recent changes to u.s patent law brief overview of the 2011 america invents act february 13, 2012...
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Recent Changes to U.S Patent LawBrief overview of the 2011 America Invents Act
February 13, 2012Howard L. Wernow, Esq.
DisclaimerThese materials are public information and have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law and practice. These materials reflect only the personal views of the presenter(s) and are not individual legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. And not all views expressed herein are subscribed to by each presenter. Thus, the presenter(s) and his/their firm(s) cannot be bound either philosophically or as representatives of various present and future client to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the presenter(s) or his/their firm(s). While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.
What is a patent?
• A patent is an intangible property grant by the U.S. Patent and Trademark Office (USPTO) that allows the patent owner to maintain a monopoly for a limited period of time on the use and development of an invention.
Patent Application Process (generally)
1. Develop a new invention2. Familiarize your self with Prior art3. Draft and submit a patent application4. Patent application is reviewed by a USPTO
examiner- Burden is on the patent office
5. Tug-of-War type prosecution6. Patent application is either rejected or a patent
will issue.
US Patents: Brief History
• Congressional Authority to enact laws pertaining to inventions?
• US Constitution: Article I, Section 8• Enumerated Power– The Congress shall have power 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;
The Leahy Smith America Invents Act (AIA)
September 16, 2011• New reform to U.S. Patent Law Changes to 35 USC 102
Effective filing date, changes to Prior Art, Pre-Issuance Submissions, Supplemental Examination, Post Grant options/Litigation related provisions, amongst other things.
• Sold to Congress as a jobs creator and to improve patent quality and further limit unnecessary litigation costs.– See June 1, 2011 House Judiciary Report to accompany H.R. 1249
First-Inventor-to-File
First-Inventor-to-File
Understanding First-Inventor-to-File
• March 16, 2013–AIA moves the USA from a First-to-Invent
system to First-Inventor-to-File patent system–Purpose is to harmonize the USA with other
countries
Understanding First-Inventor-to-File
• First inventor is NO longer “entitled” to a patent– Date of invention/conception is no longer the
critical date for determining patentability.
• First inventor to file, or publically disclose, the invention is entitled to the patent– Now: Effective Filing Date or public disclosure is
the critical date.
Understanding First-Inventor-to-File
• Patent filers must understand– Effective Filing Date– Exceptions
Understanding First-Inventor-to-File
• Effective Filing Date– Effective filing date for a claimed invention is• The actual filing date of a patent application having
claims to the invention, or• The earliest filing date to which the invention is entitled
to right of priority or benefit of an earlier filing date.
Understanding First-Inventor-to-File
• Effective Filing Date– However…• New FITF patent system applies to any application that
contains, or contained at any time, claims to an invention with an effective filing date after March 16, 2013.
Understanding First-Inventor-to-File
• Exceptions:• First Exception– Public Disclosure (by inventor)• Within 1-year of the effective filing date will not bar
patentability if the disclosure was made by – the inventor, or–One who obtained the disclosed subject matter
directly or indirectly from the inventor
Understanding First-Inventor-to-File
• Exceptions:• Second Exception– Public Disclosure (3rd Party)• Does not bar patentability if the disclosed subject
matter was made public by inventor –Within 1-year of the effective filing date, and– Prior to 3rd Party’s public disclosure
Understanding First-Inventor-to-File
Understanding First-Inventor-to-File
Hypo #1
Understanding First-Inventor-to-File
Hypo #2
Understanding First-Inventor-to-File
Hypo #3
Understanding First-Inventor-to-File
• Filing before March 16, 2013• Benefits:– Ability to swear behind references based on the
date of invention/conception– Not subject to Post Grant Review– Less susceptible to prior art submissions by 3rd
parties
Understanding First-Inventor-to-File
• Who benefits from filing after March 16, 2013 under FITF
• Large Corporations? Small Business? Sole Inventors?
• Answer: AGILE entities
Understanding First-Inventor-to-File
• Become Agile– Establish a cohesive patent strategy– Know the “big picture” for your entity– Shorten the inventing process– Set time tables for internal disclosure review– Set time tables for conducting/reporting searches
and drafting applications
Understanding First-Inventor-to-File
• BASIC USPTO FILING FEES
• Source: http://www.uspto.gov/aia_implementation/AC54_Final_Table_of_Patent_Fee_Changes.pdf
Filing Pre-AIA Fee (Small Entity)
AIA Fee (Micro Entity)
Basic Filing Fee $195 $70
Utility Search Fee $310 $150
Utility Examination Fee $125 180
TOTAL $630 $400
THANK YOU!
Value added IP: How Intellectual Property creates value for a new business
Or….Why File a Patent at All?
John D. Gugliotta, P.E., Esq.3020 West Market Street
Fairlawn, OH 44333Phone (330) 253-2225
Facsimile (330) [email protected]
www.pctlawgroup.com
Why Protect Your Intellectual Property?
Attorney Wernow discussed the when....
But….WHY make the investment at all?
Empirical Reasons
• Obtained from other inventors / entrepreneurs• Over the last 20 years
-changes in business models(from “Brick and Mortar” to “Virtual”)
-throughout various business cycles(Internet Bubble…..Great Recession)
There is NO ONE RIGHT ANSWER!!!
Three Basic Categories
-Asset-Protection
-Monetization
Patents as an Asset
• Balance Sheet “Asset”• Tax/accounting purposes• Enterprise “valuation” - on exit
- banking/financing - other (share valuation??)• Increased multiplier on Exist
Protection
• Offensive -exclusive right to “make, use or sell” -enforcement -create hurdles for the competition
• Defensive -as a defense against the competition’s
offensive IP
When Offensive vs. Defensive
• Goals• Market
-size or segmentation?• Competitive Nature of the Industry -litigious vs. “steer clear” -adverse appearance of “copying” -”catch me if you can” (……WalMart….Target….Dollar Stores….)
Monetization
• Licensing-identifies “technology”
-basis of royalties -identifies “prior” or “joint” development• Investment -protection for “investors”
Crossover of Rational
• Acquiring/Investor Pool may have different reasons that you
• Keep motivations of “target” in mind• Keep open alternative strategies
CASE STUDIESCase Study #1 - Thermal Insulated Windows
• The inventor is experienced in the window extrusion industry and particularly in the sales and the marketing of the equipment utilized to manufacture insulated glass units.
• The inventor drafted and filed with the Patent and Trademark Office a hand-written provisional patent application. The inventor then contacted us to represent him in licensing negotiations with a Fortune 500 company.
• The negotiations resulted in the inventor earning over $250,000 in licensing revenue; however, the Licensee’s in house attorney experienced difficulty obtaining the required utility patent protection one year later. Again retained to overcome the problems and obtained for the Licensee strong, broad and valid intellectual property protection.
• World-wide patents were thereafter filed and eventually a new company was born. • Vertical Ventures V-5 LLC was formed as a joint venture that generated additional
licensing revenue in excess of $250,000. • Result: The inventor has received more than $600,000 to date based on a nominal,
legal investment. Always keep in mind the Return on Investment!
CASE STUDIES
• Unique Fishing Lure-Note on Fishing/Hunting” and “Sporting Goods” fields
• Making in “Cottage” / “Lifestyle” Model -Making at home, selling at “flea markets” -Retail Price approx. $1.00
• COGS approx. $0.50• No “layered” distribution
CASE STUDIES
• Approaches by someone in supply channel for “buy-out”
• Offered $1Million Lump Sum
• REFUSED OFFER WITH ONLY COUNTEROFFER, NO NEGOTIATIONS
CASE STUDIES
• “I need at least $2Million • WHY?
- …..if I were to invest this money and live off the interest it would not be enough to stop working…..
• Any objective valuation? NO. • “How many flea markets will it take to get to
$1mm?”
CASE STUDIES
• Similar Stories• “It is worth one billion dollars….”
• Q: “So you make about $5,000 a year now selling your jewelry designs. If you were to sell the copyrights outright, what would you consider to be a good result?”A: “I would never take anything less than one
million dollars”
CASE STUDIES
• Rising Phoenix “OmniFrio-patents
-trademarks -investment (approx $2mm, several years,
entire personal assets)• Market (mass merchant retail) requires
SIGNIFICANT CAPITAL• i.e. Unable to Launch (ran out of $$)
CASE STUDIES
• Change in goals• Have tooling, but no inventory. Interest, but
no sales• What to do?
CASE STUDIESPrimo Water has acquired certain assets of Omnifrio, which mainly consist of appliance and
intellectual property related to single-serve, carbonated beverages, flavour cups (S-cups) and CO2 canisters used with the appliances to make a variety of cold drinks.The acquisition of Omnifrio positions Primo Water in the $39bn US market for carbonated beverages. The company plans to integrate the Omnifrio carbonation and single-serve cold-beverage technology into some of its water dispenser appliances to develop multi-beverage hydration stations for both household and office use.
Omnifrio has several patent applications pending for its carbonated beverage makers. It has developed over 30 flavours of S-cups with three carbonation levels. Primo expects to begin selling cold carbonated beverage appliances and flavour cups to specialty and catalogue retailers in the US in the fourth quarter of 2011.
Billy Prim, Primo's president and CEO, said: "This should enhance our ability to add innovative beverage and hydration solutions to our line of water dispensers and convert more households into Primo consumers."This technology combines two of the fastest-growing beverage categories: carbonation systems and single-serve beverages. Additionally, we plan to offer two add-on consumables: S-cups and CO2 cylinders for exchange."
• Source: Primo Water Corporation
THANK YOU!