Cover Page

Contents

Cover

Title Page

Copyright

Preface: How this Book Came To Be and for Whom it is Written

Acknowledgments

Abbreviations

Chapter 1: The U.S. Patent System

1.1 WHAT IS A PATENT?

1.2 WHY SHOULD YOU FILE A PATENT?

Chapter 2: Origins of U.S. Patent Law

2.1 A BRIEF HISTORY OF PATENT LAW

2.2 THE FOUNTAINHEAD: THE CONSTITUTION AND THE U.S. PATENT SYSTEM

2.3 ARE PATENTS A MONOPOLY?

Chapter 3: How to Invent: Intellectual Aspects of Inventing*

3.1 ON THE DEFINITION OF CREATIVITY

3.2 A FLAW IN PATENT LAW

3.3 PATENTABLE CREATIVITY

3.4 INTELLECTUAL REQUIREMENTS OF INVENTING

3.5 THE PROCESS AND PRODUCT OF INVENTING

3.6 PIONEERING VERSUS MEDIOCRE INVENTIONS: THE TOUCH OF THE EXPERT

3.7 THE IMPORTANCE OF INDUSTRIAL EXPERIENCE

3.8 THE ULTIMATE GOAL: INNOVATION

Chapter 4: A Short Summary of Intellectual Property

4.1 PATENTS

4.2 TRADE SECRETS

4.3 COPYRIGHTS

4.4 TRADEMARKS AND SERVICEMARKS

4.5 OTHER TYPES OF INTELLECTUAL PROPERTY

Chapter 5: Requirements of Patentability

5.1 WHAT IS PATENTABLE?

5.2 PATENTABLE AND NONPATENTABLE SUBJECT MATTER

5.3 THE THREE CLASSES OF PATENTS

5.4 THE FIRST LAW OF INVENTING

5.5 THE SECOND LAW OF INVENTING

5.6 THE STRUCTURE OF THE PATENT DOCUMENT

Chapter 6: How Does the Patent Process Work?

6.1 THE NOTEBOOK

6.2 THE PROVISIONAL PATENT APPLICATION

6.3 THE (REGULAR OR NONPROVISIONAL) PATENT APPLICATION

6.4 PROSECUTION: CONVINCING THE PATENT EXAMINER

6.5 CONTINUATION, CONTINUATION-IN-PART, AND DIVISIONAL APPLICATIONS

6.6 ALLOWANCE AND ISSUANCE

6.7 LOSS OF PATENT RIGHTS

6.8 CHALLENGES AND CHANGES TO ISSUED PATENTS

6.9 SUMMARY OF CHAPTERS 5 AND 6

Chapter 7: Infringement and Freedom to Operate

7.1 THE PARABLE OF THE KNIFE

7.2 TYPES OF INFRINGEMENT

7.3 INFRINGEMENT SUITS

7.4 WHEN TO SUE AN INFRINGER

7.5 FREEDOM TO OPERATE

7.6 PRIOR COMMERCIAL USE RIGHTS

Chapter 8: Biotechnology, Computer Software, and Business Method Patents

8.1 BIOLOGY MEETS PATENTS

8.2 COMPUTER SOFTWARE PATENTS

8.3 BUSINESS METHOD PATENTS

Chapter 9: Who is the Inventor?

9.1 CONCEIVING AN INVENTIVE IDEA

9.2 JOINT INVENTORS

9.3 NAMING INVENTORS ON PATENT APPLICATIONS

9.4 QUALIFICATIONS TO BE AN INVENTOR

Chapter 10: Ownership

10.1 SELLING, LICENSING AND ASSIGNING PATENTS

10.2 HIRED-TO-INVENT AND SHOP RIGHTS

10.3 INVENTING ON YOUR OWN TIME

10.4 NON-COMPETE AGREEMENTS

10.5 THE BAYH–DOLE ACT

Chapter 11: Translating Ideas into Economic Reward

11.1 THE COSTS OF PATENTING

11.2 ASSESSMENT

11.3 SELLING AND LICENSING A PATENT

11.4 START-UPS, SPIN-OUTS, AND JOINT VENTURES

11.5 PATENTING AND MARKETING DEPARTMENTS; TECHNOLOGY TRANSFER OFFICES

11.6 PATENT VALUATION

Chapter 12: Foreign Patents

12.1 DISTINCTIVE FEATURES OF U.S. PATENT LAW

12.2 THE INTERNATIONAL PATENT COOPERATION TREATY

12.3 THE EUROPEAN PATENT UNION

12.4 OTHER FOREIGN PATENT PRACTICES

12.5 ENFORCING PATENTS ABROAD

12.6 CHOOSING WHETHER TO FILE A FOREIGN PATENT APPLICATION

Chapter 13: Innovation

13.1 INNOVATION IS MORE THAN INVENTION

13.2 WHAT DRIVES INNOVATION

13.3 THE LAW OF INNOVATION

13.4 COMPANIES AND INNOVATION

13.5 THE INNOVATION AND JOB CREATION RELATIONSHIP

13.6 DISCOVERY PUSH VERSUS MARKET PULL INNOVATION

13.7 INCREMENTAL VERSUS DISRUPTIVE INNOVATION

13.8 SOURCES OF INNOVATION

13.9 INNOVATION AND PUBLIC POLICY

Chapter 14: Concluding Thoughts

14.1 IS THE PATENT SYSTEM WORTH THE COSTS?

14.2 THE PATENT SYSTEM LEADS TO ADDITIONAL RESEARCH AND KNOWLEDGE CREATION

14.3 FOSTERING COMPETITION

14.4 RESULTS OF IGNORANCE OF THE PATENT SYSTEM

14.5 HOW LAW AND TECHNOLOGY YIELD PATENTS

Appendix 1: Important Forms

A. INVENTION DISCLOSURE FORM

B. MATERIAL TRANSFER AGREEMENT

C. EMPLOYMENT AGREEMENT

D. PATENT ASSIGNMENT AGREEMENT

E. NON-DISCLOSURE AGREEMENT

F. INFORMATION DISCLOSURE STATEMENT

G. INVENTOR'S OATH

H. PATENT LICENSE AGREEMENT

I. SPONSORED RESEARCH AGREEMENT

J. JOINT OWNERSHIP AGREEMENT

Appendix 2: Self-Assessment Questions

CHAPTER 1. THE U.S. PATENT SYSTEM

CHAPTER 2. ORIGINS OF U.S. PATENT LAW

CHAPTER 3. INTELLECTUAL ASPECTS OF INVENTING

CHAPTER 4. A SHORT SUMMARY OF INTELLECTUAL PROPERTY

CHAPTER 5. REQUIREMENTS FOR PATENTABILITY

CHAPTER 6. HOW DOES THE PATENT PROCESS WORK?

CHAPTER 7. INFRINGEMENT AND FREEDOM TO OPERATE

CHAPTER 8. BIOTECHNOLOGY, COMPUTER SOFTWARE AND BUSINESS METHODS PATENTS

CHAPTER 9. WHO IS THE INVENTOR?

CHAPTER 10. OWNERSHIP

CHAPTER 11. TRANSLATING IDEAS INTO ECONOMIC REWARD

CHAPTER 12. FOREIGN PATENTS

CHAPTER 13. INNOVATION

CHAPTER 14. CONCLUDING THOUGHTS

Glossary

Index

Title Page

PREFACE: HOW THIS BOOK CAME TO BE AND FOR WHOM IT IS WRITTEN

This book is mainly for graduate students in the sciences and engineering, but can be of use to educators, non-patent attorneys, and business people.

Joseph P. Kennedy.

I am an industrial scientist/researcher transplanted to academia (a re-tread we would say in Akron). After 13 years in the polymer and petrochemical industries I came to The University of Akron, where I have been teaching and doing research for the last 40 years. I decided to join academia not because I didn't make it in industry but because I wanted to do my thing my own way. I loved industrial research and was a little sad when I came to the conclusion that the time had come to change.

When I got to the university, I knew pretty well what kind of research I wanted to do but hadn't made up my mind about the courses I wanted to teach. Because it was easy for me I decided to give a course on “Cationic Polymerizations,” a field I knew and wanted to do research in. Thus, I created a course, and the students who took it seemed interested. I noticed that the most animated questioning always arose during the presentation of industry-oriented material.

This was an eye opener and led me to the idea of writing a course of things industrial for budding mission-directed scientists on the threshold of leaving our program and entering the industrial market. To justify my course, I had to know how many of our students actually went to industry, who exactly were our industry “clients,” and what our clients really wanted and needed. A little surveying revealed that, by far, most of our Ph.D. and M.S. graduates went to industry, and only a few went to government and academia.

The next questions were obvious: What are we doing for our clients? Are we producing the product they want? Or are we producing young professionals that we want, or we think they want? I remembered that when I, then a post-doc, sold my soul for better pay to industry and switched to an industrial research job, I hadn't the foggiest idea about my new job. I thought I would be doing polymer research and was very proud of the little knowledge I had. I learned awfully fast that the technical part was the easy part of my job. I learned rapidly that the cost of a material and not its molecular weight or melting point is its most important property; that patenting, marketing, accounting, sales, and so on, exist; and that people in these functions are just as important, if not more important, to the company as I, the bench chemist, was. I suddenly realized and still feel strongly that when the young graduate student in the sciences starts his career in industry he is overeducated in technical matters in his specialty and undereducated in other things that are just as important to his career. The young polymer scientist soon finds that his group leader is not much interested in his Ph.D. thesis or in elegant syntheses, but more in his ability to demonstrate how to make cheaply a faster-curing rubber, a better sticking glue, and so on.

It can be readily demonstrated that while fully two-thirds of students graduating with advanced degrees in chemistry go on to work in the private sector (most to the chemical industry), these youngsters are almost without exception badly prepared for what they are really to do. The young graduate is usually excellently qualified to carry out research; however, he has little understanding of the nontechnical—that is, business, legal, intellectual property, economic, and societal—aspects of his profession. It is here that graduate curricula are singularly lacking.

A Ph.D. degree should indicate that the holder is qualified to define and carry out an independent research project. It does not mean he is an expert in polymer chemistry, except perhaps in the narrow field of his thesis research. But the young polymer scientist is seldom hired for his expertise in his thesis area; the chance that he will work in this field in industry is remote. Few companies hire young Ph.D.s because they need such expertise, and even companies who do will expect the young professional to adapt and change when the project is terminated. Industry hires Ph.D.s not because they need specific expertise but because it surmises that Ph.D.s are the best academia has to offer.

Graduate departments are much too oriented to producing good research professors and too little oriented to producing good industrial professionals. It is my observation, and many of my friends in industry share my belief, that it takes two to five years after first joining a company for a young chemist to make a worthwhile contribution toward the objectives of his organization. The university must try to shorten this induction period, this incredibly high-risk investment. (To me research in an investment and not a cost.)

At present, career education in polymer science and chemistry consists mainly of advice, both formal and informal, on the part of the faculty. Faculty advice seems to run the spectrum from well-informed and open-minded to downright uninformed or biased. And career counseling has to be solicited by the students; the student has to feel the need for advice and take the initiative in seeking it. The student cannot get the best job in industry when he doesn't even know what to look for. Trying to find out about career requirements before a student gets a degree is too late. Faculty have an obligation to help the student not only with research but also by widening his horizons and broadening his interest. I felt the need to design a career-oriented course for graduate students in the sciences and engineering headed for industry. The student should not only be exposed to technical specialties but should be made aware of nontechnical career options of his chosen profession.

With these thoughts in mind, I wrote the course “The Professional Scientist and Engineer in Industry,” which I taught here at The University of Akron with gratifying response. The course is for graduate students or for undergraduate seniors with permission.

The course starts with a broad examination of research and development in the chemical, including polymer, industry. We examine the types of jobs available in the chemical and allied industries and we talk about the roles of support people. We ask: What are young inexperienced Ph.D.'s good for? What can they do? What are the chances that they will be doing the kind of research they were trained for?

The next area we tackle is the difference between academic and industrial jobs. And this is a meaty subject. One way of presenting this dichotomy is shown in Table P.1.

Table P.1 Job Differences Between Industry and Universities

Job Aspect Industry University
Continuity Low High
Flexibility High Low
Technical content during professional career Changes Constant
Job security Low, reflects environment High
Interfaces, contacts Various levels and disciplines Peers, usually in same discipline
Accountability High and constant Low
Public relations (personality) Important Less important
Progression Varied, sinusoidal Steady, linear
Knowledge requirement Broad, general Narrow, specialized
Direction To exploit knowledge To generate knowledge
Target To complete specific missions To generate knowledge
Communication, written Patents, reports, articles Journal publications
Communication, oral Peers, managers, support people Scientific peers, students

Then we discuss the raison d’être of industrial research and development: to create investment opportunities by inventing and innovating. In this manner, we reach our starting point for examination: intellectual property and the patent system from the vantage point of the professional scientist and engineer. To me, the fact that teaching the fundamentals of patents is ignored in the graduate curriculum is incomprehensible and simply indefensible. While almost all chemists and polymer scientists in industry are involved with potentially patentable work, American graduate students are underexposed to and unprepared for this all-important field. They are unaware of the importance of U.S. Patent Law and patent practices in shaping their daily industrial existence and future. A measure of understanding and appreciation of U.S. Patent Law by every graduate student in the sciences and engineering would be an asset, but ignorance of this law by an industrial employee is intolerable.

When we talk about this, I reminisce about my first in-flesh encounter with a patent lawyer. First, we didn't quite understand each other. After we started to communicate—sort of—I realized that I was at a terrible disadvantage and felt terribly ill at ease. This young patent lawyer, with his limited understanding of the chemistry of my case (the hydride migration polymerization of 3-methyl-1-butene to the first crystalline poly-alpha-olefin by cationic technique), proceeded to explain to me what I had really invented. He expressed dismay that I did not know when conception occurred and when reduction to practice took place, and he asked me why I hadn't been concerned with “utility.” He did say that I was “diligent,” but only later did I learn that this was not his way of approving my activities. I felt awfully deflated. I hope I can spare my students such ordeals.

I relate to the class another unpleasant episode that occurred at the start of my industrial career and could have been easily avoided had I known the elements of U.S. Patent Law. In my first job, my group leader told me to produce a polyacrylonitrile (PAN) fiber, which he had found could be made by a new catalyst. My job was to characterize this PAN. After considerable work I was able to show that the thermal properties of this PAN were somewhat better than those of “conventional” PAN. However, I was terribly disappointed to learn that my name would not appear on the patent as I was not an inventor. It would have been on a journal paper. I was particularly upset because without my contribution there could not have been a patent application. I thought that the patent attorney and my group leader's explanation having to do with “conception” and “reduction to practice” was unjust and that they were in cahoots against me. I thought I was duped and considered returning to academia among gentlemen. Again, I think I can spare my students from situations like this.

I am convinced that spending a few hours on patent matters is one of the best investments a graduate student in the sciences and engineering can make.

And thus, this book came about.

Wayne H. Watkins.

My career has focused on identifying, assessing, and commercializing innovations to achieve economic benefit and to improve overall quality of living. It has been a privilege to serve and associate with gifted scientists and engineers, business experts, capital providers, and community leaders who collectively have created technology, processes, and products that make your life and my life better.

Although he objects to my singling him out, my co-author, Dr. Joseph P. Kennedy, is the named inventor on more than 100 patents and well exemplifies creative genius and capacity to innovate. Researching, inventing, identifying quality ideas, assessing their commercial potential, and then developing and implementing plans for commercial development constitute the components of a most rewarding career. I am honored to be a participant in this remarkable process.

My interests in innovation were influenced by association with brilliant innovators including my father, Reynold K. Watkins, a civil engineering professor who was (and is at age 92 in 2012) always connecting his profession to the communities he serves. Dad would often share with his impressionable son the stories of his own innovations, as well as those of others that he championed. One inventor constantly approached Dad on new engine designs. Dad described his friend as an “irascible inventor,” a phrase I have thought of often as I have come to love and understand the passion and tenacity of inventors. Dad was instrumental in designing the original track master snow vehicle for the purpose of helping his Utah State University colleagues measure snowpack in the Rocky Mountains as they developed models for managing water resources in the arid west. At the request of LaDell Anderson, a university and professional basketball coach, Dad as a professor and “public servant” designed the adjustable height basketball hoop, based on a parallelogram configuration which is now found on driveways throughout America. Dad's payment for the invention services was a basketball hoop that I used as a youth. Dad, a geotechnical engineer, designed a soil bridge arch, using the concept of a keystone arch with the “keystone” consisting of a bin with compacted soil, thus allowing for long-span flexible culverts. I am grateful for such an upbringing.

I completed an engineering degree along with a law degree and an MBA degree. The result was a freshly minted graduate with little real-world savvy, but with enough understanding of the essential roles of science, business, and law in creating wealth and commercializing innovations.

I became the original administrator of a private innovation center spun out of the University of Utah. I supported relatively well-to-do individuals in managing their assets, including acquiring companies. I started a university research park and technology transfer program. I became a principal in several technology-focused enterprises. I have participated in creating model university-industry programs. I am a past president of the University Economic Development Association. I enjoy teaching intellectual property management. I am grateful for the opportunity to co-author this book with Dr. Joseph P. Kennedy, an innovator “par excellence”, and with Elyse Ball, a talented and gifted writer and a valued colleague.

Elyse N. Ball.

Less than a decade ago, I was a recent graduate of Ohio University's E.W. Scripps School of Journalism and had moved back home to find a job in my chosen field or any other field that would take me. In between periods of job hunting and wondering whether getting a degree in journalism was such a good idea after all, I attended the graduation party of a family friend, Tanner Watkins. Naturally, Tanner's father (and my current co-author) Wayne was at the party and, after I had explained my predicament, he told me there was an opening at the University of Akron Research Foundation.

Wayne has a habit of carrying around index cards in his jacket pocket, so that he can jot down notes on anything important that comes up. Over the course of writing this book, he has probably run through 100 notecards, keeping track of all the ideas that come out of our weekly book meetings. But on this occasion, Wayne put together an index card for me. On it, he had written about eight phrases, like “intellectual property management,” “technology licensing” and “joint venture.” He encouraged me to familiarize myself with these terms if I wanted to apply for the job at the Research Foundation.

I would love to say that I still have this card and that it is framed and hanging in my office. But I haven't seen it in years and assume that it was thrown out during some bout of bedroom cleaning when I found it in the bottom of my desk drawer or under a pile of sweaters in my closet. I think it probably wound up in one of those locations because I remember taking it home and hiding it. As a recent college graduate, I had no idea what to do when confronted with a half dozen phrases I didn't understand. In fact, if I hadn't known Wayne so well, I probably would have suspected this was some kind of cruel practical joke.

I did eventually get over my fear of those unfamiliar phrases. I dug the index card back out, Googled every phrase, interviewed for a job for which I was grossly underqualified, and was hired by the Research Foundation a month later. I learned more during my time at the Research Foundation than I have learned in any other job or in any number of years of schooling. I had the opportunity to work with dozens of brilliant professors seeking to commercialize their inventions and with equally brilliant lawyers, scientists, business people, and accountants who help these inventors in that quest. I've learned more than I ever thought I would about starting a company and the challenges these technology-based start-ups face. I also decided to attend law school and subsequently graduated from Boston University's School of Law. Last year, I returned to Akron to start my legal career.

The more I have learned about intellectual property law, the more I have come to understand its importance and enjoy being a part of the field. I think that many scientists, business people, and even lawyers view intellectual property law and patents as being about what someone can't do. You can't make, use, or sell a patented invention. And you can't print, copy, or distribute a copyrighted book. But more than anything, I have been drawn to intellectual property law because of what you can do. Hard-working university researchers can make money from the products of their research by patenting and then licensing their inventions. A small business owner can challenge established companies on the free market because they can prevent these industry giants from stealing their invention. And a region, like Akron, can create jobs by investing in the kind of activities that lead to patentable invention and by funneling these patents to companies that are poised to commercialize them. But I also understand that intellectual property law lacks any purpose without scientists and engineers to make the inventions that patent law so fiercely protects.

It has been a great honor to co-author this book, in part because I get to work with two people that I admire greatly and in part because it is incredibly important to help those who invent understand the legal aspects of protecting their inventions. My hope is that readers of this book will master the basics of patent law, gain an appreciation of the role that patents play in turning inventions into socially beneficial products, and learn at least half a dozen phrases that they can write on index cards to intimidate recent graduates. All of this is to say that most people, even future lawyers, at one point found patent law baffling and intimidating. After all, I still vividly remember hiding a list of patent-related terms in the bottom of a desk drawer.

JOSEPH P. KENNEDY
WAYNE H. WATKINS
ELYSE N. BALL

ACKNOWLEDGMENTS

This book is the result of Cynthia Rose's insistence and Ingrid Kennedy's nudging that their father and husband respectively, Dr. Joseph P. Kennedy, capture in writing the essence of his experiences teaching a graduate-level course on intellectual property for over 20 years. The course was designed to teach science and engineering students how to invent and how to protect an invention, as well as how to improve the human condition through science related inventing and patenting. Cynthia Rose also originated the concept for the cover of this book.

The authors are most grateful to the significant contributions of Susan E. Dollinger and Dr. Rex W. Watkins. Susan is a valued colleague at The University of Akron and has been instrumental is supporting Dr. Kennedy's innovation activities. She requested that Dr. Kennedy include his experience and perspective on inventing in the book, which you will find as Chapter 3. Rex, with his perspective as a recent Ph.D. student in biochemistry and now as a patent agent and soon to be patent attorney, provided important and appreciated comments and edits.

Others to whom the authors are indebted and most grateful for their assistance include Justin Ball, Aimee DeChambeau, Bernard Schneier, and Loreley Woody, who each reviewed and commented on various portions of the book. The authors also acknowledge Mark Murphy, whose original hand-drawn illustrations greatly add to this book.

Finally, the authors would like to thank their families for their love, support, encouragement, editing prowess, and willingness to put up with working weekends and late nights while this project was in progress.

J. P. K.
W. H. W.
E. N. B.

ABBREVIATIONS

CCPA Court of Customs and Patent Appeals
CAFC Court of Appeals of the Federal Circuit
CIP Continuation-in-Part
EPO European Patent Office
FDA Federal Drug Administration
he he or she
him him or her
himself himself or herself
NPR non-publication request
MPEP Manual of Patent Examining Procedures
NDA non-disclosure agreement
NSF National Science Foundation
PCT Patent Cooperation Treaty
PHOSITA Person having ordinary skill in the art
PRP Patent Rules of Practice
PTAB Patent Trial and Appeal Board
PTO U.S. Patent and Trademark Office
TRIPS Agreement on Trade Related Aspects of Intellectual Property Rights
U.S.C. 35 Title 35 of the U.S. Code, the Patent Law
WIPO World Intellectual Property Organization

CHAPTER 1

THE U.S. PATENT SYSTEM

1.1 WHAT IS A PATENT?

Let us start with the U.S. Patent Office's definition of a patent:

A patent for an invention is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office. Generally, the term of a new patent is 20 years from the date on which the application for the patent was filed in the United States. … U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions.

The right conferred by the patent grant is … the right to exclude others from making, using, offering for sale, or selling the invention in the United States or importing the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.

A patent is essentially a bargain or agreement, between the inventor and the government. The essence of the agreement is that the inventor discloses his secret (invention) to the public and the federal government authorizes him to stop others from exploiting the invention for a limited time. The rationale for this agreement is that scientific progress is promoted by providing a strong incentive to both invent and disclose one's invention. This is accomplished by the government's guarantee to the inventor (or his designated commercialization partners) of the right to limit others from making, using, or selling the invention for the life of the patent. The end result is that the inventor has a better chance to derive a profit from the invention. This is distinguished from an inventor having a guarantee that she will profit from the invention, a guarantee that is not provided by a patent.

This equivalence can be expressed by the equation

Unnumbered Display Equation

where P is patent protection, I is invention, D is public disclosure of the invention, and F represents fees to the government. A patent provides increased opportunity for its owner to receive a financial return from the invention by granting a right to limit others from exploiting the invention.

The patent system exists to encourage individuals to divulge secret ideas that will promote scientific progress. Unlike physical goods (tangible assets), ideas (intangible assets) can theoretically be reproduced an infinite number of times at no cost, which means that even if one person has the idea, all other people could conceivably have it as well. For example, if one person gives a dollar bill to another, the second person is one dollar richer, while the first is one dollar poorer. However, if one person gives an idea to another, the second person is one idea richer, but the first person is not any poorer.

Unlike ideas, physical possessions are limited by the material used and the human or machine effort needed to make the items. When one expends intellectual energy, physical hard work, or financial resources to obtain a physical possession, like a home or a flat screen TV, he alone is the owner of that item. He can exclude others from using his home or TV based on personal property laws. Intellectual property, such as an idea about an invention that can be made or a process for manufacturing, is similar in that one can limit (by law) another's use, but is dissimilar as it is not limited by physical material or equipment and labor to manufacture. If an inventor puts intellectual energy, hard work, and physical resources into developing a new idea, he has no means (aside from patent law) to prevent others from making his product or using his process, after it has been used or disclosed. Thus, the inventor's instinct is to protect his idea by hiding it from others. He will attempt to prevent others from knowing how he made the product or how his process works. In such a situation, secretively protecting one's invention is perfectly logical. However, if the product or process is kept secret, anyone who wants to make the same product or use the same process must develop it on his own. In some cases, this could be done through careful observation or reverse engineering. But regardless of the means of obtaining this knowledge, others must expend additional effort and energy to gain possession of knowledge that is already in existence.

Patent rights circumvent this wasteful process of inventing, keeping one's invention secret and forcing others to expend energy “inventing” something that has, in fact, already been invented. Patent law is just one form of intellectual property, along with copyright, trademark, and many others.

As stated by U.S. law, the goal of patents is purely utilitarian: having people share the secrets of their inventive ideas in exchange for the right to prevent others from copying or using their invention for a limited time. Put another way, patent law encourages inventors to divulge a secret in exchange for short-term “exclusivity” to use their invention. Of course, there are other results of patent law, such as financially rewarding inventive activity, giving inventors recognition for their accomplishments and giving inventors control over the product of their hard work. These considerations are secondary and are not explicitly recognized by the authorizing U.S. law for patents.

Patents and inventions should not be confused. For example, an inventor owns a patent for a product. When the inventor sells his invention, he is selling the physical product, not the idea behind it. When the inventor sells the patent, he sells the right to make the invention or to use his idea. The invention can be great; but if the patent is poorly written (constructed), it will be of little value. However, if a patent is broadly constructed, even a mediocre invention can become a valuable patent.

A patent is evidenced by a legal document, the issued letters patent, usually written by a patent attorney who by definition has both technical and legal training. The patent attorney is generally skilled in communicating technical matters in an appropriate manner to meet legal requirements and to ensure technical precision. The patent attorney, with the help of the inventor, translates the results of scientific and/or engineering research into legally enforceable property. The words of the patent adequately and precisely define the property rights claimed. At times, patent attorneys are accused of writing in legalese. Patent writing can be perceived by an inventor as being peculiar. Inventors and attorneys need to exercise extra care in ensuring effective communication. Communicating across multiple cultures and disciplines, such as law and science or business and science, can be a daunting task. Those who do it well increase their career potential.

Patents contain specifications that teach, along with claims that define that which is novel, useful, and unobvious and thus what one is prohibited from using without authorization. Specifications teach others how to make or use the invention, whereas claims prohibit them from making, using, or selling the invention. These words and concepts will be explained in greater detail in later chapters.

Physically, a patent is printed in an impressive document adorned by a gold seal, a red ribbon, and signatures and is given to the owner of the patent for safe keeping (Figure 1.1). Time will tell whether this document is worth millions of dollars and will revolutionize an industry, or a worthless sheet of paper collecting dust on a shelf.

Figure 1.1 The facsimile of a U.S. patent.

ch01fig001.eps

1.2 WHY SHOULD YOU FILE A PATENT?

A patent gives an inventor control over the use of his invention. The owner of the patent has the right to exclude others from profiting from the invention. In other words, the patent is a negative right, a right to stop others from making, selling, using, or importing a product or service that is based on the invention. In contrast, a positive right gives one the affirmative ability to take an action; for example, patent holders have the positive right to sue those that infringe their patents. It is important to understand that the granting of a patent does not give the patent holder the right to make, use, sell, or import the thing he invented, nor does it guarantee that the inventor is free and clear to do those things. A patent holder may be blocked from making products from his invention because the invention is based in part on another's patent (often referred to as a blocking or dominating patent) that she does not have authorization to make or use. In addition, a product may be limited by laws that prohibit the manufacture or use of such a product (certain weapons or illegal drugs) or by administrative regulations that may limit how an invention can be used, such as a new pharmaceutical that is limited in its uses by the Food and Drug Administration (FDA).

Although the patent confers only an exclusionary right, it can be a formidable weapon against an intruder (infringer) who invades the patent holder's domain. A patent gives the inventor the right to sue infringers, those who use the invention without the patent owner's permission. If the infringer is found to have made, used, or sold a product or service that is based on the patented invention, then she will likely have to pay the actual damages the patent owner has incurred to compensate the patent owner for lost value, and may be enjoined (prohibited) from using the invention. Thus a patent allows one to limit the use of an invention to those who are specifically authorized or licensed.

So why is it important to be able to stop others from making, using, selling, or importing an invention? Having the exclusive ability to engage in these activities means that the inventor can successfully limit those who would otherwise try to make money off of his invention and he can charge them for the right to use his invention. Provided that he is not blocked by other patents or regulations, an inventor can also refuse to share his patent rights with others, meaning that (for a short time) he is the only one that can sell products based on his invention. As discussed in Section 1.1, patents protect inventors who want to share their ideas with others by guaranteeing that inventors maintain ownership of the very ideas they want to share. Because a patent can be freely discussed with the public, patent holders have greater ability to promote their new inventions. Patent-holding inventors can advertise their inventions in trade publications, discuss how their inventions work with potential buyers and licensees, and transfer certain rights to use their inventions with a legally binding contract (i.e., the license agreement). Additional reasons to file a patent application may include discouraging competitors, getting royalty payments from those that make or sell your invention, escaping royalty payments by proving you actually own the invention, and for advertising purposes (such as the ability to use the phrase “patent pending”).

An additional purpose for pursuing a patent is to gain an understanding of a competitor's latest developments by encouraging the competitor to object to your patent application if they have developed the same. If multiple parties attempt to patent the same invention, the Patent and Trademark Office (PTO) might automatically initiate a “derivation proceeding” to see if one inventor stole the idea for the invention from another, which will bring out more details about the competitor's invention. Similarly, filing a patent infringement suit can force a competitor to disclose information about his technology.

CHAPTER 2

ORIGINS OF U.S. PATENT LAW

So from where did patents (from the Latin patere “to lay open”) originate, and how did the patent system come about?

The answer to these questions is both educational and brings our subject sharply into focus. In the final analysis, we come to the prosaic conclusion that the patent system came about mainly because of humanity's innate greed and laziness or, as some may say, “enlightened self-interest.” Greed has spawned many achievements in human history. Just think of the accidental discovery of America by Columbus, whose real purpose was to find a shorter, less expensive route than the long and dangerous Silk Road to bring expensive Indian spices to Europe. As this applies to patents, why would a person reveal a valuable secret or allow the copying of what she invented, if not for personal enrichment? Most persons expect substantial benefit to be willing to share a valuable intellectual possession with another person.

And in regard to laziness, most persons strive to discover new materials or new processes to increase their leisure time, avoid work, or improve their quality of life.

This is not to say that inventors are greedy or lazy. In fact, the personal enrichment that inventors attain through invention leads to great fulfillment. Many inventors conduct research to simply have fun, to satisfy natural curiosity, or to serve others, as well as to get paid for it. Inventions, ranging from farming equipment to new information technology, have greatly increased the efficiency with which we complete work, which means that inventors today have more leisure time than their predecessors. Notwithstanding, many inventors just spend their leisure time doing research and inventing.

2.1 A BRIEF HISTORY OF PATENT LAW

It is rather difficult to pinpoint exactly when and where the patent system originated. We may regard the exclusive rights granted by kings, rulers, municipalities, or guilds to individuals in exchange for their performing some arduous task as the precursor of the patent system. For example, a medieval prince who wanted to have a bridge built over a dangerous river crossing could have said to one of his barons: “If you build us a sturdy bridge across this river at this place, I will grant you the right to collect toll from those who want to use your bridge and I will prevent others from building competing bridges.” In this manner, the baron was satisfied that his bridge-building investment was protected and that he would have a steady stream of income at least as long as the prince was in power.

The first formal patent system may be traced to the medieval city-state of Venice, a powerful trading center during the Renaissance. Venetian patent laws allowed the government to destroy devices competing with those of the inventor, which is basically what happens today when a patent holder wins an infringement suit. In passing their patent law in 1474, the Venetian government declared that granting patent privileges to individuals for their inventions and manufactures would motivate others to emulate the holder of the patent right, leading to even more innovation. The recognition that patents encourage competition is the basis of all subsequent patent laws, and we are indeed much indebted to Venice for first codifying this fundamental insight.

The Venetian system spawned the concept of the modern patent. In 1624, the British Parliament passed a law called the “Statute of Monopolies,” which granted monopolies to inventors for 14 years. This was the first time the law placed a time limitation on protected monopolies.

From England, the patent system reached the United States. After independence but prior to the U.S. Constitution, most of the individual states had their own patent laws and practices. The Founding Fathers recognized the critical importance of protecting the rights of inventors and creative artists (collectively, the right to intellectual property) and gave Congress the Constitutional power to protect inventions and creative works.

2.2 THE FOUNTAINHEAD: THE CONSTITUTION AND THE U.S. PATENT SYSTEM

It all starts with the Constitution of the United States, one of the greatest documents in human history. In it, the Founding Fathers included three lines that became the foundation of U.S. patent law and helped to transform a newly formed, poor, agricultural country into the richest industrialized nation in the world. Clause 8 of Section 8 of Article 1 of the U.S. Constitution states:

Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to … Inventors the exclusive Right to their … Discoveries.

The Patent Act interprets the word “discovery” to mean what we now consider to be “invention.”

Thus, patents are the product of laws passed by Congress, and the overriding purpose of patents is to “promote the Progress of Science and useful Arts” and reward the inventor for this accomplishment. The public good takes precedence over the reward. In fact, the Patent Act's only stated purpose is to further science and the useful arts for the public good. This fundamental principle, which is the basis of the patent system, has not changed since the Constitution was ratified in 1790 and set the stage the modern patent.

Figure 2.1 The first U.S. patent.

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The first, relatively brief (only seven sections) U.S. patent law, titled “Act to Promote Progress of the Useful Arts,” was enacted by Congress in 1790 and signed by President George Washington. That same year, the first patent was issued to Samuel Hopkins for an improved process for making potash. This brief one-paragraph, hand-written patent was signed by President George Washington, Attorney General Edmund Randolph and Secretary of State Thomas Jefferson (see Figure 2.1). Jefferson, a prolific inventor who created a portable printing press and made substantial improvements to the plow, was responsible for the examination of the first U.S. patents. As the first U.S. patent examiner, he personally reviewed every patent application during the first three years of the Patent Office's existence. He employed university people, notably from the University of Pennsylvania, to help with the examination of applications.

Since 1790, the U.S. patent law has gone through many Darwinian evolutionary steps: In 1793, it was replaced by a new act, which was amended in 1800, then expanded in 1839, amended in 1861, and revised in 1874. In 1925, the Patent Office, originally part of the State Department, was transferred to the Department of Commerce. In 1952, the structure of contemporary patent law was established and codified substantially into its present form: Title 35 of the United States Code. While the 1952 act fundamentally restructured previous patent laws, remarkably, it left the original definition of patentable invention adopted in 1793 essentially unchanged. Since 1952, the Patent Law has undergone a large number of amendments, modifications, and refinements to strengthen the cornerstone of the system: protection for divulging a secret.