Basic Patent Facts and Inventor's Responsibilities

What is a Patent?

The government grants a patent to an inventor for a novel and non-obvious invention.  The patent gives the inventor the right for a limited period to stop others from making, using or selling the invention without permission.

In return for this right, the applicant must disclose to the public how the invention works. When a patent is granted, the applicant becomes the owner of the patent. Like any other form of property, a patent can be bought, sold, licensed or mortgaged. Patents are territorial rights, so a U.S. patent will only give the owner rights within the United States.

UTILITY PATENT APPLICATION: A utility patent application is the primary form of protection for an inventor. A utility patent can be used to protect any novel (and non-obvious) device, apparatus, construction, machine, composition of matter, industrial method, process, or even a novel method of doing business. A utility patent lasts for 20 years from its filing date and prevents any competitors from making, using, selling, offering for sale, or importing any products that infringe upon the claimed invention.

DESIGN PATENT APPLICATION: A design patent application protects the "ornamental appearance" of an invention when the appearance of the invention is important, a design patent can by valuable. 

PROVISIONAL PATENT APPLICATION:  A new type of patent is the Provisional Patent, which is a temporary form of Utility Patent.  A Provisional does not require “claims” (the complex legal language), and is thus easier and generally less expensive to prepare and file.  A Provisional is good for one year, at which time a Utility Patent application must be filed.

What is Patentable ?

There are two primary requirements that are critical to patentability: (1) An invention must be NOVEL, meaning that the invention has not been made before, and (2) An invention must also be NON-OBVIOUS, meaning that the invention cannot be merely a combination of known elements, put together in a way that would be obvious to one skilled in the art.

If an invention meets these criteria, almost any form of invention is patentable, from new machines, devices, and compositions of matter, to improved methods of manufacturing a product, methods of performing certain tasks (from surgery to tasks performed by computer software), and even methods of doing business.

Procedure for Protecting an Invention

PATENT SEARCH.  When you invent a new product, the first step is to perform a patent search.  Not only does a patent search confirm that the invention is patentable (and not patented by another), it also improves the quality of your patent application.  When your attorney writes your patent application, it is critical that he review the most relevant prior art.  A great patent can be invalidated in court if important prior art was not considered. Don’t lose a valuable patent because of a simple oversight.

A patent search opinion by a patent attorney is also a great sales tool.  The best way to persuade investors and licensees to accept your idea, is to show that you have done your homework and you possess a valuable property. When they ask for your patent search results, make sure you can deliver a patent search report from a registered patent attorney.

PATENT APPLICATION FILING.  The second step, assuming the patent search indicates that the invention is patentable, is to file a patent application as soon as possible.  While U.S. law grants patent rights to the first to invent an invention, in practice, priority is often granted to the first to file simply because of the expense required to prove earlier conception.  Furthermore, most international countries grant priority to the first to file the application.  Rather than risk losing patent rights to a competitor, it is always best to file early.  You should certainly file the application before disclosing the idea publicly or to a potential competitor.

Duty to Disclose Prior Art

When you file your patent application, it is important to make certain that you have delivered all pertinent prior art references (prior patents, publications, pictures, et cetera) to the Patent Office (in the form of an Information Disclosure Statement).  An inventor has an ongoing duty to report prior art references to the Patent Office up until the patent is granted.  Consideration of the prior art is also critical to the preparation of the patent application, and disclosure of the references to the Patent Office will help protect your patent from being challenged on the basis of these references.

Inventorship

All persons who have contributed to the invention of the claimed subject matter (and only those persons) must be listed as inventors.  Incorrect reporting of inventors can lead to a patent becoming invalidated in court, so make certain that all inventors are listed correctly.

Inventors are initially granted full rights to the invention, and can make use of the invention.   An inventor may license the patent to another party without any obligation to the other inventors.  It is therefore suggested that written agreements and/or assignments of patent rights are in place when a patent application is filed.

Ownership

If there is more than one inventor, a corporation, an investor, or an assignee/licensee involved, it is up to the inventor(s) and other parties to determine who should own the patent rights.  Absent a written transfer of rights, every inventor or co-inventor has the right to make, use, sell, or offer to sell products that include the patented technology.

Common arrangements include the following:

            (1)  All inventors are employees of a corporation, and the inventors assign their rights to the corporation.  This is a common provision in an employment contract, which has been acknowledged and signed by the employee.  Also, make sure that any independent contractors, that may have been involved in product development has signed a Work Agreement.

(2)   A co-inventor who has helped the inventor with developing the invention.  The parties should agree beforehand who will own the patent rights, and what benefits each party can expect from the profits of the invention.  An inventor will typically want to have the co-inventor sign a Work Agreement that assigns patent rights to the primary inventor (preferably before the work on the invention is commenced).  The parties may have a separate contract that describes benefits (if any) that may be payable to the co-inventor.

(3)   Two inventors that develop the invention through collaboration.  At the very least, the two parties should have a contract defining who gets what benefits out of the deal.  It is greatly preferred that the parties assign rights to a single entity (either one of the inventors, or to a corporation or similar entity).

(4)   An inventor and an investor who work together on a project.  The inventor will have the initial rights to the invention, although the investor may require the inventor to assign or license the rights to a corporation or other entity. 

There are many important legal issues and tax consequences involved in these transactions. Seek professional advice before you commit to a particular arrangement.

Confidentiality Agreements and Work Agreements

It is critical to keep the idea confidential until the patent is filed. Tell as few people as possible, and have everyone sign a Confidentiality Agreement before you tell them the idea. This is not just important to prevent theft – it is also important to prove to the courts that you have not publicly disclosed the idea or offered the idea for sale before you file your patent application.

If you have an engineer or other prototyping expert help you in product development and/or manufacturing, it is critical to have the consultant sign a Work Agreement. If a paid assistant/consultant improves your invention, he or she may have to be listed as a co-inventor on your patent. Even though you are paying them for their work, they will obtain rights to the invention as a co-inventor. A Work Agreement assigns their potential patent rights to the inventor. 

See Forms to download a copy of a standard Confidentiality Agreement and/or Work Agreement.

Small Entity

Small entities (individuals, or corporations with less than 500 employees), which have not transferred the patent rights to a large entity, are entitled to pay half-price filing fees. 

Publication

Current U.S. law provides that patent applications will be published after 18 months from the earliest patent filing date.  It is possible at the time of filing to request that the patent not be published -- if no foreign patent applications are going to be filed.  It can be desirable to have the application published, as this gives rise to “provisional rights” to collect a royalty for infringement that takes place post-publication and pre-issuance.  The default practice of this office is to allow the application to be published.

In some circumstances, it is possible to request early publication of an application. Early publication may increase damages obtainable against any infringers.

Foreign Patent Protection

A U.S. patent provides protection in the United States and prevents anyone from "making, using, selling, or offering for sale" the subject invention.  This does not, however, provide any protection outside of the United States.

Under International Treaty (The Paris Convention), a U.S. patent provides protection for up to one year throughout most of the world.  An inventor, therefore, has one year from the first patent filing date (utility or provisional) to file for patent protection in most foreign countries (6 months for design patents).  There are two primary methods of securing foreign patent protection: (1) through the Patent Cooperation Treaty (PCT), or (2) by filing National (or Regional) applications directly into individual countries in which you are seeking protection.

The Patent Cooperation Treaty (PCT) provides protection throughout most of the world for up to 30 months from the initial patent filing.  The PCT typically costs relatively less compared to filing National applications.  Therefore, the PCT is a great way to defer foreign patent costs until an inventor is better able to afford the filings.

National applications are filed in individual countries just like the U.S. application.  Each application requires government fees, foreign agent fees, translation fees, etc., all of which vary depending upon the complexity of the invention, length of the patent application, and the country or countries in which protection is desired.  This can, needless to say, become very expensive.

There are some regions, most notably in Europe, that allow an applicant to file a single application to cover multiple countries.  This can sometimes considerably reduce the cost of foreign patent protection, as well as defer other fees for several years.