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Should I get a patent or keep my invention secret?

Inventors and companies often ask if they should file for a patent or keep their invention secret and protect it as a trade secret.  The answer depends on the facts of each situation.

Patent protection is federally provided right that an individual or company files an application to obtain.  Patents give the patent holder certain quasi-monopoly rights in the invention, including the rights to keep others from making, selling, importing, or offering to sell the patented invention.  However, patents come with a cost both monetarily and in that patents only have a limited lifespan of 20 years.  Patents can be particularly important, for example, if a product is simple to reverse engineer, in technical fields in which there are low barriers to entry, or if it is not possible to keep the idea a “secret”.

In contrast to patent law, trade secret protection is generally protected by state law.  Under Idaho Code 48-801(5)Trade secrets can include any “information, including a formula, pattern, compilation, program, computer program, device, method, technique, or process that:

a)  Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

b)  Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Factors that courts generally consider in determining if information qualifies as a trade secret include:

  • The extent to which the information is known outside of the claimant’s business
  • The extent to which it is known by employees and others in the claimant’s business
  • The extent of measures taken by the claimant to keep the information secret
  • The value of the information to the claimant’s business and in the industry.
  • The amount of money and effort need to develop the information.
  • The difficulty a third party would face in independently developing the information.

Trade secrets are theoretically protectable indefinitely, however trade secret protection is very limited and difficult to prove.  Trade secret protection does not prevent third parties from reverse engineering the idea to determine the composition of the “secret”.  Trade secret protection only provides protection against misappropriation  of trade secrets, meaning only if a third party actual misappropriates the trade secret (meaning only if the third party steals the secret or obtains the trade secret knowing or having reason to know that the trade secret was misappropriated through improper means.  The Uniform Trade Secret Act (UTSA) has been enacted by numerous states (forty or more) including the state of Idaho.  Idaho’s trade secret act is located at Chapter 8 of Title 48 of Idaho Code, and can be found here.

 

Can I change the device 10% or 15% and not infringe a patent?

The short answer to this question is NO, patent infringement is not based on a percentage of how close to the original your device is.

Patent infringement is determined by comparing the claims of a patent to the accused devise.  If the device has all of the elements of the patent claim, it is deemed to be an infringing device.  If the accused device does not have all of the elements of the patent claim, it is likely not infringing.

There is one caveat to the above analysis, the doctrine of equivalents.  Patent infringement can either be literal infringement or infringement under the doctrine of equivalents.  Literal infringement occurs when a device literally infringes the claims of the patent, or in other words when the accused device literally has all of the elements of the asserted patent claim.  Infringement under the doctrine of equivalents occurs when any differences between the claimed invention and the accused product are insubstantial.  One way of showing infringement under the doctrine of equivalents is when the accused claim elements or limitations “perform substantially the same function in substantially the same way with substantially the same result as each claim limitation of the patented product.” (citation omitted).

Thus, the question of patent infringement is more detailed than “can I change 5%, 10%, 15%, 20%, 25% etc. of the patented product and not infringe?”  The question is does the accused device contain all elements and limitations found in the claims of the patent.

What is the purpose of a patent?

United States Patent law sets forth “whoever without authority makes, uses, offers to sell, or sells any patent invention, within the United States or imports into the United States any patent invention during the term of the patent therefor, infringes the patent.”  35 U.S.C. § 271.  Patents also give you the right to prevent others from selling a component of your invention

Determining if a patent infringes requires an analysis of the claims of the patent as applied to the accused device.  If the accused device has all of the elements found in any claim of the patent, the device infringes the patent.  This is called the “all elements” rule of patent infringement.  For example, if claim 1 of a patent claims elements A+B+C+D, if the accused device has elements A+B+C+D it infringes the patent.  Similarly, if the accused device has elements A+B+C+D+E+F it still infringes on the patent because it has elements A+B+C+D.

If someone is infringing on your patent you may be able to get an injunction, royalties for the sale of the device, damages for your losses due to the infringement, and/or enhanced damages and attorney fees (provided the infringement was willful).  Often a cease and desist letter suffices to halt the infringement, but in some cases the patent owner is forced to proceed to court action to stop the infringement and enforce their patent rights.

Owning a patent can be key to protecting your investment in your technology, particularly if your invention becomes successful.  Companies that you may want to license your invention too will often not even listen to your idea unless you are patent pending.  We highly recommend that you discuss obtaining a patent with a patent attorney (either a patent attorney at our firm or elsewhere) before you go forward with publicly using or selling your invention.

Patentability requirement – Nonobviousness

The term nonobviousness is a legal term of art in the patent world.  The question is would the invention have been obvious to  a person having ordinary skill in the art (a PHOSITA) at the time of invention.  While this appears to be a simple question, it requires a significant amount of analysis to determine if an invention is obvious or if it falls under the non-obvious category and thus suitable for being protected by a patent.  The Manual of Patent Examination and Procedure (commonly called the MPEP by patent practitioners) defines the obviousness bar as stating “A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.”  See MPEP 2141.

The framework for deciding what is, or is not, obvious was set forth by the United States Supreme Court in Graham v. John Deere Co., 383 U.S. 1, 148 USPQ 459 (1966).  In sum, the considerations set forth by the U.S. Supreme Court focus on if a PHOSITA faced with a problem would be led, in the ordinary course of proceeding to solve the problem, to the Applicant’s invention as claimed.  If the invention provides more than just a combination of known elements in a new form, it may be patentable.  If the invention provides a combination of known elements in a new form and provides unforeseen results, the invention may be patentable.  The non-obviousness requirement to obtain a patent is assessed on a case by case basis that can quickly lead to a very complex procedure.   If your invention as claimed receives an obviousness rejection, there are a variety of arguments that, depending on the rejection itself, can be used to overcome these rejections.  Additional evidence of nonobviousness, called “secondary considerations of nonobviousness,” can also be used to overcome a patent examiner’s obviousness rejection.

Each foreign country or entity has its own requirement akin to the nonobvious patent requirement set forth in the United States.  In Europe, a comparative term is the “inventive step” requirement, meaning did the inventor have to undergo an inventive step to reach the application.  Each of these individual countries has a different standard for determining what is patentable, and it may be easier in some countries to obtain a patent and more difficult in other countries to obtain a patent.

Our patent attorneys can assist you in overcoming an obvious to try patent rejection or to draft your patent application to try and avoid these patent rejections whether you or located in Boise, Idaho, elsewhere in the United States, or abroad.

Patentability Requirement– Novelty

One of the requirements for receiving a patent on an idea is that the idea must be novel, or new.  This requirement is found at 35 U.S.C. 102.  In general, the novelty patent requirement means that the idea as claimed in the claims of a patent application is not found in a single reference that pre-dates the date of filing of the patent application.  A reference is considered as “anticipating” an invention as claimed if the reference has all of the elements, either expressly or inherently, of the invention as claimed.  If the invention is novel, it has one or more elements or a combination of elements that is/are not found in a single prior art reference.

The Manual of Patent Examination and Procedure (or MPEP as it is commonly called by patent attorneys and practitioners) states that “[a] claim is anticipated only if each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.”  See MPEP 2131.  In order to overcome a novelty patent rejection, typically an inventor must show that each element found in his or her patent application claims is not found in the single reference cited by the patent examiner.

Typically a patent search performed by a patent attorney will provide you with an accurate  opinion on whether or not your invention is novel and the potential for obtaining a patent from any patent application you file.

 

Patentability requirements – Useful Requirement

In order to obtain a patent on an idea, that idea must be “useful.”   In other words, the idea must have some useful purpose.  The “useful” patent requirement is a low standard and typically easy to meet.  Typical exceptions to the useful requirement occur in perpetual motion machines, which do not serve a typical “useful” purpose and chemical compounds that have no known use.  Useful rejections are rarely encountered when filing a patent application.

When should I file for a patent?

If you have an idea that you view as worth protecting, you should file a patent application before you disclose the idea to any third parties.  In the United States, you have a 1 year grace period from the time you publicly use, disclose, or offer for sale your idea to file for a patent.  If you wait past that time, your idea is deemed to be in the public domain and you are barred from obtaining patent protection.  Many foreign countries do not offer any grace period and any public disclosure prevents you from obtaining a patent application.

The U.S. and most, if not all, foreign countries use a first to file patent system.  This means that the first person or company to file a patent applications gets the patent, regardless of who invented it first.  One exception is that if the inventor can prove that the earlier filer derived (or stole) the invention the subsequent filer is entitled to the patent.  The first to file system has placed an added importance on filing as soon as possible.

The purpose behind the patent system is that in exchange for you disclosing your idea to the public to further the arts and sciences, the law provides you with a 20 year pseudo-monopoly on your idea.  This gives you a 20 year exclusive right to sell your idea, use your idea, offer to sell your idea, to make your idea, and to import your idea.  After the 20 year period, your idea becomes a part of the public domain for anyone to use.  If your idea is already in the public domain, their is no incentive for the government to provide you with any exclusivity in the idea in exchange for your public disclosure of the idea.

Foreign Patent Protection

How do I get a patent in a foreign country?

In order to have patent protection in a foreign country, a person or company must have a patent in whatever entity or jurisdiction provides patent rights in that country.  This can mean having a patent in each individual country or obtaining a patent through a broader protection entity, such as the European Patent Office (or EPO).  There are several mechanisms to obtain a patent in a foreign country, the most common method for our United States clients is to file a U.S. patent application (either a provisional or non-provisional U.S. patent application) to obtain a priority date, and within a year file a PCT (patent cooperation treaty) application that designates potential future countries or entities in which the patent applicant intends or is considering seeking patent protection in.  Within 30 or 31 months (this time frame depends on the rules of the foreign country in which protection is sought) from the date of filing, the patent applicant must file separate patent applications in each individual country in which patent protection is sought.  This is typically considered filing a national phase entry application.  The stage of national phase entry is typically the most expensive phase as the patent applicant must hire patent attorneys or agents in each of the countries or associations in which protection is sought.  Alternatively, a patent applicant can file directly in individual countries and not file a PCT application.

The attorneys at Shaver & Swanson, LLP have filed for patent protection in a wide array of foreign countries, including Brazil, Canada, Mexico, Turkey, Australia, China, South Korea, Japan, and wide range of European countries including filing EPO patent applications for protection in the European Union (EU).  Our attorneys are adept at counseling on and obtaining foreign patent protection.

Utility Patent Protection

What qualifies for utility patent protection?

  • Section 101 of Title 35 of the United States Code states that “any new and useful process, machine, or composition of matter, or any new and useful improvement thereof” can be the subject of a patent. This can include new devices, new methods or processes, improvements in existing devices or methods, methods of doing business, software, new uses of existing technology, Internet methods of doing business, recipes, formulas and systems.
  • Section 100 of Title 35 of the United States Code defines the word “process” as meaning a process (leave it to Congress to define “a process” as “a process”), art or method, and includes a new use for a known invention.
  • Things which do not qualify for patent protection include: scientific principles, mathematical processes, mental steps, printed matter, naturally occurring articles, mere aggregations of unrelated parts (a pencil with an eraser at one end is considered such an aggregation), and “any invention or discovery which is useful solely in the utilization of special nuclear material or atomic energy in an atomic weapon.” (42 USC § 2181(a)).

An inventor can file for a provisional patent or a nonprovisional utility patent to protect his or her idea.

Provisional Patent Applications

What is a Provisional Patent Application?

  • The “provisional” patent application system was created after the GATT treaty was signed in 1995. A provisional application may be filed without claims, is not examined or even read by anyone at the Patent Office, and, as the “provisional” name implies, is temporary. A provisional patent application expires exactly one year after filing and unless you file a utility application before the end of that one year period, you may be found to have abandoned your invention to the public domain.
  • The three main reasons to file a provisional application are: (1) in an emergency situation where a filing date is needed to protect rights while a utility patent application is prepared (for instance, getting something on file the day before you show your invention at a trade show), (2) where the inventor needs to limit costs while trying to determine if the invention would be commercially profitable, and (3) where the invention is expected to have a long market life span (the provisional application could, theoretically, add an additional year to the term of the patent.
  • Because provisional applications are not examined, they can never mature into an issued patent. There is no such thing as a provisional patent.
  • It is important enough to bear repeating: a utility patent application must be written and filed based upon the provisional patent application within one year (the life span of the provisional application).
  • A provisional patent application cannot claim priority from another application, foreign or domestic.
  • While provisional patent applications were intended by Congress to make filing easier for inventors, these same applications often become a trap for unprepared inventors. The main traps are: (1) missing the one year date (when a provisional application is abandoned, it is gone forever), and (2) inadequate disclosure (if the disclosure is not clear and detailed, the resulting problems may completely void the application altogether). Provisional patent applications also draw out the patent prosecution process, making it longer until you have an issued patent in hand (your competitors can only “infringe” your patent after it issues).
  • Preparation and filing of a provisional patent application typically costs 1/3 to 2/3 of the cost of preparing and filing a utility application. Then within one year, the inventor must also pay to have a utility application prepared and filed based on the provisional application. This can result in increasing total patent costs at least 1/3 to 2/3 over only filing a non-provisional application in the first place. However, this additional year gives an inventor an lower cost option to be patent pending for a year thus allowing the inventor to gauge market interest on their invention or to seek investors.

 

Plant Patents

What is a plant patent?

  • A plant patent is a grant from the government of the right to exclude others from making, selling or using the claimed asexually reproduced plant for a period of twenty (20) years from the filing date of the application.
  • There are no maintenance fees for plant patents.

Design patents

What is a design patent?

  • A design patent is a grant from the government of the right to exclude others from making, selling or using the claimed ornamental design features of an invention for a period of fourteen (14) years.
  • There are no maintenance fees for design patents.

Utility Patents

What is a utility patent?

  • A utility patent is a grant from the government of the right to exclude others from making, selling, or using the claimed group of functional features of an invention for a period of 20 years from the date the patent application was filed.  Utility patents generally protect the way something works as opposed to the ornamental way an object looks.
  • The owner of a utility patent must pay maintenance fees throughout the life of the utility patent in order to keep the patent enforceable. The first maintenance fee must be paid after the third year and prior to the expiration of the 3-1/2 year period from the issuance of the patent. The second fee must be paid after the seventh year and prior to the expiration of the 7-1/2 year period from the issuance of the patent. The third fee must be paid after the eleventh year and prior to the 11-1/2 year period from the issuance of the patent. There is a six-month grace period for each of these payments, with a penalty imposed, of course.

What does “Patent Pending” or “Pat. Pend.” mean?

 

  • Patent pending means that the person or manufacturer is giving notice that some kind of patent application has been filed for some portion of the object on which the words appear.
  • It is illegal to mark a product or invention as patented if it has not been patented, or as patent pending if no patent application is on file with the Patent and Trademark Office.
  • Patent pending affords you no legal rights. However, most reputable businesses and people will not infringe upon an item which has a patent pending. They know in the long run that it is probably cheaper to either buy the rights from you or to wait to determine what patent rights will be awarded, if any. This de facto coverage can provide a significant competitive advantage for new products.
  • The patent pending period is one of the most marketable times for the rights to an invention. Manufacturers can utilize the period of patent pending to get a jump on their competitors. This is possible because the applications are held in secrecy. (However, in the future, the Patent Office may start publishing patent applications after they have been on file for 18 months). No one else can know what kind of patent you’ve applied for, or how broad the protection you will receive, if any at all.
  • By way of analogy, claiming patent pending is like posting no trespassing signs on a lot you are in the process of buying, but do not own yet. Most people will stay off the lot, but if someone does challenge you, you must wait until you own it before having legal grounds for excluding them. If the sale falls through, of course, you don’t have any right to exclude.

Overview of the Prosecution Phase of Getting a Patent

The non-provisional patent application is examined by an examiner at the Patent Office approximately one year after filing and typically all of the claims are rejected by the examiner.  We then have a chance to respond to his/her rejections, a task which is billed by the hour and is  typically $800.00-1,800.00, depending on how complex the response is.  Sometimes, a rebuttal of the initial rejection results in obtaining allowed claims.  Once the claims are allowed, about another $1,000.00 is required for the issue fee.  This happens about two years after filing the utility patent application.   More than one round of rejection and rebuttal are possible.  The examination of the application depends on the examiner we get, and how close the prior art is to your device.

Patent Searching

A person can do their own patent searching, by accessing two databases which are available to the public.  One is the google patents database, and the other is the USPTO patent database.

Types of Patents and Patent Applications

Once the inventor has made a decision to proceed with filing a patent application for his/her invention, the type of application must be considered.

  • Provisional Patent Application: A provisional patent application is less formal application which allows a person to become patent pending quickly and with less expense. Though a provisional application establishes a filing date which may then be used in the filing of the more formal application one year later, it does not, alone, mature into a patent. This type of application is merely a placeholder that expires after one year.
  • Non-Provisional Application: A non-provisional application is a more formal application which can be filed after a provisional application or in place of one. If the non-provisional is filed within one year of a provisional application for the same invention, the non-provisional application may claim the date of the earlier filing. A non-provisional application is a formal document which requires drawings, full disclosure and description of the invention, claims, and other formalities. Unlike a provisional application which simply acts as a placeholder, a non-provisional patent application is reviewed by an examiner at the United States Patent and Trademark Office (USPTO).
  • Design Patent Application: A design patent application is a specific type of non-provisional application that is available for design innovations of an existing invention. A provisional application is not an option for design patent applications.