny benefit to mailing an invention disclosure to yourself -- it helped established an invention date. Even this benefit is now gone, as the America Invents Act changed US patent law so that the patent is awarded to the first inventor to file for a patent, regardless of who invented first (with lots of caveats, see a lawyer for details).
In fact, even hiring a patent lawyer and filing a patent application is not a patent (a "rich man's" patent?). The only way an invention is protected under the patent system is by making it through the patent process successfully (and thanks to the America Invents Act, surviving the likely post-grant administrative challenges).
Somebody using the (ineffective) "poor man's patent" approach may also be attempting to allow themselves to continue to practice an invention even if somebody else later invents and patents it (old rules) or later files for and gets a patent (new rules). If somebody doesn't mind making their invention public and possibly preventing themselves from ever getting a patent on it, the most effective way to do this is to publish a thorough description of what they are doing in a public forum. This would then constitute "prior art" and prevent issuance of a valid patent covering that technology (patent office error could result in issuance of a patent, but it wouldn't be valid over prior art if done right). This also triggers real threats to the inventor's later attempts to get a patent ("on sale" bar for example), and should not be done lightly.
The bottom line is that there are really three patent issues the "Poor Man's Patent" raises, two of them highly related:
(1) Can I legally prevent somebody from doing what I invented?
Answer: Only by getting an issued patent. There is no shortcut -- although if you keep it as a trade secret there may be some benefit, but that's really something that a lawyer needs to advise on.
(2) Can I keep doing what I'm doing?
Answer: This is a freedom to operate question, and even the best patent lawyers in the world can only get to "pretty sure" on this one in most cases. There are millions of valid patents globally, and attempting to answer the question without a strong legal team is just asking for patent litigation.
(3) Can I stop somebody else from getting a patent on what I'm doing?
Answer: If you publish your invention in a public forum, it is usually going to serve as prior art and prevent issuance of a valid patent -- with some wrinkles that a patent lawyer should expand on if you're really contemplating this.
An inventor who is cash poor does have an option: There is a "poor man's patent application" -- the provisional patent application. It can be filed with or without a lawyer, and costs $65, $130, OR $260 (depending on entity status - microentity, small entity, or large entity, excluding attorneys fees). This application will never mature into an issued patent without filing a proper utility patent application within a certain time frame (a year usually, although it can be shorter in some circumstances, such as when claiming priority to multiple provisionals). Note that the rules for patents other than "utility patents" differ.
There is some dispute in the patent community as to whether simply filing source code as a provisional patent application is beneficial -- my opinion is that there are some cases where it may be appropriate. Let's be clear, though: Saving money on a patent application up front strongly reduces the chance of getting a valid and valuable patent at the end. This is particularly so given the changes happening in patent law. A provisional patent application protects only the content of the application, and if you leave something out, that can be a problem later.
While some materials, like the ehow article referenced above, are clearly and obviously wrong in some material ways, even well researched materials -- even recent court cases -- can become wrong or misleading very quickly. Any reference materials more than a few months old should be assumed invalid as to at least some points. The law is changing that rapidly (a big case came down last week from the Federal Circuit on a 6/5 vote about whether delay in enforcing rights waives patent damages). The speed of change is such that relying on anything other than a lawyer (or, if you can't afford one, at least careful reading of current USPTO materials) is likely to lead to mistakes.
One advantage of Fresno I've found as an inventor is that there is at least one excellent patent lawyer (the one I use), and I suspect there are others. Moving my patent work from two large LA law firms to her in Fresno has resulted in large cost savings (Fresno is simply a better priced legal market) and there has been no compromise on the quality of the work.
Given the pitfalls of going it alone on patents and the more than competitive rates we can get in Fresno, it is my strong opinion that using a licensed patent lawyer (or patent agent -- though I don't know if we have any in Fresno) is critical to any invention-driven startup.
Side note: Ironically, what would have provided at least some benefit, compared to the "why would people think this is effective at all" self-mailing method, would have been to sign an NDA with a witness or notary public, have them sign and witness the actual document, then seal it or not, who cares. This would have established an invention date with proof of invention, which under the old "first to invent" regime would have given the inventor priority over an earlier-filed but later-invented invention assuming the inventor timely files for a patent. Under the new first to file regime, this wouldn't work.
The bottom line is that patents are expensive. Using a lawyer local to Fresno makes them far less expensive, but patents are still not cheap to acquire. There is simply no way to get patent protection in the US without going through the patent office. Anybody who tells you otherwise is wrong. The real alternative to a patent is treating the invention as a trade secret, but that comes with its own set of risks and benefits and should not be done without the advice of counsel.
The Poor Man's Copyright:
A related myth to watch out for is people "copyrighting" things by putting them in an envelope and mailing it to themselves. It may provide proof of date, but that is easier to do by just getting a notary public, and far more likely to be legally accepted as proof. Moreover, things are copyrighted as soon as they are created in fixed and tangible form. You don't need to do anything to get a copyright in your work. The doodle you drew while talking with your friend yesterday was copyrighted as soon as you drew it.
There are three levels of copyright protection in the U.S. (the first two levels differ only in terms of how the creator documents the creation date, so they differ in functional but not legal terms):
(1) You create a work, and it is automatically copyrighted with nothing further required on your part;
(2) A work you created and which you documented in a way that allows you to prove date of creation (thereby helping you to win a case if somebody copies your work and later claims that it was you who copied their work); and
(3) A registered copyright.
People don't understand the difference between copyright and a registered copyright. A registered copyright comes with the right to statutory damages and attorneys fees. Registration is cheap and easy, but is done with the US Copyright Office.
Just like with patents, writing something down and putting it in an envelope to "copyright" it is effective as a way of wasting a stamp and little more. Proof of creation date is far better established in other ways, and in any event is a poor second to actually registering the work. Unlike patents, most copyright registrations can be done equally well by a non-lawyer as by a lawyer, although for mission critical things like a novel, at least running it past a lawyer isn't a bad idea.
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