Intellectual Property Directions

I doubt that it’s news to many people that the US is changing from a so-called first-to-invent priority system for awarding patents to a first-(inventor)-to-file system. And that pending change (March of 2013) has a lot of people running around as if the sky were falling. It’s not. You aren’t really in a race to the patent office to beat another inventor.

For most inventors this switch, per se, will have no effect on their patent applications. The chances that you and another inventor more or less simultaneously invent and file the same invention is small. After all, there are currently just a handful of “interference” procedures to sort out who was the first to invent. And in those procedures, the first inventor to file usually comes out on top anyway.

That’s not to say the switch will not have an impact on you. The collateral damage from the switch to first to file is that the scope of problematic prior art is significantly increased. In the present system you can “swear behind” a piece of prior art by presenting evidence that your date of invention was earlier than the date of the prior art.

Such swearing behind only makes sense when the date of invention is important (as it is now). Essentially you are proving that you had fully conceived your invention before the piece of prior art was known to the public; even if it took a year of diligent work to reduce your invention to practice (during which time the prior art became public) you are still entitled to the patent.

Under first-to-file, the idea of using the date of conception to provide priority goes out the window… all first to file cares about is, not surprisingly, when you file. But even this change is not a totally new concept to wrap your head around. If you’ve even been interested in getting a patent outside the US you have seen this issue before. In virtually the rest of the world, “absolute novelty” reigns; if your invention has been disclosed to the public, you lose.

Admittedly, under the new US rules things are even more difficult since prior art can be invalidating for both novelty AND obviousness, but the basic principle of needing to file before someone else makes a public disclosure is the same.

So, after March 16, 2013, there’s no race to beat another inventor to the patent office but there is an imperative to file before some (academic sort?) publishes something that will destroy your right (and everybody else’s) to get a patent. But right now, before first to file, you should make a concerted effort to file (at least a provisional application) on any potentially patentable invention you’ve been working on.

If you don’t, the piece of prior art you can swear behind on March 15th will be invalidating on March 16th.

During the Cold War era, the United States and Soviet Union engaged in a game of nuclear chicken called MAD, Mutual Assured Destruction. Essentially the doctrine said that the two superpowers realized that each had such large nuclear stockpiles that any preemptive attack would be tantamount to suicide. For smaller nations, the implicit threat was that a first strike would be assured destruction for them, without the “mutual” part. In the IP world, we call MAD a “defensive patent strategy”. With an appropriately designed, strong patent portfolio, anyone who tries to sue you for infringement is probably infringing your patents, so you both stand down and don’t actually end up in court.

Happily, the Cold War is over and MAD is gone too (at least as a stated policy). However, on April 17 Twitter posted their new “Inventor’s Patent Agreement” which is really not much more than a statement that they will utilize a purely defensive patent strategy. Their blog post suggests that they are eschewing offensively asserting their patents against alleged infringers because they don’t want to stifle innovation; in reality, given their dominance in their social media niche, NOT going after alleged infringing competitors unless sued for infringement gives them a license to steal any small competitor’s ideas without much cost to their business.

How so? First let’s posit that in the short text message space – or whatever tweets are – Twitter has a first mover advantage so large as to become nearly impossible to unseat. Unlike hardware or software products, social media products have a tipping point or critical mass after which competition is almost useless. Unlike hardware products, where what coffee maker I use has almost no effect on your choice of a Kurig or Mr. Coffee, your choice of social media tools  is very much affected by what social media I use… or more to the point, what social media most people you know use. If you “short message”, you tweet; if you want to share your life, you use Facebook.

Second, let’s posit that anyone trying to out-twitter Twitter is likely to infringe some Twitter patent, even as they perhaps add some interesting feature on top of Twitter’s IP. And if they don’t infringe, they probably come close enough that it would not be a frivolous suit if Twitter sued.

SO, what do you do if you are Twitter and a startup, Quacker, has developed a novel and interesting addition to tweeting? Do you pull out your patent suite and use it offensively (and look like an ogre)? NO, you copy their novel and interesting addition, taking away any competitive advantage it might have given little Quacker before more than a handful of tweeters become quackers.

And what if the interesting addition is patented by Quacker? You don’t care(!) since if they try to sue you then, well, your Inventor’s Patent Agreement says you’ll only use the patents “defensively” to deflect patent suits. Out come all those defensive patents which just happen to be able to crush Quacker, so they’ll cross-license with you…but you’re “paying” with the patents you were letting them infringe for free anyway.

The bottom line for Twitter is that they have turned potential competitors (innovators) into an unpaid R&D source. By letting them infringe, Twitter loses very little because of the critical mass nature of social media; by copying the innovators’ innovations, Twitter removes any competitive advantage the potential competitor might have developed; by having a “defensive” strategy, Twitter can position itself as a “good guy” even as it holds its WMD’s over the heads of the little guys.

The lesson for the rest of us… if you are not in the social media space, think twice about forswearing the offensive use of your patent portfolio since your customers are unlikely to have “brand loyalty” if your competitors have a better/faster/cheaper product. And if you are in the social media space, well, don’t try to compete with Twitter unless you are very, very good.

I was watching some pre-season football this past week and, as usual, the commentators are always big on the two teams’ “game plans”. While the subtleties of a pro football game plan escape me, it occurred to me that dealing with the patent examiner these days seems to require a game plan – a strategy for exploiting his or her weaknesses while capitalizing on our strengths. Having a game plan only makes sense, however, when you are playing a game. What we need to do is take the adversarial gamesmanship out of patent examination. What we need is a “NO Games” plan.

Admittedly, since every game has two competing sides, to reach the state of no-games patent examination we will need the other “team”  – the patent office and its minions, the examiners – to give up their adversarial behavior too. And I’ll admit I don’t know enough about the politics to figure out how to get the PTO to change. But in the interim, I do think we can approach patent examination with a new attitude, one that tones down the adrenaline level, and, achieves our objective.

The number one change that is in our control is to return to the basic idea that the patent should be a teaching document – that the goal of the patent is to teach “society” about your invention. When we teach society, we also teach the patent examiner. If we accept that the patent examiner has very little time to examine our application; that s/he must divide that time between reading our claims, searching for the prior art, reading our specification, and, not insignificantly, writing up an office action that gives an explicit reason, based on evidence, for any claim rejection – if we accept this condition as a fact, then we can understand that the less clear, less succinct, less complete our application is, the poorer job of examination we are going to experience.

So what specifically should we do to stop playing games when we file a patent?

1. Put some content into the background and summary description sections. Point to specific pieces of prior art, when your invention really builds on that art and use the summary description to explain the principles of operation. The less search time the examiner has to spend the more time s/he can spend actually thinking about the differences between your invention and the prior art.
2. Don’t make your independent claim(s) over-reachingly broad. All an overly broad independent claim does is put the examiner in a negative (viz., rejecting) frame of mind and make he spend time writing up something that you knew wasn’t going to fly.
   
3. Don’t include trivially significant dependent claims. Again, won’t you feel annoyed if you had to examine a bunch of claims that address absolutely trivial elements of the invention. I just read an application with a dependent claim for a table with wheels to support the personal computer used in the invention. Really.
   
4. Use plainly understandable language and simple element names. There’s a saying that if you can’t impress someone with your brilliance then you should baffle them with BS. If the examiner can’t read your specification quickly and get a good idea what your invention is, you can be sure s/he will shoot first and ask questions later. The examiner isn’t going to give you the benefit of the doubt, so at best you are going to have an extra round of office actions explaining what you didn’t explain clearly in the first place.
   
5. Accept the fact that your invention is an incremental improvement in the state of the art (unless, of course, it is really a game changer!) As the song goes, you gotta know when to hold ‘em, you gotta know when to fold ‘em. I’ve seen write ups of cases from the Board of Patent Appeals where the examiner is holding on to what seems to be a irrational position over a minor claim term. My first reaction is “what is that examiner thinking” but on second thought I begin to wonder – is the examiner struggling to find a way to get to the right ends (rejecting a lousy patent) by the only means s/he can grab onto, given that there is no way to reject based on “it’s a lousy patent”

Remember, these 5 suggestions are not legal advice – instead use them to stimulate a discussion with your patent attorney about what you are trying to accomplish with your patent application and what are the costs and benefits of various approaches to drafting patent applications.

While it’s not quite true that there’s “nothing new under the sun”, it is generally true that most technology developments are built on the foundations of prior art. For the inventor or product developer, this prior-art dependency has serious implications. No matter how innovative you are, no matter how carefully you consider your freedom to operate, the chances are that someone out there has a patent that arguably relates to your work. And argue they will if you represent a threat.

Consider the situation of Nova Biomedical. As described by Joe Kalinowski of Trilogy Associates in his enewsletter, Trilogy Tidings, Nova is getting beat over the head by the patent attorneys from the big guys, Abbott, Roche and Medtronic. Here’s the story as Joe describes it:

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Forbes.com recently published the fascinating story of Nova Biomedical. That company, a supplier of benchtop clinical lab analyzers and personal blood-glucose meters, has been in a fight for survival since 2003 when they were threatened by multiple lawsuits dealing with patent infringement and trade-secret appropriation by the likes of Abbott, Roche and Medtronic.

I was in the business, developing new products for Corning Medical (now part of Siemens Diagnostics), when Nova Biomedical came into being. From the start the company was very innovative, a disruptive force in the market for sure. Great scientists and engineers. Savvy marketers. Today the company’s sales revenues are about $165 million.

The trouble started when Nova invented and brought to market a blood-glucose meter and associated disposable test strip with performance superior to the incumbents in that $8 billion market. The incumbents did not take kindly to this upstart and unleashed their lawyer tribes, peppering the firm with multiple lawsuits. The good news for Nova is that they have prevailed in every instance in court and with the USPTO so far. The bad news? The owners of the firm have so far spent $31 million, laid off 60 employees, and taken out $15 million in bank loans defending the company. You have to admire their dedication, but some might question their sanity. Will it all be worth it in the end? Who knows?

One can second-guess Nova management’s decisions all day long. Should they have caved in, settled and partnered up much sooner? Should they have taken some short money early on and gone ahead to invent and commercialize other stuff? Should they have avoided such a large market with powerful competitors in the first place? Should they have been more considerate of their employees? The answer to every one of these questions might be yes.

Then there’s the principle of the thing! What would you have done?

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Yeah, Joe, good questions. What would/should one do in that situation.