Authorities have argued that ownership and control of new technologies are the vital key to success in business. Every company, whether or not directly involved in technological research, should have a process established whereby information relating to new designs, processes, technologies, or inventions is reviewed by management. Managers having timely possession of such knowledge are in a much better position to decide whether to invest the resources to obtain patent protection in these assets. This paper addresses several strategies for patent protection.
Let.s first discuss why businesses should be concerned about patents. Patent protection is available for new, useful, and non-obvious processes, machines, articles of manufacture or compositions of matter, or improvements relating to the above, including computer software and business methods. Indeed, the U.S. Patent Office issued new Examination Guidelines of the Patent and Trademark Office (PTO) that are directed toward the examination of software patent applications.
Patents are granted by a sovereign to provide certain exclusive rights to the patentee within its territorial boundaries. In the U.S., the patent holder has the right to exclude others for a set period of time, which is 20 years from the date of filing, from making, using, selling, or offering for sale any patented invention within the U.S. When the time period expires, the subject matter of the patent enters the public domain. International treaties, such as the Paris Cooperation Treaty (PCT) and the European Convention Treaty (EPC), provide helpful means for filing patents in several countries with a single patent application.
When enforced, patents themselves typically come under retaliatory attack from accused infringers. Importantly, the courts today have more often found patents to be valid and infringed. The remedies for infringing a patent can be quite severe and can include injunctions, damages, and attorney.s fees, with treble damages available for willful infringement. Having to defend against a charge of patent infringement can involve large sums of money, which amount has been estimated to start at $ 1 million dollars. Accordingly, some companies are now having extensive patent searches conducted before spending high amounts of energy and resources on particular technologies. Patent searches do not provide a guarantee that you will avoid infringing someone else.s property rights, but do provide a basis for decision making.
A strong patent portfolio can be a company.s most significant asset not only for the protection of new technology but also for other business reasons. A patent portfolio could be used as a defense against patent infringement charges brought by another. This has usually led to the cross-licensing of technology as a means of settling litigation cases. A strong portfolio may also be used in an aggressive marketing strategy that includes extensive patent licensing. Additionally, patents can also facilitate joint venture or other similar relationships between different companies. Thus, given these options, the following are suggested strategies for seeking and utilizing patent protection.
An Intellectual Property Review
Conducting an internal company survey or audit is one method for determining what inventions, if any, are being developed by the company. Disclosure forms can be circulated or questions can be developed to provide a way for identifying possible patentable inventions. Such questions can include:
Has the invention been publicly disclosed? If so, when?
Is the invention new and useful?
Who are the inventors of the subject invention?
Has a prototype of the invention been made?
Is the invention directed toward a computer software process?
Is the invention directed toward an ornamental design?
The step of determining how much time, if any, has elapsed from any public disclosure of the invention is critical. In the U.S., there is a one-year grace period after a public disclosure, public use, sale or offer for sale in which to file a patent application. Most, if not all, foreign jurisdictions do NOT provide such a grace period. Preferably, patent protection should be commenced prior to any commercial use or public disclosure to preserve the right to file for a foreign patent application. Also, multiple reviews should be conducted to capture inventions that were not previously disclosed.
Is the Invention Patentable?
Once a possible invention has been identified for patent protection, the next step is to determine whether the identified invention is patentable. I strongly recommend that this step always be taken, because it is critical to know whether the invention has been patented or described by someone else, or whether the invention has been publicly disclosed more than one year prior to the possible date of filing prior to incurring the expenses associated with preparing and filing a patent application.
Questions that can be used to help determine the patentability of an invention include:
What is the practical application or use for the invention?
Has the invention been publicly disclosed?
Is a prototype available for inspection?
Does the inventor have any research logbooks or materials for review?
Is the invention an improvement over an existing device or technology?
Can the inventor prepare a brief description of the invention and some drawings for your review?
Can the invention be classified as non-patentable matter, such as music, literature, mere data, a mathematical algorithm, or a natural phenomenon, such as energy or magnetism?
Conduct a Prior Art Search
Once you have obtained information regarding the invention, the next step is to have a prior art search conducted. A brief discussion between the inventors and the patent searcher is helpful, because this can narrow the scope of the possible search.
With the results of the prior art search, certain questions may now be answered, preferably by a qualified patent attorney. These include:
Has the invention been made or described by another?
Is the invention described in a prior patent?
Is the invention suggested by a prior patent?
Do prior patents suggest the combination of certain technologies or processes for arriving at the invention?
Is the invention being considered already known and protected?
If the invention is described in a patent discovered in the search, will production and sale of the invention infringe the rights of others?
Filing a Patent Application
If the patent search and the resulting analysis indicate that the invention is patentable, then the inventors must decide whether to obtain a patent for the invention, for the right to exclude others from making, using, or selling the invention. Factors to consider include:
Can the resulting patent be a source of revenue through licensing?
Can the resulting patent provide a competitive advantage?
Consider the potentially high costs and expenses incurred in obtaining a patent. Typically the costs and expenses just for filing the application for a patent are $5,000 to $20,000. Further, progressive maintenance fees are due to the PTO at 3 1/2 years, 7 1/2 years, and 11 1/2 years into the patent term.
The process of obtaining a patent through the PTO is a lengthy and time-consuming process.
There may be high costs and fees associated with prosecuting the application through the PTO to finally obtain the resulting patent.
Foreign patent protection, if sought, can also be a lengthy and expensive process.
Focus on the more critical inventions.
Is there a market plan being considered to help determine where and when to file?
Consider long-term benefits. Patents can pay for themselves many times over. Don.t be "penny wise and pound foolish." By saving a few thousand dollars by not protecting a patentable product, you may give away a commercial advantage.
Other Types of Patent Searches
The patent search described above is a general search. Other types of patent searches that may involve detailed analysis are performed in certain circumstances. For example:
A patentability search can be expanded into a more comprehensive non-infringement search prior to marketing a newly developed product to avoid marketing a product that is protected by a patent.
If threatened with infringement litigation, conduct a validity study on the patent at issue. Patents are presumed valid, but with all the technology available today, there may be patents or other material not reviewed during examination that could act to invalidate an issued patent.
If threatened with infringement litigation, conduct a patent search for the product at issue, as it may be the subject of an expired patent and therefore in the public domain.
If approached by an inventor with a patent to license or sell, conduct a search to determine whether the patent is enforceable and valid.
Conduct patent avoidance analysis, including a prior art search, in order to design around an existing patent. Certain features of patented inventions may be omitted to "get around" a patent. If these features are described in other patents, then the opponent.s arguments of infringement are undercut.
Conduct a search to determine what patents reside in your competitor.s portfolio.
Licensing Strategies
Once a patent has been obtained, consider the option of licensing the technology. Licenses not only provide a source of revenue to the patent holders, but also a means for settling a litigation matter. By offering a license, a dispute can be settled.
Additional Issues to Consider
If marketing abroad, seek international patent protection in relevant countries. But remember, patents are territorial. A Japanese patent is of no use in Australia.
On more complex products or processes, obtain multiple patents to enhance the difficulty level faced by competitors in designing around patents covering the product or process and to thereby enhance the patentee.s commercial advantage.
Summary
While patents have been around for many years, patent rights are as important and strong as they were a century ago. I hope to have demonstrated that businesses need to be aware of their own patent opportunities, as well as the patents held by their competitors. In today.s environment, it is difficult, and indeed, unwise to ignore patent rights. Systematic intellectual property reviews or surveys provide a means for ensuring that present and future opportunities are not lost and also provide a means for avoiding someone else.s patent rights.
Further, while securing patent protection is a time-consuming and expensive process, once obtained patents provide (i) one of the only allowed monopolies, (ii) a source of revenue, (iii) a long-term competitive advantage, and (iv) strategic benefits in negotiating deals. With the courts looking favorably on those who have taken the risks and incurred the expenses for obtaining a patent, the rewards and incentives can outweigh the costs and expenses.
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