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What a Business Should Know About Patents

By J. Nevin Shaffer, Jr.

Every Business Has Intellectual Property

The first thing to keep in mind is that every person who is in business has at least three of the four types of intellectual property. They have words, symbols and slogans that they use to identify and distinguish their brand of stuff from their competitors’ stuff. These are their trademarks. They also have works of art and/or authorship in the form of advertising, original software and the like that is protected by copyrights and they have trade secrets such as customer lists.

Not Every Business Has A Patent (But More And More Do)

There is no requirement that your business have a patent in order to be successful in your business, but it sure helps. Twenty years ago eight out of ten patent infringement cases ended up in the court throwing out the patent. Since the establishment of the Court of Appeals for the Federal Circuit, the odds have reversed. The bottom line now is that a patent is a very powerful business tool. Think of maximum leverage.

What A Patent Is:

The Good News

The good news is that a patent gives its owner something less than a 20 year monopoly to stop other people from making, using, and/or selling the patented invention. The actual length of a patent depends upon how long the bureaucrats in Washington, and you, take to approve an application for a patent. That is, the time begins to run from the day you file the application. Typically it currently takes two to three years from the date of application to approval.

Additional Good News is that, in the United States, you still qualify for a patent even after offering it for sale or disclosing it publicly. So long as a year has not elapsed from the date of first sale or disclosure you can still file an application.

The Bad News

The bad news is that they just don’t give away patents. Everything that has ever been invented must pass three tests:

  • First, the invention must be useful. A lump of lead is useful as a paperweight so it is clear that this first test is a very low threshold test.

  • Second, the invention must be new. Essentially this test means that so long as the identical thing has not been done before it is new.

  • Third, an invention is patentable so long as it is a nonobvious improvement over pre-existing technology. This test is the kicker. The implementation of this test requires the creation of a hypothetical person. This hypothetical person is presumed to have ordinary skill in the “art” and to know every patent and publication in that art with which the invention is related. The problem that the invention has solved is presented to this person and if they can solve it the way you did it is an obvious, therefore not patentable, improvement. If they cannot, it is a nonobvious, therefore patentable, improvement. An obvious difficulty with this test is that everything is obvious when you know how. The paper clip is pretty obvious but it was patented. Patent attorneys, patent examiners, and you will spend most of their time struggling with issues of nonobviousness.

Two Options:

Do a Patent Search

One option for a person with an invention is to do a patent search. You can spend nothing on a patent search because the law does not require one before filing a patent application. On the other hand, you can spend the gross domestic product of the United States on a patent search. Even if you spent all the money in the world on a patent search, you would never know for sure that the invention is patentable because patent applications that are pending are confidential and may not be searched. Typically, a patent attorney and you will use a patent search as “go-no go” decision-making information. The thrust of the search is to attempt to determine if the exact thing has been done before (novelty) and if it is an obvious improvement on pre-existing technology or not (nonobviousness).

File a Patent Application

Another option is to file a patent application. As a practical matter, the patent examiner is the person who says yes or no, no matter how much you have or have not spent on patent searches. The issue here is cost. The number one question asked of patent attorneys is: How much does a patent application cost? This question, and its answer, is similar to asking: How much does a car cost? The answer is, it depends. It depends on the novelty, nonobviousness, complexity, time constraints, and business strategy of your business to name a few. Each situation is different. In general, a patent attorney will ask for more information about the invention not less. Once he or she is comfortable in their understanding of the invention they will give you an estimate of the cost of the application. While I have written a patent application in a weekend, it is best to give your patent attorney more time to draft the application, not less. A normal period of time is three to four weeks.

What a Business with an Invention Should Do

  1. Keep It Confidential
    Most inventors are paranoid. That is a good thing. In the knowledge/information age, ideas are the most valuable assets in the world. There are lots of people in the world these days with a lot of money but there are very few people with good ideas. The longer you keep your idea confidential the greater your options. Nonetheless most inventors have a need to consult with somebody, an engineer, a draft person, a (heaven forbid) venture capitalist, and you can so long as you first have a signed Nondisclosure/Confidentiality agreement.

  2. Know Your Market
    The most important thing an inventor can do after coming up with the invention is to aggressively determine the commercial viability of the invention. It is not enough to say: “The market is huge.” You should be able to tell your attorney all the “players” in this particular market and exactly what are the numbers concerning products or processes that attempt to solve the problem solved by your invention. The more accurately you understands the potential for the invention the better able you will be to evaluate the cost-benefit ratio of filing a patent application, for starters.

  3. Contact A Patent Attorney
    Actually this is tied with number 1. The sooner you get in contact with a competent patent attorney the better served you and your business will be.

© Copyright 2004 JNSJrPA. The material in this article is provided for general informational purposes only and should not be considered a legal opinion nor relied upon in lieu of specific legal advice. Accordingly, readers who require legal services in connection with their specific circumstances should consult an attorney competent in the field of intellectual property.

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