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Does America Need So Many Patents?

A 2012 lawsuit between Apple and Motorola, where both companies accused each other of violating patents for smartphone components, drew attention to the general problems of the American patent system. Experts raise questions on whether the degree of patent protection that is currently provided in all markets, with no distinction by types of inventions or industries, is really needed.

When Patenting Is Good

The U.S. patent law grants a company that was the first to patent a particular kind of product with a long-lasting (typically for 20 years) monopoly for manufacturing and selling this product. Without this protection of intellectual rights, some industries could hardly have existed and developed at all. An example of such an industry is pharmaceutics. The patent system is essential for its survival for the following reasons:

  • The creation and testing of a new drug is extremely costly, while manufacturing costs are low. If copying was possible right away, the inventing company would always be at a loss because competitors would be able to manufacture and sell the same drug without putting a single dollar into its development.
  • Each new drug has to be tested for at least 10 years before it can be sold. A competitive advantage at the start that is gained through patent protection is necessary to compensate for such a long term of recoupment and associated risks.
  • Being first does not create a durable competitive advantage in this industry. Customers do not typically associate a drug with the company that first started selling it.

When Patenting Is Bad

For the same reasons that patenting is good for the pharmaceutics industry, it can be destructive for other kinds of markets – those where the costs of inventions are low as compared to manufacturing costs, and those where being first creates a powerful marketing advantage by itself. The adverse effects are the following:

  • Excessive resources spent by companies in order to speed the invention process up and file a particular patent first. In markets with low invention costs, improvements happen naturally as part of normal market competition. The benefit of “patent races” for customers is negligible (getting a new product several days earlier), while the extra pressure put on company budgets is considerable.
  • The problem of patent trolls – companies that file patents not in order to manufacture a particular product (these companies do not manufacture anything at all) but only to sue others who will manufacture a similar product for patent infringement.

These problems can be solved by the abolishment of patents in industries that do not really need them, like most hi-tech markets.

Unitary Patent: All Your EU Patent Issues Solved in One Go

The first attempts to create a unitary patent for the EU region date back to 1970s. Although, the projects and initiatives introduced at that time had different names, the idea behind them was very similar to the one that prompted the creation of unitary patent that may soon help many businesses and inventors avoid a lot of unnecessary headache.

The main characteristics of the so-called European patent are:

  • The patent, once granted, will be valid at all the member countries. This means that you will not need to apply for a patent in every country separately.
  • The holder of the patent will only have to pay a single renewal fee. This is another huge benefit of the unitary effect. You only need to pay for the patent renewal once, and it will be automatically updated in every European country.
  • There will be only one court to deal with the unitary patent-related issues. The Unified Patent Court is to be the legal body that will govern all the judicial matters associated with this patent.
  • The owner of the patent will be offered uniform protection. This means that should any issue arise, like a patent infringement case, the final decision made by the court will pertain to the patent as a whole, so you won’t have to sue the offenders in every European country.

Considering all these qualities, it is really no wonder that this idea gained popularity quickly. Although it took a lot of time to work out a unitary patent agreement that is accepted by everyone, people finally managed to do this, and many inventors today can benefit from the results of their hard work, right?

It turns out that the situation isn’t as good as it may seem. Spain, Croatia, and Italy decided to fight this project tooth and nail, and their combined efforts managed to hinder the progress of the patent’s legal acceptance.

Why Unitary Patent?

There are many benefits to unitary patent, but the real reason that will definitely make it the most popular European patent option is its affordability. The unitary effect allows the applicants to cut their costs significantly, as they only need to pay for the patent once.

The officials don’t even require for the paperwork to be translated if it is filed in English, German, or French. This also helps cut down your expenses a little. A machine translation of the text may be required, but it will not hold any legal power.

There is no doubt that European unitary patent is the future of this business. Its implementation will be able to simplify the business relations within the EU and with its foreign partners.

Starting a Career in Patents

Career opportunities in patents are becoming more and more attractive as more inventions are made around the world. If you have ever considered becoming a patent specialist, keep reading to learn about the main types of patent occupations and what you need to enter them.

Patent Attorneys

Becoming a patent attorney is easy if you are already a lawyer. You just need to register with the Unites States Patent and Trademark Office (USPTO). File an application, then take a patent knowledge exam at its official testing center. To learn virtually everything you need to pass this exam, take a patent bar preparation course.

Also, you will need to provide USPTO with a certificate of good standing from your state bar association. If you fail to do this, it will register you as a patent agent instead of a patent attorney.

If you are not a lawyer, you will first need to become one by attending an accredited law school for three years. To get a job in a large corporation, select a top 25 U.S. school and try to rank among the top 10% students in your class. After you graduate, apply to USPTO to be registered as a patent attorney.

Patent Agents

A patent agent does almost the same as a patent attorney, but to start working as an agent, you do not have to spend three years at law school. All you need to do is take a patent bar preparation course, file an application with USPTO, and pass the exam. To file an application, you need to be a U.S. citizen or a legal alien.

As a patent agent, you may work for a law firm or a private corporation. Your main job responsibilities will be to draft patent applications and submit them to USPTO in order to obtain a patent for your client. However, unlike a patent attorney, you will not be allowed to open your own legal practice.

IT Patent Professionals

Large technological companies often have hundreds or even thousands of patents in their portfolios. To manage these intellectual archives, they need IT professionals who have expertise in both patent law and technology.

If your current occupation is an IT engineer and you are not fully satisfied with it, consider completing reputable patent law courses. You will then be able to work for a major technology company directly, or for an intellectual property agency that provides patent management services to such firms.

Invention Promotion Firms and Their Services

Being talented enough to invent something in one specific area doesn’t mean that a person can also be proficient enough in business to market his or her invention properly. However, such an accomplishment deserves recognition, and invention promotion firms were established in order to ensure that inventors get the credit and profit that they are due.

The services usually offered by this type of company are:

  • Evaluating the invention’s patentability.
  • Filing the required patent applications, licensing the inventions, and generally dealing with all the paperwork that pertains to these procedures.
  • Negotiating with manufacturers and writing contracts on the inventors’ behalf.
  • Assisting the inventors in gathering funds and building prototypes.
  • Marketing the inventions through various media.

It seems like these firms are exactly what the inventors need. Unfortunately, statistics indicate that their services aren’t as helpful as they should be. The success rate of these companies is less than one percent when it comes to providing the inventor with license fees that can offset the costs of the firm’s services. When you look at the issue from this angle, the most reasonable question to ask is “how do they manage to succeed at all?”

Apparently, being good at marketing and promotion pays the firms’ salaries well, as they use their skills in these areas to attract inventors who feel lost and seek professional assistance. This move is indeed ingenious. However, the majority of the people who have lost their chances to succeed because they entrusted their creations with incapable hands will hardly admire these companies’ tenacities.

These firms make their profits from the money they charge their clients (inventors) for their services. The set amount must be paid up front, so the creator of the product doesn’t get a chance to demand guarantees of his or her patent application getting approved.

Should Inventors Trust Invention Promotion Firms?

Even though the statistics about these companies are abysmal, not all of them are bad. There is usually a list compiled by some of the law enforcement agencies of different countries with the names of firms that have been accused of cheating their clients. As an inventor, you need to find your country’s list and study it carefully. You also need to research the company’s reputation and background in detail.

If you don’t want to take the risks, you can seek the services of various law and patent consulting firms. They should be able to provide you with the information you need to handle the legal parts of the patenting process.

EPLA: Things You Need to Know about the European Patent Litigation Agreement

EPLA, also known as the Draft Agreement on the Establishment of a European Patent Litigation System, is a form of patent law that is similar to the Unified Patent Court Agreement that is coordinated by the European Council and Commission. However, unlike UPCA, the European Patent Litigation Agreement is coordinated by the European Patent Office. This means that it offers an opportunity for people from the non-EU countries to participate.

The European Commission didn’t take lightly to EPLA and proclaimed it to be unlawful. The situation changed in 2006 when the EC started to actively promote mutual recognition of patents between EU and non-EU nations. This active promo campaign in “harmonization” resulted in the inspiring speech by Charlie McCreevy (European Commissioner for Internal Market and Services) on the 12th of July 2006. At that time, he proclaimed that EPLA offered some promise in regards of developing a unitary jurisdiction for national patents. The seeming success was marred in October of the same year when the European Parliament stated that the text of the Agreement required numerous changes before it can be formally accepted.

The situation with EPLA got worse in the beginning of 2007 as its Article 98 directly conflicted with the Article 292 of the EC Treaty for the Member States of the European Union. The two groups, those who supported and those who fought against EPLA got into a heated debate with the former group losing.

The initial EPLA draft introduced in 2003 offered to create a special body that will regulate all the patents within its jurisdiction. It was called EPJ, European Patent Judiciary, and comprised of two parts:

  1. Administrative Committee
  2. European Patent Court

According to the draft, EPJ should establish regional patent chambers, making the national patent courts things of the past. The court that was a part of EPJ would be granted the power to decide all the patent related matters of the EPO member states.

The biggest problem that prevented successful implementation of EPLA was the lack of competence from the EU member countries. They simply could not develop an effective system that would meet such high standards, as long as it fell outside of their legal framework, which was exactly the case. Some of the EU member states also had a few more specific (constitutional) issues with this particular document, like France.

There is no doubt that the idea of EPLA was impressive and quite a few professionals managed to appreciate it. Unfortunately, it is currently impossible to implement successfully.

Everything You Need to Know about PCT

If you want to patent an invention or need to get involved with the world of patenting in some regard, you need to understand what PCT is and how it affects the international rules of patenting. PCT stands for the Patent Cooperation Treaty, a patent law treaty signed in 1970. In essence, it is a set of legal regulations that govern the procedure of patent application in all the countries that contract PCT.

One creates a PCT application, also known as an international patent application, in one language. The application is filed with the RO (Receiving Office). Next, it gets transferred to the ISA (International Searching Authority) that conducts a thorough search for similar patented objects. The applicant also receives an official opinion about the patentability of the invention. If all the necessary examinations are cleared successfully, the applicant’s national patenting authority issues a patent.

Technically, filing a PCT application doesn’t guarantee that you will actually receive the patent, because there are no “international patents”. The issue of patents is handled by the local authorities. This means that every country that contracts PCT must decide whether it agrees with issuing this particular patent. Because of this, you may be able to get the exclusive rights you seek only in some of the countries. However, filing a PCT application makes the process much easier and cheaper on the inventor, because it relieves him or her from the need to appeal to every country’s patenting authority individually.

History and Member Countries

Although the treaty itself was signed in 1970, it became active only in 1978. The first PCT application was filed on the 1st of June 1978. The International Patent Cooperation Union (an organization that consists of the countries that contract the PCT) started with 18 member countries.

Over the years, IPCU has evolved, and today almost every country (148 countries total) in the world is a member of this union. The most notable exceptions from the list are Taiwan and Argentina. Saudi Arabia and Iran were the last countries to join the IPCU. They became members in 2013.

There are very few types of inventions that do not fall under the PCT’s regulations. This means that every person who believes that he or she has indeed developed a notable invention can try applying for an international patent. The best thing about this is that after the official search is complete and you are presented with the report, you will be able to see whether acquiring patents in all the countries you aim for will indeed be profitable for your business.

Patent Applications: Overview

The first thing you need to do in order to obtain a patent is to file a patent application. This is a special request that you will have to file with a patent office. The very process of applying for a patent is also called the “patent application”.

Please note that you need to file an application with the right patent office. In this case, “right” means one which has the jurisdiction to grant patents within the geographic area of the patent coverage. In regards to this, there exist three types of applications:

  • National applications: These applications are filed in order to obtain a patent that will be active in the country of this particular office.
  • Regional applications: This application can have effects in several countries. For example, an application filed with the European Patent Office will provide you with a patent that will be active in all or some of the countries of the European Patent Convention. The major benefit of regional applications is that filing one of those saves you from the need to obtain a national patent in each country.
  • International applications under PCT: PCT stands for the Patent Cooperation Treaty that is operated by the World Intellectual Property Organization. The organization itself doesn’t grant patents. However, this system allows you to file a single application that will eventually lead you to obtain patents in some or all of the countries that contract PCT. In this case, the vast majority of the formalities are handled by WIPO. Filing this type of application will significantly cut down your costs if you need to get a patent in many countries.

Patent Application Types

There are several specific types of applications defined by patent offices. Although every office has its own set of names for different applications, all of them can be grouped into the following categories:

  • Standard applications: This application contains all the required parts (claims and written description of the invention).
  • Provisional applications: These applications allow you to secure a filing date. They are cheaper than standard applications and don’t have similar disclosure requirements. A standard application can follow a provisional application if you decide to pursue a patent. If not, the provisional application will simply expire.
  • Continuation applications: These are filed in order to continue previous applications. This option is perfect if your provisional application is about to expire but your project still needs to be refined.
  • Divisional applications: This application is “divided” from the original application. This option is used in case a unity of invention objection is issued.

Interesting Things You Should Know About Patents

Patenting is a rather complex field that may seem dull and uninspiring. However, quite a few interesting developments occur in it from time to time, especially in regards to patent disputes.

Here is a short list of peculiar facts about patents that will make you see this field with a new perspective:

  • There are “trolls” in patenting. Every person who uses social networks today must have encountered a “troll” at some point. They are extremely obnoxious and annoying people whose only goals in life seems to be goading others into arguments. A “patent troll” is a company that patents some invention for the sole purpose of suing others for supposed violations of their rights. These lawsuits slow down the progress and cost American businesses around $29 billion a year. Some policies and laws are currently being developed to make the very existence of “patent trolling” impossible.
  • Some patents are really silly. Apparently, being sensible isn’t a necessary requirement for a patentable object. History has some examples of patents that can only be described as silly. For example, there is a patented method of swinging on a swing, a case for bananas, a face-mask that prevents eating, a gerbil shirt, and the list just goes on.
  • The real American patent boom occurred between 1915 and 1916. In 2011, the U.S. Patent Office granted approximately 120,000 patents. This may seem like a lot, but this number is merely a drop in the ocean when compared to the statistics of 1915-1916. During these two years, the Patent Office granted about 400 patents per person. Please note that the population of America at that time was around 100,000,000.
  • Patents are expensive. The average price of a patent is approximately $500,000. Some patents can cost up to $1,000,000. The funny thing is that despite the fact that people are willing to make these large payments to get the desired document, many of them allow their patents to expire after the initial four year period. The reason behind this is their refusal to pay the $900 yearly maintenance fee.
    • There is a much better and cheaper alternative to patents. Declaring your invention to be a trade secret can be more beneficial than patenting it. In this case, the object will be protected by employment law and nondisclosure agreements. Unlike a patent that will expire in a few years, a trade secret can remain a secret in perpetuity unless it is breached by one of the parties. If this happens, the person responsible for the leak will face charges of corporate espionage and breach of confidentiality.

Approach to Software Patents: The US Versus the EU

The U.S. and the European Union have rather different approaches to patenting software. These differences make it easier for developers to patent their creations in the EU.

In one of the cases heard by the U.S. Supreme Court in 2014, it was announced that a special two-step test must be implemented in order to determine whether an invention is patentable. The first part of the test determines whether the subject of the testing falls into the “unpatentable” category, such as laws of nature or abstract ideas. The second part of the test is used to find out if the subject is created through an inventive application of an idea or law of nature. This approach makes it rather difficult to patent software, as it is usually deemed to be excluded from the area of patenting.

At the first glance, it may seem that the situation in Europe should be even worse, as EU laws have a provision stating that software should be excluded from patenting by default. However, local lawyers found a way around this restriction, which resulted in a de minimis application of said provision. They are using the fact that the EU patenting legislation considers “technical character” to be a synonym to “invention”. This means that everything that can be labeled “technical character” can be patented, and anything even remotely related to computers can be deemed as a “technical character”.

In Europe, the patent eligibility threshold for software is a mere formality, but U.S. courts do not accept this kind of approach. U.S. rules state that software is an ineligible subject for patenting, so no amount of creative wording can change the judge’s view on this matter. The European courts aren’t very supportive of this practice either. However, there is not much they can do if the patent application was worded in a specific way. Due to these formalities, almost every software patent claim in the EU is accepted.

The problem with the U.S. approach to software patenting could be solved if the courts put more faith in the technical application test. The current system that is based on determining patentability suffers because the very concept of “abstract idea” is too vague. It needs to be clarified in order to prove or disprove whether the subject of the patent claim falls into this category.

Should a better “test of abstraction” be created, the problem will be easily solved. Unfortunately, no significant steps have been taken in this direction so far. This is why many software developers prefer to operate from Europe.

Things You Can and Cannot Patent

If you are an aspiring inventor, you will need to know what exactly you can and cannot patent. This will allow you to protect the results of your hard work and legally prevent anyone else from making money by stealing your ideas.

Under the current U.S. laws, the patentability criteria are:

  • Novelty: The invention that you want to patent must be original. This means that it may not simply be a mildly altered version of an existing item.
  • Nonobvious: Your invention must not be obvious. This means that you cannot patent something that alters an existing item in an obvious way. You also cannot combine two old inventions and patent the resulting item. This can only work if this combination provides some unexpected and nonobvious results.
  • Utility: The main purpose of every patented invention is usefulness. Even if you manage to create a new and original item, you won’t be granted a patent if it doesn’t benefit anyone.

Patenting an Idea

Ideas are the main cause of misconceptions about patents in general. Every inventor wonders whether they will be able to patent an idea of an invention, thereby protecting it even before the item is created.

The answer to this question is no. Ideas aren’t physical, and therefore cannot be protected by law. This means that it would be wise to keep your thoughts and notes secret until you manage to create a working model of your invention.

If you need to share your idea with someone else, perhaps to get funding, you should draw up a confidentiality agreement in order to protect it from being stolen. It is always best to entrust the writing of the agreement to a specialized attorney. A legal professional will know how to word the document in a way that leaves no loopholes that can be exploited against you.

Once you come up with an idea, you should do a patent search and market study. The results of the patent search will let you know whether there is another invention that is similar to the one you’ve come up with. Studying the market will tell you whether your invention is indeed useful and can fill a void that currently exists.

If the results of your research show that your invention is either not unique or not very useful, you should focus on developing other ideas or improving the one you already have. It will be pointless to keep working on an invention that will not be patented in the future.