Intellectual Property 101 for Inventors

There are four main categories of intellectual property we’ll deal with in this booklet:

• Copyright
• Trademark
• Trade Secret
• Patent

Copyright

Copyright provides rights in “original works of authorship, including literary, dramatic, musical, artistic, and certain other intellectual works.” The tangible implementation is protected, not the idea. For example, the script of a play may be protected, but not a performance of that play.

Rights afforded by Copyright

As a copyright owner, you may prevent other people from reproducing the work, preparing derivative works, distributing to the public, performing publicly, or displaying publicly. “Moral rights,” which allow you to claim or disclaim authorship and to object to alterations to the work that may damage your reputation are not protected in the US generally, although there are statutes that provide some similar protections.

Requirements for Copyright

To be copyrighted, a work must be original and fixed in a tangible form. Categories of protectable works of authorship include literary works; musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes and choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works.

 Copyright is automatic when you create something, but may not be enforceable until it is registered. Statutory damages and attorneys’ fees will be available to you in court actions if you register within three months of publication or prior to infringement. At the time of this writing, the fee to register online a single work by a single author not made for hire is $35.00. If your work is valuable, register your copyright! Information on registering is available at http://www.copyright.gov ↗. 

Work made for hire

If a work is prepared within the scope of employment, or, in certain cases, if a work is ordered or commissioned, it may be considered as a work made for hire. In such cases, the employer and not the employee is considered the author. More information is available from http://www.copyright.gov/circs/circ09.pdf ↗.

Trademark

There are four types of marks

• Trademarks
• Service Marks
• Certification Marks
• Collective Marks

A trademark identifies the source of a product, while a service mark identifies the source of a service. Both are often referred to as trademarks.

Certification marks identify that a certification authority has approved a product. One example is the Good Housekeeping Seal of Approval.

Collective marks indicate that a product or service is supplied by a member of a union or other organization that sets standards for goods or services provided by members of the organization.

Words, phrases, symbols, and designs may all be used as trademarks. Even smells and colors have been used as trademarks—anything that may be used to identify the source of an item. Business names, brand names, individual product names, logos, and slogans are often used as trademarks.

A trademark exists as soon as you use it in commerce, and, unlike copyright, does offer some protection even if it is not registered. But registration may provide additional protection. Trademarks may be registered federally with the United States Patent and Trademark Office (USPTO), or registered by a state.

When registering a trademark, you must indicate what category or categories you are using the mark for.  

The purpose of a trademark is to prevent confusion for consumers. If a small company has been selling firewood under a certain brand name, another company may manufacture cars under the same brand name; consumers are unlikely to be confused and think that the firewood company started making cars. A company that started selling wood carvings under that brand name may confuse consumers, however, and may be prevented from continuing to use that mark or a similar one.

Marks that are used in one geographical region may not be protected in another region if it is not likely to confuse consumers. For example, a little coffee shop in Maine may use the same mark as a little coffee shop in Kentucky without any issue, unless it is likely that consumers at one would think it was associated with the other shop.

Trade Secret

Trade secrets may provide good protection for products difficult to reverse-engineer. But there is nothing to prevent others from attempting to reverse-engineer, and if they are successful there is no cause of action—you cannot sue for that. The trade secret would be lost.

As a secret, protection is immediate and perpetual—at least as long as the secret remains a secret. Two famous trade secrets are the formula for Coca-Cola, and the Kentucky Fried Chicken “11 herbs and spices.”

A common trade secret in a smaller company is a customer list, which may be protected if:

• The list is a compilation of information
• It is valuable because it is unknown to others
• The owner has made reasonable attempts to keep the information secret

Trade secrets are generally protected from misappropriation under state laws, and protection may vary from state to state.

Patent

A patent is a right granted by the United States Government to an inventor. The right is “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time. The Government grants this right in exchange for public disclosure of the invention.

A common misconception is that a patent protects an idea. But patents apply to implementations, not abstract ideas. To obtain a patent, your application must contain sufficient information to allow a person having “ordinary skill in the art” to practice your invention. This requirement is known as “enablement.” You must also share the best way you know to practice your invention as of the time of your application; this is known as “best mode.”

Note that the rights are to exclude others from practicing your invention; there is no right that ensures you can practice it. There are several cases where a patent owner may not be permitted to make a device covered by his or her patent. For example, patent A may cover an improvement to a product protected by patent B. If the owner A of patent A made the product protected by patent B with A’s improvement, the patent B may be infringed. Owner A may not be permitted to practice his or her invention, while the owner of patent B may be excluded from using A’s improvement. Of course, agreements may be made to allow one or both parties to use both patents.

Business Benefits of Patents

Patents may provide many different benefits to a business, and different businesses may use patents differently over time.

Some potential uses include:

• Preventing competitors from practicing your invention
• Licensing your invention to obtain royalties
• Cross-licensing technologies to partner with other companies
• Build a strong portfolio to reduce the chance of getting sued by other companies
• Identifying your invention as being patented, which may provide some marketing advantages

While this list is not exhaustive, it should illustrate that patents can be flexible tools in your business’s arsenal.

Types of Patents

There are three types of patents:

• Utility
• Design
• Plant

Utility patents may be granted to anyone who “invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof.” 35 USC §101. Utility patents are what most people think of when they hear the word “patent.” Utility patents are granted for a period ending 20 years from the date of filing of the application, and the rights start when a patent is issued. Thus, the time between filing and issuance actually shortens the length of time you will have rights from your patent. It is not unusual for obtaining a patent to take several years, although if there is an excess delay because of the USPTO, they can extend the term of the patent to compensate for the time used.

Design patents are used for novel, non-obvious, ornamental designs of useful articles. Design patents may relate to the shape, configuration, or the surface ornamentation applied to an article of manufacture. A design patent does not protect the structural or utilitarian features of an invention, only the appearance. Design patents are granted for fourteen years from the date of the grant.

Plant patents are available to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant other than a tuber propagated plant or a plant found in an uncultivated state. Plant patents are granted for a period ending 20 years from the date of filing of the application.

The authority to grant patents (as well as copyrights) comes directly from the Constitution:

“Congress shall have power…to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” 

Patent protection for progress in the art is obtained in exchange for sharing the progress with the public. Inventors are thus encouraged to share their new technology with the public, where other inventors may discover even better ways to do things.

The America Invents Act of 2011 changed the US patent system from first to invent to first to file. As of March 16, 2013, the first inventor to file will obtain a patent, although the law will need to be tested in court to determine how much this change in philosophy will impact particular fact patterns.

Applying for a Utility Patent

A patent application is considered by some to be the most difficult form of legal writing. The author must be capable of describing technical details with legal language. As the USPTO states in their Nonprovisional (Utility) Patent Application Filing Guide:

 “A patent application is a complex legal document, best prepared by one trained to prepare such documents. Thus, after reviewing this guide, you may wish to consult with a registered patent attorney or agent.”

The USPTO has a list of registered patent attorneys and agents on their website.

What must an invention have to be patentable? There is a long list, but considerations I like to mention to clients include:

• Novelty
• Non-Obviousness
• Utility
• No statutory bar

Novelty

Novelty means that the invention must be new; if the invention was done before, you cannot receive a patent on it.

Non-Obviousness

Non-obviousness is a little harder to determine. The law states:

“A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.” 35 USC §103.

In practical terms, if your invention simply combines two or more known technologies or processes, and a person having normal skills in the art your invention entails would have seen the benefits of combining them, you may have difficulty overcoming a non-obviousness test. However, very few inventions are made of completely new everything, and in some cases, these rejections may be overcome. Over nine million patents have been granted, and most have gone through and successfully passed this test.

Utility

The utility requirement for a patent comes from the “new and useful” language of the law. Fortunately for inventors seeking a patent, this is a low hanging branch. In practice, if your invention can be used for anything other than to break the law, it will probably pass this test.

Statutory Bar

Finally, you cannot obtain a patent if there is a statutory bar preventing it. 35 USC §102 has several restrictions which may prevent you from obtaining a patent even though it meets the new, useful, and non-obvious requirements. One of the restrictions is that you may not receive a patent if you have disclosed your invention more than one year prior to the date of the application for patent.

If you have written about, sold, or used your invention in public (possibly even if the public didn’t know about it) more than one year before your application, you may not obtain a patent. Remember that a patent is granted in exchange for disclosing your invention to the public—if you have already disclosed it, there is no advantage to the public for the government to grant you a patent!

Key Components of a Non-Provisional Patent Application

There are four key parts of a non-provisional patent application:

• Abstract
  • The abstract is a paragraph that describes the application at a high level, similar to an abstract of an academic paper.
• Drawings
  • Drawings are used to help explain the claimed invention. All claimed features must be shown in drawings if they can be illustrated.
• Specification
  • The specification is the written description. Much of it is often a description of the drawings, although other things may be described as well. The application must be “enabling,” which means that it has to provide enough detail that others can use the invention.
• Claims
  • Claims set out the metes and bounds of the invention, essentially telling the public what they need your permission to do.

Provisional Application

A provisional application is an inexpensive way to obtain a filing date for a patent. But it does not move you toward obtaining a patent—a provisional application is never examined at the USPTO. It is placed on file, and becomes part of the record if you file a non-provisional application within one year of the filing of the provisional application; otherwise, the provisional is considered abandoned. 

A provisional application may include a specification and drawings, but generally does not include claims. When a non-provisional application is filed claiming priority to the provisional, any elements claimed that were disclosed in the provisional application are considered to benefit from the filing date of the provisional.

Marking

Once a provisional or non-provisional application is filed, you may mark your invention as “Patent Pending.” This does not give you any rights to prevent others from practicing your invention, but it will provide notice to others that you may obtain rights in the future. You are not permitted to mark patent pending until an application is filed; you may be fined for each item falsely marked. 

What is not patent eligible?

• Laws of nature and natural phenomena
• Products of nature
• New uses for old products
• Printed material
• Atomic weaponry

Patent Searching

Many people who begin to think about filing a patent start off searching online for patents that may be related. In some cases that may be a good thing to do, but in many cases it is not.

A quick search can be useful to see if it is worth spending money on applying for a patent. However, there are pitfalls. Prior art that may make it difficult for you to obtain a patent can come from a printed publication anywhere in the world; it does not even have to be in English. A quick search is unlikely to be very thorough in this context, so not finding anything from a quick search is not a good indicator that the USPTO will not find anything.

On the other hand, if you find something that a patent examiner may consider to be relevant when examining your application, you are required to inform the USPTO about it; this is called the duty to disclose. A failure to disclose may result in your patent becoming invalidated later.

When a patent application is filed, there are three options for publishing: publish right away, not to publish until a patent is issued, or, by default, publish eighteen months after the application is filed. Most applications are filed with the default option, and that means that a search will not return most of the applications that have been filed within the last eighteen months, no matter how extensively it is searched.

Typical Procedure

Different patent agents and attorneys may use different procedures to prepare a patent application, but many use something similar to this:

• Disclosure is provided--the inventor(s) explain the invention(s) to the patent professional
• Patent professional writes a draft application
• The draft is reviewed and edited until the stakeholders are satisfied
• The application is submitted to the USPTO
• USPTO reviews application to ensure it is complete
• USPTO assigns it to an Examiner
• Examiner examines application
• Examiner searches for prior art
• Examiner issues Office Action—usually a rejection
• Applicant responds to Office Action
• Office Action/Response repeats until either:
  • A) Application allowed, or
  • B) Applicant abandons the application

You may be asked to fill out a pre-disclosure document, providing information about who invented the subject matter, and some information about what your invention is, what problems it solves, and certain dates that may be important.

After that, it is common to have a disclosure meeting. This is a meeting where you describe your invention in detail, and it may involve a bit of brainstorming to figure out what the specification should include, and what the limits of the claims should be. 

The professional you are working with will then draft an application, and allow you to provide feedback. It may take several iterations until everyone is happy with the document, at which point it will be submitted to the USPTO.

Costs

The costs of preparing a patent application may vary dramatically, but it is not unusual for the fees to be in the $7,000 to $10,000 range. The USPTO filing fees are in addition to that. After filing, other fees will be incurred; over the course of the twenty-year term of a utility patent, it is likely to cost $25,000 to $30,000. This can sound expensive, but if you think your invention will make $100,000 or more, it is not a lot to pay to obtain good protection. Of course the value of a patent will depend on your business model; for example, if you are relying on licensing as your main income stream, a patent may be required. If your invention is easily copied, a patent may also be required to prevent others from entering the market.

After reviewing the documents submitted and ensuring everything required is complete, the USPTO will assign an application number to your application. They will then assign your application to an examiner for review. 

Examiner Work

The examiner will review your application and search for “prior art” to see if anyone had invented what you are claiming before you did. Examiners have access to a lot of sources for their searches, and usually find several items they feel are the same as or similar to your inventions. The examiner will write a document outlining the relevance of the prior art cited. This document is called an Office Action, and normally you must respond to it within three months, although you may get up to six months to respond if you are willing to pay for extensions of time. 

Depending on the technology involved in your invention, it may take about one and a half to three years until you receive a first office action.

You may pay extra money to have your application examination expedited, which normally results in a first Office Action within one year.

Responding to an office action will involve making legal and technical arguments to try to convince the examiner that your invention is different from anything in the cited art, by amending your claims to try to differentiate it, or a combination of both argument and amendments.

The examiner will then review your response to the office action, and may allow some or all of the claims from your application or may provide you with another office action. This back-and-forth with the examiner is known as “prosecuting” your application. Of all applications that have been allowed, on average each has been rejected 2.8 times.

The initial fees paid to the USPTO when you file covers two office actions from them; if you wish to continue pursuing a patent after two office actions, additional fees will be due.

Final Outcome

Patent prosecution will continue until either the patent is allowed or you abandon the application. If it is allowed, you will receive your patent, assuming you pay whatever fees are required. Until it is allowed, you may pay fees to continue arguing and amending, you may file an appeal, or you may stop paying fees, in which case the application will be considered abandoned. An important point to note is that the USPTO will never tell you that you cannot have a patent on your invention; rather they tell you that you cannot have a patent on what you are currently claiming. As long as you pay money they will consider arguments and amendments to your claims. Bear in mind, though, that at some point, it may not be worth continuing to try to obtain a patent. Always weigh the business benefits versus the costs involved.

It is possible to receive what is known as a “First Action Allowance,” meaning that the first office action you receive says you may have a patent covering one or more of your claims. While this may sound ideal, it may be an indication that your claims were narrower than they should have been, so that a competitor can easily design around your patent.

Restriction Requirement and Divisional Applications

A patent application is meant to cover one invention and only one invention. Sometimes an examiner may have a difference in opinion with you about whether you have more than one invention claimed. For example, if you claimed a chair and claimed a table for an invention of “an eating area,” the examiner may say that the chair is one invention, and the table is another. In such a case, the examiner may issue a restriction requirement. A restriction requirement means you have to choose (“elect”) which claims you wish to pursue with this application. You may submit an additional application with the remaining claims; such an application is called a divisional.

One rule of thumb examiners often use is if you have two claims that may be used independently of one another, it is two inventions. In our example, if one claim covers a chair and one covers a table, an examiner may reason that a chair is useful without a table, and a table is useful without a chair, so this is covering two different inventions, and should be protected with two patents. We could write a claim that covered both a chair and a table together, but then we really have less protection, since a competitor could make a chair or a table without infringing the claim.

Continuations and Continuations-in-Part

While a patent application is pending (i.e. before it is allowed), you may file additional applications based on the same specification. This allows you to add claims, perhaps for additional inventions that you did not initially claim, while obtaining the same filing date as the original application. This is called a continuation.

A continuation-in-part (CIP) adds new material to the specification, and obtains the original filing date for the portions that were disclosed in the original application, and the filing date of the CIP for the new material added.

Foreign Applications

Patents are country-specific—a US patent only protects your invention within the US. There is no such thing as an international patent, but thanks to the Patent Cooperation Treaty (PCT), you can apply for patents in multiple countries with one application.

By submitting a PCT application in one country, you can preserve your filing date for up to 30 months to file in other countries with the same filing date, which may give you time to decide whether to move forward with any of the countries. But you may need to provide translations of your application for some countries, and most countries require that you have a representative in that country to prosecute your application.

There are two phases in the PCT procedure. The first phase involves filing an application with a Receiving Office, and designating an International Searching Authority (ISA) to perform a search. The ISA will provide an International Search Report (ISR) with an opinion of patentability, normally within 9 months of the filing.

The second phase is called the national phase, and it involves processing in each country, known as a designated State, you wish to obtain a patent. Each country will decide on the merits of your application to determine whether they will grant you a patent.