Patents An Introduction for Owners

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1 Patents An Introduction for Owners

2 Outline Review of Patents What is a Patent? Claims: The Most Important Part of a Patent! Getting a Patent Preparing Invention Disclosures Getting Inventorship Right Consolidating Ownership Joint Research Agreements The Application Process International Patents Wielding a Patent How Does a Patent Add Value? Patent Enforcement Patent Portfolios Expanding Patent Coverage 2

3 Remember: A Patent is a Legal Contract/Document A Patent is generally understood as a legal contract between the Applicant and the U.S. Government The patent conveys a right to exclude others from practicing the patented invention The right is temporary (generally 20 years from the filing date) In return, the patent must teach others how to practice the invention When the patent expires, others can practice the invention A patent is a piece of property: it can be bought, sold, traded, leased, etc. 3

4 Remember: Claims The Most Important Part of a Patent Claims define the bounds of your protected invention. Claims define what someone must do to infringe the patent. A creation must include all elements of a patent claim to infringe on the patent Claims may recite just the most critical elements of the invention 4

5 Remember: Patents May Be a Part of a Larger IP Protection Strategy NukaCell Example: Utility Patents protect the functional aspects of NukaCell Copyrights protect the software code used by NukaCell But, utility patents protect the functions implemented by executing the code Trademarks protect the use of the term NukaCell Trade Secrets protect secret practices to build NukaCell Design Patents, Trade Dress, and Copyrights protect the non functional appearance of NukaCell 5

6 Getting a Patent: Preparing Invention Disclosures Make sure inventors document their inventions Early and Often Invaluable for preparing a good patent Important for determining inventorship Prepare Invention Disclosure Forms/Letters (IDFs / IDLs) for inventors to fill out upon completing an invention Invention features Who conceived of each feature of the invention How the invention is useful How the invention could be detected 6

7 Getting a Patent: Get Inventorship Right (The First Time) Who is an inventor? Someone who contributed to an invention recited in a claim of the patent Who is not an inventor? Someone who simply carried out an inventor s instructions without more Someone who simply managed the inventor Inventor list may change if the claims are changed! 7

8 Getting a Patent: Get Inventorship Right (The First Time) Remember: Incorrect Inventor List may Invalidate Patent! Patent Ownership Interest initially vests equally in all coinventors of the patent If inventorship is incorrect, ownership of the patent may be incorrect If ownership of the patent is incorrect, the patent may be useless at adding value! o Difficult to wield a patent that you don t fully own 8

9 Getting a Patent: Get Inventorship Right (The First Time) Determine Inventorship of each/every feature of the invention Make sure inventors record who invented each feature Make sure the recording is done ASAP (before the inventors forget) Have inventors review patent claims and determine who contributed to each claim Reconcile inventor list with author list of any associated publications Keep all records for the patent to stay on top of inventorship if patent claims are changed 9

10 Getting a Patent: Consolidate Patent Ownership Remember: Inventorship initially vests equally in all co inventors But, Patents are most effectively utilized when owned in full by a single entity! Co owner A may use a patent in a way co owner B won t like (such as sell ownership interest to a competitor) Co owner A may not be able to enforce a patent against an infringer if co owner B doesn t agree! 10

11 Getting a Patent: Consolidate Patent Ownership Solution: All (co )inventors assign ownership interest to a single legal entity! The entity can be an Individual, Partnership, Corporation, L.L.C., etc. The entity provides the vehicle for owning, wielding the patent A single owner entity may be more attractive to investors than a group of inventors. Implement: Have all co inventors sign a formal assignment of the invention and patent application to the owner entity at the time of filing the application. Include some form of compensation for inventors (shareholding, fee, etc.) Record the assignment with the Patent Office 11

12 Getting a Patent: Consolidate Patent Ownership Ownership Assignment by Employee Inventors: Establish an obligation of assignment by inventors in advance. o Have employment agreements in place state that all inventions are hereby assigned to you o This is to ensure that ex employees are obligated to assign Have assignments signed at time of patent application filing. 12

13 Joint Research Agreements (JRAs) How Do They Add Value? Prevents some previous patents of joint researchers from disqualifying later patents arising from their joint work. Earlier patent must be by a party to the JRA The party to the JRA must be co inventor of the later patent JRA must be recorded on or before date the later patent is filed JRAs must be in writing! Words and a handshake won t cut it JRAs should be recorded as soon as possible! Certainly on or before the first patent application for a product of the joint research Preferably before the potential inventors start working together 13

14 Getting a Patent: Be Prepared to Move Quickly File for a patent immediately (ASAP) In the US, the patent for an invention goes to the first inventor to file the application for it, NOT the first inventor to have invented it If you don t file immediately, you may not be able to get a patent, ever For US within one year of publication, public use, offer to sell Other Countries mustfile before publication, public use, offer to sell Remember: your own publications may disqualify subsequently filed patent applications Remember: Provisional Applications can secure filing date for invention without drafting full patent application Must convert into Non Provisional Application before one year expiration date to keep the provisional filing date! 14

15 Getting a Patent: Application Process Prepare/File a Patent Application Description, Drawings, Claims, Abstract, Etc. Claims of Priority to Earlier Filed Applications o Provisional applications o Applications filed in other countries Filing Fees Declarations of Inventorship by Inventors Assignments of Ownership (if any) 15

16 Getting a Patent: Application Process The Patent Office will examine patent application for patentability, conforming with patent laws: Is it Useful? Is it Novel? Is it Not Obvious? Does it properly disclose the Invention? If the Patent Office finds deficiencies, it may mail an Office Action rejecting the application 16

17 Getting a Patent: Application Process You may file a formal response to a rejection Amend claims, drawings, description as desired (to a point) Argue why the Office s rejections are incorrect You may also contact the Patent Examiner to discuss how to move forward Depending on your response, the Patent Office may withdraw rejections, issue new rejections, allow the application, etc. 17

18 Getting a Patent: Application Process If the Patent Office issues a Final Office Action, prosecution is closed. Generally after a response to a first office action After a Final Office Action, the following options are available: Amend claims to include subject matter found patentable (if any) File a Request for Continued Examination (re opens prosecution) Appeal the Office Action (could go all the way to SCOTUS!) Abandon the application This continues until the application is allowed or abandoned. 18

19 Getting a Patent: The Costs of Getting a Patent Patent Office Fees Filing Fees Patent Issue/Publication Fees Patent Maintenance Fees The list goes on! Attorney Fees ~$10K $30K over 5 years Time Investment 2 to 5 years, sometimes much longer Can be less than 2 years, but more expensive (financially) 19

20 Getting a Patent: International Patents Remember: Patents are generally applicable only in the countries that issued them Protecting an invention in various countries may mean obtaining a patent in each of those countries Get your invention patented in the places you may want to practice/enforce it! 20

21 Getting a Patent: International Patents NukaCell Example In which countries to seek patents? Primary markets for NukaCell? (US, Canada, China) Potential expansion markets? (India, Brazil) Where NukaCell elements are fabricated? (Korea) Where competitors assemble, sell products? (Germany, Japan) Answer: All of the Above! 21

22 Getting a Patent: International Patents When deciding whether to patent an invention, you should also decide whether to seek patents internationally at the same time. Remember: Many international patents MUST be filed before use, publication, offer for sale You MUST decide whether to pursue international patents early, or you may never be able to get international patents! 22

23 Remember: How Does a Patent Add Value? Eliminate Competition Increase Market Share Revenue Monetize Your Invention Licensing the patent Selling the patent Enforcement (Patent Infringement) Penalties Boosting Your Marketing Profile Attractiveness to investors and customers Prestige 23

24 Patent Enforcement: Enforcement Procedure Overview Infringement identified Infringing parties Infringed patents, claims Notice of Infringement (Cease and Desist) Negotiations (Licensing Possibilities?) Lawsuit Reexamination Claim Construction Trial / Judgment Appeal Penalty Payment Or Settlement? 24

25 Patent Enforcement Patent Infringement: Two Major Types Direct Infringement An entity practices each and every element of an invention as described in a patent claim. Indirect Infringement Multiple entities collectively contribute to practicing the elements of a claimed invention An entity induces someone else to practice each and every element of a claimed invention 25

26 Patent Infringement: Direct Infringement Example NukaCell patent application initially claims an unobtanium control element Riley builds a reactor with handwavium control element Riley may not be infringing If the NukaCell patent is amended to claim a generic control element The claim has broader scope, but may be more vulnerable to invalidity attack Riley infringes the claim by building the reactor, if the claim isn t invalid If the NukaCell patent is amended to claim a handwavium control element A targeted claim: less vulnerable to invalidity attack, specifically reads on Riley s creation Riley is in trouble! 26

27 Patent Infringement: Indirect Infringement Example NukaCell patent application initially claims a method of operation for NukaCell Operation may be met by portable generator maker, but consumer may be induced or instructed to infringe based on by manual, etc. 27

28 Patent Portfolios: What are They? A patent portfolio is a collection of patents owned by a common entity A given portfolio may cover a set of inventions associated with a common creation Some patents may be created by the owner Some patents may have been bought from others Specific features of patent portfolios may vary based on purpose of the portfolio 28

29 Patent Portfolios: How do They Help Add Value? A collection of patents in a tech space associated with a creation may allow the owner to establish a larger exclusive monopoly in that space than any single patent could achieve. Make it difficult or impossible for others to practice in the tech space without your consent A portfolio can be wielded to more effectively control the tech space associated with a creation Licensing, Enforcing the portfolio to attain revenue Exclude competitors from the tech space Build up market share 29

30 Patent Portfolio Management: What Should a Portfolio Include? Patents that collectively cover as much of a tech space associated with a creation as possible Patents covering different elements of the tech space associated with the creation Different classes of inventions (devices, processes, etc.) Different elements of a creation Improvements to the above Patents issued by relevant countries Countries where creations associated with the tech space are made, sold, etc. US, UK, GER, PRC, JP, etc. 30

31 Patent Portfolio Management: Patent Portfolios Cannot be Static! Remember: Each patent has a finite lifespan. Innovation in most tech spaces doesn t sit still, either. Patent Portfolios should be continuously expanded and managed to maintain a healthy portfolio. A lively portfolio is more likely to remain valuable as the pace of innovation continues A lively portfolio is also more likely to remain attractive to investment and licensing Example: A patent portfolio for NukaCell initially includes a set of patents for NukaCell elements. The portfolio may be expanded with: o New patents for improvements to the NukaCell elements o New patents for new NukaCell elements o Purchased patents for elements in the same tech space as NukaCell 31

32 Patent Portfolio Management: NukaCell Example NukaCell includes multiple novel elements (A, B, C, D, E) Each novel element is a separate invention Each novel element may be protected by a separate patent A single patent may be unable to fully protect each invention 32

33 Patent Portfolio Management: NukaCell Example A patent portfolio for NukaCell elements may provide greater coverage than a patent for the entire NukaCell: Patents for Element A Patents Covering Entire NukaCell Patents for Element E Patents for Element B Patents for Element D Patents for Element C 33

34 Patent Portfolio Management: Portfolio Development Basics Target key tech spaces Target potential investment opportunities in key tech spaces Develop plan to harvest inventions Develop plan to expand inventions and file patent applications for further improvements 34

35 Patent Portfolio Management: Portfolio Development Basics Track common or similar patent filings as a group Correlate groups to key tech spaces Determine competition in key tech spaces Determine key international markets in which to pursue patents Expand coverage of valuable patents 35

36 Patent Portfolio Management: Portfolio Goal Building Fundraising? Attracting investors Generating Publicity Building Market Share? Excluding others from market Cross licensing other portfolios? Leverage to get what you need from others Generate income? Licensing fees Portfolio sales Enforcement (suing infringers) 36

37 Patent Portfolio Management: Target Competitors / Infringers Remember: A patent gives you the right to exclude others from practicing your invention To maximize added value, develop patents that are directed towards what competitors do and/or may want to do Develop patents that must be infringed for competitors to compete with your creation Can force competitors give you revenue: license fees, royalties, penalties Can improve market share: competitors concede market share to avoid infringing your patent 37

38 Patent Portfolio Management: Target Competitors / Infringers Find your competitor(s) Find associated entities that may support competitor(s) Manufacturers, parts suppliers, contractors, etc. Get patent claims designed to capture competitor (i.e., competitor infringes the claim) Get patent claims designed to capture associated entities Get patent claims designed to capture customers to gain leverage 38

39 Expand Patent Coverage: Remember: Patents give you the right to exclude others from practicing inventions Broadening the scope of inventions covered by your patents can increase the value added by your patents Greater market share Harder for competitors to work around your patents Greater leverage in licensing agreements 39

40 Expand Patent Coverage: Use Different Classes of Claims A Patent is directed to a specific Element for the NukaCell E.g., a unique cooling system Claim the Element itself Use the claim against parts suppliers, competitors Claim a method of building the Element Use the claim against manufacturers Useful against part suppliers who only build a part of a final product! Claim a method of using the Element Use the claim against consumers (those who use the product) Useful leverage against competitors selling the product Claim apparatus with the Element (e.g., the entire NukaCell). Use against consumers, end product retailers, etc. 40

41 Expand Patent Coverage: Continuing Applications Children of a (Parent) patent application Three main Types: Continuation Continuation In Part (CIP) Divisional Patent Term runs with the parent application Each child issues as a separate patent, expiring with the parent No limit on the number of children No limit on broadening claim scope from parent patent Children may have broader coverage than parent! 41

42 Expand Patent Coverage: Continuation Application A second application for the same invention claimed in a prior (parent) non provisional application Filed before the original parent application becomes abandoned or patented Expires at the same time as the parent Why Do This? Generally, to get new claims o Claims with a different (broader?) scope than the claims of the parent application o Claims targeted at a product/action of a specific competitor/infringer Also, to keep a patent family alive to do any of the above in the future 42

43 Expand Patent Coverage: Continuation In Part (CIP) Application Adds at least some new matter not disclosed in the parent application Why do this? Can build on the parent application. CIP or New Application? CIP expires with the parent, but parent may not disqualify CIP New application lives after the parent expires, but the parent may disqualify a new application o But remember: some prior patents may not disqualify under certain conditions (common ownership, JRA applies, certain grace periods, etc.) 43

44 Expand Patent Coverage: Divisional Application An application for an independent or distinct invention from the invention claimed in the parent application Carved out of a pending application Disclosing and claiming only subject matter disclosed in the earlier or parent application. A divisional application is often a result of a restriction requirement made by the Patent Office. Example: NukaCell patent claims cover two distinct inventions. Patent Office requires the two inventions be covered by two separate applications. Elect one invention for the pending application, file divisional application(s) for the other inventions. Why do this? Because the Patent Office forces you to do it. One invention per patent > Separate Inventions, separate applications. Can avoid by filing separate new applications if you anticipate a restriction otherwise. 44

45 Expand Patent Coverage: Continuing Application Strategies Throughout prosecution of application(s), re evaluate importance and scope of claims to cover: Standards Classes of invention claimed and not claimed New technologies Competitors products Your products Use continuing applications to increase/maximize patent portfolio 45

46 Conclusion Carefully consider applying for patents Be ready to move quickly Be sure to identify and pursue patents in all relevant countries Have a plan to quickly resolve inventorship and consolidate ownership Keep track of competitors and potential infringers, adapt your portfolios to stay on top of them! Build and manage patent portfolios to maximize the added value of your inventions 46

47 Please feel free to contact us. Michael D. Gamble Harness, Dickey & Pierce, P.L.C Plaza America Drive Reston, VA Phone Number:

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