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University of North Carolina School of Law
Chin, Andrew

I. Introduction 
            A. Background
                        -US is a first to invent system
                        -patent grants exclusionary rights:
-prevent others from making, using, selling or offering for sale, or importing the patented invention for set period of time
            B. Types of Patent Protection
                        1) Utility patent
-not automatic – requires submittal of application to USPTO (per §111)
-examiners assess whether the application merits a utility patent under §131 wrt certain criteria:
(i)                       Full disclosure and distinct claiming of the invention – per §112
(ii)                     Usefulness of invention – per §101
(iii)                   Novelty of invention – per §102
(iv)                   Nonobviousness of invention – per §103
-if granted, rights conferred per §271 – exclude others from making, using, selling, offering, importing
-term typically 20yrs from date of filing
-note that the period required for examining validity is included WITHIN the patent term
i.e. the term doesn’t start after the application is deemed valid; it starts upon filing
                        2) Design patent
                                    -these patents are for a new, original, or ornamental design
                                    -design cannot be functional – if it is, have to have a utility patent instead
                                    -term is 14 years from filing date
            C. Theories for Patent Protection
1) ‘incentive to invent’
-Premise – too few inventions will be made in absence of patent protection b/c inventions, once made, are easily appropriated by competitors who have not shared in the inventive costs
i.         This will drive prices so low that no profit will be possible for the inventor; thus quash motivation
ii.        Providing a limited monopoly controls appropriations, protects limited profits for inventors
iii.      Note again – this includes a balance b/w patent protection and antitrust policy
-Objections to this theory
-Free market competition alone is incentive enough to stimulate innovation
-Limited protection may distort economic activities in ways that undermine market efficiency
-Protection may deter others from researching improvements
-Protection may cause others to waste time looking for duplicative solutions to same problem
2) ‘incentive to disclose’
-Premise – in absence of patent protection inventors would keep their inventions secret to prevent exploitation and thus prevent the public from gaining the full benefit of the new knowledge
-Objections to this theory – secrecy is not always practical w/ particularly reverse engineering capabilities
3) ‘incentive to innovate’
-Premise – patent system necessary to induce firms to invest in R&D; enhances likelihood of investment
4) ‘rent dissipation’
-Premise – tied to waste of duplicative innovation; want to have a system where everyone is ‘chasing rents’ (here patents) that are good bets and not going after too many ideas/inventions (would dissipate rents)
5) ‘race to invent’
-Premise – patent system sets up a series of ‘finish lines’ letting inventors know how far to develop an idea to obtain a patent – in a sense demarcation of requisite definiteness.
6) ‘prospect theory’
-Premise – system promotes efficient allocation of resources to the development of existing inventions by awarding exclusive, publicly recorded ownership in new prospects after their discovery
-Tied to tragedy of the commons argument –  system creates private property versus communal property
-The balance forces inventors to internalize what would otherwise be external costs and fully realize the costs as well as the benefits of further exploitation of the resource (invention)
            D. Requirements for Patentability
                        1) Statutory Subject Matter (101)
                                    -machine, article of manufacture, process, or composition of matter
                                                -also new and useful improvements to any of the above
                                    -CANNOT patent abstract ideas, laws of nature, physical phenomena
                        2) Utility (101)
                                    -invention has to have practical utility in order to be patentable
                        3) Novelty (102)
                                    -invention cannot be encompassed by prior art
                                    -presume novelty unless:
(a): invention can’t be known or used or patented or described by others in US or foreign country
(b): invention was patented or described by others in US or foreign country or in use or on sale in US more than 1 year before app date
(c): inventor abandoned invention
            -explicit or implicit abandonment
                        -implicit: failure to file for patent after reducing to practice
(d): invention was patented more than 1 year before filing in US
            -patent can be in a foreign country
(e): invention was described (but not claimed) in published patent app or patent filed in US
                        -international app: designate US and be published in English
(f): applicant isn’t true first inventor
            -inventor is the first to conceive of the specific invention claimed
(g): priority contest
-important dates: date of conception and date of reduction to practice (diligence)
            -filing date of app is constructive reduction to practice
                                                -novelty requirements: a, e, f, g – look at date of invention
                                                -statutory bars: b, c, d – look at date of filing
                        4) Nonobviousness (103)
                                    -invention cannot be obvious to POSITA (objective standard)
                                    -concerns here:
                                                1) level of skill
                                                2) relevant art
                                    -invention must be a sufficient advance over prior art in order to be patentable
                                    -cannot use hindsight to determine obviousness
                        5) Enablement (112)
                                    -patent must sufficiently describe the invention so that a POSITA can make and use it
                                    -specification is composed of:
                                                1) enablement
                                                            -how to make and use the invention from POSITA’s perspective
                                                2) written description
                                                            -clear and concise description of invention
                                                            -notice to POSITA about what has been invented
-denotes that inventor possesses the invention, either actually or constructively
-cannot have more here than what is in the claims
                                                3) best mode
                                                            -must disclose the best way of practicing invention
                                                            -collectively referred to as “adequacy of disclosure”

            -is the subject matter of the invention in one of the 5 categories?
                        -if no, not eligible for a patent
-if yes, is the subject matter for a process or a product?
                                                -is it tied to a particular machine or results in a physical transformation?
                                                            -if yes, eligible (Bilski)
                                                                        -cannot be a post-solution or extra-solution machine/txn
                                                                        -trying to prevent artful drafting
                                                            -if no, not eligible
                                                            -does the purification or isolation confer a new use?
                                                            -if yes, then eligible
                                                -present in nature:
                                                            -if yes, not eligible
                                                            -if no, eligible
                                                                        -product of human ingenuity/intervention (Chakrabarty)
III. Utility
            A. Utility Guidelines
                        -use must be credible, substantial and specific
                                    -if not, it is a “throwaway utility”
-inventor must disclose the highest and best use for his invention as part of best mode requirement
-types of utility:
1) general utility
            -can the invention actually do anything?
            -the utility cannot be frivolous (perpetual motion machine)
2) specific utility
            -can the invention perform the function it was designed for?
3) beneficial or moral utility (Lowell)
-does the purpose of the invention have some social benefit? Is it harmful?
-old rule (Lowell): don’t want to patent an invention that’s frivolous or injurious to the well being, good policy, or sound morals of society
-patents have been denied on “immoral” inventions – poisoning, gambling
-an invention that deceives the consumer may not be enough to deny patent (Juicy Whip)
-it is not up to PTO to oversee consumer deception/defrauding
-the applicant can claim multiple utilities in the app as long as one utility meets the operable utility requirement
-strong presumption that the invention is operable due to filing the app
            -don’t have to submit evidence of its utility
-burden is on the PTO to set forth factual reasons why a POSITA would question the claimed operable utility
            -PTO just has to raise reasonable doubt in order to support a rejection