INVENTIVE STEP

Utility patents get all of the publicity in when discussing innovation.  Another option that an inventor may want to consider is a design patent.  Utility patents cover structural and functional aspects of an invention, while design patents cover the asthetic features.

Design patents differ from utility patents in a number of basic ways.  A design patent is granted to cover the ornamental design of an object that has practical utility.  For example, a design patent may be obtained for a new shape of a beverage container, the particular shape and features of the tread of a shoe, computer icons, and other items that have practical utility. 

A design patent is not permitted for something that exists for purely aesthetic reasons, such as a work of art.  A painting, sculpture, or other work of fine art would be protectable by copyright and possibly other intellectual property rights, but would not be eligible for design patent protection.

An invention may be entitled to both a utility patent and a design patent since a utility patent protects the structure of an article and the way it is used and works; a design patent protects the way an article looks.  If the design–the way the article looks–is dictated primarily by the article’s function, it would not properly be the subject of a design patent.  An example may be the shape of a gear that is designed primarily to fit with other gears and not for aesthetic purposes.

The requirements for obtaining a design patent are similar to that for utility patents.  The design must be novel and non-obvious; the examiner will perform a search of the prior art to be certain that the design meets these requirements.  Furthermore, the drawings must clearly show the features sought to be protected by patent.  The drawings will typically be more detailed than in a utility application as they will often show more views of the invention.  The drawings contitute the claims of the design patent.  Because they don’t require a detailed specification like a utility patent, design patents are also less costly to prepare and file.

Design patent protection lasts for 14 years from the date the patent issues compared to 20 years from the earliest filing date for a utility patent.  No maintenance fees are required for design patents.

Another advantage of design patents over utility patents is that they seem to be much easier to obtain.  In recent years, design patents have had an allowance rate of about 90% over the last few years, compared to utility patent allowance rates of under 50%.  Over 80% of design patent applications are allowed without rejection; only 1.2% are rejected based on prior art with a larger number rejected on formality grounds.

In an era of increasing backlog and pendency of utility applications, more than half of design patents are pending for less than a year, with the average pendency being about 16 months.

For an invention where design and utility patent protection are both appropriate, I would not skip the utility patent.  An inventor should at least file a utility application for its broadder scope of coverage and should also consider a design patent.  A design patent would provide some protection while waiting for a utility patent to issue.  They are also cheap since they don’t involve a great deal of preparation and prosecution.  Inventors should always consider whether their inventions are eligible for design and utility patent protection.

Advanced Strategies for Innovative Growth Companies

Edited by David B. Orange

http://www.logos-press.com/books/great-patents.php

Great Patents is a collection of essays on patent strategy and valuation.  As Orange notes in the Introduction, there is a gap between simple patent primers, aimed at those who know little or nothing about patents, and detailed expositions of patent theory, aimed more at patent academics.  Great Patents “aims to inform executives on how best to improve their competitiveness.”  Just getting patents is not enough.  Figuring out how and when to use your patents is the key to successfully utilizing IP for a competitve advantage.

The first seven essays focus on patent strategies, while the last four focus on patent valuation.  Orange acknowledges some overlap between the two, but this seems like a good break down.

“How a Young Company can Build and Manage its Intellectual Property” is written by Lawrence Rozsnyai, Senior Director of Intellectual Property and Legal Affairs at a clinical-stage pharmaceutical startup company in the San Francisco Bay Area.  Rozsnyai’s chapter deals with many of the issues facing a young company determining how to protect its technology.  Topics that are covered include how to select IP counsel, when and how to decide to file provisional applications vs. non-provisional applications, tips for writing the first few patent applications, how to train R&D staff to properly protect the IP, and even some next steps.

Rozsnyai’s chapter contains some valuable information and strategies including how patent applications may differ depending on the goal of broad coverage vs. quick issuance, avoiding disclosing too much in patent applications about nascent technology, claim drafting, defining terms, and providing sufficient examples.  He briefly covers how R&D personnel should be trained to document and maintain IP as it is developed, how they should work with IP counsel, and how to keep notebooks and invention disclosure forms.  Finally, he provides recommendations to keep business goals in mind when crafting an IP strategy, be certain you have a freedom to operate in the area of innovation, and when and how to proceed to international patent protection.

“Present Patenting for Future Business Strategies” is written by Oscar Llorin, a patent attorney in Maryland.  Llorin’s chapter provides a bit more of a primer on the parts of a patent and the potential purposes of patents.  Next, for technology within the company’s main areas, he advises keeping patent applications pending so that it can be focused on competitors’ later-developed technology.  He also covers how post-grant proceedings, such as re-issue and re-examination applications, can be used to meet long term goals.

“The Tension Between Academic Authorship and Patent Inventorship” is written by John Evans, a patent attorney in Washington, DC.  Evans reviews the rather interesting fact pattern from a 1998 Federal Circuit case to demonstrate how authorship conventions in the scientific research community do not necessarily track actual contribution to conception of inventive concepts disclosed in the articles.  Thus, patent attorneys must investigate actual inventorship regardless of who is listed as an article’s author or risk losing the validity or ownership of the patent.

“Obtaining Patents and Trade Secrets for Health Technology Companies” is written by Kevin McCabe, an IP attorney in Washington, DC.  McCabe stresses the value of IP to a health technology company and contrasts this with the value to an electronics company, based on the number of patents covering key technology, investment timeframes, and barriers to market entry.  McCabe then spends a great deal of time providing a patent primer focusing specifically on issues that arise in the health technology field such as inherency, written description, and enablement.  Finally, he briefly addresses trade secrets and how they can be applied to health technology.

“Small Business Intellectual Property Considerations When Doing Business With the Federal Government” is written by William Bainbridge, a government contracts attorney in Washington, DC.  Bainbridge goes through the various opportunities for funding from the federal government that are available to small businesses.  He stresses the importance of preparing and understanding the contract with the government so as not to lose any rights in your property.  Finally, Bainbridge provides information on protecting technical data when transacting with the government.

“Standard Setting Organizations” is written by Marlin Blizinsky, a government relations officer near Seattle.  This chapter provides a primer on standard setting, including the purpose of standards, reasons that companies would or would not want to participate in standard setting organizations (SSOs), how SSOs operate and develop standards, and obligations of membership in SSOs.  Blizinsky gives special treatment to patent issues including licensing obligations and terms and how some SSOs seem to shun or avoid patented technology.  He provides guidance on antitrust issues within SSOs, as well as how standards are implemented and marketed by SSOs.  Blizinsky provides a great deal of information that may be helpful to an executive in deciding whether to participate in an SSO.

“A Patent Judge’s Perspective” is written by Luann Battersby, a patent attorney in Pennsylvania.  Battersby interviewed Neal Abrams who spent 17 years as an ALJ on the BPAI from 1987-2004.  Abrams provides tips on which cases to appeal, strategies for writing briefs, and best practices for oral argument before the Board.

“Patent Disputes” is written by Eric Fudo, an accountant and consultant who advises clients on economic damage issues in patent infringement matters.  Fudo provides an overview of damage calculation in patent cases, reviewing the standards for lost profits and reasonable royalty damges.  He provides a great amount of detail on what goes into such calculations and how the courts are requiring more detailed analyses from experts.  Issues regarding lost profits include calculating lost revenue and incremental expenses, and focusing not only on past profits, but also on future projected profits, taking the infringement into account.  Fudo also covers the elements of the hypothetical negotiation used to determine the reasonable royalty in patent cases.

“Developing and Evaluating Intellectual Property Assets” is written by Leo Jennings, an IP attorney in Virginia.  Jennings describes how to promote a culture within an organization that encourages innovation, such as how to encourage employees to participate in the process and how to document invention disclosures.  He covers other issues including international patenting, patent maintenance, enforcement, and how to determine whether to protect a particular invention.  Jennings then turns to monetary valuation of IP.  Various approaches are described, such as a cost approach, income approach, market approach, and hybrid methods.  Strengths and weaknesses of each method are reviewed, and he provides some advise on how to select the best method.

“Patent Sales” is written by David O’Steen, President of an IP boutique and patent brokerage firm.  O’Steen reviews ways to monetize patents, including litigation, licensing, and sales.  He focuses his chapter on how to sell a patent or patent portfolio.  He reviews how to determine what assets to sell, which assets may have potential buyers, who those buyers might be, and how to determine the value of a patent portfolio.  O’Steen reviews how a patent’s history or future potential of infringement, licensing, and litigation may affect its value and the potential buyers for the property.

O’Steen next reviews the three typical platforms for selling patents:  online, auction, or private sale.  He reviews the pros and cons of each platform, including the speed, number of buyers, and sales price potential for each, including who performs the sale.  Next, he reviews the due diligence to be performed on a patent portfolio, both by the buyer and by the seller.  This includes determining whether the patents have a clear chain of title and whether there is a potential income stream in the form of licensing revenue or infringement damages.

“Patently Ridiculous” is written by Gerry Langeler, Managing Director of a venture capital firm in Oregon.  Lengeler provides insight on whether and how venture capitalists choose to invest in patented technology.  He reveals that having a patent is less important than having the ability to execute the patent.  Lengeler provides a few stories that demonstrate why venture capitalists are hesitant to fund new endeavors:  uncertainty.  A mistake in the patent or a judge who rules in an unexpected way are several examples of such uncertainty.

Like most books that are compilations of writings, some of the essays in Great Patents are much better than others.  Some violate Orange’s statement of not providing a patent primer.  Overall, however, there is some good information and some inside or expert advise from different players in the field that are not always considered when making decisions regarding patents.  Great Patents is a worthwhile read.

Inventions can be conceived of and reduced to practice by multiple individuals.  Perhaps each makes a contribution to the overall invention.  Each individual is considered an inventor.

I am often approached by an individual or group of individuals that have worked together to develop a new invention for which they would like to file a patent application.  They could be friends, neighbors, college buddies, or maybe just acquaintances.  They almost never have any type of agreement, written or otherwise, regarding rights or ownership in the invention. 

Sometimes, one of the inventors asks me to represent him, but that it is not necessary for me to represent them both.  Maybe the second inventor is not available to talk to me or does not have time to review documents or some other reason.  As I always explain to the one inventor who requests my representation, this creates a number of problems.  For one thing, all inventors must review and understand the contents of a patent application and sign a declaration stating that they believe they are the first and true inventors of the invention described in the application and that they understand their duty of disclosure to the PTO.

The primary complication is that any communication I have with the inventor who is my client is protected by attorney-client privilege.  I cannot, however, discuss the matter with the non-client inventor because of the privilege.  If the inventor who is my client shares our conversations with the non-client inventor, the attorney-client privilege may be waived.  This could result in serious consequences if the inventors seek to license or enforce the patent at a later date.

I typically prevail on the joint inventors that I need to represent all of them in order to keep our communications protected by the privilege.  Even the case of representing all of the inventors individually can present problems. 

First, if the inventors have a disagreement or separation from the endeavor, I would not be permitted to represent any of them.  This represents a situation where there would be a conflict of interest in my representation.  If I previously represented inventors A and B on a matter and they have a disagreement, I cannot then represent only inventor A or only inventor B in the matter that is now potentially adverse to the interests of the other inventor who would become my former client.  In such a case, I would be forced to withdraw from the representation and the inventors would each be required to get new attorneys to handle the matter.  This results in needless duplication of efforts, delays, and added expense.

Second, as I detailed in an earlier post, there is the problem of “secret prior art.”  Inventor A conceives of an invention and files a patent application for it on Augut 31, 2011.  Later, Inventor A and Inventor B conceive of an improvement to Inventor A’s invention and file a patent application for it on September 30, 2011.  The jointly-filed application may be rejected over Inventor A’s earlier application if the improvement would have been obvious in light of Inventor A’s initial invention to one of ordinary skill in the art.  This is even true whether Inventor B is aware of Inventor A’s earlier application or not.

35 U.S.C. § 103(c)

Congress saw this as a potential problem and enacted a solution.

(1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.

(2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if -

(A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;

(B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and

(C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

(3) For purposes of paragraph (2), the term “joint research agreement” means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

Subsection (1) refers to the situation where the invention and the improvement are owned by the same entity or that the inventors are both obligated to assign to the same entity.  So, as above, if both Inventor A and Inventor B had an obligation to assign their inventions to a corporation or a jointly-formed entity, such as an LLC, this section precludes the use of Inventor A’s application as prior art for obviousness purposes against the application filed for the later improvement.

Subsection (2) refers to the situation where there is no single entity for assignment or obligation of assignment, but there is a joint research endeavor.  If there is a written agreement, and the improvement is invented as part of the agreement, then the original application cannot be used in an obviousness rejection of the application filed for the improvement.  Thus, if Inventors A and B had a written agreement signifying a joint research endeavor, this provision would provide them with a shelter from an obviousness rejection.

Inventors Should Have an Agreement to Take Advantage of 103(c)

What does all this mean?  When inventors get together with the idea of inventing or creating a new product, they should at least have at least a written joint research agreement.  In that case, none of the individual inventors’ prior inventions that might otherwise qualify as “secret prior art” can be used to reject any new inventions as obvious.  I understand that this may seem onerous, but at least a written agreement that states that the individuals intend to work together to develop a new product or invention is better than nothing.

An even better scenario is when the inventors form a common entity, such as an LLC, to which they obligate themselves to assign the inventions.  This permits the inventors to use the safe harbor provisions of § 103(c) and to avoid potential conflicts of interest when the inventors approach an attorney to represent them individually with respect to the inventions.  The attorney can represent the LLC rather than the inventors individually.  Then, if one of the inventors withdraws from the LLC, the attorney can continue to represent the LLC and does not necessarily need to withdrawn from the representation completely.

You’ve come up with a great new idea for a product that you’ve never seen before.  In fact, you’re sure it’s never been done by anyone before.  Here are some issues to consider when determining whether to apply for a patent.

Who Has Rights in the Invention?

If you have a new idea or invention, you may need to determine who else may have rights in the invention, such as a co-inventor or employer.  For example, as an employee, if you develop a new idea or invention, you may need to discuss it with your employer to determine how best to proceed.  In general, employees retain ownership of their inventions that they invent unless there is an agreement with the employer to assign the invention to the employer, or if the employee was hired to invent.  Even if the employee retains ownership of the invention, the employer may have certain “shop rights” in the invention that may permit the employer to practice the invention.

If technology is or may be important to a company, it is important to have an employment or other type of agreement in place to be certain that rights to any inventions created by your employees are assigned to the company.  Ideally, these agreements are signed upon engagement of employment.  They can, however, with certain restrictions, be used at other times during employment.  An attorney can help prepare such an agreement to make sure that rights would be properly transferred.  This can also create an “obligation of assignment” in the invention to avoid certain obviousness rejections during prosecution of the patent application.

If you determine that you, or you and a co-inventor, have rights in an invention, you may want to determine whether to apply for a patent.  Anyone who is a co-inventor of an invention claimed in a patent application has an undivided right of ownership in the invention.  Each co-inventor has the right to license, assign, sell, or transfer his or her rights in the invention, or any part of the rights, without permission of the other co-inventors.  This is another reason that agreements between co-inventors is so important.

Should You Apply for a Patent?

One approach that can be used to determine how to proceed, that is, to determine whether to apply for a patent, is as follows:

If you have a new idea or if you have ownership rights in a new idea, the first thing you may wish to do is to try to determine whether it would be best protected by a patent or by another type of intellectual property protection, such as whether to keep the idea a trade secret or whether the idea is one best protected by copyright.  If the idea is easily kept secret, it may be better to keep the idea as a trade secret.  Trade secrets may be protected for an indefinite period of time, as long as they remain secret and provide a competitive benefit.  Other factors in this decision include whether it will be difficult to obtain patent protection, or if it will be difficult to detect infringement of the invention.  Such cases may also weigh in favor of trade secret protection.

If you believe the idea would be best protected by a patent, you should document and record any evidence of inventive activities, as these could become important when prosecuting the patent application.

Next, you may want to determine whether your idea is sufficiently developed to pursue patent protection at this time.  While it is not necessary to have made a model or prototype to obtain a patent, a patent application must include sufficient description and drawings of the invention to permit someone skilled in the art to which the invention pertains to make and use the invention.  If you have not yet determined these details, the invention may not yet be ready for patent protection.

The next step that you may wish to take is to determine whether filing a patent application is warranted and develop a business plan.  Is there a market for the invention?  Will you be able to sell or license the invention, or manufacture the product?  Will it be easy to detect infringement?  Does the investment justify the cost?

Before proceeding further, you may want to do any Internet search to determine the closest products that might affect the novelty or obviousness of the invention and also to determine who might be competitors.  This can be done initially using a search engine and also on a website that includes patents, such as http://www.uspto.gov/.  This search may help determine whether applying for a patent is warranted.  Many patents have been issued for products that never made it to the marketplace.  You may have never seen anything like your new invention, but there may be a patent that describes it, which would preclude you from patenting the same invention.  This initial search does not substitute for a search performed by a professional search company, but it is a good start.

You should then bring any search results and a brief description, as well as any drawings or models to a meeting with a patent attorney.  You should also provide any information that may be a statutory bar and any evidence of inventive activities.  The attorney can help advise you further on whether to file a patent application and prepare one for you should you decide to do so.

If the current Patent Reform bills pending in Congress are enacted, these steps will need to be conducted at light speed as the U.S. transitions from a first-to-invent to a first-to-file regime.

Clearance Searches & Opinions

Once you’ve developed a new product or invention, another consideration is whether anybody else has a patent that covers the product or invention that they can enforce against you.  Before undertaking significant investment in filing a patent application or in bringing the product to market, it may be prudent to perform a patent clearance search, sometimes called a “freedom to operate” search.  Otherwise, it may be that you receive a cease and desist letter or are sued for infringement after these investments have already been made and you could be on the hook for infringement damages and/or be prevented from using your invention.  At the very least, you may have to defend an expensive patent infringement lawsuit.

A patent attorney can assist you by having a search performed for a third party’s patents that may pose a risk of infringement for your product or invention.  If there are patents that are close or that may pose a problem, the attorney can work with you to design around the patent or you may abandon the idea and try something else before making significant investment.

What should you do if you have received a letter from a third party that threatens you with a patent infringement suit or asks you to license a patent?  Again, the advice of a patent attorney is invaluable here.  Simply ignoring the letter could potentially lead to your having to pay triple damages to the patentee in an infringement suit and being faced with an injunction.  The patent attorney can help you to decide an appropriate response and potentially give you a non-infringement opinion or an opinion that the patent is invalid.  The opinion could be used as a defense to a charge of willful infringement that may require a payment of triple damages.

Performing a bit of due diligence and spending a bit of time and money performing some background research can be invaluable before undertaking the marketing of a product or filing a patent application.  Spending some money now, could save you from a big lawsuit or failure to obtain good patent protection, or any patent at all, later.

Although the cost of protecting the invention may seem high, it usually pales in comparison to the cost of an infringement suit or the initial investment in getting a new product or service to market.  You generally should not share your invention with anyone, including approaching companies about it, without at least a non-disclosure agreement (NDA) in place, and preferably at least a provisional application.

I recently spoke with another patent attorney who was asked to prosecute a patent application that was originally prepared and filed by the inventor.  The inventor wanted to keep costs down as she didn’t have a lot of  money when she filed the original application.  To prepare the application, she reviewed other patents to get the format down.  She is a smart professional, she can understand how to do this.  She knew the details of her invention well; after all, there’s a lot of do-it-yourself patent sites and books out there.

You might have heard this story before.  Nearly two years after filing her application, she received an office action from the PTO.  The office action included 8 separate drawing rejections, a reminder of the proper format for the specification that included 4 separate specification objections, and an objection to the abstract.  One claim was objected to for informalities and there were 7 separate claim rejections for indefiniteness.  Finally, there were 4 § 102(b) rejections and 3 obviousness rejections.

The attorney stated that it will take him at least triple the amount of time that it would normally take to respond to an office action, as he has to get new drawings, do a substitute specification, and substantially re-write the claims.  The inventive features were not clear to him from the specification; it was not until he spoke to the inventor in detail that he understood.

Will he be successful in obtaining a patent for the invention?  At this point, it is unclear.  He is stuck with the disclosure prepared and filed by the inventor because he can’t add new matter.  There may be important details or inventive features that were not adequately described.  The inventor may find herself out of luck.  In any event, once he files the amendment, the examiner may be able to fully comprehend the invention, but the next office action will be final.  The examiner will, correctly, note that any further search is required by the amendment.  Thus, to get further prosecution, an RCE will be required.

So, what’s the bottom line here?  The inventor was able to save the cost of having an attorney prepare and file the application at the start.  Perhaps she saved $5000-10,000.  The invention is moderately complex, so we’ll say she saved $7,500.  If the application proceeded as normal, the response to the office action would run about $2000-2500.  Prosecution is always a bit unpredictable, but hopefully, the claims would then be allowed.  Instead, the attorney says it will cost triple that amount to respond with new drawings, a substitute specification, and substantially re-written claims.  That means about $6000-7500.  Then, the case will require an RCE and another response plus the RCE filing fee.

And, there’s no certainty that she can even get a patent now.  Did she save money by preparing and filing the application herself?  It would appear not.  She will probably end up spending $8000-10,000 on prosecution costs, plus an RCE filing fee, to save about $7500 up front.  And, she may not get a patent at all.

The lesson here is that the patent system is complex.  The PTO and courts have imposed numerous rules and requirements that patent attorneys are experts in, but are not readily apparent to those who do not work with patents every day.  Patent attorneys can provide invaluable advice on the proper strategy and how to properly prepare the specification, drawings, and claims.  You never know if the invention will be a great commercial success, but if you don’t treat it as such up front, any patent received will be worth the price you paid for it.

I sometimes hear from inventors and companies that have come up with a new product and are worried that their competitors may get a patent on the product later.  Perhaps one of their competitors has done this in the past.  They believe that they came up with a product first and then their competitor filed a patent application covering the same product.  At a minimum, they have to respond to the competitor’s accusations of infringement by trying to prove an earlier invention date, etc.  At worst, they had to defend an expensive infringement suit.  Plus, the competitor used the patent for marketing purposes and hurt my client’s image in the field, perhaps with the accusation of infringement.

The first thing I tell such clients is that they should be scrupulously documenting their inventive activities.  The second thing is to file a patent application as soon as possible.  At least until the America Invents Act becomes law, the US system remains a first to invent system.  If the client can prove it was the first inventor, it should be able to get patent protection (assuming the invention is patentable) and not be subject to a competitor’s charge of patent infringement.

Sometimes the client is not really interested in patent protection, but just wants to be certain that a competitor can’t get a patent that would block the client from marketing its own product.  In that case, the client may want to make the invention public as soon as possible in order to create prior art that would preclude a competitor from later getting a patent on the same product. 

One option is to publish the invention in a journal or other printed publication.  In some scientific fields, this is a good option.  The publication process can be slow, however.  Another option is to publish information about the invention on the Internet.  This has the advantage of being almost instantaneous.  Due to the dynamic nature of the Internet, dating publications on the web can be tricky. 

A Better Option

For each of these options, especially Internet publication, the client may be waiving all rights to patent protection by making such publication, and almost definitely is giving up foreign patent rights.  Even if the client is absolutely certain that it is not interested in patent protection, I still advise another option–filing a patent application.  This option has the advantage of preserving patent rights, including foreign rights, in case the client has a change of mind, and creates a date certain for the information contained in the application.  Thus, the filing date of the application can be used against the competitor who tries to claim rights in the invention.

Furthermore, unless the applicant specifically requests otherwise, patent applications are published thereby creating prior art against the competitor’s attempts to patent the same or an obvious variation of the invention.  In the US, patent applications are published 18 months after their earliest priority date and are prior art as of their filing date.  For example, a patent application that is filed today would be published around November 5, 2012, but would be prior art as of May 5, 2011.  Thus, even if the competitor files prior to the application becoming public on November 5, 2012, if it is after today’s date, the published application is still prior art.  And applicants can request earlier publication if they want the invention to be made public sooner than 18 months from filing.

Sometimes the client originally says that it does not care about patent protection and merely seeks to protect itself defensively.  A year later, while the patent application is pending but has not yet been examined, the product is highly successful and the client wishes it had applied for a patent.  Without the pending application, patent rights would be be lost after the one year grace period, or in the case of foreign rights sooner.  Because the defensive patent application was filed, however, the application will be examined and the invention may still gain patent protection.

If the client truly decides that it does not desire a patent, a published patent application can simply be abandoned to avoid further expense.  This can be done either expressly, by filing a notice with the PTO, or by simply not responding to an Office Action.

Conclusion

A patent application can be a good vehicle for defensive purposes due to the publication of patent applications at the PTO.  Published applications become prior art as of their filing dates.  And filing a patent application near the beginning of the process preserves patent rights if the inventor changes his mind regarding whether such rights are desired.

Suppose I invent a new chemical molecule.  I begin testing the molecule to determine its usefulness.  After testing, I determine that when the molecule is combined with certain other ingredients to form a drug, it exhibits a utility in killing cancer cells.  I find that administering the drug by a novel method maximizes the cancer-killing ability of the drug.  Finally, I develop a novel way to manufacture the drug that can increase its potency.

Based on this information, what can I patent?  Assuming that each of the inventions is novel and non-obvious, I have a number of options.  First, I should write claims directed to the molecule itself.  Then, I can keep anyone from making, using, offering for sale, selling, or importing this molecule for any purpose.  That would be pretty good protection.

But, I’m concerned that someone might find prior art that shows that this molecule (or an obvious variation) was actually discovered a number of years ago.  Therefore, I should also try to protect that drug that includes this molecule as the active ingredient.  I will not be able to prevent others from using the molecule for other purposes, but again, anyone who makes, uses, sells, offers for sale, or imports the drug (putting aside FDA approval) would be infringing claims to the drug.

Again, let’s assume that the drug itself is not patentable.  It has been used before to treat baldness.  Because the use of the drug to treat cancer is new and patentable, I should prepare claims that are directed to methods of treating cancer (or killing cancer cells or something similar) by administering the drug.  Now, what can I stop others from doing?  The molecule can still be made, the drug can still be made; I can only protect the method of using of the drug to treat cancer.  Who actually performs the steps this method?  Probably the doctor, maybe the patient.  Do I really want to sue doctors or patients for infringement?  I might be able to sue the manufacturer for indirect infringement if they contribute to or induce infringement of these claims by the doctor or patient.

A similar analysis applies to the novel method of administrating the drug.  Again, the doctor is probably the direct infringer of such a claim because the manufacturer of the drug does not perform the steps of administration.  Conversely, if I claim the novel method of manufacture, that claim would be infringed by the manufacturer and not by the doctor or patient.

Akamai Techs., Inc. v. Limelight Networks, Inc.

The inventors in Akamai developed an improved method for storing web page content.  Limelight sought to avoid infringement of the claims by having some of the method steps be performed by its customers rather than itself.  Akamai sued under the theory of joint infringement arguing that Limelight provides specific instructions to its customers to perform the missing method steps to infringe the claims of the patent.

Although the jury agreed with Akamai and found Limelight liable for infringement, the district court disagreed and set aside the jury’s verdict.  The Federal Circuit affirmed.

The Federal Circuit held that joint infringement requires more than merely direction or even control.  It requires that the acts of one party can be attributed to the other, such as through an agency or contractual relationship.  The court then rejected Akamai’s argument that Limelight’s customers were acting as agents of Limelight, as well as the argument that the customers had a contractual obligation to perform the infringing method steps.  The court held that the contract did not require the customers to perform the method step, but only explains the steps that should be undertaken if the customer wants to take advantage of Limelight’s service.

The lesson from the Federal Circuit is one that they have given many times:

[T]his court has noted that such concerns can usually be offset by proper claim drafting. A patentee can usually structure a claim to capture infringement by a single party.

So again, proper claim drafting is key.  When preparing the claims for a patent application, it is not enough to merely ask what the invention is; one must also ask who would be the infringer and how claims should be prepared to permit the patent owner to prevent infringement by that infringer.

Last week, the Federal Circuit agreed to hear Akamai en banc to decide the question:

If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?

Perhaps the court will ease the requirement of agency or contractual relationship for a finding of joint infringement.  The lesson regarding proper claim drafting, however, remains.  The Federal Circuit continues to instruct inventors and patent attorneys to take more care when preparing patent applications and claims.