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Patent Law Using your common sense and whatever patent knowledge you have, should this be patentable? Why? An apparatus for use as a toy by an animal,

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Presentation on theme: "Patent Law Using your common sense and whatever patent knowledge you have, should this be patentable? Why? An apparatus for use as a toy by an animal,"— Presentation transcript:

1 Patent Law Using your common sense and whatever patent knowledge you have, should this be patentable? Why? An apparatus for use as a toy by an animal, for example a dog, to either fetch carry or chew includes a main section with at least one protrusion extending there from that resembles a branch in appearance.

2 It Got a Patent - US Patent No. 6,360,693 -Patent Law OverviewUS Patent No. 6,360,693 Patentable subject matter – Anything man made Useful Novel Non-obvious Adequately described

3 Pass around patent samples Buttocks support device US Patent No. 6,360,375 Issued March 26, 2002 Beerbrella US Patent No. 6,637,447 Issued October 28, 2003 Useful Patents?

4 6,681,419

5 Patent Law Overview Continued Grant of Exclusive Monopoly. Exclusive monopoly for a limited period of time – 20 years Reveal Secret. Must reveal to the public the secret Federal law – not state Court of Limited Jurisdiction. US Court of Appeals for the Federal Circuit (rather than patent cases spread among all federal circuit courts) Conflict Between Antitrust and Patent Law. – The Congress shall have the 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 - US Constitution – Soon passed The Patent Act

6 Deep Secrets Revealed! What is it? Interestingly, it is an improvement on three previous patents on roughtly the same idea. U.S. Pat. Nos. 6,023,792; 6,081,941; and 6,125,480. This patent extends the umbrella to add a leash to the dog. Previous patents for pet umbrellas did not include the leash U.S. Pat. Nos. 5,546,970 and 5,918,611

7 Key Sections of The Patent Act § 101.Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title § 102. If the invention lacks novelty, i.e. public is aware, then no patent shall issue. § 103. Non-Obvious

8 Change in Direction KSR v. Teleflex. 2007 US Supreme Court Case Struck down patent on a gas pedal as nothing more than obvious combination of existing technologies.KSR v. Teleflex Bilski v. Doll – - discussed later under business process patents

9 Non-Obvious Standard. Would have been obvious at the time of the invention was made to a person having ordinary skill in the art to which said subject matter prevails. Example. – Inventor invents A + B. – A is known art – B is know art – Upon looking at A and then looking at B, would someone of skill in the art consider A + B to be already know? If yes, obvious. If no, then non-obvious Subjective Standard. 1/19/13 St. Cloud Times

10 Non-Obvious? Towel for Hair Styling

11 Non-Obvious Patent? Copied from actual patent

12 Types of Patents – Utility Utility. Useful inventions – process – machines – manufactured goods – composition of matter – improvements (a better mousetrap) – 20 years

13 Subset of Utility Patents - Business Process Patent State Street Bank Case Oral presentation – Grading RubricGrading Rubric Case Brief – Grading Rubric SampleGrading RubricSample – Summary of facts – Statement of legal issues – Summary of law that pertains – Analysis of the law Your Thoughts Both Sides – Debate Why this case is important – Answer questions from class

14 State Street Bank Case Business process patent Both State Street and Signature Work as custodians for mutual funds Mutual funds pooled into larger groups to save administrative costs and enable daily valuations Complex process to do so – getting values and then distributing those values back to the spokes Relies heavily on math formulas as well as process State Street sought license from Signature and sued for declaratory judgment of patent invalidity when talks broke down Mutual Fund Valuation Hub Pooled assets Mutual Fund

15 State Street Bank – Legal Issues Can you patent a business process? – Yes – since this case if it results in a useful, concrete, and tangible result Can you patent a math algorithm? – Sort of – no if its pure math, but yes if its a process employing a law of nature, natural phenomenon, or abstract idea… that produces a useful, concrete and tangible result – Why not allow patents on math itself?

16 Group Presentation: Groups 1 and 2 – Diamond v. Chakrabarty, 447 U.S. 303 (1980)) – 200 – start here did design patents and business process patents

17 Group Presentation: Groups 1 and 2 – Diamond v. Chakrabarty, 447 U.S. 303 (1980)) – Chakrabarty created a new bacterium – Judged in this light, respondents micro-organism plainly qualifies as patentable subject matter. His claim is not a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter – a product of human ingenuity giving a distinctive name, character [and] use. … [T]he patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not natures handiwork, but his own; accordingly it is patentable subject matter under §101.

18 Types of Patents - Design Patents Design Covered – Ornamental features Exclusions – Novel – Non-obvious Years. 14 years Weak – protects what is drawn – Marketing Value patent pending patent issued – Multiple Design Patents – help protect – Design Patent and Utility Patent on Same Invention Two: Aug 28, 2007 Issued Design Patents, Ideas? First design patent False sideburn sunglasses Design Patent # 376,811

19 End-of-Chapter Question 2 – Design Patent on Ink Cartridge Patent Infringement Suit. Seiko Epson Corp sued Nu-Kote International for design patent infringement Court Held No Infringement. District court held design patent not valid – The cartridge is not visible after installation and during use – the design was not a matter of concern to consumers. and – The design is not aesthetically pleasing What are your thoughts? Should Seiko Epson be entitled to a design patent on an ugly design that cannot be seen?

20 End of Chapter – Question 4 – Design Patent on Cigarette Package New Feature – Package opens from bottom Quote: I was motivated… to design a new cigarette package when I happen to see… workers pull out cigarettes from the packages holding their filter tip top with dirty fingers during work to smoke them. Some even used their teeth to pull them out so as not to contaminate the filter-tip end with dirty fingers, and some others tore open the bottom part of the package to take out cigarettes from the bottom. In re: Uie S. Chung 2000 US App Lexis 24916 (Fed. Cir. Oct 2000) Note: this is not the same patent as this case but close

21 Plant Patent Novel, Non-obvious and Distinct Living Organism Duplicated Through Asexual Reproduction. A living plant organism which expresses a set of characteristics determined by its single, genetic makeup or genotype, which can be duplicated through asexual reproduction, but which can not otherwise be "made" or "manufactured." Hybrids and Natural Plants. Sports, mutants, hybrids, and transformed plants are comprehended; sports or mutants may be spontaneous or induced. Hybrids may be natural, from a planned breeding program, or somatic in source. While natural plant mutants might have naturally occurred, they must have been discovered in a cultivated area. – Algae and macro fungi are regarded as plants, but bacteria are not. – That the plant is not a plant which is excluded by statute, where the part of the plant used for asexual reproduction is not a tuber food part, as with potato or Jerusalem artichoke. – That the person or persons filing the application are those who actually invented the claimed plant; i.e., discovered or developed and identified or isolated the plant, and asexually reproduced the plant. – That the plant has not been sold or released in the United States of America more than one year prior to the date of the application. – That the plant has not been enabled to the public, i.e., by description in a printed publication in this country more than one year before the application for patent with an offer to sale; or by release or sale of the plant more than one year prior to application for patent. – That the plant be shown to differ from known, related plants by at least one distinguishing characteristic, which is more than a difference caused by growing conditions or fertility levels, etc. – The invention would not have been obvious to one skilled in the art at the time of invention by applicant.

22 Patent Statistics from US Patent Office 2011 TypeU.S.% Granted Utility503,58246%* (77,501 to US, 80,271 Foreign – 50%) Design30,34770%* Plant1,13972%* *The percentage of patents granted is approximate as I am simply dividing total patents issued in a year by total applications submitted. Patents applications generally take more than a year so this is not an accurate measure but at least provides rough guidance.

23 2011 Patent Reform – America Invests Act 1.First to File. For patents filed after March 16, 2013. 2.Patent Office to Keep Fees Charged. This will help get the patent office funding to deal with backlog of cases (sort of – funds put in fund and released by Congress). 3.Allow Post Grant Dispute Process. The measure allows inventors or companies to contest the validity of a patent for nine months after it issues. 4.Allows Putting Patent Number on Product After Patent Expires. Except the government can sue or a competitor if actually hurt by markings. 5.Expands the Definition of Prior Art. Actions and prior art that bar patentability will include public use, sales, publications and other disclosures available to the public anywhere in the world as of the date of filing, other than publications by the inventor within one year of filing. 6.Prior User Rights Defense. If an individual/entity begins using an invention more than a year before a subsequent inventor files for a patent on the same invention, the original user will have the right to continue use. This rule used to only apply to business process patents. 7.Cheaper Fees for Mirco-Entity. Previous calendar year gross income of less than three times the national median household income and has filed no more than 4 patents. 8.Business Method Patent Transitional Program. Creates an Administrative program for review of business-method patents. Transition Program for Covered Business Method Patents. No nine month review limitation. 9.Bans Tax-Strategy Patents. Expired patent lawsuits – person suing gets to keep ½ with the rest going to the federal government – well no more. $500 per offense.

24 Patent Issues First to Invent/First to File. Application Process – Prior art search – Cost – Fully disclose invention as price of getting patent – Must file within 1 year of first commercial use Notice – Pat. – patented – Patent number Idea made public after 18 months unless withdrawn (U.S. used to not make public until granted – recently change to match more of the world) Patent Searches Made Easy US Patent Office Web Site Patent Office Web Site Free Patent Search Web Site Patent Search Web Site bigw 862221 Meat cutting

25 Patent Invalidation/Infringement Directly infringe Induce another to infringe – Actual infringement by a third-party is a necessary element – Sales literature, etc. to get another to infringe Contributory infringe – Sell a key element of patented product, that has no use except as a component of a patented product – Action contributes to anothers direct infringement Manufactures or sells components to be assembled abroad Imports, sells or offers to sell or uses a product made abroad through patented processes Note: retailers are potentially liable but not liable if an adequate remedy against the primary manufacturer Attorneys Fees. The winning party to recover legal fees from the losing party in exceptional cases like intentional infringement. Treble Damages. The court may award treble damages if the defendant willfully infringed or acted in bad faith. update Proctor and Gamble sold Folders (to Smuckers) and settled

26 Recent Patent Case – Heinz Ketchup

27 Recent Patent Case – Apple v. Samsung One Key Feature for Discussion: Pinch to zoom Bounce back scrolling Rounded corners – design patent Icon style and layout Should you be able to patent how people interact with a machine?

28 Inducement to Infringe Inducement. Assist a person to infringe Contributory. Sells a material component. Snuba International v. Dolphin World, Inc.

29 Defenses to Patent Infringement Invention not novel, non-obvious and useful Not novel, non-obvious and ornamental for a design patent Patent misuse. – Antitrust – more than patent was meant to do Inequitable conduct. Experimental use defense Not a defense – patent not used (ok to sit on invention) Question 1, p. 421. LG Electronics licenses use its patent to Intel for Intel to make computer chips. Quanta Computer bought Intel chip and LG wants Quanta to pay patent royalty. Quanta argues LG cannot collect patent fees twice – what else would you use an Intel computer chip for?

30 Ebay v. MercExchange Supreme Court Case - 2006 From ebay Patent Damages Injunction – not using the patent and license it to others 1.Based on four factors when an injunction usually issues NTP v. RIM Patent for push email technology 3 million users shut down?

31 Injunction Monetary – Lost profits – Reasonable royalty – Attorneys fees (sometimes) – Treble damages – if willful or reckless Personal Liability. Corporate officers and managers can be held personally liable. Famous Music Corp v Bay State Harness Horse Racing & Breeding Assoc, 423 f. Supp. 341 (1977) Similar Case: Amazon patented single action or one-click purchasing over the internet. BN started express lane doing basically the same thing. Patent Damages Continued

32 Patent Infringement – CHINA Copy of iphone –minione Easy ways to clone: Ghost shift Shadow factory Read patents – hire 20 to 40 engineers to reverse engineer Often not the same Cheaper materials crash tests on copied cars performed much worse than original Chinese government slow to enforce. May 29, 2007, Zheng Xiaoyu sentenced to death for accepting bribes. The bribes were given in part to secure approval of a counterfeit drug antibiotic that later killed 10 people. CHERYCHEVY Source: Popular Science, Sept. 2007 Sony PlayStation Hit With $90 Million Judgment. Japanese Company, Sony, hit with $90.7 million judgment to pay patent holder of tactile feedback feature. Sony used the feature on its PlayStation consoles – Dual Shock controllers.

33 More on Business Process Patents Patent for Janitorial Services Show patent Illustrations


35 Change in Direction for Business Process Patents? Bilski v. Doll –on business method of hedging. Ruled June 28, 2010 Sarcastic Comments About Business Process patents. Justice Roberts comment: I buy low and sell high – thats my patent for maximizing wealth. speed dating – Sonia Sotomayor Great method to teach antitrust – Breyer IBM Comment – it is the leader in business process patents – it thinks they should be reduced. New Standard. Business process patent ok if – if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing (could be okay otherwise as well). State Street Bank standard of a useful, concrete, and tangible result is no longer adequate. 930 start here tues– did patent reform slide

36 Ownership of Patent Ownership of patent – employee versus employer Shop rights Invention assignment agreements IBM, Sony, Pitney Bowes, and Nokia announce patent sharing plan. Will not assert patents against anyone who is using them in an environmentally friendly way. IBM is donating….one for recyclable protective-packaging material for delicate electronic parts. Unlike commonly used foam peanuts, the material can be recycled in the same waste stream as the cardboard box that contains it.

37 Cost of a Patent Filing Timing. Generally all fees are not due up front because Patent Office backlogged – generally sits first 18 months. This will allow some budgeting and planning. Filing fee - $165 for small inventor ($330 for a large inventor) plus a search fee of $270 ($540) and an Examination fee of $110 ($220). Total of $545.* Issue Fee – an additional $755 ($1,510) Multiple Filings. Often the patent office will award some claims and not others – you may decide to issue those patents, thus the issue fee, and continue to pursue the other claims – thus more filing fees. Drawing Fee. You need drawings, generally $100 plus per drawing. Attorney Fees. National average $250-275 per hour. Attorney will generally do a patent search for around $300. Next step is a patentability opinion which would cost around $1,000 on the low end. More. Plus more fees for a variety of items. The fees are actually quite a bit more complicated as this slide sticks to the basics. 97% of Patents Lose Money The U.S. Patent & Trademark Office estimates that only 3% of the patents issued by the Patent Office actually make more money than it cost to get the patent. Source: 2007 *2009 Numbers

38 Filing Cost for Patents Pre-2011 Law Small Entity Fees Post 2011 Mirco Entity Cost

39 Average Cost of Patent Process Type of InventionExamplesCost SimpleCoat hanger, diapers, ice cube try$4,00-$6,000 Minimal ComplexityBoard game, umbrella, toothbrush$6,500-$9,000 Moderately ComplexPower hand tool, lawn mower, camera, cell phone $9,000-$12,000 Intermediate ComplexVideo game, ride on lawn mower, solar concentrator $12,000 to $16.000 Relatively ComplexShock absorbing prosthetic device, internet implemented business method with computer system $16,000-$25,000 Highly ComplexMRI scanner, telecommunication networking system $25,000++ Source: Quinn, The Cost of Obtaining a Patent, (July 26, 2007)

40 Worldwide Patent Protection – Each country has its own laws – Paris Convention – 160 countries National treatment to foreign patents – Patent Cooperation Treaty 108 members - Cheaper than dealing with each country individually Novartis Article – Facts. Novartis gave up patent fight in India for its drug Gleevec – Issue. India is not as supportive of patent laws Brazil, Russia, India, China and Turkey could account for half Novartiss revenue growth in the next five years "Big pharma in rich countries is slowing Poor countries cannot afford the medicine – thus relying on growing economies Newly industrializing countries are also more interested in protecting patents as their companies begin developing unique drugs and solutions – Law. India now allows patents on drugs developed after 1995 Comment. Inventors, at least in the pharmaceutical industry, need to be conscious of foreign patent rules International Patent Issues Q: Is it worth it to get a patent in China? A: The big risk – if another company gets a patent

41 International Issues Continued New India Law. – 1970 law allowed Indians to reverse engineer drugs to promote better publish health (e.g. aids drugs for $200/year v. $10,000/year in U.S. – ½ of aids drugs come from India) – Now must wait 3 years and pay reasonable royalty to patent holder (4%? Is that reasonable? 45% - what German company wants?) Difference between U.S. law and other countries (U.S. used to patent for 17 years – now 20 to harmonize with Europe. U.S.World (primarily Europe) Filing First to Invent until 2013First to File Worked No requirementYes, some countries Business Methods Patentable, 2011 law restricted this somewhat. No – Europe Yes - Asia Grace Period Yes, can reveal secret and still file – 1 year No, once secret revealed no longer patentable Challenge 2011 Law made consistent with world. Opposition challenge within 9 months Secret Public after 18 months with some exceptions No, published after 18 months

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