Patent Basics for Investors
By: Rackham H. Karlsson
In our work as patent counsel for clients ranging from solo inventors to large companies, we have found that many inventors have similar questions and concerns. Here, we provide information directed to some of those that tend to arise, particularly in the high tech and software fields. Understanding these concepts can help inventors become more comfortable with the patent process and avoid inadvertent forfeiture of patent rights.
- Media reporting exaggerates patent system abuses.
With headlines like “Apple Wants to Patent A Paper Bag,” media reporting on patents can make inventors reluctant to participate in a patent system that is often represented as frivolous and subject to abuse. What many – including some technology reporters – do not realize is that significant portions of a patent application merely provide context for the actual invention. Ultimately, the claims at the end of the patent application define the scope of the invention that the applicant actually seeks to patent, and those claims tend to be much narrower than the broad concepts discussed in the specification. In the case of Apple’s paper bag (U.S. Patent No. 10,259,616), the claims cover a particular construction of an environmentally friendly paper bag – not the broad concept of a paper bag itself. While abuses do occur, they are not nearly as common as sensationalist headlines might suggest.
- An invention doesn’t have to be earth-shattering to be patentable.
Many valuable patents represent incremental, but nonetheless patentable, improvements in prior technology. In general, the largest hurdles to patentability tend to be novelty and non-obviousness. A patent claim is “novel” if nobody has conceived of it before. The difference can be very small, as long as there is a difference. However, the patent office might still reject a novel patent claim as “obvious,” based on other information that was available at the time of the invention. For example, changing the type of material used in a product might be considered obvious, even if nobody has done it before, if the new material was a known substitute for the original material in similar products. Alternatively, changing the type of material might be considered non-obvious (and therefore patentable), if the substitution was innovative at the time. Inventors should know that what seems obvious to them in retrospect, having the benefit of already being familiar with the invention, might not have been legally obvious at the time of the invention. In addition, some variants of an invention might be considered obvious while others are not. A well-drafted patent application should include enough details and variants to provide fallback positions that are less likely to be considered obvious.
- Implementation is not a requirement for patentability.
To seek patent protection, it is not necessary to have actually implemented the invention before filing a patent application. In fact, it is often better to file a patent application prior to implementation, when there is less risk of public disclosure (more on that below). This is true even if there are no immediate plans to develop the invention into a product.
- The more information that inventors provide to patent counsel, the better.
While a patent is not intended to protect a specific implementation, it does need to describe the invention in sufficient detail that a “person skilled in the art” would be able to implement it. For that reason, it is very helpful for patent counsel to receive copies of whitepapers, flowcharts, architectural diagrams, hypothetical examples, simulations, models, test data, and other existing documents that describe the invention. In addition, while prior art searches are often not advised, inventors should be prepared to share their knowledge of the state of the art, including competitors, related research, and alternative approaches to the problem being solved. This information can help patent counsel both understand the invention and prepare a patent application at an appropriate level of detail. For that reason, it is better for inventors to err on the side of providing too much information than too little; patent counsel can always filter out information that they determine is too implementation-specific.
- Inventors should avoid making premature public disclosures.
In the United States, public disclosure of an invention starts the clock ticking for filing a patent application within a year. Many other countries are less forgiving and will not allow a patent on any invention that was publicly disclosed before filing the patent application. Obviously, bringing a product to market counts as a public disclosure. However, many other activities can also count as public disclosures. Written materials shared outside of the company (including whitepapers, press releases, grant proposals, and offers for sale), oral presentations, and product testing without a non-disclosure agreement can all qualify as public disclosures that forfeit international patent rights and initiate the one-year grace period for filing in the United States. Even a thesis paper sitting unread in a university library can be considered a public disclosure! Therefore, inventors should be aware of the importance of filing a patent application before sharing information about the invention with anybody outside the company who is not under an NDA.
- It takes a long time to get a patent.
Many inventors are unfamiliar with the patent process and wonder how long it will take. They should know that it typically takes more than a year for the patent office to issue a first “office action” (essentially an evaluation of the patent application), which is a rejection in most cases. From there, patent counsel works with the patent office to determine which aspects of the invention, if any, are patentable. On average, it takes more than two years from the filing date for a patent application to reach a final disposition of allowance or abandonment. The time to final disposition depends partly on the technical field of the invention, with some “art units” taking considerably longer than others. In addition, the USPTO offers pilot programs that can help expedite the process in some cases.
- Patent counsel does more than drafting the patent application.
Most patent applications are rejected in their initial state. Typically, the patent examiner submits that the patent claims are not allowable in view of one or more prior art references. For software patents, the examiner might also argue that the claims are directed to an ineligible “abstract idea.” Therefore, in addition to drafting the patent application, patent counsel is responsible for negotiating with the patent office. Those negotiations might involve arguing that the examiner misapplied the prior art and/or amending the claims to overcome the rejection. In the event of an impasse, patent counsel might appeal the case to the Patent Trial and Appeal Board. While time-consuming, this negotiation process increases the allowance rate substantially. (Patent counsel often also provides services other than patent prosecution, such as freedom-to-operate opinions, invalidity and non-infringement opinions, IP due diligence, and patent litigation.)
- Inventor involvement is usually limited after filing.
In addition to how long the patent process takes, inventors often wonder what their involvement will be after the application is filed. For corporate clients, patent counsel typically consults with the company to ensure that any claim amendments continue to align with the company’s products and strategic goals. While less common, patent counsel might also consult with the inventor, for example to help distinguish the invention from prior art cited by the patent examiner. However, many inventors are not involved in the patent process after the patent application is filed.
- Software inventions are often patentable.
Reports of software patents’ death have been greatly exaggerated. In January 2019, the USPTO issued new guidance on determining whether computer-implemented inventions are patent-eligible. The USPTO further clarified that guidance in October 2019. Meanwhile, although the courts have invalidated a number of software patents, they have also upheld others. This new guidance and case law provide a framework for patent prosecution strategies that increase the chances of allowance. Patent eligibility is also a developing area of law, with Congress working on legislation that is expected to further clarify the issue. For a software patent filed today, the legal landscape is likely to be even more concrete by the time it receives its first office action. Thus, the patent system remains a viable and promising path to protecting a broad range of software-based innovations, from the system layer all the way up to user interfaces.
- … and patents provide broader protection for software inventions than copyright.
Many inventors are unfamiliar with the difference between patents and copyrights. In the United States, source code enjoys protections under copyright law, regardless of whether the software is patented. However, a copyright does not prevent another company from coming up with a different implementation of the same concept. In contrast, a software patent typically includes claims that cover (a) a set of operations described at a relatively high functional level, (b) computer-readable media storing instructions for performing the operations, and (c) a computer system or apparatus that performs the operations. Therefore, the claims of a well-drafted software patent provide a scope of protection that is much broader than any specific set of source code.