A recent law allows businesses to create more value simply by filing a patent application. The 18-month rule deprives patent applications of their secrecy 18 months after they are filed, but in exchange, the patent applicant can recover damages from an infringer starting from the date of publication. The bargain is somewhat more complex, but you can improve your bottom line by maximizing the benefits of the 18-month rule and avoiding its pitfalls.
Damages can accrue earlier
As a patent applicant, you must meet three requirements to obtain damages under the 18-month rule. First, you must let the infringer know which claims it infringes. Second, you cannot drastically alter those claims thereafter. Third, your patent application must issue into a patent. If you meet these requirements, you are entitled to money damages starting from the date of publication of your application. In the past, money damages did not start until the patent issued, and the time between filing and issue could take up to three years. As a patent applicant, you should consider the following strategies:
- Notify potential infringers of your published application to start the damages clock ticking.
- To start the damages clock even earlier, request that your application be published before 18 months.
- File specific claims covering your competitor's product that you believe will be allowed.
- Republish your application if you do change your claims and give potential infringers notice of the changed claims. The damages clock will be restarted when you give that notification.
- To create uncertainty for your competitors, consider not giving them any notice. Diligent competitors are keeping track of your published applications. To keep them guessing, file a set of claims for publication and change them later. Your competitors will not know what claims to design around until your patent issues. Under this approach, however, you lose your right to damages before your patent issues.
As a potential infringer, consider the following counter-attack strategies:
Monitor your competitor's published applications to avoid making costly investments or being forced into one-sided license negotiations. What your competitor is filing will give you insight into where your competitor thinks the industry is heading.
If you get a letter from your competitor forewarning you about published claims, obtain a written opinion from a patent lawyer on whether you really do infringe or whether you can safely design around the claims.
File your own patent application covering aspects of your competitor's products, which it did not reveal in its patent applications. This approach can improve your leverage in license negotiations with your competitor.
Offensive and defensive uses of your published applications
There is more to the 18-month rule than loss of secrecy and increased damages. Another effect of the rule is that it has greatly expanded the amount of "prior art," documents and activities that are in the public domain. In the last year, over 150,000 patent applications have been published. Roughly one-third of these will not issue into patents, so there are 50,000 more pieces of prior art in the public domain than there would have been without the rule. All of these pieces of prior art have a patent-defeating effect that can be exploited by adopting the following strategies:
Request that your application be published before 18 months after filing. Your published application is now prior art to any patent application filed by your competitors as of its filing date.
To accelerate publication of your patent applications, your patent attorney can create a chain of related patent applications that are linked to an original patent application. If the later applications are filed 18 months after the original application, the later applications are published immediately. One downside to this approach is that your original application, when published, can be used to defeat your later applications.
Send your own published patent applications and other materials you think can defeat your competitor's application to the Patent Office so the new materials can be considered as the application is evaluated. If the Patent Office agrees, your competitor will be denied a patent. Remember that your competitor still has the ability to change its claims, so review all documents carefully to avoid inadvertently strengthening your competitor's position.
Opt-out of publication if you do not plan to file your invention abroad. The downside to opting-out is that you will lose your right to early damages, but your application will be kept secret from competitors until it issues as a patent. Opting-out also removes your application as prior art until it issues.
Other considerations
Create a portfolio of published patent applications to attract investors to your innovations and gain capital prior to patent issuance.
If you are considering trade secret protection for your invention, you should make that decision before you file a patent application. If unsure, consider opting-out of the 18-month rule to leave open the possibility of pursuing trade secret protection.
Be aware that your foreign competitors now have the ability to monitor your published patent applications. Before the new rule, U.S. companies could monitor their foreign competitors' applications, but foreign companies could not monitor their U.S. competitors' applications.
Strategic filing of patent applications cannot only accumulate monetary value for your business, but can help your business maintain a competitive advantage. The strategies mentioned above are just a few that should help you accomplish those goals.