Archive for March, 2014

Regarding Patent Application Costs

March 26, 2014

There are a large number of inventors and companies out there now that want patent work done as cheaply as possible.  Especially since the economy has tanked, many inventors and companies are attempting to low-ball fees for preparing patent applications.  I have seen ads for $1,400 patent applications.  There is simply no way to have a quality patent application prepared for this price.

Another case is where an inventor has prepared his own patent application and has asked me to simply review it to make sure that there are no obvious mistakes.  The reason for preparing the application himself is that the inventor believes that this will save money on preparation costs.  Unfortunately, this is usually not the case, and I tell these clients this fact up front.  Unless the inventor has significant experience with preparing and prosecuting patent applications, the application will undoubtedly need a lot of work on my part.

First, the application may be very brief, perhaps 8-10 pages with a drawing or two.  The invention will often be described in very general terms because the inventor is afraid that specific descriptions will unduly limit the invention.  In this case, I generally have to start over.  One cannot get a patent on a general idea.  One must describe specific implementations of the invention.  This does not mean that the invention must be very specifically claimed.

Otherwise, the inventor may have an application of adequate length for the complexity of the invention, say 30 or so pages, with 10 or so pages of drawings.  In fact, sometimes these inventors don’t understand the difference between a patent application and a research paper, so they will include large amounts of extraneous details ont the background or theory of the invention.  In this situation, it will probably take me just as long or longer to adequately review the entire application, discuss the details with the inventor to fully appreciate and understand the invention, and then make corrections and changes based on my experience in patent law and my adequate understanding of the invention.  This does not save the inventor money.

Another typical situation that I encounter is where an inventor or company sends me a pending patent application and asks me to take over the prosecution because they are dissatisfied with their current counsel.  They believed that the invention would be patentable and that the examiner should be able to be persuaded of this fact quickly.  They have also had commercial success with the invention, but are afraid that if they don’t get a patent, knock-offs will appear that will undercut their prices and knock them out of the market.

Often, I find out that they are correct–certain aspects of the invention are patentable.  When I review the specification, however, I realized that it is only 8 or 10 pages long.  They didn’t want to spend much money when they had their application prepared and filed (often a couple years earlier), so they went with the low-ball price for its preparation.  Now, many of the features that seem to make the invention patentable are not sufficiently described in the specification; I cannot add them to the claims because they would constitute new matter.  I do the best that I can to salvage something from the application for them, but there is a lesson here.  If the description contained more details and was say 15 or even 20 pages long, these aspects of the invention could be added to the claims.  This is not to say that longer applications are always better, but in general this is the case.

What to Do

The best practice is for each invention should be treated as a million dollar invention when the application is being prepared.  At that time, who knows which ones will be?  I always tell clients that patents are speculative investments.  You can’t tell from the start which inventions will be successful and worth the investment; you can’t be certain which will be granted broad patent protection; and, perhaps most importantly, getting a patent doesn’t mean the product will be successful in the marketplace.  If you don’t spend the time and money to prepare an adequate patent application, it doesn’t matter.  The resulting patent, if any, will only be worth what you paid for it.

With a down economy many or most patent attorneys either didn’t raise their rates or even lowered them slightly the past few years, and rightfully so.  The market dictated this event.  When comparing the services of an attorney who charges $800 per hour with one who charges $50 per hour, however, one must realize that the attorney with the low-ball rate would undoubtedly charge a higher rate if the market demanded it.  If he can be just as busy charging $200 or $300 per hour, why would he continue to charge $50 and make less money?

This isn’t to say that a higher rate always gives you a better product.  One should also take referrals and other factors into account when comparison shopping for patent services.  Sometimes a better patent attorney may choose to work for a smaller firm or in a smaller market where rates are lower than those in the big city at the big firm.  His or her work may be just as good or better than the big-firm attorney in New York or DC.  When a price is too good to be true, however, it probably is.

On the point of whether to begin a patent application by preparing the claims or the specification, I have done it both ways.  I generally find, however, that preparing the claims first is advantageous.  In this way, I can confirm with the inventor his or her understanding of what the invention actually is.  I then prepare the written description.  I try to make it as detailed as possible and get the inventor to provide me with as many different implemenations, embodiments, and optional features as I can.  It is indeed an iterative process:  when preparing the description, it is inevitable that I will discover features that that should be claimed, and vice versa.  And yes, all of this takes time; more than $1,400 worth of time.

I will often discover during prosecution that there are features of the invention that I need to add to the claims or that are patentable that were not included in the original claims.  By having an adequate disclosure from the beginning, adding such claims is easy.  If the description is too terse, however, this can’t be done.  New matter cannot be added to a pending application during prosecution.

When a client comes to me with a new idea for a patent application, I try to get all of the details of the invention from them and then provide what I believe to be a fair and realistic estimate of the cost to them based on the time it should take to adequately describe and claim the invention.  Sometimes my estimate is too high and the actual cost is lower; sometimes things happen that raise the costs.  I previously provided some tips and strategies to keep costs down and get better patents.

The bottom line is that in patent preparation and prosecution, like most everything else, you get what you pay for.


PTO Issues Guidance on Patentable Subject Matter

March 17, 2014

Several weeks ago, Andrew Hirschfeld, Deputy Commissioner for Patent Examination Policy, issued a Procedure for Subject Matter Eligibility Analysis for claims purportedly involving laws of nature, natural principles, natural phenomena, or natural products.

At its most basic, the guidelines direct patent examiners to determine whether the claims fit within one of the statutory (always a good place to start) categories (process, machine, manufacture, composition of matter).  If so, the examiner should determine whether it might fit within one of the judicially-created exceptions to eligibility.  Next, the examiner should ask this question.

Does the claim as a whole recite something significantly different than the judicial exception(s)?

What does that mean?  There is, of course, not test to determine whether a patent claim recites something “significantly different” from a patent ineligible naturally occurring product.  Thus, the guidelines set forth a large number of factors that examiners must weigh to make this determination.  The guidelines then go on for a total of 18 pages to discuss factors weighing in favor or against the subject matter being patent eligible and set forth numerous examples for examiners to review.

Looking for “significant differences” again sounds like a confusion of the standard for prior art patentability against subject matter eligibility.  The Supreme Court has made this area of patent law that was simple to understand and basically dormant into an area that is beyond confusing and creates large amounts of uncertainty for applicants and patent owners.

How does one provide comments on these new PTO guidelines to perhaps assist the examiners with new tests or examples?  We can’t.  There is no comment period at all for these guidelines as they are not deemed to be rules that require a notice and comment period.  Let’s not revert to a closed Patent Office as during previous administrations.

Bill Introduced to End Fee Diversion

March 17, 2014

Sen. Diane Feinstein (D-CA) has introduced the Patent Fee Integrity Act to purportedly end Congress’ theft of PTO user fees.  The bill would place user fees into a fund that can only be used by the PTO for its operations.

Fee diversion was a big part of the debate over the America Invents Act, but ultimately the provisions to end that practice were removed prior to final passage.  Indeed, Congress stole $120 million in PTO funds due to sequestration cuts and has taken $1.1 billion in user fees from the PTO since 1990.  This amounts to an extra tax on innovation in the US.

Congress periodically introduces these types of bills and they never go anywhere.  During the AIA debate over the issue, Rep. Lamar Alexander (R-TX) basically told PTO users to “trust me” there will be no more fee diversion.  If that were so, the PTO would not have been subject to sequestration cuts and would not have been in danger of closing during the government shut down, as users continued to file patent applications to fund the Office.

Meanwhile, Rep. John Conyers’s (D-MI) bill to end fee diversion has not advanced beyond the House Subcommittee on Courts, Intellectual Property and the Internet.

Another New Demand Letter Bill Introduced in Senate

March 5, 2014

220px-Claire_McCaskill,_Official_portrait,_112th_CongressCongress is continuing its quest to defeat the evil patent troll monster.

On the heels of the House passage of the Innovation Act in December that would bar patent owners from sending “purposely evasive” demand letters to secure willful infringement verdicts and require identification of the real party in interest, and the Patent Transparency and Improvements Act being considered by the Senate Judiciary Committee that includes a number of requirements for infringement demand  letters and would permit the FTC to act against parties sending out fraudulent letters, Senator Claire McCaskill (D-MO) has introduced the Transparency in Patent Assertion Act.

The bill, S. 2049, would similarly set minimum requirements for demand letters sent by patent assertion entities and empower the FTC to act against companies asserting patents as scams.  The bill would require the demand letter to include a detailed description of the patent at issue and the accused product or service, including how it infringes the patent.  The letter must also include the name and address of the person who has the right to enforce the patent.

Sen. McCaskill held a hearing on patent trolls in November where she made her feelings about such “bottom feeders” and “scam artists” quite well known.

If Congress, President Obama, and the Patent Office are of one mind on the evils of patent trolls, why the need for so many different bills and initiatives?