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PD Informational Article

The Patent Process

© 2012, 2013 Patent Dominion Partnership L.P. 

I. Introduction

This article is a very brief, overview/summary of the “patent process” and focuses mainly on the US patent process.

II. What is a Patent?

A patent is a (federal) government grant of a “limited” monopoly to inventors. The government gives this grant in exchange for the inventor(s) disclosing and teaching their invention, and, thereby (presumably) stimulating innovation. The invention must be new (“novelty”) and useful. [Regarding novelty:The US allows for a 1 year period of use or disclosure by the applicant of its invention prior to filing of the patent application. The rest of the world does not have this grace period and apply what is called the “absolute novelty” standard.]

The patent grants the inventor(s) [(or their assignee(s)] the right to preclude others from making, using or selling their invention. The patent does not confer (on the inventor/assignee) the right to make, use or sell their invention. Why, because to make, use or sell the invention may require the infringement of one or more patents to underlying inventions which are used in the product along with the inventor’s ‘patented’ device.

It is “limited” in that the (patent) grant lasts for 20 years from the date of filing the application. This limit is the same in most countries. [Note: Until approx. 20 years ago, the US patent term was 17 years from the date of issue (the date the panted is granted). It was changed to be in compliance with the rest of the world and to prevent abuses like “submarine patents.”]

The majority of patents are granted for what are called “improvements” while the minority are pioneering inventions (e.g. Shockley’s transistor patent). If a US patent is obtained, it covers the entire US and may only be litigated, if that becomes necessary) in US federal courts.

The examination, granting and maintenance of US patents is the province of the United States Patent & Trademark Office, overseen by the US Department of Commerce.

III. Why Are Patents So Important To Small Inventors?

Very simply: they can be the only weapon an individual or small company has to protect itself against larger, well-funded companies that may copy, reverse engineer or otherwise infringe upon their patent rights. It may not be a perfect system, but it has worked reasonably well for several hundred years as the US growth in innovation and entrepreneurship has seen.

For most investors, a patent (or, at least, a pending patent application) is a pre-requisite for investing.

IV. The Patent Process

The following is a very brief summary of the patent process to acquaint the reader with the Patent Process used in the US.

A)  The Application

The Patent Application consists of several parts including:

  1. Abstract (a brief description of the invention);
  2. Summary (a brief summary of the claims);
  3. Drawings (a set of drawings [with numerically labeled elements] which help depict how the invention works;
  4. Specification (a written description of the invention including a Background and a detailed description of the invention and how it works [which references by numeral the elements in the drawings]; and
  5. Claims (what the applicant is claiming as the invention and what, if a patent is granted will be construed as the applicants patent grant). Claims are the most important part of the application because they determine the scope of the applicant’s invention if allowed and they will be examined thoroughly by the patent examiner against the “prior art” for novelty

B) Searches & Clearances

A search refers to the process whereby the Applicant (and/or its agent) reviews the ‘prior art’ before filing the patent application for novelty and to determine whether or not to file and/or the scope of its ‘claims. The prior art includes patents, published patents, journals or anything else written, products in the market, etc. In plainer words, anything that is out in the public domain at the time of filing is ‘prior art”.

Searches are complicated and can be very expensive. They are never really complete for cost and other factors. Nevertheless, they can prove very helpful in deciding whether or not to file an application and the scope of the claims, if filed.  The Applicant is not required to do a search in order to file. The patent law requires only that the Applicant and its agent disclose whatever prior art they know of.

A clearance refers to a process many companies use before releasing a new product. A clearance is a review of the claims of relevant, issued, unexpired patents to determine if the new product may infringe any such patents.

The clearance focuses on the claims of these unexpired patents and published pending patent applications whereas a search focuses on what is taught. Stated another way: the focus of searching is “novelty” and the focus of clearances is “infringement.”

C) Filing

When the patent application is ready, it is filed with the Patent Office along with any required forms and fees. Generally, the patent application is first filed in the country where the invention was made (e.g. usually the country where the inventors reside). When received by the patent Office, the application is assigned a serial number and filing date.

D) Prosecution

Prosecution refers to what happens once the assigned Patent Examiner reviews and issues his/her report (“Office Action”). Office actions will specify both ssues of form and of substance. Issues of form refer to missing pieces, improperly prepared documents, etc. Issues of substance refer to the merits of the claims. Most patent application claims are rejected in the first office action. The Applicant must respond to all Office actions and these can be very time–consuming to review and prepare.

At the end of the prosecution phase, the application is either issued as a patent, abandoned or something other. Other includes such things as an appeal, filing of an amended application, etc.

On average, the first office action is not done/sent by the USPTO for 3 years (+ or -) from the filing date. Subsequent response and office actions usually go much quicker. The patent application is held in confidence by the Patent Office until it is “Published For Opposition” or issued as a patent.

E) Publication

Publication occurs near the end of the first year after filing. The reason for publication is to allow third parties to review it and submit responses on patentability. When an application is published, it becomes part of the “prior art”.

Note: If an applicant stipulates in the application not to file outside of the United States, “Publication” will not happen.

F) Maintenance

Virtually all countries require the payment of maintenance fees to keep an issued patent alive through its full term. In the US, maintenance fees must be paid in the 4th, 8th and 12th years after the patent is issued. These are graduated fees (they get more expensive in subsequent years).

G) Small Company Status

The US gives individuals and small companies a discount (usually 50%) on many fees if they qualify for “small company” status.

H) Extra-US Applications

Prior to the end of the 1st year after a patent application is filed in the USPTO, the applicant must take some action if it wants to file outside the US. This is fasr too complicated a subject for this article except to say that extra-US filings are complicated, take a long time and are extremely expensive. Even the largest companies rarely file their applications in more than a handful of other countries.