Chapter 6 Patents

Legal Framework of Patents

Government-granted monopoly for 20 years -from the time the application is filed -changed from 17 years to accommodate TRIPS Gives patent holder the right to exclude others from -Making -Using -Offering for sale -Selling the invention

Valuation

Hard to value this intangible

Utility Patents:

(1) Correct subject matter (2) New or Novel (3) Useful (4) Non obvious

At first the PTO would not grant patents for software

-Because software was not proper subject matter for patent protection: mathematical algorithm, materials common to nature( penicillin) , or unapplied ideas, natural phenomena (gravity), abstract ideas (God created man) --can't patent a scientific truth or mathematical expressions of it = algorithm --computer programs were nothing more than glorified algorithms

Utility Patents: (2) What is the Novelty or Newness Needed ?

-Cannot be patented if certain public disclosures of the invention have been made -Cannot be known to the U.S. public before it was "invented" -Cannot have been used in the U.S. publicly before it was "invented" -Cannot have been offered by the inventor for sale to the public more than one year prior to the filing date. -Cannot have been described in a publication anywhere more than one year prior to the filing date -Cannot have been patented anywhere abroad more than 12 months before filing in the U.S.

European Union (EU)

-Classifies patents into two classes: technical and non technical -Business Method Patents have technical and non technical parts --Business patents must contain sufficient technical contribution

First is based on dates of conception and reduction to practice

-Conceives first and continues on to reduce it to practice first -Conceives first and another reduces it to practice first? - still first to conceive - if the first to conceive continued diligently to try to reduce it to practice

Patents can Protect Software Better Than Copyrights Can

-Copyrights can only prevent the copying of a particular expression of an idea (doesn't protect against near duplication of all or part of a software program) -Patent will exclude others from stealing the "idea" behind the software program, even if it is not exactly the same - not a copy

What is diligently?

-Deliberate and continuous --use of bound and consecutively numbered lab manuals --witnesses attest

Patent Act: 35 U.S. Code

-Established the U.S.P.T.O. -Authority to PTO to grant three types of patents: --Utility --Design --Plant patents

Utility Patent: (4) Nonobviousness cont....

-Examiner searches previous patents --If this one has all the features of a prior patent = reject ---For instance, if just change material or size = usually reject --If all the features of this one can be found in a combination of any number of prior patents = reject, but can overcome -Has to be materially not exactly the same as prior products or process (prior art); Has to be an inventive step, and innovation not obvious to the normal engineer.

Utility Patent Procedure for Issuance of a Patent:

-Filing a patent application with the PTO --Made in writing by the inventor -Specification in writing = description of the invention -Claims in writing = precise aspects of the invention claimed for patent protection. -Drawings = whenever a drawings required to understand the invention -Oath: -All info kept in confidence by the PTO until patent granted - --change: only confidential for 18 months?

Patent Law- Downside of Patent Protection

-Have to meet certain conditions - not all ideas are patentable --See Proper Subject Matter for Patent Protection below -Expensive -Discloses secret to the public --If a patent is not granted - public may use

Prior Art

-Inventor not required to do an active search for prior art - "ostrich effect" -People say a lot of "bad" patents were issued because of no prior art on recordSoftware Patent Institute is collecting prior art - need a good data base here

Right to Exclude

-Is not a positive right to make, use, or sell, but to exclude others --Other laws may prevent patent owner from making, using, or selling -Give right to others through a patent license agreement -Doesn't matter if someone else independently develops the same invention - they can be excluded

In Re Bilski

-Issue: whether a patent can be issued for a business method patent? -Patentable Subject Matter: new and useful process, machine, manufacture or composition Exceptions: no: laws of nature, phenomena or abstract ideas. A patent eligible subject matter must also be: novel, non-obvious, and fully and particularly described. -Statute specifically identifies business methods patent: The First Inventor Defense Act provides that if a patent holder claims infringement based on a method in a patent, the alleged infringer can assert a defense of prior use.

Damages: royalties + interest + court costs

-Maybe lost profits -Treble damages is willful infringement

Utility Patent: (5) What is the Usefulness Needed?

-Must have a useful purpose --Includes ability to operate and do what it is supposed to do

Utility Patent: (1) What is the Proper Subject Matter

-Must produce a useful result: "anything under the sun that is made by man" -Processes, machines, manufactures, or compositions of matter

Utility Patent: (3) What is the Nonobviousness Needed?

-Nonobvious improvement over the prior art -Compare this invention to the prior art and determine if differences in the new invention would have been obvious to a person having ordinary skill in the type of technology used in the invention

International Recognition and Enforcement of Business Method Patents

-Patent Cooperation Treaty (PCT) --WIPO -Simplifies and reduces the costs of obtaining international patent protection and facilitates public access to a wealth of technical information relating to inventions -EPO has said it will not be a searching authority for business methods patents filed by U.S. nationals

Patent Commercialization and Knowledge Transfer Strategies

-Patent Creates huge barriers for competition -Is not easy to value these intellectual property assets -Have a limited duration --If the intellectual property is a large part of a company's assets, then when the asset is gone, the company goes under

Final Office Action by PTO

-Reject or allow -Reject = restate the problems -6 months deadline to decide: --Abandon --Request for reconsideration --Appeal to Board of Examiners and then to court of Appeals for the Federal Circuit or sue in civil court the Commissioner of Patents and Trademarks Office in Wash., D.C. --File "continuing patent" application, a new one, which will allow the examination to continue and be retroactive back to the date of filing the first one

Rights given by a Patent

-Right to exclude others from making, using, or selling the invention throughout the U.S. and its territories and possessions -Right to sue for infringement

Not patentable:

-laws of nature -mathematical algorithms -materials common to -nature -unapplied ideas

1970's U.S.S.Ct. reversed and said computer programs were patentable if certain conditions were met

-two computer-related cases before Supreme Court --Diamond v. Diehr --State Street Bank v. --Signature Financial Group

Nonobvious

Are the differences to prior art such that they would be obvious to an ordinary programmer? Hard to find prior art because most older software is not patented

State Street also held

Business patents are not unpatentable subject matter "per se" They have been patentable since 1952!

Equitable remedies

Courts can assign, rewrite inventorship, prevent violations of rights

What is "conceived"?

Details of the invention are sufficiently advanced so that a person of ordinary skill could make it operational without further creative action

Divisional application

If one application contains two inventions, must file another application, but is retroactive back to date of first filing

In Which Category Do Software Programs Fit? Utility Patent?

If the patent requires the software program to operate on data, the invention can be considered a patentable process If the patent claims the software program in connection with the physical structure of a computer, the invention can be considered a patentable machine To operate on data = process To operate in connection with the physical structure of a computer = machine

What the Inventor "Claims" is Important

If, during the patent application , the owner had to narrow the scope of patent by eliminating some of the elements, and then patent was granted based on those narrowed elements claimed, then the patent owner is barred form later asserting that the eliminated elements constituted equivalence and therefore infringement.

Shop Rights and Ownership of Patents

Inventors may assign, license or transfer: (for the most part, inventors own the patent rights for their inventions. But the inventor/owner may assign, license, or transfer their patent ownership.) Must file application in the name of the inventor If employee invents, and is under no separate agreement to assign, employer has shop rights --Shop Rights: free, non-exclusive license of invention

Trade Secret

It does not have to meet the requirements of a patent more can be protected for a longer period of time But, secret is protected only as long as it is kept secret More susceptible to theft, misappropriation

Plaintiff's Case

Literal Infringement Doctrine of Equivalence

Lock-Up Information

Maybe causes more harm than good by holding up the development of technology

Today Intellectual Property May Be a Business' Major Asset

Patents for business methods -Patents for software programs -Trade Secrets -Copyrights -Trademarks

Plaintiff must show

Prior conception of the claimed subject matter - question of law Communication of the conception to the named inventor

Defendant's Case

Prove no literal or equivalent infringement Prove the patent is invalid

Applicant's Amendment and Response

Request reconsideration Before a certain deadline = 3 months after office action mailed, can be extended w/ $fees to six months, after that = application abandoned Can ask for revival if good reason, pay fines, appeal to Commissioner Specifically address the perceived errors in the examiner's first office action May include amendment to the claims to clarify or overcome prior art cited in the first office action Arguments as to patent ability of these claims over prior art Cannot add "new matter": new descriptions of how it works or further clarification of the type of materials and components utilized

Literal Infringement

Unauthorized making, using, or selling of the patented invention within the territory of the U.S. during the term of the patent Sue in federal district court appeal to Ct. of Appeals for the federal circuit, then Supreme Court Injunction + damages Defenses: Defendant may claim no infringement because what he is doing does not fall within the language of any of the claims Defendant may challenge the patent as being invalid

Attorney's fees

must be reasonable

Competitor cannot make insignificant changes to

patent to avoid infringement claims.

What is patentable?

processes or machines

Software patents

show crucial features by a flow chart

File a patent application that discloses the invention sufficiently to meet the enabling requirements of the statute

so a person of ordinary skill could reduce it to practice without undue experimentation

Equivalence

substituting an element that is substantially similar, but not exact

Inventor must make an oath or declaration that she/he believes herself/himself

to be the original and first inventor of the subject matter of the application

Patent office get paid according

to number of patents it issues

What is reduce it to practice? Continuous and deliberate steps

to reduce an idea into practice by completing a working finished product, such as a functional prototype or a useful composition or

First inventor to make an invention has priority for obtaining a patent,

unless the inventor has suppressed, concealed or abandoned his efforts.