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Introduction to Patents

Sean Bedford

February 19, 2018

Note: The contents of this presentation does not constitute legal advice, should not be relied upon as a

substitute for the direct advice of a licensed attorney, and is intended only as an informational overview of

the patent system. The various rules and procedures herein are always subject to change. Please consult

a registered patent practitioner for legal advice regarding any specific inventions or other legal issues.

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Presentation Topics

Types of intellectual property

Identifying patentable inventions

Process for obtaining patents in U.S. & abroad

Patent rights & infringement

Pitfalls & Strategy

Practical considerations

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Types of Intellectual Property

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Types of Intellectual Property:

Trademarks

A symbol, design, or expression that consumers associate with a particular brand or product

E.g., brand names, logos, or other marks

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Types of Intellectual Property:

Copyrights

For original works of authorship fixed in any tangible medium of expression

E.g., books, photos, music

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Types of Intellectual Property:

Trade Secrets

For formulas, processes, designs, etc. that are not publicly known and provide an economic advantage to a business

E.g., formula for Coca-Cola, Google’s search algorithm, criteria for NYT bestseller list

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Types of Intellectual Property:

Patents

Utility Patent – for things that are new and useful (machine, method, composition, etc.)

Design Patent – for purely aesthetic, non-functional designs

Utility Design

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What is a Patent?

A right to exclude others from:

Making,

Using,

Selling,

Offering for sale, or

Importing

For a specific location

U.S. patents only work in the U.S.

protection abroad requires foreign patents

For a limited time

20 years from filing for utility patents in the U.S.

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"Congress shall have the 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.”

U.S. Constitution

Article 1, Section 8.

Why does the Government grant these rights?

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What can be patented?

How do you get one?

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Requirements for Patentability:

“Any new and useful process, machine, manufacture, or

composition of matter, or any new and useful improvement

thereof”

“Ideas” are not patentable (e.g., an algorithm alone)

Software per se is not patentable, but there are still ways to

protect software implementations via patents

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A patentable invention must be not “obvious”

Legal Question: Would the invention have been

obvious to “a person of ordinary skill in the art” at

the time the invention was made?

Inventions can come in small advances/improvements

Often involve combinations of known elements

Indicators of non-obviousness:

Long-felt but unsolved needs

Prior attempts and failure of others

Prior art teaches away

Commercial success

Predictable combinations are often held obvious and non-

patentable

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Process for Obtaining US Patent:

1. Prior Art Searching & Pre-Filing Evaluation

2. File Provisional Application (optional)

3. File Non-Provisional Application (within 12 months of

provisional)

4. Examination by USPTO to Determine if Invention is Patentable

5. Patent Issues

6. Optional: Can file additional “child” applications before issuance

(e.g., “continuation” or “divisional” applications)

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Provisional Application

Placeholder application

Disclosure of what you know (so far)

No claims required

Never examined, never issued, no rights

Can be relatively cheap

Allows you to claim the benefit of the filing date with a

nonprovisional application filed within 12 months

Great for securing a filing a date and buying yourself one

year to figure out what to do with the invention

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Non-Provisional Application

Full description of the invention (with Figures)

Must enable person of ordinary skill to practice invention

Claims define what you are protecting

Examined by patent office and may issue as an enforceable

patent

Must be filed within 12 months of provisional to claim benefit of

earlier filing date

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Examination of Application by USPTO

Examiner will search for “prior art”

Types of Prior Art

Patents & Published Applications (anywhere)

Any “printed publication” (articles, books, websites)

Public Use / Sale / Offer for Sale

Inventor Actions – sale, use, publication, other public

disclosure more than one year before filing date.

Claims can be amended: Examination is a negotiation with the

USPTO over what rights, if any, you are entitled to.

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Other Aspects of Application Filing

Inventorship

Inventors are those who contributed to the conception of the

claimed invention.

Inventors have common ownership of patent

But… assignments, employment agreements, etc.

Information Disclosure Statements

Must disclose known prior art

Filing and prosecution can be done “pro-se” or by registered

practitioner

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Patent Rights & Infringement

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Porsche invents a new type of convertible…

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Prior Art: Earlier version of the car

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Patent Claims

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Patent Claims

Like a wall – define the “perimeter” of the

property right

Claims define what exactly you can

exclude others from making/using/selling

You are your own “lexicographer.” Words

mean what you say they mean in the

patent specification.

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5. A cabriolet vehicle, comprising:

a body structure formed with a rear lid, left

and right openings formed through the rear

lid,

tensioning bracket holding devices mounted

to the rear lid and defining inner limits of the

respective openings,

tensioning brackets fastened to the respective

tensioning bracket holding devices and

projecting into the respective openings; and

a roof structure having a top with a top

material, the top material having a main

section and left and right lateral rear

elongation sections threaded into openings of

the body structure and attached to the

respective tensioning brackets.

Example Claim

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Example Claim

5. A cabriolet vehicle, comprising:

a body structure formed with a rear lid, left

and right openings formed through the rear

lid,

tensioning bracket holding devices mounted

to the rear lid and defining inner limits of the

respective openings,

tensioning brackets fastened to the respective

tensioning bracket holding devices and

projecting into the respective openings; and

a roof structure having a top with a top

material, the top material having a main

section and left and right lateral rear

elongation sections threaded into openings of

the body structure and attached to the

respective tensioning brackets.

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Example Claim

5. A cabriolet vehicle, comprising:

a body structure formed with a rear lid, left

and right openings formed through the rear

lid,

tensioning bracket holding devices mounted

to the rear lid and defining inner limits of the

respective openings,

tensioning brackets fastened to the respective

tensioning bracket holding devices and

projecting into the respective openings; and

a roof structure having a top with a top

material, the top material having a main

section and left and right lateral rear

elongation sections threaded into openings of

the body structure and attached to the

respective tensioning brackets.

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Patent Infringement

Product must include every limitation of at least one claim.

Limitations can be met “literally” or “equivalently” depending on prosecution history of application.

E.g., are clips “tensioning brackets”? Velcro? Depends.

Product can still infringe open-ended claims, even if it has additional features that are not claimed.

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Infringement Example

Accused Product: Lotus Elise Soft Top

Meet every limitation?

No tensioning brackets

Roof does not have lateral rear elongation sections

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Infringement Example

Accused Product: Porsche Boxster Spyder with Rocket Power.

Meet every limitation?

Yes. Doesn’t matter that this car adds a super awesome

rocket because we used open-ended language in claims

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Remedies for Infringement

Money

Damages “adequate to compensate” for the infringement

Can be tripled in cases of willful infringement

Largest Patent Verdicts:

$2.5 Billion. Merck & Co. v. Gilead Sciences (2016). Hepatitis C

drugs.

$1.7 Billion. Carnegie Mellon University v. Marvell Technologies

(2013). Integrated circuit technology.

$1.05 Billion. Apple v. Samsung (2012). Smartphone technology.

Injunction

Stops infringer from continuing to infringe

More difficult to obtain

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Patent Rights

Patent grants the right to exclude others from:

Making,

Using,

Selling,

Offering for sale, or

Importing

For a limited time (20 yrs. from filing in the U.S.)

For a specific location (e.g., in the U.S.)

Not enforceable until patent issues.

Only the right to exclude others is granted

Does not assure freedom to practice. Product with a patented

feature may still infringe other patents.

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Value of Patent Rights

Enhance Company Value

increase valuation, provide source of revenue, use as collateral to obtain loans

Attract investors

patents make company more attractive to investors; more likely to invest than compete

investors prefer companies with limited or no viable competition

Offensive Utility

Direct Revenue Source: Licensing, Damages (possibly in other markets)

Indirect Revenue Source: Market share, barriers to entry

Defensive Utility

Provides ammunition for counterclaims in litigation

Prevents others from obtaining patent rights that could prevent you from making your product

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Pitfalls, Strategy, & Practical

Considerations

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Important Pitfalls

Any of these things triggers a one-year countdown to file an

application before you forfeit patent rights:

Publication (e.g., advertisement, brochure)

Public use (e.g., display at trade show)

Sale or offer for sale

But… no grace period abroad (e.g., Europe). Doing any

of these things can cause immediate loss of rights

abroad.

First to File Rule:

If two people independently invent the same thing, first

to file has rights to the invention.

Can institute “derivation” proceeding if someone steals

your invention and files themselves.

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Money Professional Prior Art Search & Evaluation: $2,000 - $5,000

USPTO Fees (filing, search, exam; always subject to change)

Attorney’s Fees for Preparing Non-Provisional Patent Application

$10,000 to $35,000 depending on subject matter / complexity / atty rates

Attorney’s Fees for Prosecuting Non-Provisional Application

Very difficult to predict (often same as, or more than, preparing application)

Patent Infringement Law Suits are Extremely Expensive

$500K to $3M (average) in attorneys fees to get through discovery.

$1M to $6M (average) in attorneys fees to get through trial. High profile

cases even more.

Large Entity Small Entity Micro Entity

Provisional $250 $125 $62

Non-Provisional $1,260 $630 $315

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There Are No Guarantees

It is possible your invention is not patentable

USPTO finds prior art you were not aware of

USPTO decides your invention is obvious

If your invention is patentable, it is possible your claims might be

so narrow the resulting patent has minimal value

There is even more uncertainty after the patent issues…

Patents can be invalidated or cancelled in proceedings before

Federal Courts or the USPTO

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Dealing With Investors, VCs, Venture Partners, Etc.

Non-Disclosure Agreements (NDAs) are your friend.

Not everyone will agree to sign an NDA. A patent application can give

you some leverage to prevent others from stealing your idea.

Remember that investors are adverse to you.

Be very careful about assigning over your rights to a patent or patent

application. Always know what you are agreeing to.

Confidentiality & IP agreements:

With customers

With suppliers

With manufacturers

With consultants

With partners

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Tips, Strategies, & Final Thoughts

Early consideration of patentability. Beware of statutory bar actions

and deadlines!!!!

Consider provisional application filing to buy yourself time.

Working prototype is not necessary if invention is fully contemplated.

Keep notebooks and other records reflecting timeline of invention and

inventive progress.

A patent attorney will do a better job than you at preparing and

prosecuting a patent application. If you can afford one, you’re better off.

Attorneys usually bill by the hour. Make it easy for them by doing your

homework and providing detailed information.

Not getting a patent does not mean your company will fail; getting a

patent does not mean your company will succeed.

An inventor with a patent is better off than they would be without

one.

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Questions?

CLT/20010955