A patent is a document that secures to an inventor the exclusive right to sell, make, or otherwise use his or her invention for a specified number of years. The document details the terms under which the government has granted the inventor full possession of the invention. These terms of possession or "intellectual property right" include specifications designed to exclude all others from making, using, or selling the invention in the United States for the life of the patent. The patent also provides rightful patentholders with specific legal steps that can be taken to stop (or be compensated for) instances in which others have infringed on the patent.
Patented inventions have spawned thousands of small businesses over the years. Not all of these businesses have succeeded, of course; some were predicated on new products or designs that were fundamentally flawed, while others faded because of operational problems, economic trends, or personal frailties. But countless successful entrepreneurs have launched their businesses on the strength of a single invention, and patents continue to stand as among the most valuable assets of thousands of small business owners across the nation.
TYPES OF PATENTS
Inventors may apply for patents on inventions in three major categories: utility patents, design patents, and plant patents.
UTILITY PATENTS Utility Patents are the most common kind of patents. They are granted to inventors who, according to the U.S. Patent and Trademark Office (PTO), invent or discover any new and useful process, machine, manufacture, or compositions of matter (mixtures of ingredients, chemical compounds), or any new and useful variations of existing products, processes, or compositions. The legal definition of "process" in this instance includes new industrial or technical methods. Utility patents are the most complex of the three kinds of patents, for they require the patent applicant to provide a full description of the invention's functional and/or structural features (often including detailed drawings) as well as the inventor's explanation of what he or she feels is "patentable." Inventors filing utility patents subsequently are more likely to secure legal help in making certain that all details of the patent are adequately addressed. In recent years, the greatest increase in this kind of patent application has been seen in Internet-related business methodologies and innovations. In fact, Entrepreneur reported that according to PTO figures, e-commerce and software-related business-method patent applications doubled from 1998 to 1999.
DESIGN PATENTS Inventors can also obtain patents on the appearance of a product, provided that it is a new and original design. As Richard C. Levy noted in his Inventor's Desktop Companion, "if you've invented any new, original, and ornamental designs for an article of manufacture, a design patent may be appropriate. A design patent protects only the appearance of an article and not its structure or utilitarian features." Thomas Field, author of the Small Business Administration's Avoiding Patent, Trademark and Copyright Problems, pointed out that both design patents and utility patents "do more than prevent copying; they forbid the making, using or selling of an invention similar to or the same as the protected invention, " even in situations where the second invention was independently created.
PLANT PATENTS This kind of patent is granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings. The PTO does not grant plant patents, however, for tuber-propagated plants or plants found in an uncultivated state. Asexually propagated plants, noted Levy, are those that are reproduced by means other than from seeds, such as rooting of cuttings, layering, budding, grafting, and inarching. Plant patents comprise only a small minority of the total number of patents that have been bestowed by the PTO.
Although millions of patents have been granted in the United States and other countries over the years, there are many things that are not eligible to receive patent protection. These include general business ideas and strategies, printed material, scientific theories, mathematical formulas, and obvious changes to existing items, although some of the above can be legally protected in other ways. Printed material, for instance, can be protected through copyrights.
FILING A PATENT
Patents are arranged according to a massive classification system encompassing more than 400 subject classes and 115, 000 subject subclasses. The Index to the U.S. Patent Classification System, an alphabetical subject listing of these various classes and subclasses, is produced by the PTO to aid searchers of the system. "The Classifications, " wrote Levy, "are to searching a patent what the card catalog is to looking for a library book. It is the only way to discover what exists in the field of prior art [prior patents]. The Classifications are a star to steer by, without which no meaningful patent search can be completed." The Index, coupled with the Official Gazette of the United States Patent and Trademark Office, the Manual of Classification, are among the most important tools available to patent searchers.
Another important cog in the PTO's efforts to disseminate information about patents to the public is the Patent and Trademark Depository Library (PTDL), a national network of academic, research, and public libraries. Many inventors are frequent users of often-extensive PTDL resources.
CONDUCTING A PATENT SEARCH Inventors, lawyers, and patent experts all advise inventors armed with a possible new product or design to undertake a comprehensive patent search before taking any other steps. "You cannot avoid doing a search, " Levy flatly stated. "The [Patent and Trademark Office] examiner will do one anyway and if your application is rejected based upon prior art (patents that have previously issued), you'll have lost the application cost not to mention the significant time and energy you invested."
Patent searches can be mounted in one of three ways. Some inventors choose to undertake the task themselves, often with the aid of patent software programs. But the majority choose to secure the services of a patent attorney or a professional patent search firm. Patent attorneys typically hire professional researchers to do the actual patent search; the turnaround time with lawyers who specialize in handling such searches is usually fast, but they are also expensive because of the mark-up charge that attorneys impose. Other options include inventor associations, university intellectual property departments, or patent search firms. Patent search companies can also be found in local yellow pages, but inventors need to be careful in making agreements with such firms. Some are perfectly legitimate, but others prey on unsuspecting inventors, saddling them with service contracts or other bad business arrangements. Given this reality, inventors should ask for references, evidence that the search firm has prior experience in the field in which their inventions are classified, and a signed letter of non-disclosure before agreeing to any arrangement with a search firm.
The cost of a search can vary substantially, depending on the nature of the search. As Levy remarked, "there are different charges for different assignments (for example, searching utility patents versus design patents). Electronic, chemical, biological, botanical, and medical searches are often more expensive. And, in most cases, there will be incidental charges for copies, phone and fax, online fees, and shipping and handling of your materials. This is all standard." Another fact that can influence the final cost is turnaround time. Some patent search services now offer same-day service, but at higher prices than their usual searches.
Once a patent search has been completed, the inventor can proceed accordingly. In instances where the invention is in the public domain (a patent on the invention has expired), the inventor is, according to Field, "free to manufacture and market it without concern for the patent laws. Also, even if the inventor didn't find exactly what he or she originally had in mind, a host of good and freely used ideas that are even better might have been discovered. These alone could be worth several times the price of the search in saving research and development time."
If the inventor finds that any part of his or her proposed product or design is covered by a current patent, then the inventor can either drop the idea or approach the patent holder about securing a license to use it. "Infringing on a current patent exposes one to a suit for damages as well as an injunction against future use, " warned Field. "Even an injunction might mean substantial costs, including the loss of current inventory, and a patent covering even a small feature of the new [product] might give rise to the need to retool. Although deliberate infringement is more serious, ignorance of others' patents is no defense."
If one or more elements of the proposed product or design appear to be new, with notable advantages over prior patents, then the inventor can submit a patent application. Inventors should be sure that they not let their enthusiasm get the better of them in such instances. If he or she begins selling the product or design without first filing an application for patent, then he or she forfeits any possibility of securing patent rights in the United States after one year. In addition, the inventor loses all possible protection in most other countries.
APPLYING FOR A PATENT
Most experts counsel inventors to retain patent counsel to handle utility patents (although they are permitted to make utility patent applications themselves if they so desire). Utility patent applications are complex documents with myriad requirements, and as Levy indicated, "smart inventors use experienced patent counsel to assure that they obtain the strongest patent protection available on their inventions. There is too much at stake. Smart inventors do not rely on patent-it-yourself books." Design patent applications, however, are far less complicated, so many inventors take care of those documents themselves.
PATENT ATTORNEYS Before making an arrangement with a patent attorney, savvy inventors take steps to ensure that they have found competent, responsible legal counsel. The first step is to make sure that the lawyer is registered with the Patent and Trademark Office. Attorneys listed with the PTO are required to have minimum academic and professional qualifications, and must pass a PTO examination.
Inventors should also make certain that their legal counsel is familiar with the field or industry in which the invention would be used. In addition, they should do their best to insure that their attorney has all relevant information needed to make the best possible patent application. Finally, experts counsel inventors to shop around to find the best combination of price and value, and they encourage them to secure written agreements on attorney fees.
PATENT DRAWINGS Patent experts advise inventors to secure the services of an experienced patent draftsmen when the time comes to make patent drawings. "The requirements for drawings are strictly enforced, " warned Levy. "Professional draftsmen will stand behind their work and guarantee revisions if requested by the PTO due to inconsistencies in the drawings…. Because the design patent is granted for the appearance of the article, the drawing in the design patent is more critical than the drawing in a utility patent. The design drawing is the disclosure of the claimed design, whereas the utility drawing is intended to provide only an exemplary illustration of some aspects of the mechanism described in the specification and claims."
PATENTS AND THE PTO It generally takes the Patent and Trademark Office a little over 18 months to process patent applications and issue approved patents. Examinations of patent applications, which are undertaken in the order in which they are received, are arduous exercises, encompassing inspection of legal compliance and comprehensive searches to ensure the invention's legitimacy.
If an application is approved, then the inventor can proceed with his business plan, whether that involved launching a small business or seeking buyers for the invention. Many applications, however, are rejected when they are first submitted. Even applications for genuinely new products or designs sometimes need changes to meet PTO requirements. In instances in which the application is rejected, the inventor has limited options. The inventor can prepare a response to the examiner's stated grounds for rejection, explaining why he or she believes that the examiner erred; this is a viable step, and one which sometimes convinces examiners to reconsider. The inventor can also offer amendments to the application designed to assuage the examiner's objections.
On many occasions, however, the examiner will remain unswayed and will reject the inventor's claims. If this happens, the inventor can lodge appeals with the PTO commissioner and, after that, the Board of Patent Appeals and Interferences. If the application is still deemed unacceptable, and the inventor remains determined to pursue the issue, he or she can then turn to the U.S. court system. The Court of Appeals for the Federal Circuit and the U.S. District Court for the District of Columbia have both heard such cases.
FEES Recipients of patents must pay fees to the PTO for services rendered when a patent is reviewed. In 1982 a law was passed that cut some of these fees (patent application, extension of time, revival, appeal, patent issues, statutory disclaimer, maintenance on patents) for "small entities." Small entities were held to include independent inventors, small businesses, and nonprofit organizations. In addition, all utility patents are subject to the payment of maintenance fees which must be paid to keep the patent going. These payments are made at several different points of the patent's life. Inventors need to heed this payment schedule closely, for nonpayment may result in the premature expiration of the patent (a six-month grace period is typically provided during which the fee can be paid, albeit with a surcharge). Inventors who secure the services of a patent attorney generally do not have to worry about this scenario as much, since a competent attorney will notify them of impending maintenance fee payments.
In recent years, the government's decision to re-tool the PTO so that it could operate without federal funding has triggered significant increases in PTO fees. In 1991 Congress dramatically raised patent application fees to cover the Office's operating costs, but by the mid-1990s this income was being redistributed to pay for other government programs or address the federal budget deficit. The PTO was subsequently forced to mull additional fee increases, which angered many members of the small business community who felt that such increases disproportionately impact individual inventors and entrepreneurs. However, one of the provisions of the American Inventors Protection Act of 1999 reduced certain patent fees.
U.S. PATENTS AND GATT The 1994 General Agreement on Tariffs and Trade (GATT) also brought significant changes to U.S. patent law. The biggest one changed the duration of patent protection. Prior to GATT, patents lasted for 17 years (14 years for design patents) from the date that the patent was granted. After GATT, patent terms were extended to 20 years from the date at which the patent application was first filed. This is a significant change, for as Levy noted, under the new arrangement, a competitor could conceivably file a long stream of fraudulent interference objections (claims that it had developed a similar product or design at the same time) in order to delay the issuance of a patent, "thereby reducing the patent's life when it does issue." Many observers fear that entrepreneurs and small businesses could be hurt by this arrangement.
GATT does provide some patent rules of potential advantage to small inventors. For example, it provides for the issuance of "provisional patent applications, " which in effect allows inventors to file a preliminary application that establishes the data of invention. The provisional application does not replace the regular PTO application, but it gives inventors additional time to prepare for that step. Other GATT rules changed import/export rules regarding intellectual property and expanded the number of scenarios under which interference proceedings could be launched.
AMERICAN INVENTORS PROTECTION ACT The most recent domestic legislation that has impacted the patent and invention process is the American Inventors Protection Act of 1999. This law contained many provisions of interest to inventors, including the following:
* Establishes the Patent and Trademark Office as an agency within the Department of Commerce.
* Reduced the risk of patent infringement lawsuits against various industries, most notably financial services companies, whose "methods of doing business" had been claimed as proprietary by patent holders.
* Requires invention promotion companies to provide complete disclosure of various aspects of their operational history, including their customers success in receiving net financial profit and license agreements as a direct result of the invention promotion services.
* Reduces fees for international patent applications and initial maintenance fees, and authorizes the PTO director to adjust trademark fees without regard to fluctuations in the Consumer Price Index.
* Extends the terms of patents to compensate for processing delays and delays in the prosecution of applications pending for more than three years. Provides minimum of 17-year patent term for diligent applicants.
* Provides for publication of patent applications 18 months after filing unless the applicant requests otherwise and certifies that the invention has not and will not be patented in another country.
FILING PATENTS IN THE U.S. AND ABROAD
Most experienced inventors and patent experts counsels inventors to file for a patent as soon as possible. In the United States you have to apply for a patent within one year of the time you first disclose the device or start selling it. At the conclusion of that year, a valid patent may not be obtained. Inventors should also note that a U.S. patent will not provide him or her with protection in other countries; patent applications need to be made in every country in which protection is desired. Moreover, in other countries, inventors have to apply for the patent before it is publicly disclosed.
Finally, the PTO notes that in most instances, American inventors seeking to secure a patent in another country must first get a license from the Commissioner of Patents and Trademarks. This requirement is waived, however, if the filing in the foreign country takes place more than six months after the U.S. filing took place.
There are two major international patent treaties that should be studied by inventors hoping to market their products abroad. The Paris Convention for the Protection of Industrial Property, which was signed by the United States and nearly 100 other nations, stipulates that each signing nation provide the same rights in patents and trademarks to citizens of other participating nations that it does to its own. The Patent Cooperation Treaty, meanwhile, is a patent agreement that includes more than 50 nations.