An assignment can be filed with a patent application to immediately convey control of the patent application to the assignee. This is frequently necessary where the inventor is an employee of a company that will be controlling the patent application. Only an inventor – a human – can be an applicant for a patent, not the company, so the inventor must be the initial applicant with a corresponding assignment conveying to the company thereafter. An assignment doesn’t need to be recorded with the USPTO to pass ownership of the patent application, but it must be on file to allow the company to control prosecution. The cleanest, simplest way of doing this is by drafting an assignment agreement, having the inventor and assignee-company sign it, notarizing it, and then recording it in the Patent Office at the time the application is filed.

I hear too many people saying, “I’ve got this great idea. If I could just get it patented, I’d make a million dollars.” A patent isn’t a ticket into a life of luxury. It doesn’t mean squat if you don’t use it. The first indication of this should be the sheer number of patents and the lack of a corresponding number of millionaires in America. If that isn’t enough, then this site should give you an idea that not every patent will spawn a trust fund.

A patent is what you make of it. It is the start of a long process involving manufacturing, marketing, selling, and struggling. Just as buying hammer at Home Depot doesn’t mean you’ll come home to a newly remodeled home, owning a patent doesn’t guarantee you any sort of success. It’s a tool whose effectiveness is realized by the skill and drive of the owner.

An invention must be of the appropriate subject matter to be eligible for a patent.  Appropriate subject matter includes, by statutory definition, a machine, article of manufacture, composition of matter, or process.  For most inventions, the determination regarding whether the invention is patent eligible is generally an easy one.  However, in some areas of technology, this questions becomes extremely difficult.

The Supreme Court is currently tackling a case whose core issue is the patentability of a process of applying a drug containing an active ingredient and subsequently measuring that ingredient’s levels in the patient.  Patentable subject matter is an issue the Supreme Court does not often take up, one reason simply being that it is a difficult issue.  Oral argument was yesterday, and Justice Breyer, at least, revealed some frustration around the issue (via Patently-O):

JUSTICE BREYER: Suppose I discover that if … someone takes aspirin … for a headache and, you know, I see an amazing thing: if you look at a person’s little finger, and you notice the color [indicates that] you need a little more, unless it’s a different color, you need a little less. Now, I’ve discovered a law of nature and I may have spent millions on that. And I can’t patent that law of nature, but I say: I didn’t; I said apply it. I said: Look at his little finger.

MR. SHAPIRO: Sure.

JUSTICE BREYER: Okay? Is that a good patent or isn’t it?

MR. SHAPIRO: No … Well, because you — you’ve added to a law of nature [to] just a simple observation of the man’s little finger.

Understanding patent claims is crucial when you are trying to understand what a patent is and what it can do for you as an inventor.  I recently read in Mechanics of Patent Claim Drafting by John Landis a great, easy-to-comprehend explanation: “A claim is a one-sentence definition of the structure of the defined invention.  It defines that invention with the same particularity and precision as the description of a parcel of land in a deed.  The analogy to the deed is a good one because United States [patent] claims serve to define the outer limits or boundaries of the invention in the same fashion as the description of land in a deed defines the outer limits of the land monopoly.”

I love the analogy to a piece of tangible property as a way for the layman to understand an intangible patent.  Landis ends the explanation with an adaptation of a line from Sperry v. Florida, which I love as well for its emphasis and implicit warning to inventors: “[T]here are very few if any chores in the area of legal draftsmanship that are as demanding of language as the chore of drafting a claim.”

After listening to a fascinating interview of double-amputee Scott Rigsby on IM Talk, I began thinking about the world of prosthetics and how it relates to my career in patents.  With nearly all medical devices, intellectual property protection can often be a divisive topic.  On the one hand, some argue that patents are necessary to create incentives to development of new products: research, design, and construction of new medical devices aren’t cheap.  On the other hand, some argue that patents limit access to new medical devices for those who can’t afford to pay the premiums through which medical companies recoup their costs and profit.  Scott noted that in the recent Hawaii Ironman Championships, he had to have $90,000 in equipment to compete.  One organization, The Open Prosthetics Project, is attempting to remove some of the expenditure obstacles  by encouraging open-source design of prosthetics.  It hosts a worthy site at which to spend some time and consideration.

When a patent application is filed with the United States Patent and Trademark Office, the applicant currently must sign a Declaration attesting to several things. First, that the applicant is the original and first inventor of the claimed subject matter. Second, that the applicant has reviewed and understands the contents of the application. Third, that the applicant acknowledges the duty to disclose all information material to patentability. This is known as the duty of candor and good faith toward the USPTO.

The duty of candor and good faith requires that certain individuals disclose to the USPTO any information that they know of which is material to patentability. Information that is considered material to patentability is not always easy to define. In a harsh perspective, if the information would affect the decision of the USPTO during examination or granting of the application, it is material to patentability. However, some courts hold that information is material only if the USPTO would not have issued a patent had the information been presented to the USPTO. Information found in patent searches is always disclosed. Failure to do so would certainly invite an inequitable conduct argument against a patentee trying to sue someone for infringement, which could lead to the patent being held invalid or unenforceable. Information which runs counter to an argument of patentability that the applicant makes is also considered material to patentability.

The duty of candor and good faith applies not just to applicants, but to anyone involved in the preparation and prosecution of the application. The duty begins with the submission of a patent application and continues as long as the application, or continuation-in-part applications, are pending before the USPTO. That means if the applicant becomes aware of new information during the prosecution of the patent application, he or she must disclose it if it is material to patentability.

There is no duty to disclose information which is not relevant or material to patentability. The duty to disclose is satisfied if all information known to be material to the patentability of any claim is cited by the USPTO or disclosed by the applicant or the applicant’s attorney.

I’ve already received many calls from clients about the American Invents Act.  For those who want an online reference, the USPTO has created a site that contains some very basic information about the changes it will bring.  Some of those changes, such as patent fees, went into effect yesterday.  Others will fall into place over the next 18 months.  The site does include a timeline that shows some major highlights in the coming year.

You may have heard that a patent reform bill was recently passed by Congress reforming the way our patent system runs.  If signed by the President, it will bring the largest changes to the patent system in over a hundred years.

Some of the changes:

First Inventor to File: The US currently uses a first-to-invent patent system.  That is, in the US, only the first person to invent a product can obtain a patent on it.  The rest of the world uses a first-to-file system, or more properly, a first-inventor-to-file system.  This bill brings the US in line with the rest of the world.  Now, a person who invents a product second can obtain a patent if he beats the first inventor to the patent office.  This poses some risk for independent inventors.  Large companies have divisions dedicated to patenting internal inventions.  By keeping everything in-house, they can develop an invention and file a patent on it very quickly.  In contrast, most independent inventors take time to file patent applications – they come up with an idea, think about it, develop it, look for a patent attorney, hire the patent attorney, discuss the invention with the patent attorney, and then hand over the disclosure to the patent attorney so that he can write the application and prepare it for filing.  The new law gives larger companies the upper hand.  That means inventors can’t sit on applications anymore – they will have to file quickly, or file provisional applications soon after conception of the invention.  But it doesn’t mean that someone can steal your invention and file a patent on it.  The law will require that the applicant be a true inventor, not a thief.  That is why it is called a first-inventor-to-file system.

Filing Fees: In addition to the already existing “Large” and “Small” entity statuses, the bill creates a “Micro” category, which will pay half the fees that a small entity pays, which are already half the fees that large entities pay.  This would mean, with today’s filing fees, micro entities would pay about $231 to file a non-provisional patent application.  Fees are expected to go up immediately for most inventors.  10 days after the law goes into effect, the government will charge a 15% surcharge on fees.  So if you are considering filing, file soon.

Prior Use Rights: In some situations, disclosing before filing can create some presumptive rights.  If someone accuses you of infringing their patent, and you can point to a disclosure made within one year before their patent application filing date.  But not all prior disclosures count, and some can waive your US and foreign rights.  Be careful and talk with an attorney.

Expedited Examination: If you don’t have some other basis for expediting examination, you can now request that your patent application be given priority with, essentially, a bribe.  An extra $4,800 governmental filing fee buys you into an accelerated examination track that could provide a final examination within 12 months, rather than the more typical 2-4 years.  It will have to be seen what effect this has on the backlog of non-prioritized applications.

Humans: No claims will be granted “directed to or encompassing a human organism.”  This language is bound to create a huge amount of litigation.

David Abrams and Dennis Crouch have published a comparative study on the switch from a first-to-invent system to a first-to-file system in Canada and applied the analysis to the potential change to the US patent system by the America Invents Act.  Read it here.  It posits that a reduction in patent activity by small inventors is likely.

Patently-O did a brief post yesterday on a selected group of patent applications to see how the applications have proceeded through the PTO.  Of the applications filed in February 2006, 57% have matured into a patent, 28% are abandoned, and 15% remain pending.  Five and a half years is a long time to work through the Patent Office, but it may be that a large majority of that 15% are in a cramped technology field, one in which the Patent Office has a disproportionately large backlog.