Failure to properly mark a product with its patent number limits an infringer’s liability for damages. Infringers have the burden of production to initially identify products which the patentee failed to mark. The patentee then has the burden of proof to show that the unmarked products are not covered by the patent.
In Arctic Cat Inc. v. Bombardier Recreational Products Inc. (BRP) (Fed. Cir. 2017), the Federal Circuit sorted the respective burdens of the alleged infringer and the patent owner when the alleged infringer tries to limit damages based on the patent marking statute. In particular, “an alleged infringer who challenges the patentee’s compliance with §287 bears an initial burden of production to articulate the products it believes are unmarked ‘patented articles’ subject to 35 USC §287. … Once the alleged infringer meets its burden of production, however, the patentee bears the burden to prove the products identified do not practice the patented invention.”
Patent marking: General Background Information
Before moving the particular facts of the case and the ramifications of the case, here is general background information on patent marking.
Patent marking as codified in §287 provides a means by which a patent owner can constructively give notice to the public of its patent so that infringers are liable for damages regardless of whether the infringer actually knew about the infringement. The patent marking statute serves three related purposes:
Encouraging patentees to give public notice that the article is patented, and
Aiding the public to identify whether an article is patented.
To comply with the patent marking statute, the patent owner must place a mark on the patented product with the right patent number or a webpage that leads one to a webpage with the right patent number. If so, the public is given public notice of the patent.
Now, if the patent owner does not mark their patented products with the right patent number or just fails to mark the patented product with the patent number at all, then those unmarked patented products will have the opposite effect of leading the public to believe that the patented product is actually not patented. In this event, §287 places a limit on damages that the patent owner can receive should he or she fail to mark its products. Damages do not start to accrue not until the alleged infringer has received actual notice of infringement of the patent.
Now moving to the facts of this case.
Evidence provided to meet Burden of Production
In this case, the alleged infringer (Bombardier Recreational Products, Inc. (BRP)) provided evidence that the patent owner (Arctic Cat) failed to mark all of the patented products (i.e., Personal Water Craft) with the right patent number. The evidence provided by the alleged infringer to meet its burden of production included:
a licensing agreement between the patent owner and Honda to practice the patent;
Expert testimony that if BRP’s model was infringing on the patent so would Honda’s product.
Thus, the alleged infringer argued that the patent owner should not be awarded damages at the start of the infringement via constructive notice under §287 but only after BRP received actual notice of the infringement of the patent. Because of the evidence presented by the infringer, the burden switched to the patent owner. The patent owner now has to prove that the Honda products were not covered by the patent, and thus the identified products which were not marked did not need to be marked with the patents at issue in this case.
Minimum needed to meet Burden of Production
In making its holding, the Federal Circuit specifically stated that they are not determining the minimum showing needed to meet the initial burden of production by the alleged infringer. They made clear that in the facts of this case, the alleged infringer did meet its burden of production.
Because the Federal Circuit did not provide a standard for how the alleged infringer can meet its initial burden of product, the next issue for the lower courts is to render opinions as to what the standard might be.
Does the alleged infringer need only identify the models which were not marked? Can they merely list all of the patent owner’s models that might be covered by the patent and should have been marked regardless of whether it was marked? These are all questions to be answered in future litigation.
On the other hand, if a narrow interpretation of the patent claims is taken so as to avoid liability for false patent marking, then some of the patent owner’s products that should be marked, will not be marked and the patent owner would have failed to comply with the patent marking statue.This case also raises issue of false patent marking under §292. On the one hand, if a broad interpretation of the patent claims is taken, then some of the patent owner’s products that should not be marked, will be marked with a patent number. In this scenario, the marking of the unpatented product will constitute false patent marking and comes with its own set of liabilities for the patent owner.
Fortunately, the case law relating to patent marking appears to allow for some of the patented product to be unmarked yet still comply with the patent marking statute as long as patent marking has been “substantially consistent and continuous”. American Medical Systems, Inc. v. Medical Engineering Corporation (Fed. Cir. 193). In Arctic Cat, the products which the alleged infringer asserted were not marked with the proper patent number were the products of the patent owner’s licensee. In that case, the court recognizes that it might be hard for the patent owner to police all of its licensee’s products and thus uses a “rule of reason” as to whether the patent owner made reasonable efforts to ensure compliance with the marking requirements. This is one of the issues to be decided on remand.
On the other hand, the false patent marking statue requires an intent to deceive the public. If you have a good faith belief that the product is covered by the patent, then that fact would mitigate the changes that you would be liable for false patent marking. If you have your patent attorney review the product to be marked and the patent(s), he or she can make a determination as to whether the product is covered by the patent(s).
In order to ensure maximum compensation for any infringements on your patents, your products should include a clear patent marking to show that they are protected. Let’s dive-in:
Patent marking provides constructive notice to the public of your patent. Constructive notice is given to the public of your patent by affixing the patent number on the patented product. By doing so, alleged infringers are liable for patent infringement as soon as possible even if they don’t have actual knowledge of your patent. This article focuses on the patent marking requirements for the United States.
Each type of intellectual property, such as patents, copyrights and trademarks, has its own specific requirement for marking. For copyrights, the Copyright Office publishes a Copyright Notice Circular 3, which explains the requirements for copyrights in regards to marking. For trademarks, the marking requirement is explained within the Trademark Manual of Examining Procedure Section 906.
How do I comply with the patent marking statute?
The patent marking statute explains how to comply so that you are entitled to the benefit of the patent marking statute.
The patent marking statute provides you with two different methods to comply with the law. The first method I refer to as the “traditional patent marking.” This patent marking method requires that the product or its packaging clearly identify the patent(s), which cover the product. The second method I refer to as “virtual patent marking.” This method was created and enacted in 2013 with the America Invents Act. Virtual patent marking requires that the product or its packaging clearly identifies a web address that would allow a person to find the patent(s) that cover that specific product.
I generally recommend virtual patent marking over the more traditional method of patent marking because of its advantages, which I have listed below. If you do not have a website, or your product will only be covered by one patent, you might then consider using the traditional patent marking method.
Here are the necessary steps to comply with the patent marking statute. Always double-check this information with your patent attorney since laws can change, and courts might construe the patent marking statute differently in the future.
Step 1: Decide between a traditional patent marking or a virtual patent marking.
The traditional patent marking method places all of the patent number(s) directly on the product or, when that is not feasible, on its packaging or label. The problem with the traditional marking method is that the patent portfolios may grow, and patents expire over time. The product, packaging or label will need to be updated continually each time a patent is added or removed. Oftentimes, this was quite burdensome because it affects the manufacturing and assembly process for your product. If your product is covered by only one patent, it might be easier to use this traditional patent marking method since there would be no need to change the patent marking in the future..
In contrast, virtual patent marking is a hybrid system because the product is marked with an internet webpage, which displays the associated patent number(s). For example, the product itself can be marked with “Pat.: www.[domainname.com]/patents.” If the product cannot be marked with the internet webpage, then its packaging or label would include a reference to the internet webpage. The patent information placed on the product, packaging or label will remain the same regardless of what happens to the patent portfolio in the future. The patent information marked on the product would lead a person to a patent webpage that would contain the up-to-date status of the patent number(s) associated with the patented product.
The obvious benefit of virtual patent marking is that the manufacturing and assembly processes for your product never have to change when your product goes from being patent pending to patented, when your patent expires, or when more patents that cover your product are added in the future. The only thing that needs to change is the content on the patent webpage so that it includes the updated patent information. You do not need to change your product or its packaging in response to changes in the patent portfolio.
For this reason, I generally recommend virtual patent marking rather than the more traditional method of patent marking unless you do not have a website, or you will only have one patent for your product.
Step 2: For traditional patent marking, follow the format as defined in the statute.
For traditional patent marking, the patent number is placed on the product, packaging or label. See patent marking examples below.
Patent marking example
The law dictates the exact words that you need to use to comply with the statute. You must use the term “Patent” or “Pat.” followed by the specific patent number. Remember that for design patents, the letter D must be included with the number. Here are some patent marking examples.
For Utility Patents
For Design Patents
Patent: US D654,321
Pat.: US D654,321
Some companies prefer the verbiage “This product is covered by U.S. Patent No(s). [insert patent number(s)] and other pending applications and foreign patents.” However, the statute does not require that you use this verbiage.
Step 3: For virtual patent marking, follow the guidelines as defined in the statute.
For virtual patent marking, the statute also states that the product must have the words “Patent” or “Pat.” followed by the internet webpage (not the patent number(s)) where a person can look up and find which patent(s) cover the product.
The patent marking statute requires you to put the webpage address on the product. You can put the patent webpage address on the packaging or label when it is no feasible to put it on the actual product itself. For this reason, I recommend that you make the internet address as short as possible.
The product, packaging or label needs to be clearly marked using the following format:
Patent or Pat. with the internet address such as:
The patent webpage needs to accessible to the public without requiring a fee or payment, and it cannot be placed behind a click-through agreement. For example, e-cigarette sites might require the user to identify themselves as being over 18. The patent webpage needs to be accessible without having to click through this type of warning or limitation.
On the internet webpage, the statute states that you must associate the patented article with the patent number. Put simply, the internet user must be able to make the association between the product and the patent number(s) easily. Don’t be creative; just get straight to the point. This is an instance where you need to be straightforward and as transparent as possible. You are trying to satisfy a statutory requirement, not optimize the patent webpage for search engines.
The statute has not been litigated at this point, so there is no magic format that the courts have sanctioned to define for us how to effectively associate the patent number and the patented article.
I recommend that you make the patented article easy to locate on your webpage. Anyone who is holding your product should be able to look at the product and find the patented article on the webpage quickly and without any significant effort. You can use a picture, product identification number, product number or any other method as long as the internet user can locate the patented article on the patent webpage for the product. You can use one or more product identifiers to help the internet user associate the product and the patent number(s) if that would help.
Next, the internet user should also be able to find the associated patent number(s) once they locate the product on your webpage.
The following is a sample virtual patent marking example for a patent webpage that might live on your website or a patent marking website.
Patent webpage examples for virtual patent marking
These URLs are quite long, and it would be difficult to place such a long URL on a small product. It would also be aesthetically displeasing for the potential customer. A solution would be to register the shortest domain possible and have that domain forward internet users directly to your patent webpage on your website. It is also possible to have the shortest domain possible direct internet users to a webpage that is hosted by a virtual patent marking online service.
Step 4: Congratulations! You have now provided virtual constructive notice of your patent to the world.
By complying with the patent marking statute, the patent holder is automatically providing constructive notice of the patent to the public. The product, packaging or label now leaves a trail from the product to the patent via the webpage.
What are the advantages of complying with the patent marking statute?
Patent marking refers to a law that allows you, the patent owner, to collect damages from an alleged infringer even if they did not possess actual knowledge of your patent. When you comply with the patent marking statute, the law states that you have given the world constructive notice of the existence of your patent. Therefore, the alleged infringer should have known about your patent and are liable to you for damages even when you cannot prove that they actually knew about your patent. The alleged infringer is responsible for conducting thorough research to avoid infringing on other people’s patents.
Put simply, the benefit of compliance of the patent marking statute is that it allows the patent holder to impose patent infringement liability on the alleged infringer as early as possible and to maximize potential damage awards even if the infringer does not actually know about your patent.
If you are reading this, you probably were awarded a patent recently. You may also be interested in maintenance fees, policing the market for infringement on Amazon and eBay, licensing, etc.
What is the Patent Marking Statute and how it encourages compliance
35 U.S.C. § 287(a) states:
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice. (emphasis added).
The last part of the patent marking statute explains the consequences if there is a failure to mark a product correctly with the patent number. Such failure to mark will mean that you have failed to give the public constructive notice of your patent. This means that you also give up your right to collect damages unless evidence is shown that the alleged infringer was notified (i.e., actual notice; e.g., cease and desist letter) of the infringement. The law presupposes that the alleged infringer could not have found out about your patent because your product would not have provided any indication that your product was patented. Hence, even if the alleged infringer did not look for your patent(s) on your products, they are not liable for patent infringement until they have actual knowledge of your patent. In this way, the law encourages compliance with the patent marking statute by causing you to forfeit your ability to collect damages if you fail to comply.
Implied Benefits of Patent Marking for the patent holder and competitors
Marking your product with the proper patent number to comply with the patent marking statute is beneficial in two important ways for the patent owner and two significant ways for competitors.
Two benefits to the patent owner
For the patent owner, the first benefit is that, as discussed above, it gives you, the patent owner, the right to seek damages or redress for the infringement as early as possible. Liability for patent infringement can occur as soon as your patent application matures into a patent, which is referred to as the issue date of the patent. This date is located at the upper right-hand corner of your issued patent.
The patent marking statute allows you to give constructive notice to the public, including any alleged infringers, about the existence of your patent. This is similar to a recordation of a transfer of ownership on a house, which gives the public constructive notice of that transaction. Even if the public is not actually aware of it, they are legally responsible for knowing about the transaction so that they do not infringe on the new owners’ rights. The same is true with the patent marking statute. Even if the alleged infringer did not actually know about the issued patent, they are responsible for researching that information.
Constructive notice is based on the legal principal that:
Ignorantia juris non excusat or Ignorance of the law excuses not
If someone could avoid liability for their actions by merely claiming ignorance, everyone would do exactly that.
The second benefit for the patent owner is that it eliminates the potential for a declaratory judgement action against you. This protects you from getting dragged into litigation. If you had to give actual notice, such as a cease and desist letter, to every alleged infringer to impose liability of patent infringement, that notice might then be interpreted as a threat of litigation. The law allows those who are being threatened with litigation (i.e., alleged infringer), the option to be the first to go to court and ask the court to decide the rights and responsibilities between the parties.
By providing constructive notice of the patent instead of an actual notice of infringement, you are not threatening any one with infringement or a lawsuit. You are passively notifying the world of your patent.
Two benefits to competitors
For competitors, the first benefit is that it helps them to mitigate potential patent infringement liability. It isn’t a perfect system, but it works. Patent marking gives competitors a way to find information as to what patents might be out there so that they can avoid infringement. If you find a patent number on a product similar to your product, you may need to investigate to determine if your product will be potentially infringing on that patent.
One of the recommendations that I provide to new inventors who want to secure a patent on their product is to look for other products that serve a similar purpose. If they find a similar product, I tell them to look for patent markings on those products. This is a way to learn about the patents of their competitors and issues that they might need to deal with if they want to launch their own competitive product.
Side Note: Another way to find patents associated with a product is to conduct a simple Google search. Just type in PATENT and [PRODUCT NAME] in the google search engine. If nothing is found, you might then consider purchasing the product to inspect the labels and product packaging and literature for any patent marking.
The second benefit to competitors is that it gives them a sneak peak into how broadly the patent owner is construing their patent claims especially when the patent claims do not necessarily match up closely to the product. This information is only an indication because in my opinion, anecdotally, most patent owners take a liberal approach to the breadth of the claims of their patents. Nevertheless, it may provide valuable information.
Frequently Asked Question for patent marking
Why do I recommend virtual patent marking over traditional patent marking?
Put simply, virtual patent marking does not interrupt the manufacturing and assembly process in the future because the patent webpage that is printed or placed on the product, packaging or label does not need to change over time. When more patents are acquired that cover the product, no change to the product, packaging or label is necessary. Only the patent webpage content will change to reflect the newly acquired patent(s).
What happens when a patent expires? You should remove the patent number on the patent webpage. To do this under a traditional patent marking method, you might have to make new molds. For example, a few years back, Solo Cups used the same injection molds for their lids for a period of time longer than the life of their patent. They were sued for false patent marking. They did not remove the patent number from their lids after the patent expired because the patent numbers were a part of the mold, and removing the numbers would have meant making new molds. They decided that they did not want to incur that expense, but they ended up having to possibly face legal fees to deal with the false patent marking lawsuit instead.
With virtual patent marking, no new molds would have been necessary. You can just change the information on the patent webpage when the associated patent expires.
Side Note: Virtual patent marking was recently enacted, and there has been little litigation to provide detailed guidance as to what would be considered sufficient or insufficient association between the patented article and the patent number.
Do you need to have a record of when the patent number and patented product was first associated on the patent webpage? Do you need to keep record on a daily, weekly, monthly or yearly basis to show that the association was always there and available to the public?
I would say yes to both questions as a precaution. The reason is that it might be unfair to the public or your competitor to leave the patent webpage blank and only associate the patent number and the patented product right before litigation. Similarly, it would be unfair to put up the patent webpage but take it down until such point as litigation occurs. These would not serve the overall goal of constructive notice to the public. On the other hand, the statute provides for no requirement to keep records regarding your patent webpage. I suggest doing so for your own protection in the case of future litigation.
These are potential areas where one might legally accuse the patent owner of not complying with the patent marking statute by not providing sufficient constructive notice.
I would take a conservative approach and, to the extent that is reasonable, take regular snapshots of the patent webpage and keep those in your records. You could have your web developer take pdfs of the webpage and save it to the website hosting server on a regular basis. Similarly, you could have the image emailed to someone for safe storage and retrieval later on during litigation if necessary.
What are virtual patent marking online services?
Online companies exist that will maintain your patent webpage. Supposedly, they will also help you to comply with the patent marking statute. I have not researched them and have never used any of them. You can find several by typing “virtual patent marking online services” into www.google.com. Here are a few examples, but please be aware that these are not endorsements.
Do I really need to comply with the patent marking statute?
No. However, if you do not comply, you forfeit the benefits of the statute. The alleged infringer is no longer liable for any damages to you until the alleged infringer is provided actual notice of your patent.
Additionally, you risk the possibility of being dragged into court by the alleged infringer through a declaratory judgement action when you do provide actual notice of the infringement via a cease and desist letter.
Patented method claims are an exception to the patent marking requirement. For patented methods, you can accrue damages prior to actual notice to the alleged infringer even without any patent marking. In many cases, patented method do not need to be marked with the patent number. A part of the inherent problem of marking a method as patented is that there is no way to mark a step or action with a patent number.
However, that is not true all of the time. In prior cases, an alleged infringer was not liable for damages that the patent holder incurred before actual notice was..
Licensing Termination Provisions for Under-performing License Agreements
After securing a patent on an invention and you are making money, another company may want to use the patented technology in their product or service. To give a business the right to use the patented technology, the patent holder and the business enter into a contract for the right to use the intellectual property of the patent holder. The relationship might start off well but over a period of time with the pressures of business, the patent holder or the licensee may want to get out of the license. Because the patent holder may be dissatisfied with the licensee, the patent holder must negotiate the terms of the agreement so that the patent holder can terminate license when that happens. We will explore licensing termination provisions which would help the patent holder get out of the license when it is not beneficial.
First off, why would a patent holder want to license the technology out to someone else if they are using the patented technology in its own products?
In many instances, I would agree. Why would you want to let a competitor incorporate your patented feature into their product offering? You would think that there would be very little incentive for a patent owner to allow others to compete against them in the marketplace. The theory would be that every widget that the competitor sells is one less widget that the patent holder could have sold and made a profit.
Two benefits for extending a license
Here are two reasons the patent owner may want to license the patented technology out to others such as cross-licensing.
Expand current market share: The inventor has started to market and manufacture the patented product but is unable to fully penetrate the market. The inventor may want to collaborate with another company that might have a better distribution model or some specialized knowledge to bring revenues to the next level and penetrate the market. The potential licensee may have special know-how that is useful to the patent owner that will allow them to expand their market share. In this instance, it may be worthwhile to allow others to license out the patented technology.
Different niche: If the potential licensee wants to utilize the patented technology in an unrelated niche field from that of the inventor.
Typically, an inventor would get a patent in their niche field. However, the goal of patent protection is, yes, to secure patent protection in the inventor’s niche field but over the long run to broaden the scope of patent protection into other niches or what we refer to as fields of use.
To give you an example, if the inventor patented a feature that goes on a desktop computer, the goal would be to secure a patent for the feature as it would be incorporated into a desktop computer. However, a good patent strategy would be to expand that patent protection by building a portfolio of patents to include laptops, smartphone, etc. Since the inventor is not in these other niches, a possible win-win situation would be to license and collect royalties from multiple licensee from diverse niches while still selling widgets in the inventor’s own niche.
Why is it important to negotiate licensing termination provisions to help you exit a license agreement?
Okay, now that possible reasons for extending a license has been discussed, the thought process of reviewing the license agreement will be discussed.
An important structural aspect of a license agreement is the “exit.” There is no clause or title referred to as the exit but it is important to learn about how to set up the contract through the licensing termination provisions so that the patent holder can terminate the agreement and exit the deal. After all, the patent owner wouldn’t want to be bound by the deal if it isn’t beneficial.
The patent owner and the licensee wouldn’t want to be bound by the deal if it is not beneficial to either one of them. If the term of the license agreement is five years but one party fails to deliver on results, then the other party would want to be able to exit the deal. During negotiations, the patent owner may puff up the benefits of the technology and the licensee may exaggerate its ability to market the invention. The puffery and the exaggeration increase the expectations of the parties as they enter into the license agreement. This sets up the relationship for failure because one or both parties won’t be able to live up the expectations that they set up for themselves. One or both parties may want to exit the deal and terminate terminate the agreement.
How to build in the exit in a license agreement?
A good place to start is the termination or term of the license provisions. This section will provide the conditions under which the parties can terminate the agreement. Thinking in terms of worst case scenario is a good idea when reviewing a license agreement. If the term of the license agreement is five years, then the patent owner needs to consider whether it is acceptable to have this entity as a licensee during the entire five year period. For example, let’s say that the licensee exaggerated its capabilities but only delivers meager results during those five years. Would that be acceptable? Would it be acceptable for the patent owner to be bound by the license agreement for the full five years?
If the license agreement is exclusive to one licensee and the licensee is not performing as claimed during the negotiation process, then that would be a bad deal because the patent owner would have to accept meager results and would not be able to license the patented technology out to others because of its exclusivity. The agreement should have a way that the patent owner can terminate the agreement before the five years is up.
Nonexclusive agreement doesn’t necessarily help
The patent owner might think that setting up the license agreement as a non-exclusive license so that the patent holder can extend multiple licenses might be the way to mitigate being bound by a nonperforming license. However, that might not be the case. If the patent owner found another licensee but that licensee wanted an exclusive, then the deal cannot be made because the patent owner cannot get out of the non-exclusive license and cannot extend an exclusive license.
The non-exclusivity of the license agreement only allows the patent owner to extend additional non-exclusive licenses.
Two provisions for negotiating in an exit to the license agreement
Two provisions can be written into the license agreement which require the licensee to make the licensor or patent holder satisfied with the license are performance milestones and a minimum yearly royalty. If these requirements are not met by the licensee, then the licensee would be in breach of the agreement. The contract would allow the patent holder to provide notice that the license will be terminated. The patent holder can exit the agreement before the full term of the agreement.
The first is performance milestones. These are acceptable performance markers that make the agreement attractive in terms of whether the patent owner would want to stay in the agreement. For example, performance milestones may be a series of concrete steps that the licensee must take within a certain period of time.
In the beginning, the concrete steps may be to:
prepare a business plan,
build a website,
set up manufacturing for the patented technology,
get three distributors or
whatever steps the parties agree are reasonable.
As time progresses, the performance milestones may turn into minimum yearly sales requirements. If the performance milestones are not met, the terms of the agreement should allow the patent holder to give notice to the licensee and terminate the contract. The performance milestones can mimic those activities that are required for the licensee to build up sales. If the licensee is not doing the basics, then that would frustrate the patent holder. The patent holder would naturally want to terminate the license.
Minimum yearly royalty
The second is referred to as a minimum yearly royalty. The minimum yearly royalty is a minimum dollar amount that the patent holder would like to be paid for the licensee to tie up the patent rights of the patent holder. The minimum yearly royalty is the royalty that the licensee is required to pay even if the royalty calculations based on sales fall below the amount of the minimum yearly royalty. By paying the minimum yearly royalty, the licensee forces the patent owner to stay in the agreement if the licensee believes that the drop in sales will go back up in future years. The licensee doesn’t have to lose the rights granted under the license just because of a bad year or missing one of the performance milestones.
The minimum yearly royalty should be the amount that the patent holder would want to make to be satisfied with the contact. In the event that the licensee is not able to generate enough sales to exceed the minimum yearly royalty, the licensee must still pay the minimum yearly royalty or the patent holder has the option to terminate the license. The patent owner could exit the agreement if and when the minimum yearly royalty is not paid. The minimum yearly royalty is a minimum benefit that the patent owner is willing to accept to maintain the license.
Many different terms of the agreement needs to be negotiated when reviewing a license agreement. A quick search on the internet will uncover various lists produced by other attorneys regarding specific provisions and clauses. However, the performance milestones and the minimum yearly royalty should be negotiated into the agreement. Otherwise, the patent holder risks the possibility that they would be required to stay in the agreement.
All business owners think that their trademarks is unique and easily recognizable and may apply for a “trademark” to protect their logo and branding. Trademark protection is not available, however, for marks that are considered to be descriptive unless the mark is known as a trademark and not just a way to describe the goods or services. When the trademark application is first filed, the application will request registration on the principal register. However, the USPTO may refuse registration of the mark on the principal register and inform the business owner that the mark can be registered on the supplemental register. This blog post will discuss the pros and cons of registering a trademark on the supplemental register and conditions under which one might do so.
Supplemental register versus principal register
The United States Patent and Trademark Office (USPTO) maintains two different lists that identify registered trademarks in the United States. The lists are referred to as the supplemental register and the principal register. The principal register is the preferred list to be registered on for a proposed mark because of the significant benefits to the trademark owner. The supplemental register has some benefits but they are not as significant as the principal register, as will be discussed below. Initially, a trademark application should not request registration of the trademark on the supplemental register. Registration should be sought on the principal register. However, if the mark is descriptive, then the examining attorney may suggest registration on the supplemental register. The issue is whether the trademark applicant should request registration of the trademark on the supplemental register instead of the principal register given that the principal register provides significantly more benefits.
Supplemental register is for non-distinctive trademarks
When reviewing a trademark application, the USPTO will refuse to register a trademark on the principal register if it deems the mark to be “merely descriptive” of the goods and services of the applicant. If this occurs, counsel may suggest applying to the Supplemental register, which is reserved for marks that are descriptive, but not inherently distinctive to be recognized as a trademark.
Option to amend or argue acquired distinctiveness
If a descriptiveness refusal is made, then the applicant has two options.
The first option is to amend the trademark application to request registration on the supplemental register instead of the principal register.
The second option is to argue that the proposed mark is actually suggestive, not descriptive of the goods and services. If successful, the mark would proceed to registration on the principal register.
Assess the likelihood of overcoming the descriptiveness refusal
To decide whether to take option 1 which would provide less benefits or option 2,an assessment should be made as to the likelihood of overcoming the descriptiveness refusal. The descriptiveness refusal could be overcome by presenting:
arguments to the examining attorney that the mark is suggestive and not descriptive; or
evidence that the proposed mark has acquired distinctiveness which means that the public now recognizes the mark as a trademark of one person or entity.
If the chances of overcoming the descriptiveness refusal is low, then the applicant should strongly consider registration on the supplemental register. The alternative is to spend more money with a low probability of success. If the applicant does request registration on the supplemental register, then it is important to understand what the applicant is giving up via registration on the supplemental register.
Benefits of principal register not granted to supplemental register
The following are benefits of registration on the principal register which are NOT given to marks registered on the supplemental register. Registration of the mark on the principal register receives the benefits of prima facie or “on its face” evidence of the:
validity of the mark;
registration of the mark;
registrant’s ownership of the mark; and
registrant’s exclusive right to use the registered mark;
in commerce on or in connection with the goods or services specified in the registration.
Also, registration of a mark on the principal register has the option of becoming incontestable after five years of substantial and exclusive use. An incontestable mark is stronger because such status limits the ways that the validity of the trademark registration can be attacked.
The supplemental registration does not provide the benefits mentioned above.
Supplemental register – Pros
Registration on the supplemental register does provide some benefits to the trademark owner. For example, registration on the supplemental register:
prevents registration of another mark on the principal and supplemental registers if a likelihood of confusion exists with the mark registered on the supplemental register;
the option to refile a trademark application and request registration on the principal register later usually after five years of substantial and exclusive use the mark in commerce to show acquired distinctiveness
allows the trademark owner to use the circle R ®; and
the option to file a suit for infringement in federal court instead of state court.
A significant benefit is number 2 above. Put simply, registration of the mark on the supplemental registration is a road to registration on the principal registration is everything goes well in the future.
Supplemental register – Cons
A significant downside of registration of a mark on the supplemental register is that another entity could acquire state trademark rights or common law trademark rights in other parts of the United States where the trademark owner is not using the mark. This other entity’s use of the same or similar mark would give that entity senior rights to the trademark applicant. This situation would be detrimental to the trademark applicant’s ability to secure registration on the principal registration later on.
One must keep in mind that registration of the proposed mark on the supplemental register does not confer trademark rights to the trademark applicant. It merely prohibits others from registering a confusingly similar mark on the principal and supplemental registers. This benefit is described in number 1 above.
Arguing against descriptiveness-When to incur costs
If, at the time of receiving the descriptiveness refusal, the applicant has evidence that the proposed mark has acquired distinctiveness, then it is generally beneficial to incur the cost to submit the evidence than to just request registration on the supplemental register. Building brands takes considerable time and money and securing registration on the principal register now may be worth the cost as opposed to risking the possibility of not being able to do register the mark in the future.
If such evidence of acquired distinctiveness is not available yet, then the next question is whether it is worthwhile to file arguments to show that the mark is not descriptive but suggestive. If successful, the mark would be registered on the principal register and receive all of the benefits described above. It depends on assessment of the likelihood of success.
The factors involved in deciding which route to take is dependent on many factors. Those factors include:
the available funds of the trademark applicant to prepare and submit such arguments
the likelihood of successfully convincing the examining attorney that the mark is suggestive
the risk tolerance of the trademark applicant that another entity might acquire state or common law trademark rights, and other factors
Route if no funds are available
If the trademark applicant does not have the money to prepare and submit arguments or present evidence of acquired distinctiveness, then the trademark applicant should request registration on the supplemental register. After five years of substantially exclusive and continuous use, then the trademark applicant may refile another trademark application and request registration on the principal register. The goal is to prevent others from registering the same or similar mark on the principal register which keeps the principal register clear for registration of your mark after an extended period of time has elapsed and the mark has acquired distinctiveness.
When dealing with trademark issues, it’s always best to seek the guidance of an attorney experienced in trademark law. We can review your trademark, application, or USPTO refusal and work with you to determine the course of action suitable for your business.
 Suggestive marks are those that, when applied to the goods or services at issue, require imagination, thought, or perception to reach a conclusion as to the nature of the goods or services. A suggestive mark is different from a descriptive term, which immediately tells something about the goods or services. For example, a suggestive mark is SPEEDI BAKE for frozen dough because it only vaguely suggests a desirable characteristic of frozen dough, namely, that it quickly and easily may be based into bread. TMEP 1209.01(a).
 Acquired distinctiveness is also referred to as secondary meaning. Acquired distinctiveness means that even though the descriptive mark is primarily perceived as describing the goods and services, consumers have come to recognize the mark as serving a second meaning, namely, as a moniker to identify the source of the goods and services. Acquired distinctiveness may be shown by submitting evidence of use of the mark for the past five years substantially exclusive and continuous.
I invite you to contact me with your trademark questions at 9949) 716-8178. Please feel free to forward this article to your friends. As a Trademark Attorney helping clients in Orange County, I welcome your inquiries to see if we are good fit.
The drawings for a design patent application is the most important part of the design patent application. The drawings define the scope of protection afforded under the design patent. The drawings for the design patent application are not designed to tell a story as in the drawings for a utility patent application. Rather, because a design patent protects the ornamentation of a product, it is primarily concerned with showing the protected design of the product. Simply put, the drawings should show the look of the product it is protecting.
Keep the End Goal in Mind when Preparing Drawings for a Design Patent Application
Show the unique design
The end goal for the drawings of a design patent application is to show the unique design of the product.
Focus only on the unique portion
The focus of the drawings should be only on the unique portion of the design. If the overall design of the product is unique, then the drawings should show the overall design of the product. If more of the product is shown than the unique portion, then doing so will unduly narrows the scope of protection granted by the design patent.
In general terms, if a bicycle wheel had a unique design and the bicycle manufacturer wanted to seek a design patent on the bicycle wheel, then to add the frame, handlebars, brakes, etc. which are not related to the uniqueness of the bicycle wheel limits the scope of protection given to the design patent.
For a competitor to infringe on a bicycle wheel design patent that also shows the other components of the bicycle, the competitor would have to copy the design of the bicycle which is peripheral to the unique bicycle wheel. In contrast, if only the bicycle wheel is shown, and thus claimed in the design patent, then as long as the competitor’s bicycle wheel copies the unique design elements of the patented bicycle wheel, then the competitor is liable for design patent infringement liability.
When do you prepare the drawings for the design patent application?
As indicated above, the drawings for the design patent application must represent the unique portion of what one wants to protect. In this sense, the drawings for the design patent application should be prepared after you are settled on the design. The drawings for the design patent application should not be prepared early in the product development cycle. The reason is that the design might change at any time before product launch. If so, the drawings might not be useful for filing of the application.
In general, the drawings should be prepared as close to the product launch as possible. It could be filed earlier such as after machining the plastic injection molds or some other financial investment that locks the design in place. Why? Because after the molds are made, it would be financially difficult to justify a change in the design. It also probably means that the management has settled on the design and there will probably be no more changes.
Patent applicant’s must comply with the Code of Federal Regulations (C.F.R.). They are referred to as the “rules.”
Rule 152 (37 C.F.R. 152) states: “The design must be represented by a drawing that complies with the requirements of § 1.84 and must contain a sufficient number of views to constitute a complete disclosure of the appearance of the design.”
From the rules, the United States Patent and Trademark Office (USPTO) produces guides to implement the rules. To this end, the USPTO has published a Design Patent Application Guide (“Guide”). The Guide discusses all aspects of drawings for design patent applications. For example, the Guide explains “The Views” to be shown in the drawings and use of “Broken Lines. These are important aspects of the drawings among other things.
In practice, the common views that are shown in a design patent application is one perspective view of the product. The product can be placed in its environment but the environment should be placed in broken lines. By environment, we mean the context of the unique design. In the bicycle wheel example above, the bicycle frame, handle bars, etc. would be considered the environment of the unique bicycle wheel.
Broken lines represent the environment and do not show or reflect any part of the design or ornamentation to be protected. Solid lines on the other hand show features of the unique design and define the ornamentation or design to be protected.
Along with the perspective view, six other views are commonly shown, namely, the front view, the rear view, the top view, the bottom view, the left view and the right view.
More views than those described above may be needed. Simply put, there must be a sufficient number of views to show all of the surfaces to be protected by the design patent.
The Guide and the MPEP will be the best resources for anyone interested in the mechanics of preparing drawings for a design patent application and drafting the text portion of the design patent application.
Hire a Patent Attorney, Patent Drafter, or Do It Yourself
The USPTO provides great resources for those that might want to learn how to prepare and file a design patent application. However, in my humble opinion, those resources are insufficient to learn how to protect the design. Oftentimes, the design patent appears simple and it really is simple to prepare but because of certain nuances, it is quite tricky to secure broad design patent protection unless you hire an experienced patent attorney.
In my experience, bypassing the patent attorney and going direct to a patent drafter will not be useful to the do-it-yourself inventor. The reason is that the patent drafters cannot provide advice on what to protect and how to protect it. The do-it-yourself inventor must give the drafter instructions on which views to show and which portion of the product is to be in solid lines and which sections are to be shown in hidden lines.
Tip when filing corresponding utility and design patent applications
Sometimes corresponding utility and design patent applications are filed on the same product. Design patents protect the ornamentation, whereas, the utility patent protects the functional features of a product. In this regard, the design and utility patents protect different things. Hence, both can be filed to protect a product.
One of the issues with filing both a utility and design patent application on the same product is that it is tempting to utilize the same drawings for both the utility and design patent applications to save on drawing costs. However, it may be prudent to incur additional costs so that the utility drawings are not the same as the design drawings, and vice versa. The design drawings cannot protect functional features. As such, if the utility drawings are used in the design drawings, then there may be an implicit admission that the drawings of the design patent application are functional in nature and may limit the protection in the design patent because design patents cannot protect functional features. Conversely, the use of the design drawings in the utility patent may be an admission that the features shown in the utility patent are ornamentation and not really functional in nature, and thus limiting the scope of protection of the utility patent.
I invite you to contact me with your patent questions (949) 716-8178. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.
An inventor may want to attract investors (e.g., angel investor) to help with the finances of launching an invention. The inventor might just have an idea and nothing else. They may not have started the patent process, engineering, prototyping, or proof of concept and are really at the very beginning of the launching process. However, they may want the investor to share in the development costs. How does the inventor go about pitching the invention invention to the investor?
Dilemma between the investor and the inventor
The inventor needs to protect the invention so that an investor cannot steal the idea and launch the product themselves. Hence, the inventor wants to bind the investor with a nondisclosure agreement. However, the investor does not want to bind him or herself to a confidentiality agreement unless he or she is going to do the deal. The investor needs enough information to evaluate the deal. How can the inventor pitch the invention to the investor while stopping the investor from stealing the idea / invention from the inventor.
Four options for pitching the invention to investors
The four options for pitching the invention to investors are:
After establishing patent pendency;
Under a nondisclosure agreement;
Both 1 and 2; or
Neither 1 nor 2.
1. After establishing patent pendency
A safe way to pitch the invention to an investor so that the investor can evaluate the deal is to disclose the invention after establishing patent pendency of the invention. Patent pendency is established by filing either a provisional or nonprovisional patent application. The patent application should include detailed information about the invention. What are its benefits? How does it work? This information and much more should be included in the patent application.
By establishing patent pendency before disclosing the idea to an investor, any efforts by the investor to commercialize the invention or file their own patent application on the invention would be trumped by the investor’s first filed patent application.
The downside to establishing patent pendency first is the cost. Patent application cost can range between a few hundred dollars up to $10 000 to $20 000. If the patent application is being filed for the sole purpose of establishing patent pendency before pitching the invention to an investor then the upper range of the cost to file the patent application is not a worthwhile investment. If that investor declines to invest in the idea / invention, then the cost to file the patent application will have been wasted. If the patent application is also filed for other additional purposes, then it may be worthwhile spending the money to establish patent pendency.
At the lower end of the range, the patent application may be inadequate to protect the inventor. Patent applications at the lower end of the cost spectrum generally mean that the patent attorney had less time to prepare the patent application. Less time generally means that they may not have included all of the information that they should have included in the patent application. Patent protection afforded by establishing patent pendency is dependent upon the information that is included in the patent application. If the information does not fully describe the full scope of the invention then the lower cost patent application, and thus lower quality does not provide any type of patent protection for aspects of the invention that were not disclosed in the patent application.
Depending on the inventor’s financial means and the value of the invention, the inventor needs to decide for themselves if it is financially beneficial to spend the money to establish patent pendency for their idea.
2. Under a nondisclosure agreement
A nondisclosure agreement (or confidentiality agreement) is a contract that would prohibit the investor from disclosing or commercializing the invention on their own. The inventor could pitch the idea to the investor under a nondisclosure agreement. It would also prohibit the investor from using the information pitched to the investor for any other reason (e.g., benefits of patent protection) than to evaluate whether the investor would like to invest in the invention or product launch. The investor could be liable for breach of contract if they violate the terms of the nondisclosure agreement.
For the investor, the downside is that the nondisclosure agreement locks them in and prevents them engaging in businesses elsewhere that they might otherwise want to invest in. To mitigate this, there are often exceptions to the agreement to not disclose the information. Nondisclosure agreements often have an exception that the investor is not prohibited from investing in a similar business if the investor had previously received similar information from another inventor.
Even with this and other exceptions, many investors are reluctant to enter into nondisclosure agreements. Some online commentators have stated that “Real investors don’t sign NDAs.” I was an update author for Trade Secret Practice in California published by the Continuing Education of the Bar of California for a number of years. The standard recommendation to companies and investors was to have a standing negative nondisclosure. It is a notice that they would not keep any information confidential and that the inventor should establish patent pendency prior to pitching the invention to the investor or company. Patent pendency had to be established by the inventor before submission. It was better to require that inventors file a patent application on the invention and establish patent pendency before receiving any type of idea submission. This requirement limited the number of idea submissions but it would also limit liability to companies and investors for any potential breach of a nondisclosure agreement.
Not all investors are unwilling to enter into a nondisclosure agreement—it is worth at least asking to see if they would consider it. If they won’t, then the inventor would have to choose whether to spend the money to establish patent pendency, disclose the invention without any sort of protection, or to forego pitching the idea to that investor.
3. Both 1 and 2 (After establishing patent pendency and under a nondisclosure agreement)
This would be the best of both worlds—patent infringement and breach of contract. This would also be the safest way to disclose the idea to the investor. The inventor would have the patent application prepared and filed before disclosing the invention to the investor. The inventor would also ask the investor to enter into a nondisclosure agreement. If the investor says yes, then great. If not, then the inventor would have to decide whether to pitch the invention with patent pendency only, which in many circumstances would be acceptable.
4. Neither 1 nor 2
If patent pendency is not established and the investor does not want to enter into a nondisclosure agreement, then the inventor has to choose whether to disclose the idea / invention without any protection, or to forego pitching the invention to the investor.
The United States is a “relative novelty country.” This means that the United States allows its inventors to disclose and even commercialize an invention for one year, and they must establish patent pendency before that one year time period has expired. This is referred to as the “one year grace period.” If the patent application is not filed within the one year time period, the invention is dedicated to the public.
Unfortunately, the United States changed its patent laws in 2013 to be a “first-inventor-to-file” country. With this, the United States retained the one year grace period, but made it detrimental to rely on this grace period. The reason is that a third party (i.e., investor) could file their own patent application for an improved version of the invention within this period and be awarded the patent if they were the first to file.
There are actions and procedures that the inventor could take against the third party to remedy this situation. However, the costs and uncertainty of the outcome would, in my estimation, dissuade many inventors from pursuing those actions. Many would give up their idea.
Nevertheless, this is a valid option, and it occurs frequently, especially among family and friends. However, it is not the ideal situation.
I invite you to contact me with your patent questions (949) 716-8178. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.
A system claim is a claim directed to a system having a number of different components that work together. In Intellectual Ventures I LLC v. Motorola Mobility LLC (Fed. Cir. 2017), the patent claim being litigated was a system claim. The patent was directed to the broad concept of transferring computer files electronically from one location to another, and more particularly to electronic transfer of computer files directly between two or more computers or computing devices.” With the rise of mobile phones that have very powerful microprocessors, many of these computer based patents are being applied in the mobile phone context.
The patent being asserted by IV against Motorola was a system claim. The system claim was very long and for the purposes of highlighting only the relevant parts of the system claim, I will summarize the claim as follows. The claimed system included a “communications device,” a “second device,” and an “authenticating device configured to … generate a delivery report.” The parties did not dispute whether a user of Motorola’s mobile phones “used” the first two components but focused on whether Motorola’s users used the third component, namely, an authenticating device configured to … generate a delivery report for the purposes of establishing direct infringement under 35 USC Section 271(a).
Section 271(a) states that “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” (emphasis added)
If IV could establish that Motorola’s customers “used” the claimed system to establish direct infringement by Motorola’s customers, then IV could then move to the next step of proving that Motorola would be liable for patent infringement under a theory of indirect infringement. IV was unable to show that Motorola’s customers used the claimed system, as discussed below.
Drafting a claim is one of the hardest part of preparing a patent application and also one of the hardest parts of prosecuting a patent application. In this case, IV choose to seek a system claim comprising all three of the 1) communications device, 2) the second device and 3) the authenticating device. I am unsure whether IV ever sought a claim solely directed individually to each of the communications device, the second device and the authenticating device which could have been enough to establish patent infringement.
However, for the purposes of this litigation, IV choose to litigate the system claim against Motorola and was unsuccessful in holding Motorola liable for patent infringement.
During the litigation, the parties agreed that Centillion controlled the definition of whether there was a use of a system claim. Based on Centillion Data Systems, LLC v. Qwest Comm. Int., Inc. (Fed. Cir. 2011) and NTP, Inc. v. Research in Motion, Ltd. (Fed. Cir. 2005), the Federal Circuit concluded that to prove an infringing use of a system under Section 271(a), a patentee must demonstrate “use” – that is, “control” and “benefit” – of the claimed system by an accused direct infringer.
IV argued that the benefit to the direct infringer is in the context of the system “as a whole” instead of on a “limitation-by-limitation” basis. The former would be easier to show than the later because IV only had to establish some benefit from the claimed system. The Federal Circuit disagreed and found that “to use a system [to establish infringement under Section 271(a)], a person must control (even if indirectly) and benefit from each claimed component.” (emphasis added).
Here, Motorola attacked the third component of the system, namely, an “authenticating device configured to … generate a delivery report.” Motorola argued that the end users received no benefit from this limitation. The Federal Circuit went through the alleged benefits proferred by IV that Motorola’s customers may have received and why the users did not receive the purported benefits.
IV argued that the end user benefitted from the delivery report because the delivery report could be used for authentication purposes. The Federal Circuit dismissed this benefit because nothing in the record indicated how this benefit flowed from the delivery reports to the customer.
The asserted patent did mention a benefit to the user based on the delivery report but the evidence of record indicated that the end user never received the delivery report and the phones that the end user was rendered technologically incapable of transmitting delivery reports.
The main problem that IV encountered in trying to show the benefit was that their main argument was that the benefit could be shown in terms of “as a whole” analysis and as a result did not appear to focus on or try to show benefits on a limitation by limitation basis.
I invite you to contact me with your patent questions at (949) 716-8178. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.
The drawings for a utility patent application are one of the most important parts of the patent application. The drawings are a quick, easy way to establish some understanding of what to expect if one were to spend time reading the utility patent or application. Patent rules also require the drawings show what is being claimed as the invention. Moreover, without the drawings, the text of the patent document cannot be placed into context, and its full meaning may be harder to understand. Hence, the importance of the drawings cannot be understated; they are crucial to understanding the utility patent.
Keep the End Goal in Mind when Preparing Drawings for a Utility Patent Application
To begin preparation of the drawings for a utility patent application, keep in mind the end goal of the patent document, which is to show or illustrate what is being claimed. See the Patent Rules section below. What is being claimed will relate to the point of novelty of the invention. To show the point of novelty, I suggest telling a story through the patent drawings about how to make and use the invention.
Point of Novelty
The point of novelty is the point at which your invention departs from existing technology. The point of novelty should show how functionally your invention operates differently or has an additional benefit compared to existing technology. How does your invention depart from existing technology in terms of how it is made and/or used? To capture the point of novelty through the drawings for a utility patent application may be hard to do, but it is part of the goal of the drawings.
Tell a Story
The drawings of the utility patent application should tell a story to show the point of novelty effectively. The story may be a sequence of events. For example, if the invention deals with how a mechanical clicker of a mechanical pencil operates to push a lead rod through the pencil, then the drawings might show two views—first a cross-sectional view of the mechanical clicker when the user depresses the clicker and a second view when the user does not depress the clicker. If the invention is a series of steps, the drawings might show the different steps pictorially or in a flow chart.
Rule 1.83 (37 C.F.R. 1.83) states, “The drawings in a nonprovisional application must (emphasis added) show every feature of the invention specified in the claims.” Since the drawings for a utility patent application must show what is being claimed, it is important to have what you are trying to claim as your invention in mind when preparing the drawings. Oftentimes, a good suggestion is to write at least one or two claims that will help you clarify what the invention is or make the invention more concrete in your mind.
The United States Patent and Trademark Office (USPTO) produces a Guide to Preparation of Patent Drawings. This is an extensive explanation of the formatting rules for preparing drawings for a utility patent application. For example, the Guide covers topics such as the requirements for line drawings, reference numbers, types of views, margins, text sizes, etc.
Hire a Patent Attorney, Patent Drafter, or Do It Yourself
Most likely, a patent attorney will not agree to do only part of the preparation of a patent application; the attorney will prepare the entire application including the drawings, the technical description, and the claims, or will not accept your case. The reason is that the drawings, the technical description, and the claims work together to explain how to make and use the invention and define it as a whole. Without controlling all aspects of the patent application, many good patent attorneys would not want to be associated with or deal with the issues that come up.
A patent drafter can be used. Here are a few: www.patentsink.com, www.globalpatentgraphics.com, and www.patentdrawings.com. However, in my experience, a patent drafter is good for following the rules listed in the Patent Guidance section but not for identifying the point of novelty and figuring out the views to tell the story of your point of novelty.
If you have views in mind that you want to show, they will be good for formatting those drawings because they are familiar with the USPTO’s Patent Guidance. Patent drafters can place the drawings in the right format. However, they generally do not help you identify the point of novelty or tell the story to illustrate that point of novelty.
You can do the entire project yourself, including using a computer drafting program to produce the drawings. If you don’t have enough money to do the drawings, you may not have any other option but to do the drawings yourself. This brings up another issue; do you have enough funds to see the patent process to completion?
To secure a permanent injunction, the patent owner must demonstrate that four factors favor issuance of the permanent injunction. These four factors include (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
The difficulty in determining whether the causal nexus requirement has been satisfied is that the degree to which the infringement of the patent caused the harm varies based on the business situation.
For example, in simple transactions, the patent owner may have to show that the infringement of the patent was the sole reason of the harm to the patent owner. In contrast, for multi-purchaser, multi-feature products, the patent owner may show much less. They may have to show that the infringement of the patent was more than just an insubstantial cause of the harm experienced by the patent owner. As such, a proper analysis of the causal nexus requirement varies and involves an investigation as to the business situation surrounding the infringement and the patented product.
Facts of Genband
In Genband, the patent owner (Genband) sells products that help telecommunication companies offer Voice over IP services to others. Metaswitch competes with Genband. Genband sued Metaswitch for patent infringement and sought a permanent injunction.
Legal Analysis of Genband
The district court denied the permanent injunction. On appeal, the Federal Circuit reversed and remanded the case back to the district court for further consideration based on the proper standard for the causal nexus requirement as the Federal Circuit explained.
In denying the permanent injunction, the district court used an erroneous standard. The district court used too high of a standard. The district court stated that “it is Genband’s burden to demonstrate that the patented features drive demand for the product.” (emphasis added).
The wrong standard was used because of an erroneous understanding of a series of opinions related to litigation between Apple v. Samsung. This series of cases explained the causal nexus requirement in more detail. In the earlier Apple cases, the Federal Circuit used the term “drive demand” to describe the causal nexus requirement. However, in the later Apple cases, the Federal Circuit used words such as “some connection.” Thus, the Federal Circuit used varying language to show the type of causation that needs to be shown. Apparently, the variation in language appears to have caused some confusion as to the proper standard.
In reviewing the Genband case, the Federal Circuit expressed concern that the drive demand standard was too stringent for the current business situation between the parties. A strict formulation of the drive demand standard would require proof that no or almost no buyer would buy the product but for the infringing feature. A looser formulation of the drive demand formulation would only require that the infringing feature be a driver (versus the driver) of decisions by substantial (versus insubstantial) number of individual consumer decision-makers considering multiple features.
Apple v. Samsung cases
In discussing the Apple v. Samsung series of opinions, the Federal Circuit explained that the level of causation between the infringement and the harm can be expressed as the scale between the sole reason to something more than an insubstantial connection. The degree of causal nexus depends on the market situation in which the patent owner and defendant find themselves.
For example, in smart phone sales, there are many different factors that consumers use to decide which smart phone to purchase. Phones are very complicated and have multiple features. No one feature may be the deciding factor that a consumer uses to purchase the smart phone. Rather, the consumer may use a combination of features to make a purchasing decision between competing smartphones. If a strict standard is used to define the causal nexus requirement, then the patent owner would most likely never be able to show that a particular patented feature was the sole reason for a consumer to purchase a particular smart phone. However, a high standard may be appropriate for simple purchasing decisions where the product may have a single feature which is patented.
I invite you to contact me with your patent questions at (949) 716-8178. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.
A patent specification has a number of different legal requirements. One of those requirements is that the patent specification must provide a “written description” of the claimed invention. 35 U.S.C. § 112 recites that the “specification shall contain a written description of the invention ….”
An excerpt from the Stanford case discussed below explains the standard to determine whether the written description requirement has been satisfied.
Whether a patent claim satisfies the written description requirement of 35 U.S.C. § 112, paragraph 1, depends on whether the description “clearly allow[s] persons of ordinary skill in the art to recognize that [the inventor] invented what is claimed.” Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1562–63 (Fed. Cir. 1991) (internal quotation marks omitted) (quoting In re Gosteli, 872 F.2d 1008, 1012 (Fed. Cir. 1989)).
[W]hatever the specific articulation, the test requires an objective inquiry into the four corners of the specification from the perspective of a person of ordinary skill in the art. Based on that inquiry, the specification must describe an invention understandable to that skilled artisan and show that the inventor actually invented the invention claimed.
Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc).
Put simply, the written description is satisfied when an explanation of the claimed invention is provided by words and drawings.
This is easier said than done. For example, when the invention is to a combination of known components and known methods used in a unique and nonobvious way, the known components and known methods are sometimes summarized or referred to by its industry name. They are referenced in the patent specification by their industry name, tradename, brand name and model number. However, there may come a time when particular piece of information about the known component or known method is not expressly stated in the patent specification except by its industry name but it would be beneficial to include some aspect of the known component or known method into the claims for the purposes of securing a patent. This was the issue in Stanford Univ. v. Chinese Univ. of Hong Kong (Fed. Cir. June 27, 2017) and whether such reference could provide an implicit support for something that was not expressly stated in the patent specification.
In Stanford, the patent owner attempted to show by reference to a known method that the claimed invention satisfied the written description requirement even though the words of the claimed invention were never expressly used in the patent specification. In particular, the claim recited a random massively parallel sequencing. But, the patent specification never expressly stated that the random aspect of that phrase. Nevertheless, by reference to a known method, the patent owner attempted to show that the written description requirement was satisfied with respect to the random aspect.
The patent drafter had generically described the known method in the patent specification by making reference to particular products utilizing that method in the patent specification. An excerpt of the patent specification is shown below:
A methodology useful in the present invention platform is based on massively parallel sequencing of millions of fragments using attachment of randomly fragmented genomic DNA to a planar, optically transparent surface and solid phase amplification to create a high density sequencing flow cell with millions of clusters, each containing ~1,000 copies of template per sq. cm. These templates are sequenced using four-color DNA sequencing-by-synthesis technology. See, products offered by Illumina, Inc., San Diego Calif. Also, see US 2003/0022207 to Balasubramanian, et al., published Jan. 30, 2003, entitled “Arrayed poly-nucleotides and their use in genome analysis.” (emphasis added).
As shown, the patent specification made reference to a massively parallel sequencing (MPS) of nucleic acid sequences and tells the reader to “See, products offered by Illumina, Inc., San Diego Calif.” However, the above quoted section of the patent specification does not expressly state that the massively parallel sequencing was random.
The claimed invention was directed to a random massively parallel sequencing. The alleged defendant attacked the validity of the patent by arguing that the claims failed to satisfy the written description requirement for “random.” On the other hand, the patent owner attempted to show that the patent specification did describe the random feature of the massively parallel sequencing because the patent specification referenced the Illumina products and the Illumina products as of the filing date of the patent application used random massively parallel sequencing.
In the Federal Circuit’s analysis, they made clear that the patent specification satisfies the written description requirement when the essence of the original disclosure (i.e., patent application specification as of the filing date thereof) conveys the necessary information-“regardless of how it” conveys such information. In this regard, it did not matter that the evidence was by reference to a known method.
The Federal Circuit remanded the case back to the Board and requested the Board examine whether a person of ordinary skill in the art would have known, as of the priority date, that the ’018 patent specification’s reference to Illumina products meant random MPS sequencing as recited in the claim, by examining the record evidence as to the pre-filing date art-related facts on Illumina products.
In light of the Stanford case, patent application should continue to reference product names and methods into the patent specification. This can enable the patent prosecutor to be able to argue that the patent specification does provide support for a feature or characteristic of the known product or known method which is not expressly stated in the patent specification. The patent drafter should be careful so that reference to the known product or method does not define the present invention but only illustrates what the present invention may be.
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