Posts Tagged “PTO rules”

It’s one of those “evergreen” local TV news segments. You’ve heard it many times: “People/fans/devotees starting lining up at 6AM today to be among the first to buy… the new iPhone/Red Sox tickets/the latest version of Grand Theft Auto”. Luckily for inventors, getting priority for your patent application doesn’t involve camping outside the patent office until the examiner first opens your file – not many of us have two or three years to kill. In fact, under the still current “first to invent” law we don’t have to worry about being first in line at the patent office (although it never hurts!)

However, as we all know, the rules have changed and more changes – “first to file” in particular – are coming soon. A few weeks ago I got an email from a client. He wrote:

“We having something that we would like to patent. What are the guidelines now with the new patent law on how long can you wait to do the application?

I told him that nothing in the new law changes how long you CAN wait before filing. Currently you CAN wait indefinitely to file but it there is a risk you might lose out to a later inventor when the patent office determines you could have filed earlier.

What will change after March of next year is that the risk of losing to the later inventor becomes a certainty. First To File means that if you don’t file “now” and some other person later independently invents the same invention and files before you do, he or she definitely gets the patent.

Of course, under current or new rules, you only lose your right to the patent if there is a second, independent inventor. The longer you wait to file, the greater the risk of losing the patent to another inventor. Under “first to invent” you might lose it for holding your invention back while the other inventor was willing to share. Under “first to file” you were simply too late getting in line at the box office… uh, patent office.

My advice for now and after next March is to file at least a provisional application as soon as you practically can. Make sure you have a place in the ticket line. If you are pretty sure that no one else is working on the same invention, you can periodically re-file the same application provisionally, thereby pushing back the deadline for converting to a regular application. It’s like letting people who don’t want the same seats as you do go in front of you in line.

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Like many pieces of major legislation, the September 16th passage of the “America Invents Act” had some people running around with their hair on fire… whereas the reality is that many of its most ballyhooed provisions don’t come into play for a year or more. In the next couple of posts I’ll review what you need to think about now…and eventually review what you need to think about later.

The provisions of the act can be broken down into three groups; those coming into effect on or before November 15, 2011, those coming into effect on September 16, 2012, and those coming into effect on March 16, 2013. [For the nit-pickers, yes, some of the later provisions will apply to pending or even issued patents, so there is some earlier impact than their effective dates]. Anyway, let’s look at the most significant provisions that are or will be in effect by a month from now.

Provisions that affect everyone (financial):

  1. There is now a 15% surcharge on Patent Office fees.
  2. Starting 11/15 there is a $400 “electronic filing incentive” (actually a paper filing disincentive surcharge)
  3. There is now a “Micro-Entity” filing category that qualifies for a 75% discount off filing fees.

Item 1. is pretty clear and is already incorporated into the fee schedule from the PTO.
Item 2. is also clear – so if you are almost ready to file a (non-provisional) application on paper, do it before 11/15 to save yourself $400 ($200 small entity).
Item 3., when you read who qualifies as a micro-entity, is really directed at the independent inventor. Here are the qualifications:

  • Qualifies as a small entity;
  • Has not been named as an inventor on more than 4 previously filed patent applications;
  • Did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding 3 times the median household income [approximately $50,200]; and
  • Has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income.

Note that being named as an inventor on a patent assigned to a prior employer doesn’t count against you.

Prior User Rights (trade secrets):

The only other immediately effective provision of importance to most of my clients is the expansion of “prior user rights”. Prior user rights means that you can be protected from an infringement suit IF you can prove that you were using the invention commercially in secret for at least a year before the patent holder disclosed the invention publicly.

Under prior law you had a Catch-22 situation; you could maintain your trade secret for years and suddenly risk being sued for infringement should someone else patent your invention, or you could file a patent application, which made your secret public, and risk never being able to enforce your patent (since the actual invention in a trade secret is inherently not visible to the outside world).

Under the new law you can maintain your secrets and still have an infringement defense. It would appear that you will be okay if you maintain an evidentiary chain showing that you were using the invention in commerce. For example, keep process control records that show use of the invention to make a product that you sold. Even stronger as evidence – involve a third party who has no financial interest in the invention. For example, a trusted customer to whom, under NDA, you have revealed the processes you used to fill his orders.


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In my previous post I indicated that Jaffe and Lerner’s suggestion of doing away with patent examination and the presumption of validity for an issued patent that goes with it – essentially changing patents into registration-only documents, as is the case for copyrights – might not be a bad idea after all.

But of course times have changed since they made that suggestion (2004) and the problems we have today are different from what they addressed then. Then, the problem was that anything could be patented; now the problem is that even good inventions have to fight inane, illogical, and unfair office actions at significant extra expense to the applicant.

Also, Jaffe and Lerner’s suggestion did not fix the problem they identified (poor examination); all it did was push “examination” down the road to a more expensive venue where, it was assumed, only “valuable” inventions would end up. The rest of the inventions, presumed not valuable because no one needs to enforce them, would be registered and make nice wallpaper. This latter presumption is flawed, particularly for the small entity.

The final flaw in their suggestion is that it is inconceivable that it would ever be implemented. The idea that Congress would ever change the fundamental definition of a patent is inconceivable.

Rather than try to change what a patent is, let’s make the process of getting a patent conform to the stated goals of the patent system. It is the patent examination process that is flawed, not the definition of a patent. Let’s fix the problem by changing the problem’s source. Incidentally, fixing the examination process can, for the most part, be achieved without legislative action.

There are two goals for the patent system: on the one hand, the system is intended to reward inventors who advance the state of “science and useful arts”, on the other hand the patent system is intended to provide the benefits of such an advance to society by adequately disclosing the advance in the patent specification. The primary function of the examination process, then, is to determine, by a reading the specification, whether the inventor has indeed made a significant enough advance to science and the useful arts to merit awarding a limited time monopoly on the invention, and whether the advance is disclosed clearly enough in the specification that other workers can make use of the advance.

I believe that the only way to achieve the goals of the patent system is to have an examination process that seeks the truth about the invention’s quality and that ensures that the specification explains the details of the invention. A model for such a process exists today, not in the patent world, but in the publication of academic research. In theory, if not in practice, the editor and reviewers for an academic journal are supposed to read a manuscript to determine both the value and originality of the underlying research AND whether the presentation in the manuscript is clear and complete enough that other researchers can try to replicate the results.

Without pretending to understand the “back story” of how we got here, it is clear to me that the current examination process, far from being an evaluation of the value and clarity of the invention and specification respectively, is instead an exercise in intentional obfuscation on the part of many applicants and an exercise in semantic gamesmanship on the part of many examiners. Patent examination is not supposed to be an adversarial process, but it is clear that, at almost every turn, applicants are wary of admitting or explaining anything, for fear it will be used against them and examiners seem intent on finding a word or phrase in the independent claims that they can use to cite obviousness or anticipation, even where there is none.

This process must change.

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Quick – look behind you – run!!!

Everybody’s been warning you to watch out for “first-to-file” ( FTF) but you should be more worried about “Post-Grant Review” (PGR). Conceptually, PGR is a good way to improve patent quality. It gives third parties (not the PTO or patent holder) the chance to present evidence that the patent should not have been issued (e.g., was already in the public domain, is obvious, etc) during a defined time window AFTER the patent has been issued.

I pointed out last month, I don’t think small entities are necessarily at a disadvantage under FTF and even if I’m wrong, the only time where there is a head-to-head foot race to the patent office is near simultaneous invention – when’s the last time you were part of an interference procedure?

PGR, if enacted here, would be similar to European “opposition” procedures. In both procedures people who don’t like your ISSUED patent can submit evidence that the patent should not have issued, at a cost much lower than going to court. For a large entity this cost is much more bearable than for a small entity and allows the large entity to force costs onto the small entity after the small entity has showed its cards (and spent its budget) during prosecution.

The large entity’s capability and inclination to try to crush smaller but annoying competitors post-grant was demonstrated to me when I was Vice-President of R&D at a small entity. Our main competitor, against whom we had been making progress, was a German multi-national. Not only did they file an opposition to our European patents but, when the written opinion came out in our favor, requested an oral hearing on the matter. Cost-wise this was actually a triple whammy for us since our patent attorney had to engage their European counterparts to represent us in the European actions.

Luckily we had the resources to fight (and win); otherwise we would have had to allow our European patents to go by the boards, having already spent considerably to get them issued.

Your best defense against getting stepped on is a good offense. Do your homework (prior art search) before you  file your application. Read and re-read your patent application before filing to make sure there are no potentially invalidating errors (like lack of a full written description or enabling description). Be careful about prematurely disclosing your invention specifics – particularly while courting that all-important first customer.

And if PGR doesn’t happen? Well, the above advice is the best way to make sure your patent remains valid if and when you ever need to enforce it or use it for licensing income.

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