Posted on August 30, 2010 by Vincent LoTempio

"Patent Pending" Provisional Rights

Recently a client asked me to sue a competitor for infringement on her patent application. I told her that even though you can mark articles with the terms "Patent Applied For" or "Patent Pending" these phrases have no legal effect, but only give information that an application for patent has been filed in the United States Patent and Trademark Office. The protection afforded by a patent does not start until the actual grant of the patent.

However, damages for pre-patent grant infringement by another are now available. The American Inventors Protection Act, 35 U.S.C. § 154(d) gives the inventor provisional rights:

“patents issuing on published applications will include the right to obtain reasonable royalties from others who, with actual notice of the published application, made used, sold, offered to sell, or imported the invention as claimed in the published application before the patent was granted.”

Once a patent application is published, an applicant may assert provisional rights. Publication occurs 18-months following the filing date or priority date claimed by an application. These § 154(d) provisional rights provide a patentee with the opportunity to obtain a reasonable royalty from a third party that infringes a published application claim provided:

  • actual notice is given to the third party by applicant (the inventor probably needs to send a cease-and-desist letter), and
  • a patent issues from the application with a substantially identical claim.

Having this ability to protect an invention is a powerful sword in the inventor’s bag of weapons. swordIt is risky business for your competition to take the chance and sell a patent pending product because they can be sued at a later date and possibly be forced to take all their products "off the shelf."

But what about the shield? How does the inventor protect an invention? If you give your competition notice of your published application is it possible they will submit documents to shoot down your patent? And what can you do to shoot down somebody else's patent or patent application?

Following publication, the application for patent is no longer held in confidence by the Patent Office and any member of the public may request access to the entire file history of the application in Patent Application Information Retrieval (PAIR). What are the available ways a competitor can submit prior art against an issued patent or pending patent application to the United States Patent and Trademark Office?

  1. Third-Party Submissions in Patent Applications (37 C.F.R. 1.99)
  2. Protests Against Published Applications (37 C.F.R. 1.291)
  3. Citation of Prior Art in Issued Patents (37 C.F.R. 1.501)

1. Third Party Submissions pursuant to 37 C.F.R. 1.99 are:

  • Submissions by the public of patents or publications only
  • During the pendency of a published application

Third Party Submissions must be filed within two months from the date of publication of the application (§ 1.215(a)) or prior to the mailing of a notice of allowance (§ 1.311), whichever is earlier. This really isn't a big window of time. How would anyone even know it was published unless they were constantly searching the United States Patent and Trademark website? Based on this law, I would suggest not giving anyone notice of your pending patent application until at least two months after publication.

2. A protest, pursuant to 37 C.F.R. 1.291, may be filed by:

  • Any member of the public, including private persons, corporate entities, and government agencies
  • In a pending patent application
  • Will be matched with application file if adequately identifies the patent application.

A protest has to be filed before publication or before a notice of allowance. This rule has always bothered me. I think this time constraint should be addressed through patent reform because there aren't many ways to find out whether an application is pending unless it's published. I would guess you would need some sort of inside information. Or based upon the marking of patent pending on an object you might guess there is an application,but then you'd have to act as a Detective and find out the application number because it isn't published.

3. Citation of Prior Art in Issued Patents (37 C.F.R. 1.501) may be filed by:

  • Any person, individual, corporate or government entity, real parties in interest, persons without a real interest
  • May submit patents or publications along with an explanation
  • Having a bearing on the patentability of any claim in a particular patent

I'd like to throw this out for discussion, why does the patent office make it so difficult to either submit third-party submissions or protests by limiting the time in which you can file these types of submissions? How could you protest and identify a patent application if it's not even published? And isn't two months from publication such a narrow time period that makes it very difficult for anyone to even find out that there is a pending published application for a Third Party Submission?

"Clipart courtesy FCIT"

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Posted on January 24, 2010 by Vincent LoTempio

Inventors and Invention Promoters

What inventors need to know...

Clients have been asking me to write a blog post about companies providing invention promotion services and whether or not they can help inventors. I saw a law blog post today by IP Watchdog regarding a lawsuit filed by INVENTION SUBMISSION CORPORATION (dba Invent Help) in the United States Federal District Court for the Northern District of New York.

This case was filed against the corporate entity IP WATCHDOG INC and Eugene R. Quinn Jr. and Renee Quinn as individuals. Invent Help claims that their company has been irreparably injured by IP Watchdogs’ past false advertising, deceptive trade practices and defamatory portrayal of Invent Help and its inventor assistance services. One such example of alleged defamatory portrayal is stated in the complaint as:

"[IP Watchdog] state[s] that InventHelp's... invention submission model is to get inventors to spend large amounts of money for services of dubious quality."

Whether this particular invention promotion services company provides services of dubious quality or high quality in which an inventor can take advantage of is a question that may be argued in court. IP Watchdog blog stated, “Rest assured, I will vigorously defend [this case]." Remember the truth is an absolute defense in a defamation case. So are all his allegations true? Will we learn the truth? Will it go to trial? Cases like this are more likely to end in settlement.

I found an article written in 2004 by Bob Sullivan the technology correspondent for MSNBC.com entitled, "Got an invention? You, too, can be scammed" where he explored the vagaries of the invention industry and he told of how, FTC targeted this firm in the past, "

The Federal Trade Commission and various state authorities have taken several sweeping legal actions against invention firms, beginning with a 1994 settlement with Invention Submission Corp., one of the largest firms. In that deal, the firm agreed to pay $1.2 million to redress consumers without admitting to any wrongdoing."

The complaint is interesting because it essentially raises the same issues against IP Watchdog that have been raised against Invent Help in IP Watchdog's blog. Here's an excerpt from the complaint:

"[IP Watchdog] advertise and promote their competing inventor services on their blog in promotional pieces titled "Not All Invention Companies are Created Equal" and in a number of blog postings linked thereto including but not limited to "Beware Invent Help Press Releases","Avoiding Invent Help & Other Invention Scams", "My Position on Invent Help the UIA and Inventors Digest", "Quinn Resigns from UIA Over Invent Help concern", "How Inventors Can Avoid Scams, Traps and Raw Deals", "Falling Prey to Invention Submission Scams", and "No holes Barred: IPWatchdog Addresses Ethical Charges" as well as "Inventing" and a number of blog postings linked thereto. Each of these web pages features IP Watchdog's "Patent Pending Today" promotion of its Invent + Patent System. When the consumer clicks on the Defendants' promotion the consumer is taken to a IP Watchdog webpage explaining IP Watchdog's: a) Watchdog's: a) patentability search and opinion service and b) on-line service for generating a provisional patent application and instructions on "patent pending" submission to industry called the "Invent +Patent System."

Invent Help alleges that IP Watchdog draws people into his website by describing "scams" perpetrated by the invention submission companies. Invent Help further alleges that  "... IP Watchdog's invent + patent system allows [IP Watchdogs'] clients to submit 'inventions' that can be sold or licensed and that [IP Watchdog] can refer inventors to a 'reputable licensing and marketing company' who will do the licensing work that [Invent Help] claims to do rather than 'steal all of your money' like Plaintiff does." (see paragraph 25 of complaint).

If you go to the Invent Help web page entitled The Truth About InventHelp® - Avoid Invention Scams where they list FAQs about Spotting Inventor Fraud you will find they indicate "The law requires an invention company to give you an explanation of its track record in advance," while they say  "we're proud of our record and provide it to you in advance" they fail to list what their track record is on this page. I finally found it on a page entitled InventHelp® Client Invention Stories: Weed Thrasher, That was a curious place to put this nugget of information:

"From 2006-2008, we signed Submission Agreements with 5,692 clients. As a result of our services, 94 clients have received license agreements for their products, and 21 clients have received more money than they paid us for these services."

The law they are referring to is the The American Inventors Protection Act of 1999. This act established certain inventor rights rights when dealing with invention promoters. Before an invention promoter can enter into a contract with an inventor, it must disclose the following information about its business practices during the past five years:uspto

  • How many inventions it has evaluated;
  • How many of those inventions got positive or negative evaluations;
  • Its total number of customers;
  • How many of those customers received a net financial profit from the promoter's services; and
  • How many of those customers have licensed their inventions due to the promoter's services.

 

An inventor came into my office last week and said he searched online for an invention submission company to help market his new product. He said he shied away from the Davison company because of a court mandated disclosure statement on their web page which indicated:

"The total number of consumers in the last five years who made more money in royalties than they paid, in total, under any and all agreements with Davison, is fourteen (14). The percentage of Davison's income that came from royalties paid on licenses of consumers' products is .001%.."

Doesn't that number seem incredibly low to you? Is it because none of the inventions were good ideas? Or are the services provided of "dubious" quality?

There are few sources which instruct inventors about what they can do to protect themselves from scams. Here are some links to use as a starting point for an inventor to find information about how to deal with companies providing invention promotion services: 

  • The Ripoff Report enables anyone to exercise their first amendment right to freedom of speech online and report companies that allegedly "rip people off." And there is a list of invention submission companies including a post about Invent Help

As a patent attorney I often tell inventors that my job is to try to protect their invention by filing a patent application. But there's no guarantee that the inventor will ever get a patent. And even if a patent is allowed there's also no guarantee the product will ever be marketed. In reality, few patents make money, most real invention service providers are highly selective about who they work with. 

The inventor/product developer has to wear many hats: manufacturer, marketer and distributor. More often than not the inventor does not have any of these skills. So inventors have to reach out for help. Invention submission companies have moved to fill this void and prey on this obvious weakness.

Essentially, inventors feel like they can't do it all themselves and they need someone to help them get it done. Invention companies know inventors have limited opportunities to get their products to market, and inventors may naively put their faith in invention submission companies persuasive claims.

I often counsel inventors that like the ancient Chinese philosopher once said, “every thousand mile journey starts with the first step" and the patent is that first step. Getting a patent isn't like a lottery ticket and once you have the patent the checks start rolling in. The product simply will not sell itself, but if it does sell, a patent attorney will help to ensure you are protected. There's a good checklist  of things an inventor should do described as the ABC's of inventing in Inventors Digest.

An inventor should deal with each aspect of the invention process separately to get quality, legitimate vendors. Inventors should always use patent lawyers/agents for filing and searching; use specialists for services such as prototype or mold making, manufacturing, market evaluation, advertising and licensing.

I often ask an inventor, " If your Idea is so good, instead of charging an upfront fee, shouldn't the invention submission company give you a royalty agreement contingent upon the product selling?"
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