Utility patents are the best way to protect most inventions. But to get one, you have to convince a USPTO examiner that your application is worthy.
Utility patents are by far the most common type of patent. In fact, the term “patent” almost always means “utility patent”. Almost all of the famous patents in history – the telephone, light bulb, transistor, airplane, motion picture, are utility patents.
What is a utility patent? Under US law, utility patents are the type of intellectual property (IP) that covers: “a new and useful process (e.g. a method of doing something), machine, manufacture, or composition of matter (e.g. a drug), or a new and useful improvement thereof.”
Note the underlined new. To get a utility patent application allowed (granted), the applicant has to prove to skeptical USPTO examiners that the invention really is new, and not just a trivial (obvious) tweak to older prior art.
Here “useful” means that the invention must have some actual benefit (isn’t clearly impossible or too illegal) and does more than just being decorative.
Utility patents are often the hardest type of IP to get. USPTO examiners usually attempt to use prior art to reject new applications. They expect applicants to rebut their rejections, often several times, before allowing the application. This process is called patent prosecution. If the applicant does not successfully rebut the various rejections, the application goes abandoned.
Legally, a US patent gives the owner the right to sue to collect royalties/damages and/or to attempt to block someone else from practicing the invention in the United States, but not internationally. The exact scope of legal protection is determined by the patent claims.
Patent valuation: Patent valuation is dictated in part by the desires of others to practice the invention, the effectiveness of the patent in thwarting these desires (what the claims cover), and the invention’s potential market size. If a particular patent covers an invention that no one else wants to practice, that patent isn’t going to be worth much!
Assuming maintenance fees are paid at 3-4, 7-8, and 11-12 years after issue, US utility patents typically last for 20 years from initial filing, sometimes more if the USPTO has taken too long to review the application. After that, they expire (go abandoned) and become public domain.
Provisional patent applications: US patent law allows inventors (applicants) to file informally written disclosures with the US patent office. These informal disclosures, called “provisional patent applications” (often abbreviated as “provisional patents”, “provisional applications”, or even just “provisional”), represent an excellent opportunity to quickly and inexpensively start the process of obtaining a patent.
Provisional patents are not usually examined. Instead they are merely stored in the USPTO databases for a year. They are then discarded, unless within that year, the inventor then files a regular utility patent application that references that provisional application. If this is done, the USPTO keeps the provisional stored forever.
Provisional patents are often useful because later, during examination of the subsequent regular utility patent, the inventor can reference the provisional patent to overcome examiner rejections (e.g. overcome other patent’s priority dates, supply additional detail, and so on).
Regular patents have detailed requirements with respect to format, figures, and claims, and tend to be expensive to file. By contrast provisional patents have almost no format requirements, and they are inexpensive to file. Almost anything that can be put onto paper (e.g. a PDF format) can be filed as a provisional application. As a result, provisional patent applications can be as simple as a single page photograph of a napkin sketch, or as complex a fully developed 100+ page formal patent application. The USPTO will cheerfully accept either one of these.
The lack of format requirements can be very helpful. Many a patent application has been saved by the fact that the inventor had earlier filed something, such as a research paper or user manual, essentially as-is, as a provisional. Although such items would never be accepted as a regular utility patent application, informal provisional patent submissions can be a quick way to put important information on the record.
This is the good news. The bad news is that many a patent application has been lost because the inventor first filed an inadequate provisional application, and then operated under a false sense of confidence that he or she was protected by that inadequate provisional application.
The dangers of an inadequate provisional application are both delayed and subtle. At first everything is fine. Then, typically about 1-3 years after the inadequate provisional has been filed, trouble can start.
For example, suppose that the USPTO examiner rejects on the basis that someone else has filed another non-provisional (regular utility) patent ahead of the applicant’s regular utility patent. Under today’s rules, almost the only way to establish that the applicant invented first is to cite the earlier filed provisional patent, and state precisely which parts of the provisional application prove that the inventor was first.
If the examiner reviews the provisional and agrees, then the provisional has been successful and the inventor will hopefully go on to successfully get the patent. But if the examiner reviews the provisional and says, “I don’t see the invention here”, then the provisional has likely failed, and the inventor may never be able to prove that he or she invented first.
Three different provisional strategies:
Personally, I think that it is useful to think about three different categories of provisional patents. These categories are: 1) quickly file your existing write ups; 2) file a rough draft of a regular utility patent; and 3) file a complete utility patent, but do so as a provisional patent rather than as a regular utility patent.
Category 1: quickly file your existing write ups. These can be existing papers, PowerPoint presentations, handouts, whatever. The argument in favor of this approach is that this is the quickest way of getting something on the official patent record. This may also be a quick way of filing a lot of supplemental information. Worst case, an improperly thought out provisional can later be abandoned. My personal views are that this approach is better than nothing, but it is not without pitfalls.
Category 2: file a rough draft of a regular utility patent. Many provisional applications are filed by inventors and small companies operating on a limited budget. Here the goal is to try to quickly file something that is relatively decent, but also try to save money while a new idea is being evaluated. Here, as a compromise between cost and quality, one way to go is to produce a rough draft of a utility patent, following the standard utility patent format, which provides some important structure. This approach tries to capture a good chunk of the value of a full patent, while keeping costs at about 50% of a standard patent, by focusing time on a few key draft claims, informal but adequate figures, and at least the most important technical aspects of the disclosure.
Category 3: file a complete utility patent, but as a provisional application. In this third type of situation, funding may not be an issue, but the inventor thinks there is a possibility that they will make additional improvements to the invention over the next year. Here a complete and detailed utility patent can be written, but is instead filed as a provisional patent rather than a regular utility patent. This provisional application can then be “aged” for up to a year. If there are no changes, the original provisional can then simply be refiled as a full utility patent. Otherwise the changes can be dialed in, and an updated version filed as the full utility patent. An additional advantage of this Category 3 approach is that it can effectively increase the lifetime of the final patent by up to a year.
A few other nuances – if you are interested in foreign patent filings, realize that the 12 month foreign filing deadline starts ticking from the time you file your provisional application. Thus the 12 month provisional expiration deadline, and the US and foreign patent filing deadlines, all fall on the same day.
The Hague system allows you to use one application to file design patents in many countries simultaneously, but it is quirky and doesn’t work everywhere.
Thinking of filing your US design patent application outside the US? Although for some countries like Canada, China, and India, you will have to file locally, for Europe (EU), Japan, and Korea, consider using the Hague system. In either case, think fast, because the deadline is often just six months after your initial filing.
What is the Hague system? The Hague system (Hague Agreement Concerning the International Registration of Industrial Designs) is a series of international treaties allowing applicants from participating countries to directly register design patents in other participating countries. If you or your company is not a resident of a participating country, you are out of luck. You must get international coverage the hard way by finding a local representative and filing with the local patent office.
The US signed up in 2015. Other countries are also in the process of joining but are not in yet. There are presently 66 countries participating. So as the map shows, coverage is still rather uneven.
The rules are not totally uniform. The drawing requirements and extent of post-filing examination can vary between countries. The EU, for example, limits design drawings to a maximum of seven views, but otherwise, acts as a registration system that doesn’t require much subsequent effort. By contrast, like the US, Japan also requires examination as well, and the applicant must thus do additional activities and pay additional fees.
Unlike US design patents, the Hague system allows for multiple related designs to be registered at the same time in one application. However for those thinking of gaming the system for US design patents, realize that the USPTO will require you to select just one design, and pay extra to examine any other versions. Still, if you are feeling indecisive, this is an interesting option to consider. However, note that the Hague system also publishes all design applications within six months of filing, while the US does not, so there can be less confidentiality.
Hague system registrations must be renewed every five years, and can generally be renewed up to a total of 15 years total coverage. By contrast, after a US design patent has issued, the USPTO will give you 15 years of coverage with no maintenance fees.
Like other patents, the USPTO will accept Hague system patent applications and forward them on to the international office in Switzerland. If your design patent has not yet previously passed a security review and obtained clearance, then you should (must) file via the USPTO. However, if you have clearance, use the Hague’s E-filing system, as it is both quicker and easier.
Is your examiner repeatedly insisting that your patent application claims are obvious? One option: “reboot” your examiner by submitting at least one Rule 132 declaration providing “secondary considerations of nonobviousness”.
Obviousness rejections are needed to prevent trivial patents. Obviousness is legally determined by considering if the invention would be obvious from the standpoint of an imaginary Person Having Ordinary Skill In The Art (PHOSITA). This is ultimately just legal guesswork, and as previously discussed, such determinations are often unduly influenced by hindsight bias.
There is an alternative mechanism. The patent legal system also allows applicants to rebut obviousness rejections by submitting “objective indicia of nonobviousness”, which we will call “outside evidence”. This outside evidence can include unexpected results, commercial success, long-unsolved needs, failure of others, professional approval, skepticism of experts, and the like.
Although allowed, such outside evidence has a rather second-class status. You can even see this in the terminology: “secondary considerations of nonobviousness”. The patent legal system actually prefers its imaginary PHOSITA reasoning over actual real-world evidence! Sounds silly, but remember that they are skeptical because applicants are constantly trying to game the system.
Submission of outside evidence is not done often. You might think that with the 2007 KSR removal of anti-hindsight rules, it would be more frequently used, but it isn’t. However, in my opinion, it is a useful “in an emergency, break glass” kind of tool. You use it when you want to try to break the examiner out of a mental “rut”, or even a mental “infinite loop” of obviousness rejections.
When to use it? Obviousness rejections are routine. It usually takes at least two office actions to see if the examiner is showing signs of having a non-negotiable “I still think it’s obvious” position. If this seems to be the case, outside evidence can potentially be used to try to “reboot” the examiner and break out of the loop. This is because according to the USPTO examination rules MPEP 716.01(d) Weighing Objective Evidence…“When an applicant timely submits [outside] evidence traversing a rejection, the examiner mustreconsider the patentability of the claimed invention.”
Outside evidence is submitted as various “Rule 132 declarations”. Here the identity and the credentials of an outside declarant (someone other than the attorney, and preferably other than the applicant) are presented, the relevant outside facts are given, and the declaration is signed by the declarant. It is important to try to find credible individuals for this and to submit the best evidence available.
Due to USPTO concerns that the outside evidence is unreliable, this is not a sure tactic. The rules state that there must be a “clear nexus” between the outside evidence and the invention’s claims. The examiner may rebut by arguing that no such clear nexus exists, proposing alternative explanations, and/or looking for other ways to discount the declaration. Still, if you do have good evidence, why not use it?
Summary:In general, software patents that deal with technical effects, physical parameters, and improving computer function tend to be favored. By contrast, software patents focused on business methods tend to be disfavored.
China: Before April 2017, China restricted software patents to methods that solve technical problems, control internal or external processes according to the laws of nature, and produce technical effects in accordance with the laws of nature. Machine readable medium type claims, and game patents, were not allowed. However these guidelines are now somewhat more expansive. For example, business methods that also have a technical aspect may now also be eligible for patent protection.
Europe: Software patents should have a “technical effect” (e.g. controlling industrial aspects, improvements in computer technology, data pertains to physical properties,). Pure methods directed “only” to doing business and computer programs without “technical effect” are not allowed.
United States: The rules are presently incoherent. Traditionally (before 2014-2015) US policy was permissive. Indeed the present written (i.e. statutory) US legal standard is that all types of software patents are permitted. However the latest judicial rulings and USPTO policies are that at least some software patents may represent “abstract ideas” run on “generic computers” that are not patentable unless there is “something more”. Unfortunately the terms “abstract”, “generic computer” and “something more” are effectively undefined (and thus can vary according to the whims of the judge or patent examiner at hand).
How will US software patent rules evolve in the future? This is a bit like reading tea leaves, but the latest US software patent decisions appear to be trending more towards a Chinese or European-like approach. On average, “Business method” software is increasingly being rejected as being “abstract”. However software that exhibits technical effects, operates on data pertaining to physical properties, or improves computer function is often accepted on the basis that it is not “abstract”, not run on “generic computers” or contains “something more”. Arguably the US, presently lacking coherent rules, may be at least temporarily filling the void by borrowing rules from other countries. The constitutionality of this approach remains to be determined.
Legal confusion: There remains a lot of legal confusion in the US regarding the question, are software inventions patentable? How to answer this question? We could of course look at the letter of the law (e.g. 35 USC 101), which would give us the rather boring answer that software is patentable. But if someone doesn’t want software to be patentable (and a number of large powerful companies do not), that’s not the answer they want.
How else might we get an answer? In ancient Greece we might consult the Oracle at Delphi, or perhaps sacrifice a goat and examine its entrails. However in the modern US, we know that this is silly. As we all know, the modern US way to decide this is to put this question to a small panel of elderly individuals who know nothing about software or patent law. We call this small panel the Supreme Court of the United States (SCOTUS).
To answer questions, the Oracle at Delphi inhaled vapors, fell into a trance, and then spoke in riddles. These were then interpreted by various priests. In much the same way, SCOTUS (hopefully without the aid of vapors) has given us some confusing and inconsistent rulings, such as the CLS Bank v. Alice Corporationdecision, that in essence are riddles that must be interpreted by various priests (e.g. lower courts, the USPTO).
So in “Alice”, SCOTUS told us that “abstract ideas” are patent ineligible, and also told us that “In any event, we need not labor to delimit the precise contours of the “abstract ideas” category in this case. It is enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of “abstract ideas” as we have used that term.”
So the ruling in essence is the riddle: “abstract ideas are not allowed“, and “abstract ideas are undefined”. This is a pretty good riddle. So the next step is, now that the Oracle (err… SCOTUS) has spoken, how are the various priests (err… the USPTO and lower courts) going to interpret this riddle?
Some good news on this front. On December 16, 2014, the USPTO issued its “2014 Interim Guidance on Patent Subject Matter Eligibility”, available here:
Among other things, the USPTO appears to be heading towards the interpretation that when given incoherent rulings, at least try to minimize damage by applying the rulings narrowly. Thus the latest guidance instructs examiners to perform detailed analysis, and look for specific problems such as financial hedging and mitigating settlement risks, rather than generally rejecting everything. The Guidance also advises examiners that even if a patent hits on a “forbidden area” (judicial exemption), so long as the claim does not seek to tie up the judicial exemption so that others cannot practice it, the claim is probably OK. (Note added 4-26-16 — sadly the USPTO has not followed their own guidance consistently. The official patent examination “MPEP” rules for eligibility are still literally a blank page).