Patents

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Patents are governed exclusively by Federal Law (Title 35, U.S.C). A patent is an intellectual property right granted by the United States government to an inventor.  In exchange for public disclosure, the U.S. government conveys to the inventor certain property rights over the invention for a limited period of time, such as the right to exclude others from making, using, selling, or importing the invention.  Patent rights are not affirmative rights to make, use, sell, and import inventions; rather, they exclude all others from doing so. A valid patent forecloses use of the patented invention by others, even if another party independently conceives an identical invention.

United States Patents
The United States Patent and Trademark Office (USPTO) is the federal agency that promulgates rules and grants patents upon filing and prosecution of patent applications.  Patent rights conveyed by the USPTO are only enforceable within the United States. Therefore, a patent owner who desires protection outside the United States should consider filing foreign patent applications.  Other countries have similar procedures and protections within their respective territories.

Foreign Patents
In 1978 the Patent Cooperation Treaty (PCT) came into force.  PCT is the international treaty allowing an inventor to file a single international application.  This application may be used subsequently to obtain a national patent in one or more countries as long as they are signatories to the treaty.  Over 124 countries adhere to the treaty, including the United States.  To find out more, visit the World Intellectual Property Organization (WIPO) website: http://www.wipo.int/

Types of Patents
There are three types of patents issued by the USPTO: utility, design, and plant.  Although the procedures for each are similar, each type has specific requirements.  For example, both plant and design patents are limited to one claim, whereas, utility patents may have an unlimited number of claims.  

Utility patents include those granted for inventions of any useful and new process, article of manufacture, machine, or composition of matter, or any useful and new improvement thereof.  The term of protection for a utility patent is 20 years from the date the patent application is filed.

Design patents cover ornamental features of a manufactured item and may be granted to any person who creates a new, non-obvious, original, and ornamental design for an article of manufacture.  This is separate and distinct from the functioning parts and features of a manufactured item, which would instead be covered by a utility patent.  Design patents contain only one claim, which itself describes the ornamental design or appearance of an article.  The term of protection for a design patent is 14 years from the grant date.  The numbers of all design patents begin with “D” to identify them as design patents.  

Plant patents encompass asexually reproducing plants and may be conveyed to any person who invents or discovers and reproduces asexually a new and distinct type of plant.  Plant patents have only one claim and their term is 20 years from the filing date.

Who can file for a Patent
Any natural person who invents a machine, composition of matter, a process, an article of manufacture or an improvement thereof can file a patent application.  The person fili,ng must be the inventor, with certain specific exceptions.  Corporations are not natural persons; therefore, they cannot file for an invention, even if it was created by an employee.

Patent Professionals
To obtain a patent, an inventor may file and prosecute his own application, pro se, or be represented by a registered patent professional.  No person other than a registered patent professional may represent an inventor before the USPTO.  A registered patent professional may be either an agent or an attorney specializing in patent law.  To become a registered member of the USPTO, the patent professional must have a requisite scientific or engineering education and pass the USPTO examination.  The reasoning is that, to effectively establish and protect an inventor’s property rights, the professional must have sound knowledge of science or engineering (and a minimum level of skill in patent law).  Although a patent professional need not have obtained a law degree to file and prosecute patents before the USPTO, a patent agent cannot represent the inventor in other legal matters, even if they relate to the patented invention.  Thus, an agent may not represent an inventor during licensing negotiations, license drafting, or in litigation that involves the same patented invention.  

Ownership of the Patent
In general, an inventor owns all rights to his or her (patented) invention and the resulting issued patent.  Patent rights are freely alienable and may be sold, purchased, or licensed as if they were any other property right.  An assignment (sale) transfers all rights, title, and interest in the patent, for the entire life of the patent, to the assignee (new owner).  This means that the assignee has the right to exclude all others from making, using, importing, or offering to sell the patented invention, but nothing more.  

Patent rights may also be licensed.  In licensing agreements, the licensor is granting the licensee the right to make, use, sell, import, or offer to sell the patented invention without any possibility of being sued for that activity, which would otherwise be considered infringement.  Often times licensing agreements transfer less than the entire bundle of patent rights.  For example, a license may be for a particular development, economic sector, geographic region, or specific duration shorter than or equal to the life of patent.  Exclusive licenses are agreements whereby the licensor agrees not to license the patent rights to anyone other than the licensee.  In fact, in an exclusive licensing agreement, the licensor promises not to make, use, sell, import, or offer to sell the patented invention himself. 

With respect to inventions made by an employee, the employer may claim ownership of the invention, depending on the circumstances of its conception and development, the employment agreement, and whether the invention originated within the scope of the employment. Therefore, to avoid any uncertainty, employees should be required to sign an employment agreement that includes a covenant to assign all inventions to the employer.  Usually, this covenant results in the employer being the sole owner of the patent.  

Patentability
Subject Matter
Patentable subject matter is specified in 35 USC § 101.  According to the statute, patents may be granted to anyone who “invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”  The United States Supreme Court has stated further that Congress intended patentable subject matter to include “anything under the sun that is made by man.”  Diamond v. Chakrabarty, 447 U.S. 303 (1980).  In practice, this means that any invention that a person develops or creates may be patented as long as the requirements of novelty, uniqueness, and usefulness are met (discussed below).  However, certain things are not patentable, such as laws of nature (laws of relativity or gravity), things that occur naturally, and ideas or suggestions.  Nor can one patent a new bacterium found in nature nor a new mineral discovered on Earth or another planet.  Patent law has been developed to reward the invention of new machines, processes, and compositions of matter, not just the idea or suggestion of one.

Patentable subject matter includes new and useful machines, compositions of matter and processes.  Machines include, for example, a flat screen TV or a copy machine.  Compositions of matter may be a new drug or a new type of plastic. Processes include both the method of making something (e.g., a drug, a plastic, or a baseball bat) and the method of using something (e.g., a drug for the treatment of asthma or a plastic to make a sturdier window).  An improvement falling within any of these classes may also be patentable.  Taken together these categories of subject matter include practically all things that can be made by man and the methods for making the products.

One may seek to obtain patent protection on computer software as a “machine,” “computer program product,” or “process.” Similarly, one may obtain patent protection on new and non-obvious business methods, particularly if implemented as a computer-related invention. It should be noted, however, that the question of what is or is not patentable, particularly with respect to computer software, business methods, and computer-related inventions in general, is a difficult one. Therefore, United States patent counsel should be consulted.

Novelty, Non-obviousness, and Usefulness
The patent law specifies that an invention must be “new” and “useful.” Therefore, even if an invention fits into one of the subject matter categories, it must meet the novelty, non-obviousness, and usefulness requirements. The “new” prong of the analysis is met if the invention is novel and not obvious.  Novelty is defined as: not previously known to or used by others in the United States or printed or described in a publication anywhere.  Non-obviousness relates to whether a person having ordinary skill in the relevant art would have found the invention to be obvious.  In practice, determining novelty and non-obviousness can be very challenging and is best done by patent counsel.

The “useful” prong of the analysis is met if the invention has utility, actually works, and is not frivolous or immoral.  That is, the claimed invention as a whole must accomplish a practical application; it must have a concrete and tangible purpose.

Determining Patentability
In order to determine novelty and non-obviousness, and hence, patentability of an invention, it is often useful to search the records of the USPTO, WIPO and Google Patents. On these websites, one may examine all U.S. patents, published applications, many foreign patents, and a large number of technical publications often referred to as “references.” A patent search is customarily performed by a patent professional. A patent attorney or patent agent may be asked to render an opinion regarding the patentability of a particular invention. In this way, an inventor can then make an informed decision as to whether to proceed with the cost of an actual patent application.  Note that any reference determined to materially affect patentability must be disclosed to the USPTO during the course of prosecution of that patent.

Patenting Application Process
The patenting process can be broken down into two parts: 1) filing the application; and 2) prosecuting the application.

Filing of the application
Patent applications must be filed with the USPTO and may be filed either as a provisional application or a non-provisional application.  Filing a provisional application is a quick, simple, and cost-effective method to officially file an application with the Patent Office and obtain a filing date (discussed below).  Provisional applications are not examined; instead they act simply as a place holder for one year.  Provisional patent application requirements are less stringent than those for a regular patent application. The oath or declaration of the inventor and claims are not required.

At the end of one year, the provisional application expires and, if a non-provisional application has not been filed prior to expiration, the filing date of the provisional application is lost.  When filing a subsequent non-provisional application, an applicant may claim priority back to the filing date of the original provisional application (utility and plant applications only).

Non-provisional applications are standard utility or plant patent applications and are subject to examination by the USPTO. To file non-provisional application, four elements must be included: the specification, oath or declaration, drawings, and appropriate fees.  The specification is a description of what the invention is and what it does.  The specification can be filed in a foreign language provided that an English translation, verified by a certified translator, is filed within a prescribed period.  The oath or declaration certifies that the inventor believes himself or herself to be the first and original inventor.  If the inventor does not understand English, the oath or declaration must be in a language that the inventor understands.  The application must include drawings, if essential to understand the invention.  Finally, the appropriate fees must be included.  The fees for filing a standard utility application range from $82.00 to $330.00, depending upon whether the filing entity is small or large.  The fees can increase substantially depending on the number of claims and other factors.

Prosecution of the application
The process by which the patent application is examined by the USPTO is called prosecution.  After a proper application is filed, it is assigned to an examiner with knowledge of the particular subject matter.  The examiner makes a thorough review of the application, and of the known art in that subject matter, as well as the status of existing concepts in the relevant area to determine whether the invention meets the requirements of patentability.  The patent review process takes anywhere from 18 months to three years.  Rejection of a patent application by the examiner may be appealed to the Board of Patent Appeals. Decisions of the Board of Patent Appeals may be appealed to federal court.

Once the examiner has determined that the invention is patentable, a patent is issued on the invention.  Patents have a presumption of validity, because they have (in theory) undergone rigorous analysis as to patentability.

Importance of filing date
The filing date of a patent application is critical. It allows an inventor, assignee, or licensee a date to establish priority, which is technically the official date when the USPTO states it received the patent application and the description of the invention. The filing date is often very important in the patentability of an invention to establish novelty and non-obviousness, and it is usually important in any subsequent litigation involving patent infringement.  An application must follow certain mandated rules and procedures to obtain the filing date. Once an application is filed in the United States, international treaties allow one year to file corresponding applications in most foreign countries.

First to invent
The United States implements a “first to invent” patent system, whereas most foreign countries use “first to file.”  In first to invent systems, patent rights are granted to the person who first invented the machine, composition of matter, or process.  In first to file systems, those who file their patent applications first are granted patent rights, irrespective of whether or not they invented first.

Loss of Patent Rights
Waiting to file a patent application might very well result in the loss of all patent rights in the United States and abroad.  In the United States, one must file a patent application within one year of the first public use, disclosure, or commercial exploitation of an invention. Moreover, any public use, sale, or offer to sell in the United States or disclosure anywhere in the world prior to filing a patent application could bar patenting in foreign countries. The rules regarding these matters and the deadlines for filing can be very complicated. Patent counsel should be consulted well in advance of any potential deadlines.  

Patent Markings
After a patent application has been filed, the product made in accordance with the invention may be marked with the legend “patent pending” or “patent applied for.” After a patent is issued, products may be marked “patented” or “pat.”, together with the U.S. patent number. If the device cannot be marked, the package or label should be so marked.

Marking is not required, but it is advisable to prove marking in order to recover damages in an infringement action.  

Post-Issuance Matters
Anyone without authority from the patent holder who makes, uses, imports or sells the patented invention in the U.S. during the life of the patent is considered to “infringe” the patent and may be liable for damages.

Once a patent is issued, some form of enforcement against infringers is usually necessary. One strategy is to notify potential infringers and offer them a license in exchange for royalties. If it becomes necessary to file a lawsuit against an infringer, the patent owner may obtain an injunction against continued infringing activity, as well as damages.

Damages may be based on lost profits caused by the infringing activity or a reasonable royalty. A patent owner may also be awarded treble damages (three times the amount of compensatory damages) if the infringer is found to have willfully infringed. The patent owner may also seek its costs and attorneys’ fees in exceptional circumstances.
It should be noted that, although issued patents are presumed to be valid, a patent may be invalidated in a lawsuit if there are grounds to establish that the patent was somehow wrongfully obtained (e.g., not novel).

In most countries, periodic maintenance and renewal fees are required to keep a patent in force.  For a USPTO-granted patent, maintenance fees must be paid every four years through the life of the patent or the patent becomes abandoned.

Licensing the Patent
As discussed above, a patent may be licensed to another or several others, and standard contract law governs these agreements.  A patent owner is often able to generate revenues by licensing patents to others. If the owner of a patent is unable to satisfy the needs of the entire market for the patent, for example, the owner may license the patent to others to fully exploit the value of the patent.

Many social sector organizations may decide that, in order to advance their social mission they do not want to obtain exclusive rights to their inventions. They would rather make their invention(s) available to everyone, with the goal of getting the invention into the hands of as many people as possible who can benefit from it.  Some social sector organizations decide to provide a royalty-free license of their invention to other social sector organizations.

Rights to Patented Inventions
Disputes sometimes arise between employers and employees over the rights to inventions made by employees during the course of employment. To avoid this situation, employers often require employees to sign agreements under which each signing employee agrees that all rights to any invention made by the employee during the term of employment will belong to the employer.

Additional information about patents can be found at www.uspto.gov.  

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