Post Launch Patenting and the "Offer For Sale" Death Penalty

Often entrepreneurs launch their products or services before they’ve spoken with a Patent Attorney and then find out that they have blown the chance to obtain patent protection.  As we have bemoaned here repeatedly, the America Invents Act laid a nasty trap for the un-weary with the new “offer for sale” rule.  This rule imposes an instant death penalty on any patent application filed after an entrepreneur offers for sale a product/service incorporating an otherwise patentable idea. 

Indeed, any attempt to commercialize the idea might be enough to trigger this harsh rule.  Yes, the law does provide some exceptions such as that the inventor has to understand the idea well enough to be able to describe it well enough that those possessing “ordinary skill” in the technology would be able to reproduce the invention.  Also, there is room to argue that a “private sale” (e.g. one made under a non-disclosure agreement) will fail to trigger the rule.  Yet, many entrepreneurs run afoul of this rule anyway.

For instance, launching a web service and attempting to make money off that service represents one common and understandable strategy that could trigger the rule.  Yet, a careful analysis of the launch might salvage some patentable material.  In some cases, for a variety of reasons, entrepreneurs stagger their launches.  Some features might be delayed because of development delays.  Some features might be delayed for marketing considerations and so forth and so on.

In such situations, if the as-yet-unlaunched features remain un-commercialized, they might still be patentable.  Therefore, since it is often the case that some profitable features might be rolled out later than the core concept there might be enough life left in the product that attempting to patent it might make sense.

We at the Villhard Patent Group would welcome the opportunity to provide an initial review of your situation/launch.  For more information about us please visit us at www.villhardpatents.com or call us at 512-897-0399.  We look forward to speaking with you. 

Patent Reform Discussion with Senator John Cornyn in Austin, TX

Senator John Cornyn will be giving an update on patent reform on Tuesday October 7, 2014.  Capital Factory (701 Brazos Street, Suite 1601) will be hosting this event and here is a link to the Startup Week schedule. 

Please attend if possible and urge him to make the next round of changes more entrepreneur friendly.  More specifically, let's urge him to restore the one-year grace period that used to follow an offer for sale/attempt to commercialize an otherwise patentable idea.  For those who are unaware of this entrepreneur trap, currently in the U.S., an offer for sale immediately invalidates any subsequently filed patent application. 

The most common solution to this problem is to file a provisional application before making any offers for sale.  In addition, if you have time, examine your business plans and your R&D plans to determine when you will likely be ready to describe your idea well enough that someone of ordinary skill in the art/technology could make, use, operate, etc. your idea and when you expect to start making offers.  You should have your provisional on file before that date and/or have a non provisional application on file too (if possible).

We at the Villhard Patent Group would enjoy discussing your plans with you.  For more information about us, call (512) 897-0399 or visit us at www.villhardpatent.com. 

Enablement: Suggestions on Provisional Patent Application Content

Patent Attorneys do not usually participate in the drafting of a provisional application.  Their (and/or their firm’s) role is limited to preparing certain forms associated with the filing, handling the mechanics of the filing, and setting up a reminder system so that the conversion of the application (due one year from the provisional filing) is not overlooked.  For these services, the lawyer’s fees typically run $1000 (or more).  There is also a Patent Office fee of either  $65, $130, or $260 (as of this writing) due depending on circumstances. 

While the services listed above might seem trivial, the Patent Office filing system is the epitome of a user-unfriendly website and can have even an experienced filer pulling their hair out with frustration.  If the filer hits one of the many potential roadblocks and has to file a hard copy provisional, the Patent Office currently assesses an additional $400 (or $200) fee.  Thus, speaking frankly (and acknowledging that the following statement is somewhat self-serving), it might be well worth the money to have a Patent Lawyer handle the filing. 

So, what should entrepreneurs include in their provisional applications?  One key is to “enable” someone of ordinary skill in the art (i.e. technology) to make, use, operate, etc. the invention.  Thus, the content will vary with the invention.  If it’s a product, engineering drawings are helpful if available.  If it’s an electronic device, schematics are helpful.  And if it’s software related then block diagrams, flowcharts, etc. can be worth a thousand words.  On that note, a textual description of what the invention is, what it does, etc. can add valuable information.  And, pictures (if appropriate) are also worth a thousand words.  

While this article IS NOT LEGAL ADVISE and is in no way a suggestion that a lay person write their own non-provisional application, the author hopes that it has given you some pointers on what to include in your provisional application.

If you do feel a need for legal advice regarding your invention, we at the Villhard Patent Group would welcome a discussion of your situation.  You can obtain more information about us at www.villhardpatents.com or you can call us at 512-897-0399.  We look forward to hearing from you.

Top 10 Intellectual Property (IP) Mistakes Made by Entrepreneurs

By popular demand, we are posting a “Top 10” list of IP related mistakes made by entrepreneur/inventors.  Without further adieu, here it is:

10. Under appreciating the potential patentability of their idea(s) particularly in the e-commerce fields.

9. Using open source software in their (otherwise proprietary) software thereby potentially exposing that software to free use under the open source “copyleft” agreement.

8. Performing alpha and/or beta tests without using an NDA (non disclosure agreement) with the testers thereby making a public disclosure of the tested software.  Such public disclosures can trigger a 1-year grace period for the filing of a patent application (in the U.S.).  In many other countries, the disclosed idea immediately enters the public domain.

7. Naming people who work for other companies as inventors (when they are not) thereby allowing those companies potential access to the underlying IP.

6. Naming a person as an inventor who only helped implement an idea without contributing to its conception (the hallmark of inventorship).

5. Failing to have proper IP clauses in their third-party contracts thereby creating an opening for these parties to use the IP.

4. Launching a product/service without performing a trademark search first thereby risking trademark infringement and/or risking an expensive re-branding of the launched product.

3. Failing to have a well-written NDA in place before publically disclosing a potentially patentable idea.

2. Writing their own patent applications thereby (almost always) introducing numerous fatal flaws into these “pro se” patent applications.

1. Making an offer for sale of a product/service incorporating a potentially patentable idea without first filing a patent application.  This action can place that idea in the public domain in the U.S. immediately.

Of course, reasonable minds can differ as to the ordering of this list.  And, indeed, there are likely some mistakes not listed here. 

But, we at the Villhard Patent Group would welcome a discussion of these issues and how they might apply to your situation.  For more information about us, see www.villhardpatents or call us at 512-897-0399.  We look forward to speaking with you.

Redskins Trademark Cancelation: An Offensive Foul By the Trademark Office

The Trademark Office committed a personal foul by canceling the Redskins’ trademark registration.

Registrations are personal property due all of the constitutional safeguards enjoyed by any other property.  For instance, the government cannot “take” property without compensating the owner.  Yet, that is exactly what occurred here. 

If Pro Footballs’ appeal fails, rebranding this franchise will cost untold millions of dollars.  Worse yet, if there is any merit to the cancellation, is that everyone will be free to use “Redskins” to refer to their football teams, to place it on clothing, to place it on sporting goods, etc.  Indeed, without federal protection, the cancellation will likely cause the use of the term to explode (notwithstanding the presumptively still valid state-based trademark rights). 

Ostensibly, the Trademark Office canceled the registration because the term disparages Native Americans.  Interestingly, the Trademark Office received not a single complaint (but for the lawsuit leading to the cancelation) against this famous trademark. 

That using a term to refer to a football team would disparage anyone seems a bit odd.  Every team name that comes to mind seems chosen to borrow the prestige, respect, and/or adoration of the selected mascot.  For instance, “Texans” borrows from the loyalty paid to the state of Texas.  And “Astros” borrows the respect due America’s astronauts. 

Over the years the Redskins have won great success with five NFL Championships victories (two pre-merger, and three Super Bowls).  They also captured 13 NFL divisional titles and six NFL conference championships.  It seems that this use of Redskins, if anything, enhances the reputation of Native Americans. 

That the government would harm a business at the behest of apparent mob mentality (a.k.a. political correctness) should give business owners who could be attacked next cause for concern.   

We at the Villhard Patent Group would enjoy the opportunity to speak with you about your potential trademarks and other intellectual property issues.  You can find more information about us at www.villhardpatents.com or you can contact us at 512-897-0399.

Business Method Patents and Alice Bank: A Supreme Court Decision Clarifying Nothing

At long last, last week, the Supreme Court decided what was to be a landmark case Alice Bank v CLS (CLS) defining which business method patents can receive protection and which should not.  You can exhale now.  The decision clarified nothing and might well have made things worse.

The central issue in CLS was what types of business methods constitute “abstract” ideas and are therefore not eligible for protection.  Those of us who practice patent law were hoping for a definition of the term “Abstract” so that we could more reliably predict which business methods might merit a patent and which ones would not (other considerations aside).  Instead, the decision turned on whether the claims at issue were either “known” and/or “preempted” all uses of the claimed idea.

But, whether a claim preempts all use of an idea relates to the breadth of the claim.  U.S. law has never (until now) recognized breadth as a measure of a claim’s validity.  Moreover, according to long settled U.S. law, patent owners have the right to “exclude” others from practicing the claimed invention.  In other words, claims are supposed to allow patentees to preempt others from using that idea.  Yet the CLS decision flies in the face of this law.  Also, whether a claimed invention is “known” relates to novelty or newness.  But, novelty is already enshrined in other laws. 

Fortunately, the situation is not without hope.  Business methods are still theoretically patent eligible.  But, there is no clear cut test to use to sort the wheat from the chaff.  Without saying so, the Supreme Court seems to be applying a test like that that they use for determining whether a work is art or pornography: we know it when we see it.  In light of this ambiguity in the law, inventors and entrepreneurs would be wise to run their ideas by a Patent Attorney for evaluation before proceeding with an application.

We at the Villhard Patent Group would enjoy the opportunity to discuss your ideas with you.  For more information about us see www.villhardpatents.com or call us at 512-897-0399.  We look forward to hearing from you.

Death Panels and Patents

Reports of the death of the U.S. Patent System might be a bit exaggerated.  As some readers might be aware, the America Invents Act vested the Patent Trial and Appeal Board (PTAB) with authority to conduct post-patent-issuance validity proceedings.  In its early proceedings, the PTAB has invalidated patents at an astonishing rate of 76%.  Chief Judge Rader likened the PTAB to “death squads killing [patent] rights.”

The first word of caution for patent applicants is that, unfortunately, some patent practitioners do produce garbage.  I see these “bad” applications frequently.  Worse still, some Patent Examiners are asleep at the switch and allow these bad applications to issue.  The fatality rate might therefore reflect defendants taking a relatively inexpensive route to invalidate patents that desperately deserve euthenasia.  This strategy should be compared to paying “go away” money to appease the owners.  Moreover, invalidating bad patents would be a good thing for all (but the owners).  No statistics, though, are available yet to validate/disprove this theory.

So, what should entrepreneurs do?  First, a well-written application presents the best defense against invalidity no matter who hears the challenge (PTAB or not).  The days when making-do with second string patent drafters ought to be over.  Instead, the onus should be on innovators to hire well-qualified Patent Attorneys.  And many Patent Attorneys should up their game.

Furthermore, if this threat is actually as bad as it seems, then someone will challenge the PTAB.  But, that action will take years to wind its way through the appeal system.  That means that, in the meantime, entrepreneurs should continue filing patent applications when warranted.  In that way, when/if the challenge succeeds (or the PTAB comes around) smart entrepreneurs will be positioned to reap the benefits. 

We at the Villhard Patent Group would welcome the opportunity to discuss the specifics of your situation.  For more information about us see www.villhardpatents.com or call us at 512-897-0399.  We look forward to hearing from you.