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Posts Tagged ‘patent attorney’

Patent Litigation in Good Faith

On July 29, 2001, the Court of Appeals for the Federal Circuit issued an important decision regarding patent litigation: Eon-Net LP v. Flagstar Bancorp (Fed. Cir. 2011).  Eon-Net is a patent holding company that primarily earnings as revenue through litigation and licensing fees, rather than developing manufacturing or marketing (also known as a patent troll).   The court awarded Flagstar $489,150.48 in attorney fees and costs and $141,984.70 in sanctions against Eon-Net.  Slip  Op. at 3.  In view of this opinion, patent owners may be wondering how to enforce and license their valid patent rights without incurring liability like Eon-Net.

The court imposed sanctions under 35 U.S.C. 285, which allows sanctions to punish exceptional cases of misconduct.  Specifically, the court found that Eon-Net violated Rule 11 of the Federal Rules of Civil Procedure because “(1) the patentee brought the litigation in bad faith; and (2) the litigation is objectively baseless.”  Slip Op. at 17.

The district court noted that Eon-Net’s behavior had an “indicia of extortion”.  Slip Op. at 22.  After evaluating Eon-Net’s behavior, the court noted that Eon-Net filed over 100 lawsuits, immediately followed by offers to settle at a price far lower than the cost to defend the litigation. Slip Op. at 22.  Settlements were offered at between $25,000-$75,000 based on the annual sales of the defendant.  Slip  Op. at 22-23.  Because these settlement offers were far lower than the cost of defending a patent litigation, the great majority of defendants chose to settle.

Furthermore, the court noted that EonNet failed to engage the claim construction process in good faith because Eon-Net destroyed relevant and important documents, attempted to evade a careful analysis of the claim terms in litigation, failed to offer a construction for any disputed claim terms, lodged incomplete and  misleading extrinsic evidence with the court, and submitted declarations that contradicted earlier deposition testimony by the declarants. Slip Op. at 18-19.

The court acknowledged that patentees should be able to fit be able to defend and profit from their intellectual property.  However, the court noted that this was not a case where the claims present a close call; rather, the specification unequivocally compels the claim constructions adopted by the district court.  Slip Op. at 15-16.

Before engaging in litigation, a patentee should have a valid argument that the opposing party is infringing its patent.  The infringement argument should be based on a good-faith interpretation of the claims.  If you believe your intellectual property rights are being violated, contact us if you need a patent attorney in Los Angeles to evaluate your case. Your patent attorney has the expertise to help you determine the scope of your intellectual property rights.

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Do I qualify for Small Entity Status?

A patent may be filed at the United States Patent and Trademark Office under small entity status.  Small entities only pay 50% percent of most Patent Office fees, including application filing fees, application size fee, excess claims fees, extension of time fees, revival fees, appeal fees, patent issue fees, statutory disclaimer fees and maintenance fees.

The following entities qualify for small entity status:

  • a small business concern as defined under section 3 of the Small Business Act (i.e. the number of employees, including affiliates, does not exceed 500 persons)
  • an independent inventor
  • a university or other institution of higher education located in any country
  • a non-profit organization as described in § 501(c)(3) of the Internal Revenue Code and exempt from taxation under § 501(a)
  • any nonprofit scientific or educational organization qualified under a nonprofit organization statute of a state of this country
  • any nonprofit organization located in a foreign country which would qualify as a nonprofit organization if it were located in this country

Additionally, to qualify for small entity status, no large entity can have rights in the invention.  Specifically, a small entity may not have “assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify for small entity status as a person, small business concern, or nonprofit organization.”

Because of the provisions regarding licensing to large entities, it is possible to qualify as a small entity for one invention but not another.  Failing to properly determine and/or notify the Patent Office of a change in status can result in the invalidity of your patent, leading to the loss of any patent rights.   Make sure you notify your patent lawyer of any relevant changes in your business and/or licensing agreements that may affect your entity status.   If you have any questions, feel free to contact a qualified patent attorney at Cotman IP in the Los Angeles area.

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How can I patent my idea in the U.S. in a hurry?

By filing a Request for Prioritized Examination, pursuant to new 37 CFR 1.102(e), which will be available May 4, 2011. The United States Patent and Trademark Office (USPTO) is revising the rules of practice in patent cases to implement a procedure under which applicants may request prioritized examination at the time of filing of an application, upon payment of appropriate fees and compliance with certain requirements.  The aggregate goal for processing applications under prioritized examination is to provide a final disposition within twelve months of prioritized status being granted.  The fee for filing a request for prioritized examination is $4,000, in addition to filing fees for the application.

A request for prioritized examination may be submitted with any original utility or plant application filed on or after May 4, 2011.  Under a new 37 C.F.R. 1.102(e), the request for prioritized examination will not be granted unless:

  • the application is an original utility or plant nonprovisional application filed under 35 U.S.C. 111(a) that is complete as defined by § 1.51(b), with any fees due under § 1.16 (the filing fee, search fee, examination fee, any applicable excess claims fee, and any applicable application size fee) paid on filing;
  • the application is filed via the Office’s electronic filing system (EFS–Web) if it is a utility application;
  • the request for prioritized examination, including the prioritized examination fee set forth in § 1.17(c), the processing fee set forth in § 1.17(i), and the publication fee set forth in § 1.18(d) are present upon filing; and
  • the application contains or is amended to contain no more than four independent claims, no more than thirty total claims, and no multiple dependent claims.

Because plant applications may not be filed via EFS-Web, the USPTO will accept a request for prioritized examination in paper when it accompanies the filing of a plant application.

The USPTO is limiting requests for prioritized examination under § 1.102(e) to a maximum of 10,000 applications during the remainder of fiscal year 2011. The USPTO will revisit this limit at the end of fiscal year 2011.

Time is of the essence.  So, make prioritized examination a priority and contact your patent attorney at your earliest opportunity.  We are located just outside of Downtown Los Angeles in the City of Pasadena.

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Patent Law Reform Update

Previously, we presented the Patent Reform Act of 2011. On March 8, 2011, the Senate passed S.23, or the “America Invents Act.”  The bill garnered bipartisan support, passing with a vote of 95-5.  The House of Representatives will be acting on patent law reform in the coming weeks.  If the America Invents Act becomes law, it will be the first major change to patent law in 3 decades.  Check back to stay informed of further developments.  As your patent attorney in the Los Angeles area, we will keep you updated on how to best protect your intellectual property in light of the America Invents Act.

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Should I file a Provisional Application?

A Provisional Application is a type of patent application filed with the U.S. Patent and Trademark Office (USPTO).  The primary purpose of a Provisional Application is to obtain a filing date for the disclosure of an invention.  Upon filing, the inventor has one year to file a Utility Application.  A Provisional Application has a low filing fee and allows an applicant to quickly obtain a filing date with minimal preparation.  Furthermore, the one-year period for filing a Utility Application that claims benefit of the Provisional Application does not reduce the 20 year term of the Utility Application.

A Provisional Application is useful when there is insufficient time to prepare a full application, such as before an anticipated disclosure (e.g. publication or sale).  A Provisional Application also defers the cost of filing a full Utility Application for up to one year, allowing the applicant extra time to evaluate the market or obtain financing.

On the other hand, a Provisional Application will increase the total cost of obtaining a patent.  Furthermore, the USPTO will process the Utility Application based on the filing date of the Utility Application rather than the Provisional Application filing date.  This increases the total delay before any patent issues.  A Provisional Application will not be examined.  The Provisional Application becomes abandoned after one year.

If you choose to file a Provisional Application first, it is critical that the Provisional Application is enabling: the application must disclose enough information such that a person of ordinary skill in the art to make and use the invention.  Furthermore, you must keep in mind that new matter not included in the Provisional Application is not entitled to the filing date of the Provisional Application.

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Patent Law Reform

In our last article, we discussed the principles and incentives behind the patent system.  Patent law reform efforts are meant to reduce inefficiencies, improve patent quality, and eliminate abuses that have the potential to stifle rather than promote innovation.

Starting in 2006, a patent law reform bill has been introduced in Congress annually.  The Patent Reform Act of 2011 is a bipartisan piece of legislation that will be introduced on the heels of Obama’s State of the Union Address.  Here are a few proposed patent law changes it contains:

  • a “first inventor to file” will have priority over a “first person to invent “
  • the right of a third party to submit prior art during examination of a  patent is expanded
  • an opposition procedure is created for newly issued patents
  • judges will have a more active role in assessing the legal basis for specific damages
  • supplemental examination process will be available after issuance to improve the quality of an issued patent
  • more flexibility in setting fees to ultimately reduce the backlog at the Patent Office
  • creation of a third entity status (the micro-entity) with a 75% fee reduction

Whether or not the bill is enacted, an experienced patent lawyer will prepare your patent while keeping in mind potential changes to the patent system in the future.

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The Role of Patents in America’s Future

In the 2011 State of the Union Address, President Barack Obama stated that innovation was the key to our success in the past as well as the key to our future as a world leader. Obama noted, “America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents for inventors and entrepreneurs.” What do patents have to do with the economy, and how can they keep America ahead?

The principal purpose of the patent system is to promote innovation. Innovations are the product of research, which can be expensive. Consider the following example: a first company spends time and money to generate an invention. Without a patent, another company can copy the invention without investing any time or money. Consequently, the second company’s costs are lower. With these lower costs, the second company can undercut the first company’s price. In this scenario, there is no reason for the first company to develop the invention in the first place.

Another option for the first company is to keep its innovations secret. In this situation, no information is made available to the public other than the goods and services sold by the first company. The first company has now protected its investments as long as it maintains secrecy. However, the secrecy relies on individuals to be discreet. More importantly, no information is made available to the scientific community. Scientific development is a process that increases the collective knowledge. When scientific advances are not contributed to the collective knowledge, additional research becomes highly limited.

The patent system seeks to strike a balance by rewarding innovators with a period of monopoly in exchange for their disclosure of information to the public. In this way, the inventor’s investment is protected, giving him a reason to engage in research and development. Furthermore, the scientific community is still able to benefit from that research and development. On a large scale, scientific advancement is able to progress quickly, creating jobs, prosperity, industries, and prestige along the way.

An individual inventor should understand that the rules of the patent system are designed to promote disclosure. The system also imposes penalties that can jeopardize your rights for noncompliance. These penalties are also designed to prevent inventors from obtaining a monopoly without making the expected contribution to society. An experienced patent attorney understands the complex rules and procedures of the United States Patent and Trademark Office. Please consider our office in the Los Angeles area if you need guidance in navigating these rules and procedures.

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Restriction Requirement compared to Election of Species

An Examiner may issue a restriction requirement and/or require an election of species. The Examiner typically does so at the beginning of prosecution before evaluating patentability.  One reason is that both restriction and election of species reduce the initial search performed by the Examiner. It is important to understand the difference between a restriction and an election of species.

If the Examiner believes that more than one patently distinct invention is claimed, the Examiner can issue a restriction requirement. To respond to a restriction requirement, one invention must be elected. The election of the invention may be done with traverse (arguing that the restriction is improper). The other claims will be withdrawn from consideration.

The Examiner may also require an election of species when multiple variations of an invention are claimed. The claims may include one or more generic claims. The generic claim encompasses all variations. For example, a generic claim may be recite an incandescent lightbulb with a filament, while the species may include incandescent lightbulbs with a bamboo filament, a carbon filament, and a tungsten filament. To respond, the Applicant must elect one species.  The Examiner will begin by searching for the elected species. If the elected species is allowable, the generic claims will be prosecuted. If a generic claim is allowed, the Applicant is entitled to consideration of claims to additional species that are dependent on the generic claim.

The Applicant may pursue withdrawn claims in a divisional application. Other inventions disclosed in the application may also be pursued in a continuing application as long as the original application is pending.

Restriction practice and continuation practice involve complex issues. Your patent attorney can help you understand and address these issues to help you maximize patent coverage. Cotman IP has experienced patent attorneys located in the Los Angeles area.

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