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Patent Strategies

by N. Paul Friederichs III

Seeking a patent? A solid strategy is a must for any inventor. Any strategy is based upon a set of concerns. Typical concerns for individual inventors include, cost, protection afforded and strength of protection. These factors interact to provide several distinct strategies as outlined further below. This article will briefly cover the tools available for protecting an invention, considerations dealing with geographic protection, and specific patenting strategies and protection considerations to be considered in each phase of the invention process.

Protection Tools

Various legal tools provide protection, which principally depend upon priority dates and the importance of such a date. A priority date is the date a patent application is filed in accordance with particular statutory requirements. The priority date only applies to the disclosure contained in the application, making it imperative to have a complete disclosure. All or nearly all non-U.S. countries require that the priority date precede the first public disclosure or offer for sale. The U.S. requires the priority date to be within one year of the first public disclosure or offer for sale.

The four principal legal tools are non-disclosure agreements (NDAs), provisional patent applications (PPAs), formal patent applications (FPAs) and Patent Cooperation Treaty applications (PCT applications). These are substantially arranged in order of cost. Sound practice is to choose the particular mode of protection with a cost benefit analysis and choose counsel based upon reputation of the firm or lawyer.

An NDA can usually be obtained at little to no cost. This tool is used to prevent a "public disclosure," which prolongs the opportunity for foreign protection and avoids starting the one year clock for US protection. This certainly is the cheapest method of protection, but is fraught with problems. People refuse to sign the agreement. Seeking a signature delays or stalls out the marketing process. Copies of the agreement are lost or the inventor forgets to have it signed. NDAs are enforced under state law, which varies from state-to-state. One mistake has serious consequences, making the tool an unsatisfactory choice in most all circumstances.

The Provisional Patent Application (PPA) provides a priority date, which lasts for one year. In essence, the PPA is a cost shifting tool that allows an inventor to determine the market worthiness of an invention before incurring larger expenses. The priority date can be carried forward in a subsequent FPA or PCT application. A re-filed PPA cannot carry forward a priority date from a preceding PPA, but rather obtains a new priority.

There is a minor debate about whether foreign countries will respect the priority date of a PPA, although no specific country has been identified, either by way of that country�s law or by way of actual situation, that will not do so. This author finds it highly unlikely that any significant country would refuse to respect a U.S. granted priority for many reasons including international political relations. Recognize that substantial monetary motivation exists for lawyers to create some level of doubt about whether foreign countries will acknowledge the priority date of a PPA as such doubt is often used to convince an inventor to file a more expensive FPA. The provisional patent application is about 1/4 the cost of preparing and filing a formal patent application.

The formal patent application (FPA) provides a filing date and that date will generally be recognized in a foreign country, assuming proper procedure is followed. This is the highest quality form of protection. The FPA is the form of application most people think of first.

The Patent Cooperation Treaty application (PCT) shifts costs much like the PPA. It delays the need to file in contracting countries up to thirty (30) months. The applicant designates all countries to which he or she may later wish to apply. All or nearly all industrialized countries around the world are contracting countries. Near the expiration of the PCT term, the applicant files an FPA in all countries where they wish to pursue patent protection.

Loss of Rights Considerations

In deciding upon a patent strategy, one first needs to consider when and under what circumstance to give up geographic rights. An inventor seeking a licensee is in a difficult spot in that the protection should satisfy the desires of the unknown licensee. A typical course is to avoid losing any rights as long as reasonably possible until a licensee makes the decision to exercise or forgo such protection. An inventor selling his or her own products may be satisfied with protection limited to the United States, but many will seek patent protection in a neighboring country as well. Failure to protect an invention in any country exposes one to competition usually from much larger and financially more powerful competitors.

Persons considering self-filing a patent application should also consider what substantive rights will be lost. Typically giving up any substantive rights, e.g., scope of the claimed invention, is lethal. Doing so, creates an opportunity for a competitor to "design around" the claimed invention. That is, competitors design and market a non-infringing form of the invention to avoid paying royalties. The problem with self-filed applications is that they give up substantive protection in a quite significant manner. Self-filers should consider that they do not have the experience or ability of a lawyer and a minor difference in wording can create significant opportunities for competitors to avoid paying a royalty.

Specific Strategies

The specific strategies for obtaining patent protection vary quite widely. Perhaps the most common strategy for inventors is to use a non-disclosure agreement ("NDA") until an application can be filed. A PPA is then filed before the first public disclosure/offer for sale. Within one year of the priority date, the decision is made to pursue or not pursue foreign protection. If not, the PPA is re-filed with an FPA to be filed one year later. If yes, an FPA is prepared and filed in the US and a PCT application is filed at the same time.

Many other strategies also exist. Below are four separate time periods during which certain actions must take place or rights will be lost. This material is organized to allow one to fairly well determine the strategy best suited for their needs. Still, one should seek competent legal advice before adopting any specific strategy and especially in those situations where determining a strategy seems difficult.

Inventing phase

A non-disclosure agreement is important, but is best used as little as possible due to its shortcomings. The agreement may be the only tool available during initial development stages of an invention. Perhaps the invention is not developed to the point where the inventor knows whether the invention will even work. The invention should remain a secret either by way of limiting access only to the inventor(s) and/or should be protected by an NDA to avoid a public disclosure or offer for sale. The inventor community and bar substantially agree that an NDA is an unsatisfactory tool to use when looking for a licensee.

Pre-public disclosure or offer for sale

The inventor needs to consider whether to file a PPA or an FPA prior to the first public disclosure or offer for sale. The primary issue is preservation of the right to file for a patent in a non-U.S. country. Cost and protection considerations usually encourage an inventor to file a PPA before the first public disclosure or offer for sale. The PPA allows one to market using a patent pending designation, while obtaining a priority date and remaining prepared for a licensee. Failure to file a patent application at this time may forever waive the right to seek patent protection in a non-U.S. country.

Within one year of the priority date

The inventor needs to consider whether to further preserve foreign protection, if still available, before expiration of a one year period starting from the priority date. (This section assumes the first public disclosure or offer for sale occurred after the priority date.) Foreign protection can be preserved in two manners. A PCT application extends out the time to file a patent in contracting countries generally up to thirty (30) months after the priority date. Nearly every significant country in the world is a contracting country. Foreign rights can also be preserved by filing applications directly into each country where the inventor or licensee desires protection. This second route is used when filing in very few, e.g., one or two, countries due to cost considerations. Failure to seek non-U.S. protection at this time may preclude one from ever obtaining such protection on the invention.

Within one year of the first public disclosure or offer for sale

An inventor also needs to consider whether he or she desires U.S. protection before expiration of the one year period following the first public disclosure or offer for sale. A pending application obviates this concern, although the priority date needs to remain in tact after this point. A PPA can be refiled for slightly more than the government filing fee, follow-up with a formal patent application a year later. Alternatively, one may file an FPA. Failure to file a PPA or an FPA at or before this time may preclude one from ever obtain a United States patent for the invention.

These four periods tend to be presented in a last possible moment fashion. Don�t wait for the end of these period before acting as this will significantly increase the legal fees in most any law firm. Many firms will reject the work or charge rush basis legal fees if time is too short. Typically, at least two months should be allowed. Some forethought can save substantial amounts of money for you the inventor.

Conclusion

Protecting an invention is an important part of inventing and marketing. Failure to do so renders one vulnerable to competition, which may include competitors far more powerful than the inventor. Patents provide a monopoly that prevents others from making, using, selling, offering for sale or importing infringing products into the country issuing the patent. Accordingly, one should pick their patent strategy in view of their marketing plan and countries in which they or their ultimate licensee may engage in business.

About the Author:

N. Paul Friederichs, founder, started practice as a patent attorney in 1992 at a major Minneapolis, Minnesota law firm where he was the highest performing associate. In 1993, he started and developed Friederichs Law Firm with his father. Throughout this time Paul�s experience was heavily weighted toward litigation. He served such clients as Tonka Toys, American Harvest and Boston Medical.

He can be reached at http://www.angenehm.com/

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