Am I Ready to Patent?

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Deciding when to file a patent application can be confusing…

Many inventors are justifiably confused about when is the “right” time to apply for patent protection. Apply too early and the invention might not be fully developed or a material change occurs that requires filing another application. Apply too late, and someone may apply for the same or similar invention before you or you might lose the ability to file in foreign countries.

Applying too early is usually only a bad thing when you are short on time and/or money (so as to allow for additional applications) or when your strategy doesn’t account for filing additional applications to address shortfalls in your original filing(s).

Applying too late can be tragic. Here are a few of the pitfalls:

  • Another person (anywhere in the world) applies for a similar invention prior to your filing. In the U.S. and in most other countries, the first-to-file gets the patent.
  • You use your invention, or sell it, or publish a paper about it more than a year prior to filing. You may have lost the ability to file a patent application for that invention.
  • You disclose (sell, discuss, write-about, etc.) your invention on a non-confidential basis to others, prior to filing. You may have sacrificed your ability to file in certain countries.

When should you file? You could get as many answers as people you ask, but here are the questions I ask new clients to help figure when they should file:

  1. Are you sufficiently along in the invention process?
    The earliest you should consider filing for a patent application is when you have “conceived” of the invention. BUT WAIT! “Conception” in patent law has a particular definition:“Conception is the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.” Allergan, Inc. v. Apotex, Inc., 754 F.3d 952, 967 (Fed. Cir. 2014) (citations omitted).Note the important portions of this phrasing: “complete and operative invention.” Does this mean you need a prototype? No (unless it’s a perpetual motion machine). Does it mean you need to have an ability to code in order to describe a computerized method? No, it does not. “Complete and operative invention” means you have to know what parts go into the invention and how it is going to function. Importantly, those factors of said invention are what a patent attorney/agent needs to assist in drafting your application.
  2. Have you disclosed your invention?Disclosures (sales, publications, etc.) of your invention can set wheels in motion that require you to file an application within a certain amount of time or you lose your ability to file altogether.
  3. Are you concerned about obtaining foreign filing rights?
    If you are sure you won’t want to file patent applications in any other countries, you may have additional latitude on delaying your filing. However, as noted, the risk of waiting is that someone else could file an application for the same invention before you. In that case you couldn’t get a patent (and potentially be unable to use your invention). But if you need to evaluate the market before spending money on patents, this risk may be palatable.
  4. Do you have a financial strategy that coincides with your IP strategy and vice-versa?
    Patent applications, in some ways, are more like used cars than other purchases you’ll make for your business. After paying for the drafting and filing fees there will likely be additional costs

    Don’t let time run out.

    in the future. In fact, you can spend a lot of money very quickly depending on your filing strategy and goals. Thus, an important consideration in deciding when to file (and what type of patent application to file) is to make sure your patent activities don’t outpace your finances.

Another consideration is whether the invention that is potentially available for patenting has the requisite value to your company to justify the investment. If not, you may decide that the current iteration of the invention, while possibly patentable, isn’t really ready to patent. It may not add value to your business in the way you’d envisioned.

Make sure you work with your patent attorney on an IP strategy that meets your business and IP goals. This will ensure that you’ll be applying for the right invention, at the right time, with proper expectations, and realistic goals.

Patent Troll Legislation Update

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CaptureSeveral states passed laws in the last year to go on the offensive against patent trolls, following in Vermont’s footsteps. Some variants of Vermont’s law of note:

1. Several states have codified the jurisdiction of the state courts to include the conduct of out-of-state patent trolls. However, it’s fairly clear that this provision cannot pass constitutional muster – personal jurisdiction is simply not established by the mere sending of a demand letter. With that said, however, it would be interesting to see how this would play out with the AG of a state involved and with the law being interpreted as a quasi-criminal matter (for example, Louisiana’s AG is the only entity allowed to go after patent troll activities). As Judge Toor made clear a few weeks ago, the constitutional protections offered to patent holders to send demand letters may not be as broad if their conduct trends toward nefarious activity.

2. Several states did not include a bond – it may be that this is already allowed generally in their jurisdictions, but it seems odd not to mention or delineate any boundaries.

3. Some states only allow their AG’s to prosecute patent troll activity.

Interestingly, no state has attempted to take on some of the more vexing activities of patent trolls. For example, there is no attempt to get past the endless shell corporate structures that these entities employ to avoid potential liability. I would think that a state could require an entity to provide notice to the state (similar to what Minnesota negotiated with MPHJ) of its desire to send an infringement letter and in that notice the state could require a) evidence of actual use of the patented technology by the entity and/or b) identification of the real party-in-interest with assets sufficient to present a bond (could they be required to register as a foreign corporation?). This would at least make the AG aware of patent litigation activity in the state (if a troll is sending thousands of letters, requiring notice may dissuade them from doing so).  But I’ve talked about some of these issues before.

Links to each state’s legislation and a brief summary of the differences from Vermont’s law are just below:*

VERMONT:

Standard Bad Faith/Good Faith Assertions of Patent Infringement used.

Bond: Motion by target, determination by court. Troll must post bond equal to good faith amount target would pay to litigate the assertion (not to exceed $250K).

Damages: Standard range of damages.

ALABAMA: No significant differences.

GEORGIA: No significant differences.

IDAHO:

Includes 3 year statute of limitations.

Regarding Bond: No upper limit (typically $250K) imposed by statute. The target of a patent troll must establish a reasonable likelihood that a person has made a bad faith assertion.

LOUISIANA:

Only the state’s attorney general has the authority to investigate and pursue claims.

Person’s (or entities) from outside the state making an assertion in-state is subject to the jurisdiction of the state.

No bond provision.

MAINE: No significant differences.

MARYLAND: No bond provision.

MISSOURI: No bond provision.

OKLAHOMA: Only state attorney general has authority to investigate and pursue claims.

OREGON: No bond provision.

SOUTH DAKOTA:

Includes an exception for publicly traded companies and patent owners using the patent in manufacturing and production of products and materials (in addition to the VT exceptions for higher education and technology transfer organizations for higher education institutions).

TENNESSEE: No bond provision.

UTAH: No significant differences.

VIRGINIA:

No bond provision.

Person from outside the state making an assertion in-state is subject to the jurisdiction of the state.

$2,500 civil penalty for each infraction.

WISCONSIN: No bond provision.

*Many thanks to Mathew Kryman, student at Vermont Law School and former intern at Dunkiel Saunders, for his help in analyzing the statutes.

*Thanks also to Rupalee Rashatwar, Program Coordinator/ Acting Legislative Coordinator at the National Association of Attorneys General for the compiling the legislative activities.

MPHJ’s Losing Streak Continues

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