I. INTRODUCTION TO PATENTS
A. Patents Generally – Patents are grants of rights creating a limited monopoly to encourage the production of inventions – processes, machines, and composition of matter. The right is not to create or do something, but rather, the right to exclude others from doing so.
B. Constitutional and Federal Statutory Authority
1. U.S. Const. Article I, § 8, cl. 8 – [to] promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.
2. The Federal Patent Statute: 35 U.S.C. et seq – Patent law is exclusively federal and thus states cannot have laws covering subject matter even relatively close to the patent statute.
C. Theory of Patent Law – A patent gives its owner exclusive rights in an invention. It can be viewed as an agreement between the inventor and the public that in return for making and fully disclosing the invention to the public, the public grants the inventor the right to prevent others from making, using, selling, or offering to sell the invention in the United States or from importing into the United States for a limited period of time.
1. Purely Utilitarian Rationale based on Incentives – Inventions are public goods that are costly to make and difficult to control once they’re released. Without patent protection, not enough incentive to invest in creating, developing, and marketing new products.
2. Patents Create Incentives For…
i) Invention – Can spend resources and be protected
ii) Disclosure/Documentation – Increases public knowledge
iii) Commercialization – Incentivizes inventors to do something with their patents, i.e. they can sell their products without fear of infringement. (need to commercialize to re-coup costs of R&D and patent prosecution)
iv) Investment in R&D
v) Design-Around – Encourage finding new ways/methods of accomplishing a goal; can’t use same method, must innovate. This may be the most important incentive because it is often the second or third inventor is the one that gets it right / perfects it for public consumption.
3. Costs of Patents – Huge administrative costs; impedes follow up research, restrain innovation.
D. Structure of a Patent – Every patent is numbered for identification purposes. It also includes the following…
1. Specification – The primary part of a patent is the specification. It contains the description of the invention.
i) Front page – Includes title, inventor, publishing date, assignee (company that controls patent rights), application number, filing date, class numbers (each patent classified by technological area for ease of finding preemption), field of search (purposes of infringement suits and whether background search was insufficient), references cited, and examiners of the patent.
ii) Abstract – Summary of the invention written by the applicant (very strategic). Should include key words (for visibility of others searchers), describe as vaguely and broadly as possible for maximum potential protection from copies/improvements, but as specific as necessary as to not encompass prior patents (and thus to invalidate your patent).
iii) Written Description – Textual description of the patent including four components…
a. Description of Technical Field
b. Background of the Invention
c. Summary of the Invention
d. Detailed Description of the Invention
2. Drawings – The most illustrative drawing must be included on the title page. Other drawings help in the description of the invention.
3. Claims – Claims are the textual description that form the basis for the patent grant and provide the boundaries of the invention. They describe the invention’s structural elements (for a product claim) or steps (for a process claim) and the rest of the document supports them. Claims are evaluated individually and the document does not succeed or fail based on one claim.
E. The U.S. Patent System – There are two distinct phases of the U.S. Patent System…
1. Prosecution Phase (also called Examination; usually lasts about 2 yrs) – During this stage, the USPTO examines the patent for validity. At the end of the stage, an “issued patent” is given to the inventor, which is required for enforcement.
2. Enforcement Phase – During the enforcement state, private actions (civil suits, enforced by each individual patentee), are litigated under federal law in any federal district court that has proper personal jurisdiction. All appeals go to the Federal D.C. Circuit Court.
i) Forum Selection Choices – Forum selection is very important in patent enforcement. Thus, patent enforcement actions should be filed in jurisdictions where there is a lot of relevant data, where there are judges who have experience in patents, in a region with an economy based on this type of invention (product) for jury selection purposes (i.e. either where there are plenty of engineers or none in jury pool).
a. District of Delaware – The most popular place to file is in the federal district of Delaware. This is because it is a relatively small district with a limited amount of judges with a relative amount of expertise.
b. Eastern District of VA – So dubbed the “rocket docket,” many people like to file in EDVA as well because the short time does not allow for a lot of preparation time for the infringer.
ii) The Federal Circuit Court of Appeals – Unlike the regional circuit courts, the Federal Circuit has unlimited geographic jurisdiction nationwide with limited subject matter jurisdiction. As such, the court enjoys exclusive jurisdiction over relating to patents as well as over cases in several other areas too.
a. Purpose – Consistent application of the law, achieved by eliminating the opportunity for forum-shopping would have a direct and salutary effect on industrial innovation and thereby on the nation’s technological strength and international competitiveness.
i. Reasoning – Circuit-splits are extremely costly; forces quicker development of jurisprudence to keep up with technological innovations; avoids forum shopping on the basis of substantive law
ii. Criticisms/Concerns – By reducing circuit splits, reduces ability of Supreme Court to keep an eye on development of incorrect law. Also, DC Circuit has become overly-favorable to patent law (i.e. whenever patent law conflicted with other types, e.g. antitrust, the other law loses).
b. Judicial Discretion Unavoidable – The shaping of the patent law is to an exceptional degree in the hands of the judiciary, for in patent cases a relatively simple statutory law is applied to an extraordinary complexity of factual circumstances.
3. Timing – The system changed from 17 years after issue to 20 YEARS AFTER FILING to encourage people to do their patents correctly and to dissuade actions that would delay the patent leaving the USPTO.
F. Requirements for Patentability
1. Five Requirements for Patents…
(1) FULL DISCLOSURE (§ 112)
(a) It is disclosed and described by the applicant in such a way as to enable others to make and use the invention
1. Concerns the benefit the public obtains from the patent “bargain.”
2. Those “skilled in the art” of the invention can read and understand the inventor’s contribution and after patent expiration will be able to MAKE AND USE the invention themselves
(2) NOT SUBJECT TO A STATUTORY BAR (§ 102) – E.g. Atomic Energy Act of 1954 excludes the patenting of inventions useful solely in the utilization of special nuclear material or atomic energy in an atomic weapon.
(3) NOVELTY (§ 102) – An invention cannot be patented if: “(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent,” or “(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country more than one year prior to the application for patent in the United States”
(a) Novelty Test: Determines whether the invention is unpatentable because it was made before, sold more than a year before a patent application was filed, or otherwise disqualified by prior use or knowledge
(4) NONOBVIOUS (§ 103) – The subject matter sought to be patented must be sufficiently different from what has been used or described before that it may be said to be nonobvious to a person having ordinary skill in the area of technology related to the invention. (PHOSITA)
(a) It represents a nontrivial extension of what was known
(b) “Nonobviousness” – the MOST IMPORTANT FACTOR
1. Asks whether an invention is a big enough technical advance over the prior art
2. Even if useful, not merit a patent if merely a trivial step forward in the art (industry
(5) WITHIN THE APPROPRIATE SUBJECT MATTER (§ 101)
2. Validity Analysis
i) Occurs twice…
a. Prosecution phase (by USPTO ‘Examiners’) –
b. Enforcement phase – Defense to infringement (by Courts) … but, ‘presumption of validity’
ii) 50% Patents Eventually Declared Invalid – This is not to be completely unexpected, however, because only the marginal cases eventually end up in trial.
G. Patent Prosecution Basics: Key Points about Prosecution
1. Ex Parte Process – Secret until publication; there is nobody to argue with except for the examiner
2. Private/secret (for 24 months)
3. Procedures allow “continuing” applications
a. Around 90% of all applications eventually result in a patent
b. Internal procedural incentives to issue patents – Part of the pay of a patent examiner is how many patents are processed per month\
4. Two-Stage Appeals
i) Board Patent Appeals and Interferences (Administrative Board)
ii) Federal Circuit (also: District DC + Fed. Cir.)
5. Reexamination (ex parte, inter-partes) – Patents can be re-examinable. Done at the discretion of the patent office and is rarely accepted.
B. The Elements of Patentability
II. SUBJECT MATTER OF PATENTS
A. Subject Matter Test – In the language of the patent statute §101, any person who “invents or discovers any new and useful PROCESS, MACHINE, MANUFACTURE, or COMPOSITION OF MATTER, or any NEW AND USEFUL IMPROVEMENT thereof, may obtain a patent,” subject to the conditions and requirements of the law. Interpretations of the statute by the courts have defined the limits of the field of subject matter that can be patented, thus it has been held that LAWS OF NATURE, PHYSICAL PHENOMENA, and ABSTRACT IDEAS are not patentable subject matter. Similarly, a patent cannot be obtained upon a MERE IDEA or SUGGESTION.
B. Patentable Subject Matter
1. Process – A mode of treatment of certain materials to produce a given result. It is an act, or series of acts, performed upon the subject matter to be transformed and reduced to a different state or thing.
2. Machine – A machine is an instrument that consists of parts or elements that are organized to cooperate, when set in motion, to produce a definite predetermined result.
3. Manufacture – The production of articles for use from raw or prepared materials by giving those materials new forms, qualities
iii. If you are allowing a patent, the pressure is a little bit less – but rejecting the patent claim, you are supposed to explain. So Sup. Ct. says that M/T is a good tool to use in a rejection analysis, but ONLY A STARTING POINT. Need balancing! There are other options Page 8 – how they define process may change. They are not striking down SSB’s analysis that business methods are patentable – but they are not saying that all business methods are patentable – so failure to construe a bright line w/regard to business methods
3. Improvements or Derivative Uses – An inventor may patent an “improvement” of a product or process. This ability, however, creates a situation where there may be multiple inventors claiming rights to an improved invention (i.e. I1 to underlying invention, I2 to improvement). The conflicting “blocking patents” force the inventors to enter into an agreement to produce the improved invention free from infringement claims. This illustrates technical nature patent rights: patent holder does not have the exclusive right to make, use, sell, offer, or import the invention. Rather, he has the right to exclude others from doing those things.
III.UTILITY (Operability) REQUIREMENT
A. Useful: The Requirement of “Utility” – 35 U.S.C. §101 authorizes patents for things that are “new and useful.” The patent utility requirement is derived from this provision.
1. “Utility” Defined – Utility will be found when there is an IDENTIFIABLE, SPECIFIC BENEFIT for the invention or, in the case of a process, the product of the process. Merely demonstrating that an invention may lead to further invention is not sufficient. However, it is not necessary to demonstrate that the invention works better than alternative methods of accomplishing its particular goal or function.
i) Rationale – To give an inventor exclusive monopoly rights in a product without showing a specific benefit, one could prevent others from discovering any benefits of that product. Also, there are substantial transaction costs associated with reviewing and granting useless patents.
ii) Potential Cost of Utility Requirement – Some areas of science and technology that by their inherent nature are less predictable (e.g. bio-sciences). The utility requirement will hurt those areas (and society) because these people will have to wait longer to patent. This is because a researcher might be forced to choose between publishing the results from a study (and thereby contributing to the public realm of scientific knowledge) and keeping the results secrete (to preserve patent rights under the statutory bar).
2. Potential Value Insufficient – A process or product with no current known use, but which might prove useful in future scientific research, lacks the requisite utility needed for patentability. Utility means that a process has an identifiable, specific benefit and not merely some potential for benefit.
In re Fisher: Utility problem that is beyond patentability. Maj: You’re trying to lock something up before you even know what it does. Here, they are sequencing genes and trying to patent the result.
3. Three Types of Utility
(1) General Utility – Centers on whether an invention is operable or capable of any use. The inquiry here is whether the invention as claimed can really do anything (e.g. perpetual motion machine not allowed)
(2) Specific Utility – Whether the invention works to solve the problem it is designed to solve. The focus here is on the operability of the invention to serve its intended purpose.
(3) Beneficial or Moral Utility – Whether the intended purpose of the invention has some minimum social benefit, or at least is not completely harmful or deleterious. This is no longer a requirement because it invited dangerous value judgments.
Juicy-Whip v. Orange Bang– D patented a juice dispenser that tricks people into thinking that they’re drinking the juice from a viewable tank when really it’s in hidden tanks underneath the counter. Held: The Ct. said that trickery is not immoral so it’s OK. The benefit of an invention need not be socially beneficial and an invention whose purpose is to deceive consumers may meet the utility requirement. This effectively got rid of any “beneficial” or “moral” utility requirement for patents.
4. LOW Threshold Requirement – The utility requirement is not a high threshold. Brenner is an atypical case and the general approach is to require only an assertion of “specific and substantial utility.”