Eric Waltmire’s recently published “The Preservation Three Step: What Every Lawyer Should Know to Protect a Client’s Potentially Patentable Assets” in the DuPage County Bar Association’s October 2008 edition of its legal journal, The Brief. The article is now available here: http://www.dcbabrief.org/vol211008art4.html.
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The Preservation Three Step: What Every Lawyer Should Know to Protect a Client’s Potentially Patentable Assets
“For an idea that does not at first seem insane, there is no hope.”
—Albert Einstein
by Eric R. Waltmire
The Sinking Realization.
How many times have you said or heard someone say, “I thought of that before?” when seeing a product or service for the first time? Many individuals and businesses have lamented in the same way. Follow the three steps provided in this article to ensure your clients gain from their creativity rather than lamenting at lost opportunities.
Many of your clients have potentially patentable ideas, processes, or devices. It is important for you to identify their potentially patentable assets. It is also important to know what steps your clients should take to protect their right to seek a patent on such assets before the client makes a final determination whether those assets should be patented. This article provides (1) an overview of what types of ideas, processes, and devices are patentable and (2) the steps your client should take to preserve the right to patent a particular invention before the client makes a final determination on whether to, in fact, patent the invention.
Innovation Deserves Protection. Bill English, an employee of Xerox’s Palo Alto Research Center (PARC), invented the first computer ball mouse in the 1970s.1 Not only was the mouse invented at PARC, but scientists there developed “object-oriented programming, networked com-puters, pop-up menus, user-friendly word processing, the graphical user interface . . . and icons.”2 Most people do not think of Xerox as a computer company, but rather a copier company. This perception is due to Xerox’s decision not to seek a patent on the mouse and related computer technology. We think of the mouse as associated with Microsoft Windows, PCs, or Apple’s Macintosh user interface. This is because Steve Jobs, the CEO of Apple, saw a prototype of the mouse and the graphical user interface while visiting a Xerox facility.3 Meanwhile, the researchers at PARC could not convince the executives at Xerox that their innovation would be commercially successful, despite many demonstrations. Xerox failed to seek patent protection and allowed the technology to languish. They were too focused on their copier business. Jobs later hired some of those Palo Alto researchers away from Xerox to help build personal computers with many of the features he first saw at Xerox, including the computer mouse.
Steve jobs said, “Basically they [Xerox executives] were copier heads that just had no clue about a computer or what it could do,”4 Jobs continued, “so they just grabbed defeat from the greatest victory in the computer industry . . . Xerox could have owned the entire computer industry today.”5 Xerox didn’t fail to innovate—their scientists at PARC were one of the most innovative groups—but they failed to adequately protect and commercialize their innovation. Following the steps in this article will help your clients avoid grabbing defeat from the jaws of their greatest victory.
What is a Patent? Before discussing what things are patentable, it is important to know what a patent is. A patent is a grant from a government that provides an inventor the right to exclude others from making, selling, using, importing, or offering an invention for sale for a fixed period of time. 6 For all utility applications filed on or after June 8, 1995 in the United States, the patent term extends 20 years from the earliest effective patent application filing date.7 In order to maintain utility patent rights for the entire term, the patentee must pay maintenance fees at 3.5 years, 7.5 years, and 11.5 years from the date the patent issues.
What’s Patentable? The scope of the patentable subject matter is so broad that the Supreme Court stated that anything under the sun that is made by humans, except laws of nature, natural phenomena, abstract ideas, and humans are patentable.8 This article focuses on utility patents. However, there are two other types of patents, design patents and plant patents. A design patent covers new, original, and ornamental design for an article of manufacture. Plant patents are for one who invents or discovers and asexually reproduces any distinct and new variety of plant. Section 101 provides five categories of patentable subject matter relevant to utility patents: (1) processes (methods), (2) machines, (3) articles of manufacture, (4) compositions, (5) a new use of one of the first four.9 An applicant need not designate a category when filing a patent application as long as the invention falls within one of the categories.
Legal Requirements. This article is designed to provide you with the steps to preserve patent rights before a final determination on whether to seek a patent is made. An in-depth analysis of each patentability requirement is outside the scope of this article. However, I will briefly touch on the basic requirements.
There are at least four legal requirements for an invention to be patentable. The invention must be novel, non-obvious, useful, and classifiable within a statutory class of patentable inventions. First, on the novelty requirement, the invention must be new compared with prior art. Prior art includes (1) patents or printed publication anywhere in the world, or (2) public knowledge, public use, or sale of the invention in the United States. Consider whether the invention is different in any way from the prior art.10 Second, the invention must be “non-obvious” in view of the prior art when viewed from the standpoint of one skilled in the specific technology involved.11 The legal concept of “obviousness” in patent law is a highly litigated legal concept which may not be the same as a non-patent lawyer normally understands the term. Consider whether the invention is sufficiently different from the prior art when considered by a person having ordinary skill in the area of technology related to the invention. It is very difficult to predict what the United States Patent and Trademark Office (USPTO) will consider obvious due to the multifactor, fact intensive, inquiry required in an obviousness analysis.12 Even very small improvements may be patentable. You should consult with a patent attorney before determining that an invention is obvious. The third factor is whether the invention has utility.13 This is an easy requirement. Ask if the invention is useful for something other than landfill. If it is, then it has utility. The last factor is whether the invention falls within a statutory class, as mentioned above: a process (method), a machine, an article of manufacture, composition, or new use of any of the previous four.
The Preservation Three Step. If you think your client might have an idea that is patentable, you should advise the client to (1) keep the invention confidential, (2) document the invention and the events surrounding the invention’s conception and testing, and (3) diligently pursue the invention. You may find it useful to provide this information to all of your business clients, not just the ones that obviously engage in product or service development. Innovation is not the exclusive domain of any one type of business, but may originate from any person. Your client should take these steps before the client makes a final decision whether to apply for a patent.
1. Keep it Confidential. The inventor should avoid what I describe as “disclosure activities” before a patent application is filed. Disclosure activities include (1) disclosing the invention publicly,14 (2) disclosing the subject of the invention to a third party that is not under an obligation of confidentiality,15 (3) using the invention commercially or publically, even if the no one is aware of the public use,16 and (4) selling or offering the invention for sale.17 In some foreign countries, “publicly disclosing” can be as little as telling one person who is not under an express or implied agreement of confidentiality.
The reason to avoid disclosure activities is that these activities could forfeit an inventor’s right to obtain a patent under U.S. and foreign law. The U.S. has a one-year grace period that provides a patent application must be filed within one year after one undertakes a disclosure activity with respect to the subject matter of the invention.18 However, most foreign countries require “absolute novelty” and do not provide this one year grace period. If there is even a slight chance that patent protection is needed in foreign markets, the inventor and those associated with the invention must avoid disclosure activities until an application is filed. In either case, the safest route is to maintain confidentiality until an application is filed in the U.S. Filing a patent application in the U.S. is generally not considered a disclosure activity that violates the absolute novelty requirement of foreign countries. One can normally file a foreign patent application within a certain amount of time after filing in the U.S.
There are exceptions that may avoid the consequences of disclosure activities—such as an exception allowing use of an invention for testing purposes—but the exceptions are nuanced and outside the scope of this article. However, a client should not be paralyzed by the paranoia that someone might steal the invention. An unexploited invention has only commercial potential—like the computer innovations at the Xerox PARC facility—and those who delay pursuing that invention may lose out to a diligent inventor, like Apple. An inventor may make select disclosures to individuals who are under an obligation of confidentiality. Moreover, taking steps to document the invention as described in the next section will further preserve the inventor’s rights.
2.Document the Invention. It is important for your clients to document the facts of the invention and the events surrounding the invention’s conception: (1) to combat possible future claims by others that they invented your client’s invention independently first, (2) to prove your client invented the invention before the date of a particular prior art reference (patent or printed publication), (3) to provide proof if your client’s invention is stolen, and (4) to provide proof if there is a dispute over inventorship between co-inventors.19 While documenting an invention is not required before filing a patent application, the following provides a best practice for firmly securing patent rights as of the date of conception of the invention.
Lab Notebook. The best way to record the conception and development of the invention is to use an inventor’s lab notebook. These notebooks are designed for inventors. They are sturdy, each page is numbered, and the pages are permanently bound. The lab notebooks usually have lines at the bottom of each page for signatures and dates of the inventors and the witnesses. Lab notebooks are available at Fisher Scientific (www. fishersci.com).20 Alternatively, a standard bound notebook with pages that can’t be temporarily removed—no loose-leaf binders—will work in place of a lab notebook. When using a standard bound notebook, number all the pages consecutively before making entries in the notebook.
Notebook Information. The notebook is a diary of the inventor’s technical work. The inventors name, address and date the notebook was started should be written on the front of the notebook. The following information should be included in an entry: (1) title of the invention, (2) purpose of the invention/what problem does the invention solve (3) description of the invention’s structure and function, (4) informal drawings and/or photos with components labeled and referenced in the description, (5) new features of the invention, (6) any other close existing approaches or inventions known to the inventor or client, (7) advantages of the invention over the previous inventions/developments, (8) description of any tests performed on the invention, (9) results of any building or testing of a prototype, (10) conclusions.21 Refer to the original entry by invention title and page number when recording subsequent entries. Entries should be primarily factual, with conclusions provided only when supported by facts.
Honestly Sign and Date Each Entry. Each entry should be signed and dated. The idea is not to be sneaky in an attempt to be perfect, but rather to establish an authentic record related to the invention. If the inventor made entries days before he or she signed them, then the inventor should include a statement to that effect, for example, “I wrote the above on June 10, 2008, but forgot to sign and date it until now.”22 If the inventor conceived or built the invention already and the entry was not made contemporaneously with conception or building, the inventor should state the honest full facts and date the entry as the date the entry is written and signed by the inventor. For example, “I thought of the above invention on December 24, 2007 while fixing the door at my Aunt Mary Herzog’s house, but I didn’t write any description of it until today when my attorney advised me of a good procedure for documenting inventions.”
Witnesses. Witnesses should regularly sign notebook entries. Choose witnesses that are impartial and not relatives or people that the inventor worked closely with on the invention.23 The witness must have the capability of understanding the invention. The witness is not required to understand the theory behind the invention, although such an understanding is a plus. The witness should read and understand the material that he or she is witnessing in the notebook. The witness should not be in poor health because the point of a witness is, in part, to testify later, if needed, as to the facts that he or she witnessed. The following should appear above the witnesses’ signature and date, “The following undersigned, have witnessed, and agree not to disclose the above confidential information.”24 Obtaining two witnesses is preferred because it makes the inventor’s case stronger. Moreover, the inventor’s patent attorney should not be a witness because a patent attorney may not represent an inventor and also be a witness for the inventor.
Invention Disclosure Document. An invention disclosure document may be used as a somewhat less preferred method of recording an invention. A lab notebook with regular honest and comprehensive entries is preferred because it presents stronger evidence of the facts surrounding the invention, conception, and development of the invention. The invention disclosure document is a separate blank sheet of paper that is headed by the inventor’s name and address.25 It contains the same information as is contained in an inventor notebook entry, and concludes with the signatures and dates from the inventor and witnesses.
3. Be Diligent. As mentioned above, many times inventors are so afraid someone might steal their invention that they refuse to talk to anyone about it, including a patent attorney. However, an inventor that sits on an invention may lose out to another inventor that is diligent. This is codified at 35 U.S.C. 102(g), which provides: “In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to the conception by the other.”
Let me explain that section. The reduction to practice (RTP) can be an actual or constructive. Actual RTP is where the inventor creates a working proto-type of the invention. Constructive RTP is where the inventor files a patent application on the invention. Section 102(g) provides when two people file a patent applications on the same invention the patent will be awarded to the inventor who was first to reduce the invention to practice, unless the other inventor conceived of the invention first and was diligent in reducing the invention to practice.
Although an inventor may “win” the patent race by documenting actual RTP of the invention, filing a patent application is the best protection. This is because the USPTO knows the date an application is filed. Therefore proving the filing date of an application is simple. However, proving the date of actual RTP is more involved, less certain, and more costly. Also, if a first-to-invent dispute arises, the opposing side—like in litigation—may dispute the documentation showing actual RTP. The law rewards inventors and companies who diligently pursue their invention and diligently seek patent protection.
Moreover, even when an inventor diligently pursues her invention, if she delays filing a patent application and her invention is disclosed in certain prior art more than one year before she files, she may lose her patent rights nonetheless. Therefore, being diligent includes diligently filing a patent application.
Conclusion. Every attorney should know how to preserve patent rights for a client’s potentially patentable innovation. To do so, advise your client to (1) keep the invention confidential, (2) document the invention and the events surrounding the invention’s conception and testing, and (3) diligently pursue the invention. Guiding your client on this straightforward dance will ensure your client is not a wallflower while competitors are busy on the innovation economy dance floor.n
1 Mouse 40 years old, and it still lets you push it around, Pittsburg Post-Gazette, January 05, 2008, available at, http://www.post-gazette.com/pg/08005/846863-371.stm.
2 Morgan W. McCall Jr., Taking a Lead on Innovation: Five common mistakes that hinder innovation and how to avoid them, Harvard Management Update, http://discussionleader.hbsp.com/hmu/2008/02/taking-the-lead-on-innovation-1.php; also published in Strategy & Innovation Newsletter, 2 Harvard Business Publishing 2, March/April 2004, available at http://harvardbusinessonline.hbsp. harvard.edu/b02/en/common/tem_detail.jhtml;jsessionid=AY2KSSMSD GPQOAKRGWDR5VQBKE0YIISW?id =S04030&referral=2341.
3 John Markoff, Xerox vs. Apple: Standard ‘Dashboard’ Is at Issue, New York Times, Dec. 20, 1989, available at http://query.nytimes.com/gst/fullpage.html?res=950DEFDC103BF 933A15751C1A96F948260&sec=&spon= &pagewanted=all; Alex Soojung-Kim Pang, Mighty Mouse, Stanford Magazine, Mar./Apr. 2002, available at http://www. stanfordalumni.org/news/magazine/2002/marapr/features/mouse.html.
4 Leander Kahney, Inside Steve’s Brain, 194 (Portfolio Hardcover 2008).
5 “Triumph of The Nerds,” Transcript of Television Program, available at http://www.pbs.org/nerds/part3.html.
6 35 U.S.C. § 154 (2008).
7 Id. Design Patents have a 14 year term beginning from the date the patent issues.
8 Diamond v. Diehr, 450 U.S. 175 (1981).
9 35 U.S.C. § 101 (2008).
10 35 U.S.C. § 102; Manual of Patent Examining Procedure (MPEP) §§ 2131-2138.06 (2008) available at http://www. uspto.gov/web/offices/pac/mpep/index.html (last accessed: 07/27/2008).
11 35 US.C. § 103.
12 MPEP § 2141.
13 Id. at § 2107.
14 Id. at § 2131(I).
15 Id.
16 Id. at § 2133.03(a).
17 Id. at § 2133.03(b).
18 35 U.S.C. § 102(b).
19 David Pressman, Patent It Yourself, 46-47 (13th ed., Nolo 2008). I read this book after some of my clients mentioned it. It provides a good overview of the patent process along with practical tips.
20 Id. at 49.
21 Id. at 59.
22 Id. at 49.
23 Id. at 53.
24 Id. at 55.
25 Id. at 54.