Patent Tsunami Watch: The America Invents Act

Passage of the America Invents Act could trigger a tsunami of provisional patent applications.  Unfortunately, it will be Fortune 500® leviathans unleashing the flood rather than emerging tech-companies. 

Put bluntly, the first-to-file provision of the Act creates an opportunity for the leviathans to blanket the waterfront with provisional applications.  These applications will likely cover any idea that they currently have under development or that happens to be merely on their employees’ minds.  The alternative for these giants would be to run the risk that some upstart might obtain a patent adversely affecting their interests.  Since the last thing that these companies want is to flounder in the wake of an innovator, they are likely to blockade large areas of technology with provisional applications.  Then, while entrepreneurs are busy developing the technology, the leviathans will be monitoring developments and pursing regular applications with which to torpedo the entrepreneurs when the market matures.

How will such developments effect innovation?  Not well we fear.  The entrepreneurial community will have to find some way to navigate through these provisional applications and their progeny.  One way to fight back will be for entrepreneurs to file their own provisional applications as soon as doing so becomes commercially possible.  Then, as the idea matures, they can file more thorough non-provisional applications.  While good for the patent bar, the otherwise premature filings will draw resources from the entrepreneurs during the time when they need them for other activities.  Nonetheless, under the pending Act, filing provisional applications early might be the only way to avoid being sued for infringing an idea that you conceived first. 

The Villhard Patent Group has voiced our displeasure to Congress regarding the first-to-file provision.  We encourage emerging companies to do the same. 

For more information about patents and the patenting process please contact the Villhard Patent Group at (512) 897-0399 or see www.villhardpatents.com.

Planning For Success: IP Now!

The millions of dollars and man-years of effort required to pursue a patent infringement lawsuit usually makes taking such a course of action impracticable for entrepreneurs, start-ups, and even many mid-sized, flourishing companies.  But, some day, we all hope to succeed.  In some cases that means growing a company to a size where such tasks can be managed.  In other cases it means becoming an acquisition target for a corporate giant such as Microsoft (e.g., Skype). 

Should you succeed in growing your company in the future, the time is now to take steps to protect your intellectual property (IP).  For instance, you should review the measures you take to keep your trade secrets secret.  For trademarks and service marks that means applying for registration(s) as is appropriate and policing your competitors' use of marks that might be confused with yours.  For patentable ideas that means keeping the ideas secret for as long as is commercially feasible while, in parallel, filing appropriate patent applications.  You should also avoid making any offers for sale of products/service incorporating your idea(s) until you have at least a provisional applicaiton on file.  For copyrights as with other forms of IP, proper “marking” of related products, services, content, etc. with appropriate symbols (©, TM, SM, ®, “patent pending,” etc.) should be performed and periodically reviewed.  In this manner, when/if you reach the size where infringement suits become possible, today’s actions will enable appropriate legal actions – against your competitors.

Plus, part of the value in an acquisition for the acquiring company is usually the IP of the target.  Indeed, in many cases, big technology companies only want the target’s IP.  In any scenario, if the IP has not been properly protected, the company’s value can be greatly weakened.  Meaning, your buy out will trend lower than would otherwise be the case.

Because a blog article is too short to discuss all of the implications of this topic, we encourage you to seek a review of you IP related activities.  We at the Villhard Patent Group would be happy to discuss doing so at your convenience.  For more information see www.villhardpatents.com or call us at (512) 897-0399.

Hot on the Trail: Business Methods and Intellectual Property

THIS POSTING TO BE UPDATED IN LIGHT OF RECENT PATENT OFFICE AND LOWER COURT RULINGS REGARDING BUSINESS METHODS PATENT ELIGIBILITY

It breaks your heart watching friends forsake opportunities assuming that their brainchildren cannot be patented.  This happens more often than you might think even in tech-savvy Austin.  As one Internet-based entrepreneur said, “All we do is simply find information on the Web, put it together, and make a profit.  If that’s all it takes, everyone ought to be getting patents.”  Another Internet-based entrepreneur stated, “It’s hard to see how moving money around the Internet can be patentable.” 

The news has not yet apparently reached everyone that one year ago (in Bilski v. Kappos) the Supreme Court extended patent eligibility to business methods.

In response, many financial service companies charged to the Patent Office.  They actually began stampeding in 1998 following the State Street Bank decision.  In State Street, the Federal Circuit Court of Appeals decided that a hub-and-spoke network used for managing mutual funds was patentable.  As a result, Visa now has at least 170 published patent applications.  Bank of America has 381.  eBay has 399.  Clearly, many financial players think that business methods are patentable and worth patenting.

So it’s ironic that an entrepreneur can be hot on their business and technology development trails while letting their IP trail go cold.  Admittedly, simply finding information on the Web or just moving money around electronically alone probably won’t suffice for a patent.  But that misstates the patentability tests.  Briefly, patent eligible business methods which are also useful, new, and non-obvious can receive patent protection.  These questions usually distill down to how closely the method (simple or not) resembles pre-existing methods.  Moreover, if an entrepreneur invested their blood, sweat, and tears to build a system up from an idea, it seems that they might have created something more than simply surfing the Web or moving money around.  And, that “something” just might be patentable. 

For more information about patents and the patent process please see www.villhard patents.com.