What You Need to Know About Patent Law

By:  Lori T. Williams, Owner/Managing Attorney of Your Legal Resource, PLLC

Attorney Chris Falkowski shares his perspectives on the important issues surrounding patent law, and notes that “there has been more action in the patent law field in the last 15 years, than the previous 50 years combined.”

Falkowski worked as a computer programmer/application developer after graduating from Northwestern University.   Like many patent lawyers, he obtained an undergraduate degree in engineering.  Prior to graduating from University of Michigan Law School, he worked as a software engineer.  Early on in his legal career, Falkowski’s client base was largely comprised of technology start-up ventures. He founded his own firm, known as Falkowski PLLC, in 2005 to have greater flexibility in serving and expanding his base of start-up clients.

Falkowski notes that “the technology sector of the economy is an exciting place to be.  Companies are created, rise, and in some instances, fall very quickly.  Companies like Facebook and Google arise from nothing to become some of the strongest companies on the globe.  A company like Apple has gone through dramatic cycles of ascendancy and descendancy.  Technology provides people and organizations with new ways to interact and new ways take action.   It is a challenging context for lawyers and the law to keep up with.”

In recent years, the U.S. Supreme Court has increasingly heard more patent cases.  Falkowski notes 3 significant rulings that shaped how patent law is practiced and followed today:

1.  Transition from first to invent to first to file

One of the big changes with the recently enacted America Invents Act is that the U.S. is joining the rest of the world in adopting a “first to file” patent system.  This makes it more important than ever that clients make a decision as early as possible as to whether or not to pursue patent protection.

2.  The scope of what can be patented

In Bilski v. Kappos, the United States Supreme Court grappled with the issue of what is potentially patentable subject matter, and what types of inventions are not ripe for patenting.  While the decision affirmed the judgment of the Federal Circuit, the case did little to clarify this issue.

3.  Obviousness

One of the most difficult factors of patentability to assess is the issue of non-obviousness.  In KSR v. Teleflex, the U.S. Supreme Court grappled with the question of what constitutes obviousness in the context of patent law.  This is an ongoing challenge to those who deal with patents on a daily basis. Falkowski notes that the test for obviousness is somewhat similar to the definition of “pornography”, as set forth by Justice Stewart in the case of Jacobellis –vs- Ohio, where he wrote “I know it when I see it”.

Falkowski believes that business owners should consider these three things when they are trying to create and protect intellectual property through a patent:

1. Prioritize

Resources are always limited.  Intellectual property assets are like any other kind of asset.  Invest where you can get the most value for your dollar.

2. Create a Process

If your business results in the conception of potentially patentable inventions, you should develop a process to solicit those ideas and evaluate which technologies, if any, are worth pursuing at the patent office.  You can’t prioritize your investments if you don’t have a process for evaluating potential assets.

3. Integrate IP into the business

There are many ways in which a patent can assist a business owner.  Patents can help you market your business.  They can assist your credibility in dealing with vendors and customers.  Many small businesses underutilize their patents.  Every asset of a business should be working on behalf of the business.

In Falkowski’s experience, most people view patent searches and examinations as a simple process, resulting in a “Yes” or “No” decision.  ”In reality, the process of obtaining a patent is complex, iterative, and dynamic.  In some ways it resembles a contract negotiation.  In other ways it resembles a quasi-judicial proceeding.  Despite such complexities, some people mistakenly think of patent prosecution (the process of prosecuting a patent application at the USPTO) as analogous to obtaining a driver’s license where the outcome is either success or failure, and there is nothing in between those two outcomes.”

The potential outcomes with respect to each claim in a patent application include:

1)  The Claim is Rejected:

When this occurs, the applicant can respond by doing one of five things:

a.  Arguing that the examiner is incorrect in terms of reasoning or the underlying facts;

b.  Amending the claim so that it isn’t rejected;

c.  Cancel the claim because other claims have been allowed;

d.  Appeal the rejection of the claim;

e.  Abandon the particular claim.

2)  The claim is approved: 

This means that the Examiner acknowledges that the specific claim is allowable because it is both novel and non-obvious.

A patent application has one or more claims.  A patent cannot issue until all of the pending claims have been deemed allowable.  In many instances, some claims will be approved and other claims will be rejected.

“The examination process can resemble a negotiation in that the applicant may propose limitations on the scope of the claims in order to obtain the agreement of the Examiner that the claim would then be aproved.  Like any negotiation, it is easier to resolve the process more quickly if you are willing to negotiate more of your position away. Conversely, if you want to fight hard to get as much as you can, the process can involve substantially more time,” says Falkowski.

Falkowski notes that while filing a patent doesn’t require the applicant to retain an attorney, the nuances of patent law are such that most people would be well advised to retain an attorney or agent to prepare the application on their behalf. ”Of the three primary types of intellectual property rights (patents, trademarks, and copyrights), patents are the most complex.  If you make a mistake in filing your own patent application, it is likely that the mistake will not become apparent until years later when the USPTO points out the mistake to you, and at that point, it is unlikely that any patent attorney will be able to fix the problem.”

Many inventors wait too long before meeting with an attorney, says Falkowski. ”Filing a patent is inherently a race against the clock, because as time passes the scope of the prior art increases.  What is “novel and non-obvious“today is old news tomorrow.  One of the reasons why patents (and patent lawyers) sometime get bad press is that it is easy for a patent to look obvious in hindsight.  The race against the clock is even more important given the recently enacted America Invents Act.  It is very easy for an inventor to preclude the future possibility of obtaining a patent through their own actions in publicizing the invention.”

There are essentially three types of patents:

1.    Design patents

These involve the aesthetic non-functional aspects of a product.

2.    Utility patents

These are what most people think of, when they think of patents.  Utility patents involve functional (i.e. non-abstract) inventions such as a product, process, or an improvement to a product or process.

3.    Plant Patents

These apply to asexually reproducing plants.

In addition to these three types of patents, it is important for many inventors to familiarize themselves with what is called a provisional patent application.  A provisional patent application never actually becomes an issued patent, but it is a temporary placeholder application that provides the inventor with their “place in line” at the USPTO.  A provisional application is less expensive than a utility application, so proceeding with a provisional patent application is a way for the inventor to buy some time to further develop their technology and/or determine whether or not a market exists for their invention.  (Usually the inventor has to file a patent application within 1 year of the provisional patent application.  If they don’t do so, they lose their place in line and risk someone else will beat them to it.)

Falkowski notes that there are a lot of common pitfalls for the unwary lay person, when it comes to intellectual property rights in general and patents in particular.

Some examples include:

1. Magnitude of Innovation

This involves thinking that to be patented, an invention needs to be revolutionary like Edison’s light bulb or Gutenberg’s printing press.    In truth, most patents represent incremental advances in technology.

   2.  Patent Scope

The proper scope of a patent can only be determined by reviewing and analyzing the claims of the patent.  Many people unfamiliar with how patents work will focus on the drawings of the patent, or some text outside of the claims of the patent, and draw incorrect conclusions as to the scope of the patent.

   3.  Quality over Quantity

Just as one 10 acre plot of land can vary in value from another 10 acre plot of land, patents can vary widely in value.  It is often far better to hold one patent with broad claims covering a large product market that can survive challenges to invalidity than it is to hold numerous patents of relatively narrow scope that are more susceptible to invalidity challenges.  Large companies find it useful to play a numbers game and use the number of patents owned as a type of deterrence against allegations of patent infringement.  Smaller businesses cannot afford such an approach. Therefore, most small businesses would be best served focusing on relatively few opportunities for a truly valuable patent, than in diffusing their activities to generate a higher number of issued patents.

  4. Expiration of patent

A utility patent will expire prematurely if the required maintenance fee is not paid.  Maintenance fees are 3.5, 7.5, and 11.5 years after the issuance of a patent. Patent owners and their attorneys should both docket maintenance fee deadlines to prevent any problems.  The USPTO charges a late fee if maintenance fee payment is up to 6 months late.  Patents that lapse due to a missed maintenance fee payment can be reinstated under certain conditions with payment of an additional fee.

 5. Patent Infringement Claims

Patents don’t cover abstract ideas.  Patents are limited to products and/or processes with specifically identified attributes in the claims of the patent.  Patent infringement is a very specific analysis in which the claims of the patent are compared element by element to the attributes of a product or process.  The big challenge in patent law is definitiveness in the property boundary of the asset. If you purchase real estate, you can be reasonably certain as to the precise location of the property line. There may be a dispute measured in inches or maybe even feet, but the scope of dispute is generally limited.  In contrast, the scope of a patent is much more up in the air.  In many instances, the accused infringer of the patent will argue that the patent is invalid and thus there is no property right of any kind that can be infringed.

 6. Patent Litigation Costs

While the problem of defending against “frivolous” lawsuits is not unique to patents, the costs involved in patent litigation do  heighten the impact of the problem.  One person’s “patent troll” is another person’s “wronged inventor”, just as one person’s “frivolous” lawsuit is another person’s last chance at “justice”. One of Falkowski’s favorite examples of a frivolous suit is the case of God v. Reagan.

The cost of defending a patent lawsuit will depend on how close of a call the alleged infringement is, whether the validity of the patent can be successfully challenged, and how determined the plaintiff is.  In many instances, even large companies will pay a reasonable royalty fee without any litigation in exchange for a license to infringe the patent.  In other instances, the accused infringer may take a scorched earth policy and promise to appeal a case to the U.S. Supreme Court.  Generally speaking, patent litigation is on the more expensive end of the business litigation continuum.

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Chris Falkowski is former computer programmer whose legal practice focuses on technology-related legal issues.  He is a licensed patent attorney and a former chairperson of the IT Law Section for the State Bar of Michigan.  Mr. Falkowski works primarily with entrepreneurs, start-up businesses, and mid-sized technology companies.  For more information about Falkowski PLC, visit their website.

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Lori T. Williams is a 23 year attorney based in Birmingham, MI. She owns a legal referral and legal consulting business called Your Legal Resource, PLLC. She assists individuals and small businesses in need of legal advice or representation by connecting them with the right legal specialist for their situation. She also provides consulting services for attorneys and other professional service providers on how to generate more business through effective branding, marketing, networking, and by creating strategic partnerships. For more information, visit www.bestlegalresource.com.