Patent Law 101: A 3 Part Guide On Patent Law | Part 1

According to the USPTO, about 65 percent of all patents submitted are approved.

Of the 35% that are not approved, a large number of them fall on the reason of being improperly filled out and submitted. On average, it takes about two and a half years for a patent to be processed. In order to make sure your patent application is done right and can have the highest chance of being accepted make sure to retain the services of a registered patent attorney or patent agent to prepare and prosecute patent applications.

Below you will find the most common questions asked relating to patents and patent law. Click on a question for the answer.

Can I file my own application?

Of course, however it is strongly recommends that all prospective applicants
retain the services of a registered patent attorney or patent agent to prepare
and prosecute their applications. Without the knowledge of patent law and rules, USPTO practice
and procedures, as well as knowledge of the scientific or technical matters, the patent application process can be much more difficult and may result in the need of being redone.

What is the difference between my own patent search and one your office would perform?

In most cases, a self-search is limited to a free search of the United States Patent Office
databases through the Patent Office website, freepatentsonline.com, Google Patents or another
similar search engine platform. Other times it involves a search of the internet via Google, MSN,
AltaVista or another search engine.

A search performed by a proffessional patent attorney includes a search of 22 “full text” (includes the entire
patent) authorities around the world: Austria, Australia, Belgium, Canada, Switzerland, former
East Germany, Germany, Denmark, European Patent Office, Spain, Finland, France, Great Britain,
Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Sweden, USA, and the World Intellectual
Property Organization. Additionally, it includes 96 abstract and bibliographic collections for
searching scientific and trade journals and extracted information from non-English patent
authorities. Other advantages include some advanced searching tools in the paid search engines,
analytic tools and translation capabilities of foreign language documents.

In most cases, a self-search is performed by searching “key words” in the patent databases. Patent attorney Tracy Jong and patent agent Cheng-Ning Jong are trained in advanced searching techniques such as searching specific patent classifications that apply to an invention.

“We are able to assess potential patentability issues for a given invention and related arts that may be considered by the Patent Office. We also are skilled in identifying appropriate patent nomenclature to perform more precise searches. For example, a screw may be called a ‘mechanical fastener’ or a chair leg may be called
a ‘supporting member.’” – Tracy Jong

In many cases, a professional search will yield a broader search result. This may benefit you in the decision making process as to whether to seek patent protection, what competitors you may unknowingly have, or in crafting a patent application with a greater likelihood of being issued as a patent.

What can I do with my patent?

  • Assign it (sell or gift it away)
  • License it (“rent” limited rights in it)
  • Create a joint venture to exploit it
  • Exclude others from making the product
  • Exclude others from selling the product
  • Exclude others from importing and distributing infringing goods
  • Use it as security or collateral to obtain funding
  • Bequeath your patent rights in your will
  • Deter competitors and increase market share

Or, there are always these uses:

  • Hang it on your wall and admire it
  • Smile that you  did not have to go on national television’s American Inventor to obtain patent protection
  • Drop it in conversation at the cocktail parties and social gatherings
  • Use it to beef up your resume

After obtaining
patent protection, inventors may need to form a business to develop or
manufacture their product.  We can assist with incorporating or forming
limited liability companies.  We can assist with licensing or assigning
your invention to the new business entity; and counsel you in structuring the
most suitable transfer for your situation.

In developing business ideas, inventors often need to retain consultants, hire
employees, or meet with potential manufacturers or licensors.  We can
assist with protecting your inventions and proprietary business information with
confidentiality agreements, work for hire agreements, employee policy
provisions/agreements and related issues.

In developing an invention, inventors often work in collaboration with investors,
other inventors and others.  We can assist with joint venture agreements,
co-inventor agreements and general counseling on these issues.

After acquiring intellectual property rights, you may need to consider how to transfer
these rights in the event of death.  We can assist with will preparation that contemplates these unique issues.

After acquiring intellectual property rights, you may find it useful to leverage these
assets for financing necessary to develop and manufacture your product. We
can assist you with security instruments that pledge these assets or future
revenue streams as collateral in these transactions.

Who is an Inventor?

Inventors are those who conceived of the idea that is the invention. Those who merely helped reduce the idea to practice are NOT inventors (unless they contributed to conception of the invention in some way). Inventors do not need to work together on the invention at the same time, nor are they required to contribute the same amount or type of contribution.

Inventors must have contributed to at least one claim in the patent application in a substantial way. Thus, a skilled patent practitioner can selectively add or omit claims to tune the inventors to the desire of the client. The skilled patent practitioner can also craft the patent claim to include or omit various elements that affect inventorship with respect to each claim.

Someone who merely assists in reducing an invention to practice is a person who merely carries out
the inventor’s inventive concept. For example, an inventor conceives of
combining part A and part B. Inventor goes to Technician to help him configure
the combination, determine the best fastening means, and to determine the most
cost-effective materials. The Technician would most likely be found to be
reducing the inventor’s concept to practice rather than as a co-conceiving
inventor.

If an inventor is
mistakenly named or omitted from the application, he may be later added or
removed. Failure to name true inventors that rises to a fraud on the patent
office in the procurement of a patent may be a ground for invalidating a patent.

Where a joint inventor does not apply, others may apply for a patent on his behalf. A
person who has a proprietary interest in patent rights, or has been assigned
such patent rights, may apply for a patent as an agent of the inventor upon a
showing that inaction would cause irreparable damage. The PTO will issue the
patent in the name of the inventor, not the applicant. Similarly, in a case
where an inventor dies or is incapacitated, the inventor’s legal representative
may apply for a patent on behalf of the deceased.

In theory, patents are
developed and owned by individuals. Unlike other countries, corporations may not
be inventors. In order to transfer patent rights to corporate entities,
inventors must assign their patent rights to the corporation. Assignments, in
certain circumstances, may limit future involvement of the inventor in the
prosecution of the patent and any “child” cases.

Who owns
the Patent? Some key points about Patent Ownership

Under the patent laws, an inventor owns the
patent. Co-inventors have an undivided interest in the whole patent and may
exploit it without consent or accounting to the other inventors. Inventor
agreements may be entered to set forth the rights of co-inventors vis-à-vis
one another.

Patents have the legal attributes of personal property. The inventors are the
statutory patent owners and may assign the patent rights by an assignment to
others. Notarization is recommended, but not required, for valid assignments. If
all of the inventors assign all right title and interest in the patent to
another, the title to the patent rights belongs to the assignee. If only one
inventor assigns his rights, there may be a partial assignment. Prosecution
proceeds with all partial assignees and inventors who have not assigned their
rights.

Contractual covenants may impose obligations to
transfer ownership from the inventor to another person or entity. This is common
with employee inventors and their employers. (Businesses may not apply for
patents, only individuals).  The employment agreements for R&D personnel,
technical professionals, and executives often obligate the employee to assign
patent rights to the employer. A “garage inventor” or “independent inventor” may
be contractually obligated  to assign patent rights to a manufacturer for his
new product in a technology transfer or sale transaction.  Graduate students are
often required to assign inventions to an educational institution sponsoring the
research. (Notably, if research is funded by a government agency, the government
may have right to the invention even in the absence of a formal assignment.)

Assignments of patents
must be recorded with the United States Patent and Trademark Office within 3
months of execution or they will be void as against bona fide subsequent
purchasers. (There may, of course, still be liability as between assignor and
assignee under state law.) An original or a certified true copy may be recorded.
Assignments not in English will not be recorded unless accompanied by a signed
translation. Conditional assignments will be regarded by the United States
Patent and Trademark Office as absolute.  The recording of the assignment has no
bearing on the determination of its validity or title to a patent or patent
application.

As intangible property,
patents may also be the subject of a security interest such as liens or pledged
as collateral in financing transactions. Complex issues arise in foreclosure and
bankruptcy proceedings.

Patent applications,
even codified non-patented technical know-how (assignment not recorded at USPTO
in this case), can be the subject of assignment. The patents do not need to be
issued to be assigned. In fact, they may be assigned even before they are
written. Future rights evolving from patent applications may also be assigned.
These may include foreign patent filings, improvements on the invention,
reissues and patent terms adjustments to name a few common inclusions in the
bundle of rights assigned.

Ownership of a patent becomes important when
enforcing the patent. All owners must join in an enforcement action. Hold-out
partial owners may make unreasonable demands, and if not met, may license or
assign their rights to the alleged infringer, impeding the ability to bring an
enforcement action. It is prudent to have contractual obligations not only to
assign, but also to require cooperation with enforcement or defense litigation.

It is not uncommon for employers to not have
assignment covenants in place. In some circumstances, courts can impose shop
rights- essentially a personal, limited, non-exclusive, nontransferable,
irrevocable, royalty-free license for an employer to use an invention developed
by an employee in the course of employment or with business assets.

Patent ownership may be discovered, in most
cases, with a review of the United States Patent and Trademark Office records
and National Archives and Records Administration (NARA) (pre-1957 patent
assignments). Assignments of pending, unpublished or abandoned applications can
only be obtained (1) with written authority from the applicant, assignee, an
attorney representing either party, (2) upon a showing of a bona fide
prospective or actual purchaser, mortgagee or licensee, or (3) if referenced in
another publicly available patent. However, since not all inventors, businesses
and general practice attorneys know about the United States Patent and Trademark
Office recordation of assignments, it may be wise to also check the County
Clerk or state recording offices for assignments and security instruments.
This has the added benefit of uncovering unknown encumbrances on the patent
assets. The law of assignments is state law, and thus, should be handled in
transactions as would be done with other assignments. For example, the
unrecorded assignment is always a risk for attorneys to consider in
transactions. First, a patent assignment is valid if filed with the United
States Patent and Trademark Office within 90 days of execution. Appropriate warranties are recommended for this
window of potentially valid assignments. While bona fide purchasers will not be
affected by an unrecorded patent assignment, there may be contractual
implications (breach) for the parties in cases of unrecorded assignments
involving key business personal or inventor family members that may not be
deemed bona fide purchasers.

One last issue for legal practitioners that
arises with respect to patent ownership is the concept of defining the client.
While the inventor is a key contact at the patent application preparation stage,
in many circumstances the client is the assignee of the patent application.
There are potential conflicts between the interests of assignor and assignee, or
licensor and licensee, that must be considered in the course of working with the
parties.

Joint inventors have an undivided interest in the whole patent and may exercise patent rights without
the consent of other joint owners. Additionally, there is no obligation to
account to the other joint patent owners. Of course, contractual agreements
between the joint inventors can limit these rights.

Do I have to publish my
nonprovisional utility patent application?

An applicant may request that the application not be published, but only if the
invention has not been and will not be the subject of an application filed in a
foreign country that requires publication 18 months after filing (or earlier
claimed priority date) or under the Patent Cooperation Treaty. Publication
occurs after the expiration of an 18-month period following the earliest
effective filing date or priority date claimed by an application. Provisional
and design applications are not published.

After I apply for a patent, does the world know about my
invention?

Not until your application is published or issued. Patent applications are
confidential at the early stages. Following publication (or referenced in
another published patent or patent application), the application for
patent is no longer held in confidence by the USPTO and any member of the public
may request access to the entire file history of the application. To maintain
secrecy, we encourage the use of confidentiality agreements. Should your patent
application not publish or be issued as a patent, the technology may qualify as
a trade secret.


Patent Publication: Is this Technology better kept a Trade Secret?

The benefit of patent protection and the limited monopoly granted in Letters
Patent comes with a price. The inventor must contribute the public body of
knowledge by sharing his technology. In furtherance of this objective, in the
absence of an affirmative request not to publish, the United States PTO
“publishes” utility patent applications (not provisional or design patent applications) filed
on or after November 29, 2000 (including International applications). An
application will not be published if an applicant makes a request upon filing
the application certifying that the invention has not and will not be the
subject of an application filed in another country, or under a multilateral
international agreement, that requires eighteen-month publication.

An application may be published earlier than the end of such eighteen-month
period at the request of the applicant. In exchange for the publication of a
patent application, patentees may be able to obtain “provisional rights” in the
way of a reasonable royalty during the period beginning on the date of
publication of the application by the United States PTO and ending on the date
the patent is issued. Thereafter, the patentees have nonprovisional rights to
license their patents for royalties.

In some cases, companies elect to keep a technology as a proprietary trade
secret rather than to obtain patent rights. There are two realties to obtaining
a patent: (1) Once a patent term has expired, the technology would be in the
public domain; and (2) Once the application has published, others may attempt to
design around or improve upon the technology that was disclosed. This may
diminish the economic advantage that may be derived from such technology.

Management may elect to forego patent protection and maintain the technology as
a closely held trade secret. These business decisions must be made cautiously.
First, once the technology is used in commerce for one year, patent protection
may no longer be sought on the technology without new, novel and unobvious
improvements. Second, a patent grants a “limited monopoly” to the owner,
allowing the patentee to patrol and seek damages from infringers. However, a
reverse-engineered technology that has no patent protection may leave open a
small door for competitors to exploit.

These are true business decisions. They often involve inquiries such as:

What is the impact of publishing my proprietary technology?

  • Will I create a new market for accessories, increasing my own sales?
  • Will I be perceived as high tech to competitors, investors and consumers?
  • Will the patent have a deterrent effect on competitors?

My technology will be in the public domain after expiration of patent term.

  • What is the useful life and economic advantage of this technology?
  • In 20 years, will this still be a competitive advantage or cutting edge?

What if competitors design around or improve upon my technology?

  • Will I be perceived as the market leader (“the original”) in the technology?
  • Can I benefit from industry improvements myself?

Do I have a “first to market” advantage?

What is a provisional patent application?

A provisional application, which was designed to provide a lower cost first
patent filing in the United States and to give U.S. applicants parity with
foreign applicants. Provisional application provides the means to establish an
early effective filing date in a patent application and permits the term “Patent
Pending” to be applied in connection with the invention. Provisional
applications may not be filed for design inventions. The applicant would then
have up to 12 months to file a non-provisional application for patent. The
claimed subject matter in the later-filed non-provisional application is
entitled to the benefit of the filing date of the provisional application if it
has support in the provisional application.

What is PCT?

The Patent Cooperation Treaty (PCT) enables the U.S. applicant to file one application, “an international application,” in
a standardized format in English in the U.S. Receiving Office (the U.S. Patent and Trademark Office), and have that application
acknowledged as a regular national or regional filing in any State or region that is party to the PCT.

Should I test market before I invest in a patent?

It is not recommended. Patent protection may be forfeited one year after the first public disclosure or offer for sale in the US, and
immediately forfeited in some foreign countries.

Can’t I just sell my idea?

Maybe, but it is likely to be an uphill battle. Why pay for an unprotected idea that anyone else can copy?

Protecting your idea with a patent creates value for a potential purchaser. If a company purchases patent
rights, they are buying an exclusive monopoly on the inventive concept for the term of the patent. They are
the only entity that can make, sell, use or import a product embodying the inventive concept. Money the company
invests in developing the product and bringing it to market can be recovered when the product has no competitors
in the marketplace.

Inventors reap what they sow…the more they invest in developing and protecting the invention,
the more value it has in the marketplace.

How do I tell if it is worth pursuing a patent on my idea?

  1. Identify if your idea is unique. Is there a similar product in the marketplace? You may search in stores, product catalogues,
    or US patents on USPTO.gov, Freepatentsonline.com or Google Patents.
  2. Assess potential patentability challenges. Make note of the closest products you discover and determine how your product differs,
    drawbacks of existing products, drawbacks of existing products, and benefits or improvements of your invention. Are these differences
    obvious when you consider existing products and technology?
  3. Consider a professional patent search (cost around $500).
  4. Determine the potential market for your product. How much profit do you estimate? Is it cost justified to protect that market?
    What will be your return on investment?
  5. Under nondisclosure agreement, “pitch” your invention to potential companies.

How does the Chinese Patent System differ from the U.S. Patent System?

All patent systems are created equal, right? Not really. Just as it is with most things, the Chinese patent system is
different than the U.S. patent system. The U.S. patent system has been around for over 200 years while a systematic and enforceable Chinese patent system is rather
new. In the U.S., a utility patent application must be examined, allowed and issued before the patent becomes enforceable. In China, there
are two classes of utility patents – utility model patents and invention patents. Though a utility model patent protects the functionality of a device,
it is however based a registration system and it does not require prosecution for it to be enforceable. There are relatively
few of these patents that are filed outside of China and hence are available mainly in Chinese. Therefore, they can pose
real problems for companies wishing to do business in China. A U.S. utility patent is similar to a Chinese invention patent in that the invention
patent is granted based on an examination system.