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INTRODUCTION TO PATENT LAW
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Copyright © 1986-2004 Zegarelli Law Group. All rights reserved.
Written by Gregg R. Zegarelli, Esq.


THE FOUNDATION OF PATENT LAW

Most people do not realize that patent law has its foundation in the Constitution of the United States. At the very inception of our nation, our forefathers recognized that the best way to encourage creativity is to give inventors legal rights to their works.

Article I, Section 8, Clause 8 of the Constitution states: "The Congress shall have the Power . . . To promote the Progress . . . of useful Arts, by securing for limited Times to . . . Inventors the exclusive Right to their respective . . . Discoveries." This is frequently called the "patent clause" of the Constitution.

WHAT IS A PATENT

Basically, a patent is a grant made by the federal government to an inventor, which conveys the exclusive right to make, use or sell an invention. The government grants this "monopoly" in return for public disclosure of how the invention operates. Thus, the public benefits by having the opportunity to review, and presumably improve upon, the invention, and the inventor benefits by receiving a legal monopoly on the patented work.

ACQUIRING A PATENT

In order for a developer to obtain a patent, the work must qualify as an "invention." In this regard, the Patent Act establishes five requirements:

1. The applicant must be the inventor;
2. The invention must be "patentable subject matter";
3. The invention must be novel;
4. The invention must be useful; and
5. The invention must not be obvious, i.e. "nonobvious."

1. The applicant must be the inventor.

As a general rule, the person who applies for a patent must be the first person to conceive of the invention and reduce it to practice. An invention is conceived when there is a definite idea of the complete invention and all of the steps necessary to create it. An invention is reduced to practice when it is actually created or when the patent application is filed with the Patent Office.

There is an exception if a person is hired for the purpose of inventing or if employees have assigned their rights to the patent. In those cases, the employer, rather than the actual inventor, may be given ownership of the patent. In addition, if an employee used the employer's facilities in order to create the invention, then the employer may be given a non-exclusive license to use the invention through Shop Rights. The Shop Rights Doctrine provides that although the employee retains the patent, the employer has a royalty free license to use the invention.

It is also common practice for inventors to join together in developing inventions - for example when each inventor is responsible for a certain part or module. If the inventors seek a patent jointly, then each must have made some original contribution to the invention. Mere cooperation in a project will not qualify all parties as inventors.

2. The invention must be "patentable subject matter."

The Patent Act lists the categories of patentable subject matter as "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof . . .."

Ideas are specifically not patentable, although the application of ideas are. For example, Einstein's formula "E=MC2" is merely an idea; it is not a particular concrete application of the principle of atomic energy, but the very idea itself. This is sometimes referred to as a "law of nature." A law of nature, even if written as a mathematical formula, is not patentable. It is believed that mathematical formulas are the fundamental building blocks of science and should not be monopolized.

In cases of computer software, the courts have been forced to define more precisely which inventions involving the use of mathematical formulas or algorithms are disqualified under the Patent Act.

In 1972, the United States Supreme Court held that a "process" for converting binary-coded decimal numerals into pure binary numerals could not be patented. The court stated that the algorithm was a scientific truth and was so abstract that it covered all applications of the algorithm. Subsequently, in 1978 the Supreme Court denied a patent for a mathematically based process for updating alarm limits in catalytic conversion processes. The court stated that a process utilizing a scientific principle is patentable only if the process itself, not merely the mathematical algorithm, is new and useful.

The continued uncertainties concerning patentability of computer software led the Supreme Court to again consider the issue in 1981. In that case, a computer was used to calculate and monitor the exact curing time and temperature for rubber oil seals. The software was based upon a well known formula. The claimants, however, did not ask for a patent on the formula itself but on the entire process, which they claimed was unique. The Court, in a 5-4 decision, granted the patent and reiterated the test for patentability of a process:

Transformation and reduction of an article "to a different state or thing" is the clue to the patentability of a process claim that does not include particular machines.

The court then reasoned that the method for curing rubber, described in detail in the patent application, involved such a transformation. The court stressed that the use of a mathematical equation and a computer in the process did not prevent the availability of a patent. Thus, despite previous uncertainties concerning the patentability of software, it is clear that under proper circumstances software may be patented.

3. The invention must be novel.

To be patentable, the process embodied in software must be "novel," i.e. new and different from any prior processes. If a process was previously disclosed to the public, then it is considered to be "anticipated" by the prior art—and thus, it is not novel.

The Patent Office considers an invention to be previously disclosed if it was publicly known or used by others in the United States or was patented or described in a printed publication in any country more than one year prior to the date of filing the application. Thus, inventors should be extremely cautious when publicly testing potentially patentable subject matter.

Novelty is a patent requirement because it would benefit only the inventor, rather than the public, if a patent were granted in exchange for disclosing information which is already public.

4. The invention must be useful.

The utility requirement is derived from the United States Constitution which gives protection to "useful" arts. The utility of an invention must be affirmatively demonstrated in the patent application because otherwise the patent would give such broad protection that it would be protecting the idea itself rather than the application of the idea.

5. The invention must be nonobvious.

"Nonobviousness" means that the process embodied in the claim represents more than merely the next obvious step in the development of the art to which the claim relates. The difference between novelty and nonobviousness is that novelty asks whether the invention "existed" before; nonobviousness asks whether a person could or would have thought of the invention given exposure to the prior art.

THE APPLICATION PROCESS

In the patent application, the inventor publicly discloses and describes the invention. The application must include: 1) a description of the invention and the process of making and using it; 2) a declaration that the applicant is the first inventor; 3) drawings and flow-charts which are necessary for an understanding of the invention; and 4) the filing fee, which is usually between $170 and $340. However, legal and incidental fees for a patent may cost as much as $10,000.

Because the government grants a patent in return for the information disclosed in the patent application, it is imperative that the application be skillfully drafted. For example, if an application is described in broad terms, the possibility is increased that the examiner will reject it for lack of specificity. Alternatively, if the application is drafted too specifically, then the inventor will be forfeiting areas of potential legal protection.

THE PATENT EXAMINATION

After the application is filled-out and filed with the Patent and Trademark Office, it is assigned to an examiner. The examiner reviews the application and researches various public records to ensure that the patent requirements have been satisfied. While the examination is being conducted all of the inventor's trade secrets are maintained. Following the examination, the examiner will make a determination as to whether the work is patentable. If the patent is granted, it is presumed to be valid until successfully challenged through litigation. If it is rejected, the inventor may amend the claim and seek reconsideration. However, if the claim is rejected twice and if no agreement can be reached, then a Final Rejection is issued. The inventor must then appeal to the Patent and Trademark Office, and possibly to the federal courts.

During the application process, it is common for the applicant and the examiner to have extensive negotiations concerning the terms of the patent. This negotiation process is very important because the inventor will be bound by any decisions made during that time. For example, in a subsequent infringement suit, the applicant will not be allowed to state that the patent was meant to provide greater legal protection than that which was agreed upon during the application process. Thus, if an applicant agrees with the examiner on a particular issue during the examination, then the applicant may not later assert that the examiner was incorrect.

After an invention is approved and all fees are paid, the "Letters Patent" are issued to the applicant. The process may take two or three years to complete.

INFRINGEMENT AND REMEDIES

A patentee has the exclusive right to make, use, or sell the invention for a period of 17 years. During this period, an infringement will occur if someone develops, or induces another person to create a work that performs substantially the same function, in substantially the same way, to achieve substantially the same result as the patented work.

If there is an infringement of a patent, the Patent Act allows: 1) injunctive relief, 2) damages which may be trebled; 3) attorney fees; and 4) court costs. The Patent Act authorizes damages "in no event less than a reasonable royalty for the use made of the invention by the infringer." When there is an established royalty amount, there is little problem setting a minimum amount. However, if the royalties are depressed because of the infringement then the court may issue treble damages or adjust the amount accordingly.

Before damages will be granted, however, the inventor must show that the alleged infringer was on notice that the invention was patented. Notice of the patent is provided by marking the invention with the word "patent" or the abbreviation "pat." followed by the number of the patent. Although the notice is not required to have a valid patent, if the notice has not been used, then the patent owner will be allowed to recover damages only for the period subsequent to the date on which the infringer received actual notice that the invention was patented.

In addition, since patent protection does not begin until the actual issuance of the Letters Patent, competitors are basically free to copy an invention even if the application has been filed. The words "patent pending" give no legal protection during the period prior to the actual grant. In fact, use of such symbols can result in fines if the notice misrepresents the truth. However, if a patent is issued, then the competitors will be required to remove the infringing goods from the market.

CONCLUSION

In conclusion, patents often provide the most powerful form of protection for creative works. However, in exchange for such comprehensive protection, the inventor must submit to a technical, time-consuming and expensive application process. Furthermore, patent protection is not always appropriate. For example, in cases of computer software, because of the speed with which technology advances, the 17 year patent protection is often unnecessary. However, when appropriate, a patent can provide the most valuable form of protection for the work of an inventor.

Also, see our link to the Patent and Trademark OfficeZegarelli Law Group, PC can assist you with understanding and applying the law to your particular situation.  We Represent the Entrepreneurial Spirit®.



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Articles and information are for general information only, and often address issues, without expressly indicating, in generalizations. Laws vary between and among jurisdictions.  You should not rely upon any information provided by or on the website, including articles, as applicable to your particular situation. The law, filing fees, etc., change often, so the information in this document may not be current. The laws of various jurisdictions may be different than provided here.  Please contact us at info@zegarelli.com if you are interested in becoming our client--only then would this office be in the position to provide advise with regard to your particular situation.  It is important for you to review Terms of Use.

Unless otherwise specified above, Copyright © 2004,2008 Technology & Entrepreneurial Law Group, PC. All rights reserved.


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