Patent, Trademark & Copyright : Law Office of Kloss, Stenger & LoTempio

In an effort to push forward patent reform,  Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) posted a press release using the highly publicized Supreme Court decision in Bilski v. Kappos (.PDF) as a reason as to why reform is needed.

Bilski affirmed a Federal Circuit decision denying a patent for a process for hedging on energy commodities because it was deemed merely an abstract idea.  Here is what he said:

In Bilski v. Kappos, the Court unanimously affirmed the judgment of the Federal Circuit that the application for a patent on a business method should be rejected. The Court’s opinion, joined by only five of the Justices, however, needlessly left the door open for business method patents to issue in the future, and I am concerned that it will lead to more unnecessary litigation.

Since the debate over comprehensive patent reform began many years ago, the Supreme Court has demonstrated an increased interest in patent law cases. The Court’s decisions have moved in the direction of improving patent quality. While today’s decision will take time to analyze and may not have advanced the law and created the stability and certainty that it could have, it appears to continue this trend, which is consistent with the goal of patent reform legislation pending in Congress. The courts, however, are constrained by the text of our outdated statutes, and it is time for Congress to act.

I wonder what he meant about needlessly leaving the door open for business method patents? Does he  believe a business method is not a viable subject matter for a patent? Does he believe that if a patent application for a business method passes the machine-or-transformation test it shouldn't be allowed a patent?

I wish there was more substantive information in the press release. But I guess it's a political maneuver to use a well-publicized case to draw attention to his pet project, the Patent Reform Act of 2010. Still, with summer recess approaching, even with the publicity that Bilski has drawn is it possible that we will see anything in the way of progress on S.515 until the fall?

Other related posts:

USPTO Sends Bilski Memo to Patent Examiners

Bilski vs. Kappos Decision

Bilski vs Kappos

Legal community weighs in on Bilski v. Kappos

Business method patents...what will the Supreme Court Do?

Patent Reform Act of 2010: An Overview

"Patent Reform Act of 2010" and "First Inventor to File" Rule Change

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Almost immediately after the Supreme Court handed down the Bilski decision Robert W. Bahr, Acting Associate Commissioner for Patent Examination Policy sent a memorandum to the patent examining corps which gave guidance as to how the USTPO examiners should interpret the case.

Bahr told examiners to examine patent applications for compliance with section 101 using the machine-or-transformation test as a tool for determining whether the claimed invention is a process under section 101.

If a claimed method meets the machine-or-transformation test, the method is likely patent-eligible under section 101 unless there is a clear indication that the method is directed to an abstract idea.

Bahr summarized what the Supreme court decided in the short memo:

The Supreme Court confirms section 101 specifies four independent categories of inventions and discoveries that are eligible for protection: process, machines, manufacturers, and compositions of matter.

The Supreme Court confirms that laws of nature, physical phenomenon and abstract ideas are not patentable subject matter.

The Supreme Court decided claims of Bilski not patent-eligible because under section 101 because they are an attempt to patent abstract ideas.

The Supreme Court indicated machine for transformation test is only a threshold inquiry and is not the sole test for patent eligibility of processes under 35 USC 101.

Significantly, the Supreme Court also indicated that a business method is at least in some circumstances eligible for patent under section 101.

Bahr concluded by saying an examiner should continue to examine patent applications for compliance with section 101 using "existing guidance" concerning the machine-or-transformation test.

I tried to figure out what the existing guidelines are for the USPTO regarding the examination of a process claim. I found another memorandum dated January 7, 2009, by John J. Love, Deputy Commissioner for Patent Examination Policy, addressed to the Technology Center Directors and the Patent Examining Corps which explained that the Bilski machine-or-transformation test for a method claim is whether or not the claimed method is:

1. Tied to a particular machine or apparatus; or
2. Transforms a particular article to a different state or thing.

The "guidelines" go on to say that there are two corollaries to the machine-or-transformation test :

• First, a mere field of use limitation is generally insufficient to render otherwise eligible method claim patentable. This means the machine or transformation test must impose and meaningful limits on the method claim scope to pass the test; and
• Second, insignificant extra-solution activity will not transform an unpatentable principle into a credible process. This means for citing a specific machine work or a transformation of a specific article is an insignificant step, such a data gathering or outputting, is not sufficient to pass the test.

Other related posts:

Senator Leahy Uses Bilski to Push Patent Reform

Bilski vs. Kappos Decision

Bilski vs Kappos

Legal community weighs in on Bilski v. Kappos

Business method patents...what will the Supreme Court Do?

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To summarize today's Supreme Court ruling in Bilski (PDF), business method patents remain viable subject matter and the machine-or-transformation test enunciated as the sole test by the Federal Circuit is not the exclusive test, but merely one tool in the Examiner toolbox.

The court affirmed that Bilski’s risk-management method was not patentable subject matter. "Indeed, all members of the Court agree that the patent application at issue here falls out-side of §101 because it claims an abstract idea."

You can not patent laws of nature, physical phenomena, and abstract ideas.

Indeed, Justice Kennedy writing for the Court found that 35 U.S.C. §273 acknowledges the existence and statutory protection of business method patents.

Adopting the machine-or-transformation test as the sole test for what constitutes a “process” (as opposed to just an important and useful clue) violates these statutory interpretation principles. Section 100(b) provides that “[t]he term ‘process’ means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.”

"The Court is unaware of any “‘ordinary, contemporary, common meaning...of the definitional terms “process, art or method” that would require these terms to be tied to a machine or to transform an article..., under the doctrine of noscitur a sociis."

The Court found that the invention in Bilkski, is an attempt to patent an abstract idea as well as a mathematical formula to express that idea. The Court reasoned that this was not patentable subject matter under 35 U.S.C. §101.

In his concurring opinion, which was joined by Justices Gindburg, Breyer, Sotomayor and Stevens, Kennedy agreed with the majority that Bilski revolved around the attempt to patent an abstract idea and therefore ran afoul of §101.

Nevertheless, Stevens (and the concurring justices) would have taken this decision further by reiterating their position that business method “patents” are not patent-eligible subject matter in the first place.

I asked patent attorney John Del Vecchio of the Buffalo patent law firm of  Del Vecchio and Stadler about his thoughts regarding this much anticipated Supreme Court Decision, he highlighted the following quotes from the Biliski opinion (PDF):

Page 8
This Court’s precedents establish that the machine-or- transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or- transformation test is not the sole test for deciding whether an invention is a patent-eligible “process.”

Page 9
As a result, in deciding whether previously unforeseen inventions qualify as patentable “process[es],” it may not make sense to require courts to confine themselves to asking the questions posed by the machine- or-transformation test. Section 101’s terms suggest that new technologies may call for new inquiries.

Page 10
Section 101 similarly precludes the broad contention that the term “process” categorically excludes business methods.

Page 12
But beyond this or some other limitation consistent with the statutory text, the Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101.

Page 13
Petitioners’ claims are not patentable processes because they are attempts to patent abstract ideas.

Page 16
In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act.

Del Vecchio concludes, "So, it looks like the machine/ transformation test is a great clue, but not the sole test under 101. And, it looks like business method patents are alive and well.

Too bad the Court failed to spell out what the other 101 clues are!!!  Seems like we might be back to the machine/transformation test as the only sure way of satisfying 101."

Based on today’s ruling and the concurring opinion of Justice Stevens, it will be interesting to see whether the Supreme Court will further define patent eligible subject matter and grant certiorari (PDF) in Mayo v. Prometheus (PDF) a case challenging the patentable subject matter of Prometheus Labs' patents that cover a method of optimizing the dosing of a drug.

Other related posts:

Senator Leahy Uses Bilski to Push Patent Reform

USPTO Sends Bilski Memo to Patent Examiners

Bilski vs Kappos

Legal community weighs in on Bilski v. Kappos

Business method patents...what will the Supreme Court Do?

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What's taking the Supreme Court so long to hand down an opinion on the Bilski vs Kappos case? Bilski was argued on Nov. 9, 2009... 225 days ago. There has been much speculation that the decision will be published when the Supreme Court next releases its opinions on Thursday (June 24, 2010) or next Monday.

Dennis Crouch's Patently-O blog posts a nice chart of Joseph Miller, a professor at Lewis & Clark Law School, which shows the length of time it took the Supreme Court to render decisions on 20 other patent cases. The range was between 35 and 153 days. Dennis Crouch concludes:

"If you feel like you've been waiting a long time to see the Bilski opinion, it's because you have been waiting a longer time than usual."

My first thought was how can you compare Bilski, a case that's going to have long reaching consequences to many existing patents and software companies futures, with any other patent case? Wouldn't you expect it to be longer than the rest?

But a quick glance at the list and I saw a couple of the seminal cases in patent law history and a big one is right there at 140 days- Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., a case that was pending for almost twenty years and a case the Supreme Court looked at twice regarding the scope of prosecution history estoppel under the doctrine of equivalents.

The questions presented to the supreme Court in Bilski were:

1. Whether the Federal Circuit erred by holding that a "process" must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing ("machine-or-transformation" test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court's precedent declining to limit the broad statutory grant of patent eligibility for "any" new and useful process beyond excluding patents for "laws of nature, physical phenomena, and abstract ideas."
2. Whether the Federal Circuit's "machine-or-transformation" test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect "method[s] of doing or conducting business." 35 U.S.C. § 273.

The Bilski decision may affect whether any business method, software, e-commerce and/or medical diagnostic technology is patentable. It will be interesting to see what and when they decide this case. Stay tuned for my next post on the Bilski decision.

Other related posts:

Senator Leahy Uses Bilski to Push Patent Reform

USPTO Sends Bilski Memo to Patent Examiners

Bilski vs Kappos Decision

Legal community weighs in on Bilski v. Kappos

Business method patents...what will the Supreme Court Do?

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What is patentable subject matter? Many people believe that they can patent anything. But the truth is there is only certain statutorily allowable subject matter that can be patented (35 USC 101).

Here's a list of the basic allowable subject matter:

1. Process (Method of making infrared heaters which reduces costs by 25%) 
2. Machine (Motorized device for clearing leaves out of a gutter without climbing)
3. Article of manufacture (Pencil, chair)
4. Composition of matter (Paint, drugs)
5. Or any new and useful improvement thereof (Chair with a footrest)

If your invention falls into one of the above categories it must also be:

• New (no one has ever done it before) 35 USC 102
• Useful (it can't be something that has no use whatsoever) and
• Non-obvious 35 USC 103 (It must be non-obvious to one having ordinary skill in the pertinent art at the time the invention was made)

It doesn't take much to show that your idea is new because the slightest change will cause it to be original. And useful isn't really much of an obstacle, almost everything has some sort of use. There is a joke among chemical patent attorneys, "Any chemical composition has a use, it either kills grass or helps it grow!"

The hard thing to understand and to teach is what is non-obvious! I sometimes use the example of the invention of a table to get this idea across.

Let's pretend you were around 10,000 years ago and you were the first person to invent a table. Your table has a square top, a bottom and four legs.

Now someone makes an improvement on the table and tries to get a patent. The improvement is that the top is circular in shape instead of a square. The argument by the patent office may be someone skilled in the art (a carpenter) would think it obvious that the top could be made in any shape or dimension and a round top would be rejected as an obvious improvement.

Even though the improvement of the first ever circular top is new, and it is useful it would be arguably not patentable if it was determined that it would be an obvious improvement for a carpenter to make a table top in any shape.

Now let's take a different approach. Let's say that the new inventor was the first to invent a table with pedestal legs connected to the center of the bottom. It could be argued that this way to connect the legs to the top is a non-obvious improvement and would be potentially patentable in the prehistoric patent office.

But obviousness can be established by combining or modifying the teachings of the prior art to produce the claimed invention where there is some teaching, suggestion, or motivation to do so.

So if there was a chair in the prior art with a with similar legs like the pedestal legs of the invention table the examiner might combine the references of the square table with the chair and say it was obvious to come up with the new table.

I am not trying to replace the many legal treaties and case law on this the question of obviousness, not to mention the Manual of Patent Examining Procedure (MPEP) where there are many examples of what is non-obvious. I hope the simple logic of the table scenario is an easy way to generally grasp this concept.

 "Clipart courtesy FCIT"

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Can you patent an idea? No.

Many potential inventors say to me “I have an idea I would like to patent” but what they do not understand is that the invention itself is patentable, not the idea. In order for an idea to become a patented invention, the inventor must be able to teach someone of ordinary skill in the art how to make and use the invention.

In 1966 Eugene Wesley "Gene" Roddenberry came up with the “idea” for the transporter. In the Star Trek television series Captain Kirk would use his communication device (which looked a lot like the cell phones of today) from a planet’s surface to order his engineer to “beam me up Scotty.”

Could Roddenberry have applied for a patent in 1966 for the cell phone or a transporter? Not unless he could describe to someone skilled in the art how to make and use it.

The law doesn’t even require that you actually make it (“reduction to practice”) you just have to be able to describe how to make and use it. 35 U.S.C. 112 often referred to as the enablement clause reads

“The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same…”

§ 112 paragraph 1 requires nothing more than objective enablement. In fact, an inventor can "constructively" reduce an invention to practice, which is unique to patent law.

"The statute does not contain any express requirement that an invention must be reduced to practice before it can be patented. Neither the statutory definition of the term in § 100 nor the basic conditions for obtaining a patent set forth in § 101 make any mention of "reduction to practice.” Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 60-61 (1999)." 

As Judge Pauline Newman as described, "[t]he inclusion of constructed examples in a patent application is an established method of providing the technical content needed to support the conceived scope of the invention" because "[u]nlike the rules for scientific publications, which require actual performance of every experimental detail, patent law and practice are directed to teaching the invention so that it can be practiced." Hoffmann-LaRoche, Inc. v. Promega Corp., 323 F.3d 1354, 1377 MPEP § 608.01(p).

People often come to me with an idea of how some type of machine might help solve a problem. But when I ask "how do you make it?" they cannot describe the inner workings of the machine. I ask them to tell me how it works and they say "can’t we get someone like an engineer or an electrician to make it work?"  I reply "wouldn’t that engineer be the inventor?"

If we go back to 1969 and the wireless phone idea... just having the idea to transmit voice signal wirelessly wouldn’t be enough to get a patent. You would have to be able to describe it like George Sweigert of Euclid, Ohio did on June 10, 1969. Sweigert  is the man who is credited as the person who came up with the first cordless phone and was awarded US Patent Number 3,449,750 (.PDF). Download the patent to see the way he described how to make and use his invention.

The bottom line is that your new idea of a way to solve a known problem can only be patented if you can describe how to make and use it. You cannot  get a patent on the idea alone. 

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Tweet of the week

Thanks to Innovator, Consultant, Strategist, Emerging Media, Social TV, Canadian Expatriate Richard Kastelein for tweeting @expathos this week about a Sony patent application that may give us a preview on how viewers could interact with their TVs. What is the future TV of and TV apps?

We all know that one day the computers and TVs will be the same; there will be central location in your house that will control all your entertainment from movies, games, music, internet and the television. But who will bring us there first? Will it be the Sony  'Smart TV'?

Richard Kastelein reported for appmarket.tv that Financial Times (FT) and the UK Times said that Google and Intel are expected to announce Google’s I/O conference on May 19th, in San Francisco a significant breakthrough into consumer electronics and the broadcast industry with the launch of a “Smart TV” platform.

“The technology is allegedly powered by Android and Intel's chips, and will make Sony televisions and even Blu-ray DVD players function like computers, running Google's search, Chrome Web browser, YouTube and other programs.

Kastelein thinks that this smart TV will be a windfall for the App industry, he quoted Julie Jacobson

"...that by 2015, more than half of all TVs shipped worldwide will have a network connection - and seven out of ten of those units will ship with an embedded app platform and app store, according to a new report from Gigaom Pro called, “TV Apps: Evolution from Novelty to Mainstream” (subscription required)."

Janko Roettgers authored an article for newteevee.com "Is This the Sony Smart TV?"  And Paul Johnson of appmarket.tv wrote an article "Google TV - Does Sony patent give us a view on how viewers could interact with their tv's?"  Both are of the opinion that a recent Sony patent applicattion entitled NETWORK MEDIA PLAYER WITH USER-GENERATED PLAYBACK CONTROL(.PDF) may be the basis for the announcement.

The patent application essentially describes a network media player able to generate and consume XML-based metadata for programming from any source, including over-the-top, local media and cable TV. This type of metadata would then be stored on a central server and exchanged between users through social networks, or made available by broadcasters or other entities.

Here is a excerpt from the patent application:

It is desirable to provide a mechanism to create, use, and/or share different playbacks of television programs and other sensory works. For example, it is desirable to provide an individual who has recorded the Super Bowl only to watch the commercials with the ability to playback his recording of the Super Bowl on his PVR such that only the commercials are shown. Similarly, an individual who has recorded the Super Bowl only for the football may desire to only see each football play during playback. This [patent application] discusses techniques and systems that may be used to create metadata or the like that controls or varies the playback of a sensory work, such as, a television program.

It also gives a hint as to how big business will profile the American consumer and narrowly direct advertisements at a specific communities. The next step will be to direct ads at a specific household or individual. Talk about "big brother" getting closer to reality. Take a look at this:

In some instances, it may be desirable to insert additional information, video, audio, and the like, during the playback of a sensory work. For example, a user may desire to insert media from another source, from another segment within the same source, or to insert new data. One implementation of this technique would be to insert profile-based advertising during playback. For example, during the playback of the Super Bowl, viewers may be shown advertisements based on demographics or any other information available. Thus, viewers living within one census block group may be shown a Lexus advertisement, while those in another census block group may be shown a Toyota advertisement.

What are you able to afford? The Lexus or the Toyota? So will big business/brother show the Lexus to you or just to your rich brother?

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The Buffalo Law Journal May Special Report focusing on Intellectual Property is now available.

Thanks to Matt Chandler and the staff at Buffalo Law Journal for allowing me to author a guest column in this months issue.

If you haven't had a chance to check it out, here is a sneak peek at what's inside:

A look at SPLiCE, the Society of Product Licensors Committed to Excellence, through the eyes of its executive director Kimberly Billoni written by David Bertola.

Billoni shares her thoughts on the role her group plays in bringing businesses together.

An overview of the IP practice in WNY by Matt Chandler. Local attorneys say business is strong despite economic concerns. Comments of registered patent attorneys from both large and small firms to get a sense of what they are seeing as well as what the future holds for the practice of IP law.

A guest column by me Vincent LoTempio, looking at an overview of the Patent Reform Act of 2010.

Stepping away from the IP world, Matt Chandler takes a look at what impact recent health care legislation may have on companies considering implementing wellness programs in the workplace.

A spotlight on Lancaster Town Justice Mark Montour who was recognized for his efforts to reach troubled teens battling addiction in Lancaster.

Follow the Buffalo Law Journal on Twitter @BufLawJournal and Facebook.

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What Inventors Need to Know...

The "IP.com Global Patent Search"  tool may be your answer if you're looking for a free and easy way to search for prior art patents. The speed of this search engine is amazing. It finds a result almost immediately.

IP.com offers a free search engine box to be integrated into a web site or blog. The search box enables the user to search patents and selected non-patent literature. It takes just seconds to copy and paste the HTML code snippet in an appropriate location on your website, allowing visitors to quickly access patent searching.

Try searching something in the Global Patent Search box below to see how it works!

I tried a few searches myself and was impressed with the database and its ease-of-use. While the USPTO search site makes it difficult to see images and to download patent documents in .PDF format, the IP.com search engine allows you to do both seamlessly.

However there was a point it asked me to type in a CAPTCHA to ensure that my search was not generated by a computer and I was a real person. What a pain in the neck! My eyes aren't what they used to be, but I managed to type it in okay.

Below I pasted a sample of what a search result page looks like. I particularly like the "Options" box, especially its "More Like This" option because it instantly gave a neat organized list of prior art under the following titled headings:

• US Utility Registered Patents;
• US Utility Patent Applications; and
• Prior Art Database English Language Disclosures.

The "More Like This" feature certainly saves time because it allows you to get many similar examples of prior art with one simple click. This is faster than a search on the USPTO  search page where you have to go back and forth from the Patent Application search page to the Registered Patent search page. 

The IP.com search engine provides many other features, like an Advanced Search page that allows the searcher to customize a search to more efficiently find what their looking for. All in all I believe the IP.com Global Patent Search engine is a valuable tool for inventors and patent practitioners alike.

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Is the United States patent system broken and does it need to be fixed? Can our governmental leaders fix the patent system through legislation? Patent reform legislation has been introduced in each of past three Congresses and has yet to be ratified. Through the current Reform Act it is hoped that better patents are issued, patent rights will be enforced and the flow of technology advances our society for the good of us all. The argument over the many proposed changes appears to be getting closer to a conclusion.

Versions of the bill have been introduced in both the House and Senate (H.R. 1260 in the House, S.515(.PDF) in the Senate). The Senate Judiciary Committee has passed the bill and the House Judiciary Committee has held hearings on it. It will need to pass both committees and both chambers of Congress for it to be sent to the president.

The Obama administration has signaled support for a bipartisan patent reform agreement in the Senate. Senate Judiciary Committee Chairman Patrick Leahy (D-VT) recently came to agreement with Jeff Sessions (R-AL) regarding changes to the Patent Reform Act of 2009 (S. 515), increasing the chance that patent reform will actually happen.

In an April 20, 2010, letter addressed to both Senators Leahy and Sessions, Commerce Secretary Gary Locke pointed out that President Obama supports patent reform and would like to see the bill brought to the floor of the Senate and passed. Here is an excerpt from Locke’s letter:

The Obama Administration strongly supports your efforts to achieve such reforms and is committed to working with members of both houses of Congress to bring these efforts to fruition as you seek to bring a bill to the Senate floor. Regardless of any issues that remain under discussion, there is a consensus that a strong patent system, including an appropriately funded and well-functioning United States Patent and Trademark Office (USPTO), fosters innovation that drives economic growth and creates jobs.

Leahy’s procedural move is called a “hot line,” in which Senate Majority Leader Harry Reid (D-NV) will ask all Senate offices for unanimous consent to proceed to the bill, substitute the new language, and consider it passed.“Hot line” is the term used for a request to Senators to agree to allow a bill or resolution to be considered approved by the Senate without debate. It is has been reported by Dan Friedman of the NationalJournal.com that Senator Leahy is seeking floor time for consideration of S. 515, and hopes it will be taken up by the full Senate prior to Memorial Day.

Some of the proposed changes to current law are outlined below:

• First Inventor-To-File: The U.S. currently uses a "first-to-invent" system, which seeks to determine which applicant actually invented it first. The proposed reform would grant a priority of a right to the inventor who first-filed a patent application. Currently an inventor has a one-year grace period to file a patent application from the time the invention is used in public, published or offered for sale. This change would eliminate the one-year grace period unless the inventor was the "first-filer."
• False Marking: The proposed reform would eliminate the right of "any person" to file a false marking claim. Claims would be limited to individuals who have "suffered a competitive injury." This change would apply to apply to all cases, without exception, pending on or after the date of the enactment of this Act.
• Damages: The Patent Reform Act of 2010 attempts to address allegations that awards in patent cases are at times unfair and inconsistent. The Act proposes that courts be required to "identify the methodologies and factors that are relevant to the determination of damages, and the court or jury shall consider only those methodologies and factors relevant to making such determination." In other words, juries will only be allowed to award damages if the contentions are supported by substantial evidence. Each party would be required to "state, in writing and with particularity, the methodologies and factors the parties propose for instruction to the jury in determining damages … specifying the relevant underlying legal and factual bases for their assertions." This approach looks to strike a balance between the rights of patentees and accused infringers. However, as this approach does not actually limit damage awards, it remains to be seen how much this will affect a jury’s determination of damages.
• Trial: Right to split trial into segments: damages; infringement; validity; and willfulness.
• Willful Infringement: Under the current law, if it is determined that an accused infringer willfully infringed on another’s patent, "the court may increase the damages up to three times the amount found or assessed" (see S. 515 – Patent Reform Act 2009). Understandably, willful infringement was asserted in a majority of cases, and was found in many of them. This led to a number of unforeseen consequences. For instance, since one defense to willful infringement is reliance on an opinion from a patent attorney that there was no infringement, a number of lawyers were charging outrageous amounts (in excess of $100,000) for these opinions. In other cases, it was found that some businesses deliberately avoided learning about patents in order to avoid willful infringement claims. This completely goes against the whole purpose of the patent system, which is to promote science and useful arts. As a result, the Patent Reform Act of 2010 attempts to fix the willful infringement doctrine by increasing the standard for finding it. The 2010 Act proposes that, in order to be found “willful,” you must be found to be “objectively reckless” by clear and convincing evidence. It would also be made clear in the statute that knowledge alone is not enough to establish willfulness, and that any close cases should ere against a willfulness finding. This approach strikes a nice balance by making it much more difficult to assert willful infringement without getting rid of the doctrine all together.
• Pre-Issuance Submissions of Prior Art by Third Parties: The statute would expand the time frame for third-party submissions and allow third-parties to submit references and a statement regarding the relevance of the reference to patentability during examination of a patent application. This provision will benefit the public, the Patent Office, and inventors by giving the public additional time and the ability to make arguments to the Office; the Office more thoroughly examines an application in the first instance thereby decreasing potential reexamination proceedings; and the inventor is granted a patent which has been more thoroughly examined thereby decreasing the likelihood that the patent will later be invalidated through a novelty/nonobviousness argument.
• Litigation Venue: Patent cases could be transferred for the convenience of the parties to venues clearly more convenient than the venue in which the civil action is pending.
• Federal Circuit Judicial Residency:  Federal Circuit Judges would no longer be required to live in the Washington, DC area.
• Micro-Entity: A new type of entity defined as a "micro entity" for an inventor that has not been named on 5 or more previously filed patent applications would qualify for reduced fees.
• Best Mode Requirement: The Best Mode requirement would no longer be an invalidity defense and it cannot serve as a basis for holding a patent unenforceable. If the bill is made into law it will result in: Patents that do not teach the best way to make the invention, but teach “a way” to make the invention; this change favors the inventor over the infringer because it will make it harder to invalidate a patent.
• Inequitable Conduct: Currently, when applying for a patent, the patentee is required to supply to the Patent Office any information deemed relevant to the invention’s patentability. If you intentionally mislead the Patent Office at this time, you are guilty of inequitable conduct, and the penalty is unenforceability of your patent. While that appears to be fair, it turns out that because of the penalty at stake, inequitable conduct is alleged in almost every major patent case. As a result, the Patent Reform Act of 2010 proposes to allow patent owners to request “supplemental examination” prior to litigation. During this time, the patent owner could submit relevant information to the Patent Office for consideration. Any patentee surviving this reexamination would be exempt from an allegation of inequitable conduct based on the initial examination process. However, a big question mark is the ability of the Patent Office to handle the changes created by this proposed law, including processing a host of new reexamination proceedings. With 750,000+ applications sitting in its backlog, can the USPTO afford to devote manpower to this?

The Patent Reform Act of 2010 appears to balance the playing field for patentees in defending their patents.In the long run, the pressures of market competition will determine the fate of the patent system based on its performance. If the patent system fails, over time it will make the United States economically less competitive, and industry will demand change.

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How do you protect your intellectual property? What is intellectual property? Is a special sandwich that you make better than anybody else intellectual property? Imagine you are the owner of a new restaurant who has created a new edible masterpiece. And subsequently, to your surprise, you discover that a copycat sandwich is being made across the street, without your permission.What do you do? What are your remedies?

In a new television commercial, Burger King's mascot breaks into the headquarters of McDonald's and steals the recipe to the Egg McMuffin.

I don't think they can register the work with the U.S. Copyright Office and obtain a certificate of copyright. Can they file an application for patent registration of the sandwich structure?

Remember for something to be patentable subject matter it must be a new, useful and a non-obvious improvement over something that's already out there. You don't see too many patents on food recipes and sandwiches. Maybe a design patent (.PDF), but I doubt that will give them much protection.

It may be argued that the business conduct of Burger King in this instance is actionable under federal unfair competition provision of the Lanham Act. While the Lanham Act, in general, focuses primarily on obtaining, maintaining, and enforcing trademark and service mark rights, Section 43(a), allows for suits for false designation of origin. But I don't think there is a false designation, Burger King comes right out and says we're making our own version of this old sandwich.

And it's not a copy of a trade secret (like the McDonald's special sauce) so I don't think there's any grounds for McDonald's to bring a suit. There is probably not much McDonald's can do to stop Burger King from making their version of the egg McMuffin.

What is protectable is the brand name or the trademark. What Burger King is tacitly saying in this clever breakfast commercial is that, McDonald's doesn't own the rights to eggs, sausage, cheese or English muffins. McDonald's owns the trademark "Egg McMuffin(.PDF)."

John DeVore, recently wrote a Special article to CNN entitled "Big burger boys burgle breakfast." about the commercial showing how Burger King's new BK Breakfast Muffin Sandwich's is just a copy of the classic Sausage McMuffin.

But are McDonald's executives upset with this campaign? Have lawyers been rallied and accusatory calls been made?"We haven't received any direct feedback from competitors," said Brian Gries, Burger King's vice president of marketing impact. Gries further defends his company's choice to be up-front about the similarities between the BK Breakfast Muffin and the McMuffin, saying, "We are not above taking a product that we know customers like and delivering it to our guests at a great price."

I love the guile of Burger King making a full admission in the commercial that they are copying this sandwich. I would love to see the internal memos from the lawyers arguing about whether or not they should allow this commercial to air. It is not like McDonald's has not been involved in a number of lawsuits involving trademark issues in the course of its history. But I think if McDonald's brings a lawsuit in this instance it would fuel of a lot of bad press and they would have little chance of success.

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The patent reform legislation has been amended and introduced in the Senate as Amendment to S. 515 (“Patent Reform Act of 2010 (.PDF)″). When and if it will ever be enacted is a question in and of itself, however here is my summary of one of the more relevant sections of the proposed patent reform act.

Elimination of the Best Mode Requirement

Patent reformers wish to modify or remove the subjective elements of patent infringement litigation that depend on proving an inventor’s state of mind. Current patent law (35 U.S.C. 112) requires that a patent application “set forth the best mode contemplated by the inventor of carrying out his invention” and failure to comply can invalidate a patent in court.

The courts, however, have failed to consistently define and set the scope of the best mode requirement, such that compliance with the best mode requirement currently presents a guessing game for patent practitioners and inventors. Steven B. Walmsley, Best Mode: A Plea to Repair or Sacrifice This Broken Requirement of United States Patent Law, 9 Mich. Telecomm. Tech. L. Rev. 125 (2002),(PDF)

Two patents (5,827,698 and 6,040,160) in the billion dollar Bio Tech industry were recently invalidated in the case of Ajinomoto Co., Inc. v. International Trade Commission (Fed. Cir. 2010) because of failure to meet the best mode requirement of 35 U.S.C. 112. The two patents relate to methods of producing L-lysine using GM E. coli and include fairly broad claims. The evidence showed that Ajinomoto intentionally concealed their preferred host strain. The court ruled the claims were invalid for violations of the best mode requirement of 35 U.S.C. § 112, and that both patents were unenforceable for inequitable conduct because of those best mode violations.

If the Patent Reform Act of 2010 where enacted it would have eliminated the best mode invalidity defense and the Ajinomoto patents would not have been invalidated. Not to mention the time and expense to litigate the issue. I wonder how many hours were billed in the discovery and argument of this issue?

If the bill were passed, SEC. 15. BEST MODE REQUIREMENT would read in part as follows:

‘‘…failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable…”

The reasoning behind the recommended change is that the subjective “best mode” requirement throws a monkey wrench in every patent litigation. The best mode requirement focuses specifically on the best mode known to the inventor at the time the application is filed. It is a subjective standard. Time and money are expended  looking for examples of “Evidence of concealment” of a subjective state of mind of the inventor at the time of filing.

Is this “subjective” best mode requirement necessary when 35 U.S.C. 112 has an "objective" requirement that a patent application give a “written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use” the invention?

The public is fully informed of the patented technology by the requirement for a complete written description and enabling details to permit the complete scope of the claimed invention to be used. The added requirement to also disclose the “best mode” was placed into law because it was thought of as

“… a safeguard against the desire on the part of some people to obtain patent protection without making a full disclosure as required by the statute. The requirement does not permit inventors to disclose only what they know to be their second-best embodiment, while retaining the best for themselves.” In re Nelson, 280 F.2d 172, 126 USPQ 242 (CCPA 1960).

"The best mode requirement creates a statutory bargained-for-exchange by which a patentee obtains the right to exclude others from practicing the claimed invention for a certain time period, and the public receives knowledge of the preferred embodiments for practicing the claimed invention." Eli Lilly & Co. v. Barr Laboratories Inc (PDF)., 251 F.3d 955, 963, 58 USPQ2d 1865, 1874 (Fed. Cir. 2001).

This edition of the patent reform act is an example of yet another "balancing act" by the legislature. If the bill is made into law it will result in:

• Patents that do not teach the best way to make the invention, but teach “a way” to make the invention; and
• The elimination of a defense from defendants that use (infringe) patented technology so that they can not invalidate an otherwise valid patent.

Here is a patent reform that favors the inventor over the infringer and arguably over society as a whole.

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New inventors are often looking for a short overview of the patent process. Ordinarily sending inventors to the United States Patent and Trademark Office (USPTO) web site is like sending someone into a great quagmire.

But there is a nice flow cart with links directing viewers to pertinent information regarding each step of the process for getting a utility patent on the USPTO web page.

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The Patent Reform Act of 2010 was recently made public in the form of an (“Amendment to S. 515”). Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) spoke at an Executive Business meeting (webcast) February 25, 2010 about this amendment to the patent reform act.

Leahy stated, “When Senator Orrin Hatch (R-Utah) and I started this process several Congresses ago, along with Congress members  John Conyers Jr.,  Howard L. Berman, Lamar Smith and others in the House, we wanted to improve patent quality and the operations at the PTO, and address runaway damage awards that were harming innovation. We are close to a compromise that will address these issues. No one will think this a perfect bill, but we are close to a comprehensive patent reform bill that benefits all corners of the patent community.”

The 2010 amendment of the "Patent Reform Act" proposes a number of so-called improvements that are the subject of other LoTempioLaw blog posts (See the list below). This post is directed at the proposed change regarding First-Inventor-to-File.

First-Inventor-to-File

The proposed change does not call for a “First To File” system as some people mistakenly believe; it proposes a “First Inventor To File” system. Remember you cannot file a patent application in either system unless you are the inventor. Because two people can independently invent the same thing at different times there may be a race to the patent office by two inventors.

The current US system awards a patent to the inventor who is the first to invent regardless of whether the application was the first to be filed in the patent office for that invention. The new system will reward the inventor who wins the race to the USPTO and files the first application.

In the current US system, when two inventors seek a patent on the same invention the fact finder must determine who invented it first (it doesn’t matter who filled it first). The proposed “First Inventor To File” system will minimize Issues such as

• whether an inventor “abandoned, suppressed, or concealed” the invention
• “when was first conception,”
• “when was actual reduction to practice” and 
• “if the inventor used reasonable diligence coming to the patent office with the invention”

People now question if a first-inventor-to-file system is put in place will big business always beat the independent inventor to the patent office to file a patent application? Under Secretary of Commerce and USPTO Director David Kappos, says that there is a big misconception regarding “First Inventor To File.”

With the “First Inventor To File” system there is no risk of business beating the independent inventor to the patent office to file a patent application because the interloper is not an inventor. All filers have to sign an oath and declaration under penalty of criminal sanctions.“This leaves only the issue of simultaneous, non-collaborative invention—what we call interferences. The chances that a patent will be subject to interference based on a first to invent claim—that’s our current system—is .01%. In 2007—the most recent year for which we have statistics. The total number of interference cases for all applicants of all sizes that were decided based on a priority claim was seven! Of those seven decisions, only one involved a small or medium sized entity, and not a single one was won by an independent inventor who was the second to file. That means we already essentially have a first inventor to file system.”

Is this a naive view of the world? Or will non-inventors race to the office to file applications and basically say, hey prove I didn’t invent this invention. Will more litigation result because of this proposed change in the patent law? Or will the independent inventor just lose out on his/her invention because they won't have the wherewithal to fight it out in court even if he/she is the only true inventor?

The Professional Inventors Alliance USA viewpoint is that this provision will not guarantee that the actual inventor will be granted the patent.

"It creates conditions for very poor prior art, which is the existing knowledge of a similar innovation known to the general public. It burdens examiners with questionable applications by non-inventors. It creates a new malpractice liability for patent practitioners who may not beat another party to the patent office, thereby increasing the potential for litigation.

Kappos thinks the benefits will be reaped in the cost savings when filling internationally,

"... all other countries in the world use a “First Inventor to File” system. The change in the Patent Reform Bill will streamline the process for you to acquire patent rights and reduce your costs in seeking rights outside of the United States as you consider entering the global marketplace. This change will make it easier for you to “go global” with your invention."

Personally, I think this argument is much to do about nothing. I haven't heard many inventors consciously say I know it is a "first inventor system" so I don't care if somebody else files before me. I think that even with the system as it is now, inventors still believe that it's vitally important to be the first to file. Being the first to file always has its advantages. Even the patent office recognizes a patent application as a "constructive reduction to practice." I'm sure that if inventor observes an application pending in the United States Patent and Trademark Office for their invention he/she is less likely to go forward and file a second in line application regardless as to whether it's a “First Inventor to File” or a "First Inventor to Invent" system.

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Guest Blogger: Brendan S. Lillis, Registered Patent Attorney

These days, with the average waiting period to hear back from the patent office regarding a new application exceeding three years, the patent office needs all the help it can get. As such, filers of patents are required to disclose all relevant information about prior art that they know of to the patent office. This is known as the “duty to disclose,” and is governed by 37 CFR §1.56. This not only saves the patent examiner time otherwise spent searching for this information, but it also gives the patentee the chance to distinguish the new invention from prior art right off the bat.
 

But how can we be sure that the information disclosed by the patentee is accurate? How do we know some piece of information will purposely not be disclosed, in the hopes it will never be found?

Enter the Doctrine of Inequitable Conduct. This doctrine attempts to set the law, and asks two questions:

1. Was there intent to deceive the Patent Office?
2. Was the disputed information material to patentability?

According to the  Manual of Patent Examining Procedure (MPEP), the USPTO wants nothing to do with answering these questions. This leaves it up to the Federal Circuit, which has been all over the board in recent years in determining the levels of intent and materiality required to violate the doctrine. An in-depth look at the Federal Circuit’s handling of this matter can be found in a Marquette Intellectual Property Law Review (.PDF) article.

There are some real problems with the system as is it currently operates. For one, the Federal Circuit’s desire for flexibility in interpreting the rules on a per-case basis is at odds with the Patent Office’s desire to clearly state what is expected of patentees. This is due in large part to the fact that there is no statutory standard on which the rule is based. For instance, how do you determine whether certain information is “material” or not? So many different standards have been used that you don’t know which one to go by.

Also, the doctrine asserts that the best way to police patent fraud is for competitors (not the patent office or interested third parties) to raise the issue as a defense, as opposed to an independent action.

With so much recent talk of patent reform one would think this issue is sure to be brought up.  I spoke with Kali Murray, Assistant Professor of Law at Marquette University Law School and co-author of the aforementioned Marquette Law Review article and she said it's not that simple. She notes that, while this issue was in the Congressional spotlight a few years back, reform never came, and now false marking grabs all the attention. 

“Reform in Congress over the last 10 years has been very reactive as opposed to thoughtful and systematic.  They see the trees but not the forest.”

Murray also sees this as a basis for larger questions about the foundation of our patent system. 

“Congress first needs to figure out what type of patent system we should be working towards, only then can they can determine how fraud prevention fits into the system, including false marking and the doctrine of inequitable conduct.” 

At this point, I wonder whether it would be best for Congress to attempt to clarify the standards, or to scrap the Doctrine of Inequitable Conduct and start from scratch.  The feeling here is that the rule’s “heart” is in the right place, but there’s work to be done on its substantive language, and even that requires attention in the first place.
 

Related Post:

"Patent Reform Act of 2010" and False Marking Rule Change

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The latest edition of the proposed patent reform legislation was announced by the leaders of the Senate Judiciary Committee on legislation for patent reform. The act is now called the "Patent Reform Act of 2010" and is memorialized in the form of the Manager's Amendment (“Amendment to S. 515”).

When will this bill become law? This is a good question because it is a follow-up to the Patent Reform Act of 2009, the Patent Reform Act of 2008, the Patent Reform Act of 2007, the Patent Reform Act of 2006 etc. etc. etc.

Among the provisions of this proposed legislation is a modification of the false marking statute. Presently, 35 U.S.C. 292(b) provides that any private citizen can bring a qui tam action on the government’s behalf against an entity that falsely marks unpatented products. However the proposed legislation amends 292(b) to read as follows:

"A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury."

The Senate bill, if enacted, would have retroactive effect even for still-pending but earlier-filed actions as it states the amendment would "apply to all cases, without exception, pending on or after the date of the enactment of this Act."

Is this another way to protect big business at the cost of the little guy? Or is it just a way stop the onslaught of potential litigation? A list of 75 false marking lawsuits filed in the last two months against over 100 companies can be found on the Gray on Claims law blog. Many of these lawsuits have been filed by qui tam plaintiffs who are individuals or entities specifically formed to litigate such false marking suits and presumably have no claim of "competitive injury." Will they have to find an injured party?

If the patent reform amendment becomes law, qui tam plaintiffs who have filed or intend to file false marking suits for expired patent numbers will have another element to prove to win the case. How will the court define a "person who has suffered a competitive injury?"

Will something that a person would have done if not for the false marking be admissible?

1. Can a plaintiff claim it is a potential competitor and was dissuaded from entering the same market because of the false marking?
2. Can a plaintiff claim it suffered injury because it was deterred from continued scientific research to avoid possible infringement?
3. Can a plaintiff  argue that it suffered a competitive injury because it invested money to analyze patent validity or enforceability?
   

Related posts:

Patent Marking Police" Looking for the Big Jackpot

"Patent Trolls" Search for Falsely Marked Products

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Since my recent blog post entitled "Patent Trolls" Search for Falsely Marked Products the ad hoc “patent marking police” have filed at least 17 lawsuits alleging false marking against 33 different companies. This number is an approximation because False Marking suits are not consistently categorized within the federal court system. To see a list of False Marking suits filed in the last 2 months, go to Justin Gray’s blog, Gray on Claims.

The law allows any private citizen to bring a qui tam action on the government’s behalf against an entity that falsely marks unpatented products. A court can levy a fine for up to $500 for every product that is falsely marked. The final award is split evenly between the government and the person that brought suit.

What will happen if one person wins a huge damages award in one of these cases? How many more would be “Patent Police” will come out of the woodwork? In a blog post on IPWATCHDOG.com you can read A Fanciful False Marking Fiction By a Cottage Industrialist where the author daydreams about how “I just made 42 bajillion dollars today. And it’s not even 9 am.”

How easy is it to file a Patent False Marking complaint? Take a look at this complaint (PDF). Maybe you can be the next bajillionaire.

The two elements of a 35 U.S.C. § 292 false marking claim are:

1. marking an unpatented article; and
2. intent to deceive the public.

It will be interesting to see if the courts will find the necessary intent or mens rea to find false marking and what the courts will do in the “exercise of their discretion” as to the size of damage awards. Some argue that if you are marking a product with a patent number you should know when it expires and what it covers. Intent to deceive should be easy to prove. (See comment #7 by "Noise above Law"on IPWATCHDOG's post)

Now what about the damages award? The Federal Circuit held in the case of Forest Group, Inc. v. Bon Tool Co., No. 2009-1044, that the plain language of the false patent marking statute, requires courts to impose penalties for false patent marking on a “per article” basis.

The §292 statute provides a fine of “not more than $500 for every such offense. This does not mean that a court must fine those guilty of false marking $500 per article marked, even though it can. The statute provides district courts the discretion to strike a balance between encouraging enforcement of an important public policy and imposing disproportionately large penalties for small, inexpensive items produced in large quantities.

This means a court has the discretion to determine that a fraction of a penny per article is a proper penalty. The court's exercise of discretion is a balance between the chilling effect of false marking and imposing a mind boggling 42 bajillion dollars to be shared between the government and a brilliant member of the “patent marking police."

What is the chilling effect of a patent whose number has been falsely marked upon a product?

• Potential competitors may be dissuaded from entering the same market
• It may deter scientific research when an inventor decides to forego continued research to avoid possible infringement
• Can be the reason for unnecessary investment to design around
• Increases cost incurred to analyze patent validity or enforceability

I think the chilling effect of False Marking may be a serious consideration but I don’t think courts are going to start printing money. I have learned that what seems too good to be true, usually is. So don’t buy an armored truck to carry away your billions of dollars just yet.

Before taking my first law school exam Joe Walsh, a fellow law student, said to me that his attorney father gave him this advice: "If you don’t know what the answer to a question is, make pretend you are the judge and come up with a fair resolution."

Okay, you are the judge, what do you think is fair?

Related posts:

"Patent Trolls" Search for Falsely Marked Products

"Patent Reform Act of 2010" and False Marking Rule Change

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THE INVENTOR’S BIBLE

About the book

THE INVENTOR’S BIBLE, includes a workbook to help an inventor take an idea from conception to the distribution of a product. The book touches on marketing, licensing, and selling an invention. The book reviews the invention process, including:

• Patenting
• Selecting a manufacturer
• Finding the right market
• Developing a marketing plan
• Presenting a product to a company
• Negotiating a royalty deal

My review of the book

This book provides a good explanation of the invention process. The real life stories teach inventors of the potential pitfalls commonly encountered by new inventors. It maps out an inventors voyage through invention, development of the product, to protection and marketing. I think The Inventors Bible is a good book for independent inventors. The book is well written, very readable and covers a lot of useful topics. The Inventor’s Bible is an excellent collection of practical information from an inventors prospective, based on the author’s business experience. Even though the book is not presented from a legal viewpoint it is helpful because it looks at inventing, patenting and product development from a business angle.

About the Author

Ronald L Docie, Sr’s career in selling inventions spans more than three decades. His inventions are featured in Wal-Mart, Kmart and thousands of other distribution channels. As an agent for inventors, Docie has negotiated license deals with many companies including General Motors, and he’s a consultant to Johnson & Johnson on idea submission. He is the president of Docie Development, LLC, an international company that provides services for inventors and corporations.

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Tweet of the week

Thanks to @Patent Wire for tweeting about the new pilot program where the first 3,000 applications related to green technologies will be examined by the USPTO on an accelerated basis. Go green!

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In a January 12, 2010 press release IBM reported that it was awarded more U.S. patents than any other company in the world for a 17th straight year,  breaking its own record by receiving 4,914 patents in 2009. The number of patents awarded to IBM was nearly four times that received by Hewlett-Packard and was more than the combined total patent allowances of Microsoft, Hewlett-Packard, Oracle, Apple, Accenture and Google.

Data provided by IFI Patent Intelligence indicated that South Korea’s Samsung Electronics Co came in second with 3,611 and Microsoft Corp., was awarded 2,906 patents to place third in the patent race. The figures clearly show IBM’s commitment to being the world's leader when it comes to filing new patent applications. The reason why is simple, they make a lot of money by protecting their innovation and exploiting their patent portfolio through licensing deals.

Steve Levine of Bloomberg.com reported that Christopher Andrews, a spokesman for the IBM said “We invest $6 billion annually in R&D and we continue to pursue patents for inventions that will advance IBM’s business strategies..."

2009 U.S. Patent Leaders*

1. IBM 4,914
2. Samsung 3,611
3. Microsoft 2,906
4. Canon 2,206
5. Panasonic 1,829
6. Toshiba 1,696
7. Sony 1,680
8. Intel 1,537
9. Seiko Epson 1,330
10. HP 1,273

* Data provided by IFI Patent Intelligence

In addition to filing patents to stop others from using their technology, IBM published almost 4,000 defensive publications so that others are precluded from filing patent applications on certain technology and in turn stopping IBM from using that technology. As a result this technology is open and free for anyone to use because it is in the public domain. Tom Colson the CEO of IP.com  stated in a recent blog post,

"By definition, defensive publishing is the practice of placing innovation into the public domain. Although the tactic is not new, when used hand in hand with patents and trade secrets, it lets companies efficiently build and maintain competitive IP portfolios."

IBM reports, "IBM released these inventions through publication as part of its commitment to improving patent quality. Consequently, the inventions are freely available in a public database of prior art and can be cited by patent offices in limiting the scope of patent applications. The company's publication effort may also spur follow-on innovation, which enables dynamic business growth."  

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What Inventors Need to Know...

An inventor does not need a prototype to file for patent protection. Many inventors incorrectly believe they need a working prototype in order to file an application for a patent. The law requires that a patent application include a description of the invention so that somebody skilled in the art can make and use it. However, prototypes can be useful to prove whether the invention will work properly.

I spoke with Merry R. Constantino, a former Product Design Manager at Fisher-Price and currently the president of a "new product development company" called Product Logic and she said that,

A common problem when making a prototype after a patent application has been filed, is that all of the bugs have not been worked out of the product and often the 'end product' that we produce is not the same thing that was described in the patent.

Inventors should know that no "new matter" can be added to a patent application after it is filed.

There are many manufacturing and marketing factors that an inventor should consider in the initial idea stage. Here are a few of the things that Product Logic brainstorms when making a prototype:

• Human Factors/Ergonomics
• How can it be made with the fewest possible number of parts?
• What is best way to mass produce (labor sensitive)?
• What is a cost-effective way to produce?
• Can it be made in a way that others cannot easily copy?
• What is the best material it should be made from?

Another thing that an inventor should know is that when working to prepare a prototype with a new product development company is that if the company makes changes which improve the product it is possible that the company becomes a co-inventor.

Merry stated that "our company assigns all rights over to the inventor for any product that we work on." It's important to understand that when an inventor retains the services of  a company to produce a prototype there is a risk of loss of intellectual property rights unless a written assignment of rights document is prepared and executed by the parties.

If an inventor plans to license or sell their "patent rights" to an invention,  it may be necessary to build a prototype to demonstrate  to a potential licensee how great it works. In order to mass produce a product it may be necessary to design a working prototype as a model of reference for the manufacturer to duplicate.

Although an inventor does not need a prototype to get a patent, working out all the potential manufacturing issues before filing appears to be a logical step in the invention process.

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Guest Blogger: Registered Patent Agent, Gerald F. Gibbs Jr.

Practical Patent Prosecution Training for New Lawyers Seminar

I am Gerald F Gibbs Jr., a Registered Patent Agent. I am a native of Buffalo, N.Y. For the past 13+ years I have served as an industrial electrician for General Motors Corporation. Recently  I passed the patent bar examination on my first attempt and began my second career in intellectual property as a patent agent. I qualified to take the patent bar exam based upon my technical background and a Bachelor of Science degree in Physics.

On August 26 - 28, 2009, I attended the annual Practical Patent Prosecution Training for New Lawyers Seminar sponsored by the American Intellectual Property Law Association (AIPLA). The three-day event was held at the Westin Hotel, in Alexandria, Virginia which is in close proximity to the United States Patent and Trademark Office (USPTO).

The 2009 Practical Patent Prosecution Training for New Lawyers Seminar also referred to as “boot camp” is designed for new practitioners (i.e., those having about 0-2 years of experience), that want to learn the basics of patent application preparation and prosecution.

I attended the patent “boot camp” to have the opportunity to learn directly from experienced practitioners. Patent practitioners from all across the country lectured on an array of topics associated with patent law over a 3-day period. Topics included (just to name a few):

• Requirements for Patentability
• Application Drafting
• Provisional Applications
• Petitions
• Appeals & Interferences
• Responding to Examiner Actions & Affidavit Practice

The lecture portion of the seminar was by far the best part of the event.

A reception was held after each of the first two days of lecturing that gave the attendees and lecturers an opportunity to network. Many of the attendees that I met were very cordial and friendly, but many didn’t have business cards to exchange and didn’t seem interested or prepared to further a relationship beyond the 3-day event. As a result I focused on networking with the guest lecturers and I found that every practitioner was very helpful to provide career advice, exchange business cards and offer words of encouragement. 

As a result of this networking I have since communicated with and received helpful career advice from practitioners that I met at the boot camp. One of the connections I made was with Denise M. Kettelberger, PhD, JD of Faegre & Benson, LLP. She is an established and experienced patent practitioner from Minneapolis who gave an interesting and informative lecture on Responding to Examiner Actions & Affidavit Practice. She opened her lecture by saying, “This is the year of compact prosecution....compact prosecution requires that the patent practitioner get to know your examiner and vise versa.” This, she explains, provides a more friendly exchange during patent prosecution. 

On the last day of the seminar I attended the “hands on” claim-drafting workshop. It was a little disappointing because it was far from “hands on” and consisted of mostly lecturing.

AIPLA provided each attendee with a binder with valuable information on all the topics discussed and a hard copy of the power point presentation of each lecture. I also received a copy of the entire seminar on CD-ROM, which includes the audio portion of the program. I found this to be a very valuable resource to review key points of the lecture and discover information that I may have missed.

Overall the seminar was very informative and insightful and well worth the 7 hour drive from Buffalo, New York. I would recommend attending this annual event to anyone who is interested in a career in patent law.

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In Matt Chandler's Buffalo Business First article, Legal Community Weights in on Patent Case, Western New York's business newspaper, I was quoted along with other Western NY patent attorneys regarding the US Supreme Court case of Bilski v. Kappos (the case which will decide how business method patents are to be reviewed by the United States Patent and Trademark Office). 

Chandler noted, "Sources from the Buffalo legal community said it is a case that has been on their radar for quite some time, and their opinions on how the court should or will rule were mixed."

I was quoted saying,

...believes the rejection of Bilski’s patent could have wide-ranging negative consequences.The plaintiff is saying, ‘We’re the first person to come up with a way of doing this. Why shouldn’t we get value for it?’ ” he said. “Why would people even bother coming up with new ideas and ways of doing business if it’s just going to be stolen from them?”He said followers to his Twitter page – many of whom are patent attorneys – have also been weighing in on the Bilski case via daily tweets.

Michael Berchou, a partner at Phillips Lytle LLP, believes if the past is any indication, change may be on the horizon.

Anytime a case is going up to the Supreme Court, I think it usually suggests that the Supreme Court sees something in the federal opinion that they want to take a closer look at, and there might be a change in the law ...The bigger question is: Are they going to set out a new standard that might impact software companies and the patents that are in effect today?

I think should the court affirm the appellate court’s ruling that the Bilski patent should not be issued,  the business-methods patents already in place may be invalidated. This could have great economic consequences to many software companies, for example, computer software now protected by patents would be open to copying without payment of a royalty or fear of an infringement law suit.

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Bilski vs Kappos Decision

Bilski v. Kappos

Business method patents...what will the Supreme Court Do?

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On November 9, 2009 the Supreme Court heard an oral argument on the appeal from the Federal Circuit of the case of Bilski v. Kappos, wherein the central issue was whether the Federal Circuit erred by holding that a business method patent application based on a "process" must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing ("machine-or-transformation" test), to be eligible for patenting under 35 U.S.C. § 101.

Do the questions asked by Supreme Court mean they are leaning toward not allowing patent protection to non-traditional “virtual” methods of doing business unless it is somehow tied to something tangential like a machine?

In some questions the Justices attempted to concoct scenarios that would make the application for a patent for certain business methods appear ridiculous:

JUSTICE BREYER: So you are going to answer this question yes. You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake. They learned things — (Laughter) … It was fabulous. And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?

JUSTICE BREYER: Do you think that the framers would have wanted to require anyone successful in this great, vast, new continent because he thinks of something new to have had to run to Washington and to force any possible competitor to do a search and then stop the wheels of progress unless they get permission? Is that a plausible view of the patent clause?

JUSTICE BREYER: transactions between commodity providers and commodity consumers. You set a fixed price at the consumer end, you set a fixed price at the other end, and that's it. I mean, I could patent a process where I do the same thing. I initiate a series of transactions with sellers. I initiate a series of transactions with buyers. I buy low and sell high. That's my patent for maximizing wealth.

JUSTICE SOTOMAYOR: So how do we limit it to something that is reasonable? Meaning, if we don’t limit it to inventions or to technology, as some amici have, or to some tie or tether, borrowing the Solicitor General’s phraseology, to the sciences, to the useful arts, then why not patent the method of speed dating?

I hope the judges are not missing the boat.

Remember, for an idea to qualify as patentable subject matter, whether it is a method of doing business, article of manufacture or a machine it still has to be something new, useful and a non-obvious improvement over whatever is already out there.

If this new idea meets these requirements it logically adds to the wealth of society as a whole. And isn't the enhancing the good of society as a whole what the founding fathers intent was when drafting the Constitution?

Just because the invention is not tied to a machine or something tangential doesn't mean it's not a good idea that can benefit society. If inventor comes up with a new idea of doing business and somebody somewhere can benefit and make money from that idea, shouldn’t the inventor also profit? If the Supreme Court denies the inventor the benefit of his new, useful non-obvious idea there would be no incentive to share their invention with the world.

Other related posts:

Senator Leahy Uses Bilski to Push Patent Reform

USPTO Sends Bilski Memo to Patent Examiners

Bilski vs Kappos Decision

Bilski v. Kappos

Legal community weighs in on Bilski v. Kappos

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