Patents
A patent is an IP right granted by the federal government. The U.S. Patent and Trademark Office (USPTO) grants patents. The USPTO is an agency located in the Department of Commerce.
NOTE
The National Inventors Hall of Fame and Museum is located at the USPTO in Alexandria, Virginia.
FYI
Congress enacted the most recent version of U.S. patent law in the Patent Act of 1952.3 Congress has amended this law several times. The most recent amendment to U.S. patent law was in 2011. In 2011, the America Invents Act (AIA)4 introduced significant changes to U.S. patent law. Before March 2013, the United States followed a “first to invent” rule. This meant that the first person to invent something and show that it works could patent it. This rule had been in effect for more than 200 years.
The AIA drastically changed this rule. Starting in March 2013, the U.S. adopted a “first to file” system. This means that the first person to file for a patent has priority over all other people who have a similar idea. The change in the filing rules is meant to encourage inventors to patent their ideas sooner. It is intended to encourage innovation. It also aligns the United States with other countries, most of which follow “first to file” rules.
Patents are granted to encourage new and useful inventions. Patent owners have the right to keep others from making or using the patented invention. They also have the power to stop others from selling their invention. There are three basic types of patents:
NOTE
The USPTO granted 370,434 patents in 2019. Most of those patents were utility patents.5
- Utility patents
- Plant patents
- Design patents
Utility patents, which are issued for inventions and discoveries, are the most common type of patents. There are four main categories of utility patents:
- Machines
- Manufactured products
- Processes
- Compositions of matter
Improvements on any of the items in the previous list can also be patented. Utility patents are granted for a 20-year term that begins running on the date that the patent is granted.
Under patent law, a machine is an instrument or tool that completes a task by using moving parts. These parts interact with each other to accomplish a function. Machines are things such as lawnmowers, elevators, and automatic can openers. Devices that work because of an electrical process, such as computers, also fall into this category.
NOTE
A manufactured product is called an article of manufacture in patent law.
Manufactured products are products without moving parts. A milk carton is an example of a manufactured product. Although a manufactured product may have moving parts, the moving parts do not act together to accomplish a task. A folding table, even though it has moving parts, is a manufactured product. It is not a machine.
A process, also called a method, is a way of completing a task through a series of steps or actions. A process can be patented as a utility patent. A recipe might be patentable as a process, and some types of computer software may be patentable as processes as well.
A composition of matter is a chemical compound consisting of two or more substances combined to make something new. Manufacturers patent new drugs under this subcategory of utility patents. Naturally occurring chemical compounds are not patentable. For instance, the air is not patentable.
The second type of patent is plant patents. Plant patents are granted to an inventor who invents or discovers a new variety of plant. However, the inventor must prove that he or she can asexually reproduce the new plant. Asexual reproduction means that the plant is reproduced through cutting or grafting. Plants that grow from seeds do not reproduce asexually. Also, plants that are found in nature are not patentable. A plant patent can protect special kinds of hybridized plants or food crops. Plant patents, once granted, last for 20 years.
The last type of patent is design patents. Design patents are granted for new and original ornamental designs for manufactured objects. A design is apparent in appearance. They are used to protect the visual appearance of an object. For example, a design patent could protect the design for china or silverware. A design must be new and different from other designs to be patentable in this way. Design patents are granted for 14 years.
A design patent is different from a utility patent. Design patents protect only the appearance of an article, whereas a utility patent protects how the article works. Unless otherwise noted, this chapter discusses utility patents.
Patent Basics
Inventions or discoveries must be patentable in order to be protected. To be patentable, they must meet certain requirements. An inventor must meet all of the requirements in a patent application.
Patent Requirements
To be patentable, an invention or discovery must be:
- Novel
- Useful
- Non-obvious
To be patentable, an invention or discovery must be novel.6 This means that it must be a new invention or discovery. The USPTO will not issue a patent for an item that is not new. To be considered new, an invention must be different from the prior art, or public knowledge about an invention that existed before the date upon which a patent application is filed. An invention or discovery must include elements that make it different from the prior art. An invention or discovery that merely contains prior art is not new and is not patentable.
The USPTO also looks at whether the invention was used in the United States or other countries before the date of the patent application. It also reviews whether the invention was patented or published in other countries. If people know about the invention or discovery in other places, then it is not new.
NOTE
A different federal law governs plants that grow from seeds. The Plant Variety Protection Act of 1970 protects these types of plants.7
U.S. patent law does allow a limited exception to this general rule. It allows a 1-year grace period for inventions made available to the public,9 which means that an inventor must file for a patent within 1 year of announcing the invention to the public. In some cases, an inventor may want to announce an invention or discovery before applying for a patent. Inventors do this to see if there is commercial interest in the invention. An invention or discovery is still patentable in the United States if the inventor files a patent application within 1 year of announcing it. The USPTO will not consider a patent application if it is submitted more than 1 year after the invention is announced.
NOTE
In order to be patentable, the subject matter of an invention or discovery also must be patentable. The U.S. Supreme Court held in Diamond v. Chakrabarty (1980) that patentable subject matter is “anything under the sun that is made by man.”8 Some types of items are not patentable—including objects found in nature.
Taking advantage of the 1-year grace period can be risky for an inventor because another person might see the invention and build upon it. If that person files for a patent before the first inventor, then the first inventor might lose the ability to patent his or her invention. This is because, in the United States, the first person to file for a patent has priority over all patents that claim a similar invention. In this example, the second inventor’s patent application contains material that is considered prior art when the first inventor files his or her patent application later. The rules for determining priority in a patent application are very tricky, which is why many inventors hire attorneys to help them navigate the patent process.
NOTE
Under the laws of many countries, if an inventor announces or sells an invention to the public before it is patented, it automatically becomes not patentable. The United States modifies this very strict rule with a limited 1-year grace period.
The second patentability requirement is that an invention or discovery be useful.10 This requirement is also called utility. An inventor can meet this requirement by showing that the invention or discovery is beneficial to society. The inventor also must show that the invention actually works. The USPTO may reject patent applications that do not show that an invention or discovery is useful. It also can reject patent applications where the claimed usefulness seems implausible.
The final patentability requirement is that the invention or discovery must be non-obvious.11 This requirement is closely related to the “novelty” requirement. If an invention or discovery is not obvious, then it is patentable. Obvious inventions or discoveries are not patentable.
FYI
Judge Learned Hand was a U.S. federal court judge who served for the U.S. District Court for the Southern District of New York. He also served as a judge on the Second Circuit Court of Appeals. Courts and attorneys often quote his opinions on patent and copyright law. Judge Hand wrote very clearly on a complicated topic.
How Do You Protect Inventions Internationally?
In the United States, inventors register their patents with the USPTO. However, the USPTO patent rights apply only to the United States. They do not protect patents in foreign countries. If a person or business wishes to protect an invention in other countries, a foreign patent is needed.
Different countries have very different patent laws. Because countries have different patent laws, they enter into international treaties to try to put all inventors on an even playing field for protecting their inventions internationally.
The Paris Convention for the Protection of Industrial Property (1883) was the first treaty to try to address patents on an international level. This treaty is important because it fixes the filing date of patent applications to the date that the inventor first files a patent application in his or her home country.
The Paris Convention says that someone who files for a patent in his or her home country can use that filing date with other member nations to establish his or her patent’s priority in those nations. This protects an inventor’s “place in line” in other countries. This priority right is available for only 12 months after the very first patent application. If an inventor wants to protect an invention in other countries, he or she must file patent applications in those countries within 12 months of first filing for a patent in the home country. Inventors who do not file within 12 months lose their place in line for determining patent ownership.
The United States joined the Paris Convention in 1887. The Paris Convention establishes only the priority filing date. It does not confer other benefits to member nations. Inventors still must follow all the other provisions of patent laws in other countries to protect their inventions internationally. It can be a very long and expensive process to file multiple patent applications within 1 year. The Patent Cooperation Treaty of 1970 (PCT) attempts to streamline the application process. The World Intellectual Property Organization (WIPO), which is part of the United Nations, administers the PCT.
The PCT was created to make international protection of patents easier by allowing an inventor to file for patent protection simultaneously in several member countries. The PCT allows inventors to file one international patent application. Inventors submit the international patent application to their national patent office or to the WIPO in some situations. This application then has the same effect as filing for a patent in member countries. The filing date for the international application is fixed in priority as soon as the application is submitted.
Under the PCT process, an international patent application is subject to an international search. Examiners review the published documents in all member countries to see if there is any information that might affect the patentability of the invention. The search is very comprehensive.
The PCT gives other benefits as well. Under the PCT, inventors have up to 18 months after they submit their international patent applications to decide whether they will pursue patents in other countries that are PCT members. If they do, the patent process is shortened because other countries will rely on the results of the international search in conducting their review of the patent application. In addition, the inventor is guaranteed patent protection as of the date of the original international application. This is important because many foreign countries grant patent protection only to the first inventor who files for a patent application.
The United States joined the PCT in 1978. More than 150 countries have signed the treaty. You can read more at https://www.wipo.int/pct/en/.
Sometimes this requirement is hard to understand. Many inventions or discoveries seem obvious once they are publicly announced or offered for sale. People often say, “Why did I not think of that?” when they see these types of products. Courts have recognized that an invention that seems obvious after it is created may meet the non-obvious requirement. That is the nature of some types of inventions. Judge Learned Hand even said, “It certainly cannot be necessary to repeat the well-known principle that it is no indication of noninvention that the device should seem so obvious after it is discovered.”12
The USPTO looks at prior art and how an invention is used to determine if it is non-obvious. An invention is non-obvious if a person with ordinary skill in the kind of technology used in the invention would not have discovered or invented it. The invention also must be sufficiently different from the prior art. It is important to remember that the USPTO reviews these elements based on the date of the inventor’s patent application.
FIGURE 10-1 shows how the three patentability requirements work together.
FIGURE 10-1
Patentability requirements.
The Patent Application Process
An inventor must submit a patent application to the USPTO to patent an invention or discovery. Patent prosecution refers to the actions the USPTO must complete in order to grant a patent. In March 2020, it took the USPTO almost 23 months to prosecute a patent application.13 This is the period from submitting a patent application to receiving a decision on it.
A patent application contains the following basic parts:
- Specification—The written technical description of the invention. The specification also contains information about how to make and use the invention. The specification must include enough information that a person with ordinary skill in the relevant area could make the invention based on the specification.
- Drawings—The pictorial description of the invention. The drawings must completely describe the invention or discovery. They help the USPTO understand the invention or discovery.
- Oath—The inventor must sign an oath that he or she is the first inventor of the item described in the patent application.
- Filing fees—There are different filing fees based upon the type of patent. There are also additional fees for large patent applications, search fees, and examination fees.
A patent application specification must include at least one claim. A “claim” defines the part of the invention that is to be protected by the patent. A patent specification may have several different claims.
NOTE
USPTO employees are not allowed to apply for patents of their own. See U.S. Code, Vol. 35, sec. 4.
Once the USPTO receives a patent application, it reviews it to make sure that it meets the patentability requirements. Patent Office examiners conduct this review. An examiner is a USPTO employee with special skills. U.S. law requires patent examiners to have sufficient “legal knowledge and scientific ability” to conduct this review.14 After review, an examiner either rejects the application or issues a patent.
NOTE
The USPTO has a strong preference for patent applications to be electronically submitted. Applications that are submitted on paper require an additional processing fee.
An inventor must pay patent maintenance fees once the USPTO issues a patent. This keeps the patent in force. If an inventor does not maintain a patent, then other people can take advantage of it. Patent maintenance fees are due at 3.5, 7.5, and 11.5 years after the original patent issue date.
Infringement and Remedies
When an inventor receives a patent for an invention or discovery, he or she has the exclusive right to keep others from using that invention. The inventor is the only one who can make, sell, or use it. This protection begins when the patent is issued and lasts for as long as the patent is valid. The federal government does not enforce patents. Instead, inventors must enforce their own rights. They must sue people who violate their patent rights, as well as people who make, use, or sell the patented invention during the patent period. They also may sue a person who makes, uses, or sells a substantially similar product.
NOTE
A patent troll is a person who owns a patent but does not intend to make, use, or sell the invention. Instead, patent trolls enforce their patent rights and file lawsuits against alleged infringers. The term is not complimentary. It refers to a person who is overly aggressive and opportunistic.
A person who violates the IP rights of another is called an infringer. It does not matter if the infringer intended to violate the inventor’s patent. An inventor can hold an infringer liable for violating a patent even if the infringer acted unwittingly. This process, which is called strict liability, means that people can be held responsible for their actions even if they did not intend to cause harm.
If inventors want to sue for patent infringement, they must do so in federal court because patents are governed by federal law. Federal district courts have original jurisdiction for patent infringement cases.
Infringers have two basic defenses to an inventor’s claim of patent infringement:
- The patent is invalid.
- The patent is valid, but the alleged infringer did not violate the patent.
The first defense is that the inventor’s patent is invalid for some reason. For example, a patent is invalid if an invention was publicly announced or sold for more than 1 year before the patent application. The infringer would argue that the patent is not valid because the inventor violated the 1-year grace period rule. An infringer also could argue that a patent is invalid if the inventor violated certain federal laws. It could also be argued that a patent is not valid if the inventor misleads the USPTO during the patent application process.
Under patent law, an issued patent is presumed to be valid.15 This means infringers cannot merely assert that a patent is invalid to defend themselves in a lawsuit. Instead, they must prove that the patent is invalid for some reason. This is called the burden of proof. The infringer has the burden of proving that an issued patent is invalid.
The second defense is that an alleged infringer can argue that even if an inventor’s patent is valid, he or she did not violate it. The infringer can claim his or her products or inventions do not infringe upon the inventor’s patent. These cases can become very technical. Courts and jurors must review the technical specifications of products and patents to decide whether infringement occurred.
Remedies in an infringement case include injunctive relief and damages. Inventors want the court to issue an injunction that orders the infringer to stop violating the inventor’s patent. This type of order means that the infringer can no longer make, use, or sell a product that infringes on the inventor’s patent.
NOTE
In the United States, the general rule is that each party in litigation will pay its own attorney’s fees. In some cases, courts can order the losing party to pay the winning party’s attorney’s fees. Courts usually award attorney’s fees as a penalty for bad behavior or frivolous lawsuits.
NOTE
In some instances, treble damages can be awarded if a defendant intentionally used the plaintiff’s trademark.39
Inventors also are entitled to money damages in an infringement case. Damages compensate the inventor for profits that he or she may have lost because of the infringer’s actions. In some cases, an inventor may be entitled to treble damages if the infringer willfully violated the inventor’s patent.16 The inventor may also be entitled to recover his or her attorney’s fees in some cases.17
What Is the Difference Between Patents and Trade Secrets?
Patents are IP rights that are granted under federal law. They grant exclusive rights to an inventor of an item for a certain period of time. A patent owner has the right to keep others from making or using the patented invention. He or she also has the power to stop others from selling their invention.
A trade secret is similar. Trade secrets protect the formulas, processes, methods, and information that give a business a competitive edge. Trade secrets must have value to a person or business. Otherwise, there is no reason to protect it. A trade secret is a common law concept that has been codified under federal law and by many states.18 To establish a trade secret, the information that is to be protected must:
FYI
Trade secret law is considered a part of IP law. However, it sometimes does not receive as much attention as patent, trademark, or copyright issues. This is because patent, trademark, and copyright protection are based on federal registration and public disclosure. Trade secret protection is based on secrecy and confidentiality. The study of trade secrets is sometimes minimized because the process for protecting trade secrets is so different.
- Have value—The information must have economic value. This means that it is valuable to the business that protects it. It also means that it would be valuable to competitors of the business. This also considers the money, time, and resources that the business put into developing the information. The more valuable the information, the more likely that it is a trade secret.
- Be unknown—The information must not be known outside of the business. If other companies or people know about the information, then it is not a secret. Any public awareness of the information can end its protected status.
- Be unascertainable—The information must not be easy to duplicate or even reverse engineer. If little effort is needed to ascertain the information, then it is unlikely to be considered a trade secret.
- Be protected—The information must be protected. This means that the business must take steps to make sure that it does not become accessible or known to the public. To protect the information, a business should use confidentiality and nondisclosure contracts when they share the information with others. The more a business protects the information, the more likely it is a trade secret.
NOTE
Unlike patents, trade secrets are not registered. A person or business does not have to meet any registration or procedural formalities to protect his or her trade secrets.
Because they are kept secret, trade secrets can be protected for an unlimited time. To enforce their trade secrets, a person or business must take actions that protect them and keep them secret. For example, an Alabama Court of Appeals case dealt with the protection of trade secrets. In that case, documents that contained trade secret information were left in an unmarked box on the back seat of a company vehicle. The keys to the vehicle were not safeguarded. Many company employees potentially had access to the vehicle. In determining that the company did not take proper steps to protect its trade secrets, the Alabama Court of Appeals said, “We aren’t convinced that leaving allegedly confidential and sensitive documents in a cardboard box in a company vehicle for over one week . . . amounts to a reasonable step to ensure the secrecy of the information contained therein.”19
If a trade secret is stolen, then a person can pursue remedies allowed under the law against the thief. A person who violates a trade secret can be held responsible under civil and criminal law.