WEB PATENT NEWS–October, 2000
by Robert M. Hunter, Registered Patent Agent
News about patents, licensing and seed capital sources for inventors and innovating organizations.
I. PATENT MARKETPLACES ON THE WEB--Entrepreneurs are building the next "eBay" for facilitating patent licensing. Some are a good fit for innovating organizations and independent inventors in search of royalty income.
II. IS IT NEW? IS IT MINE?--Learn how to review the results of a patent search to determine whether your invention is patentable and not covered by someone else's patent claims.
III. THE ANATOMY OF A PATENT CLAIM--Many lay people have trouble understanding patent claims. In order to succeed, inventors must acquire this skill. Here is some help.
I. PATENT MARKETPLACES ON THE WEB
The Internet is changing the inventing business. It should be no surprise that entrepreneurs are now asking, "If Amazon.com can sell books on the Internet, why can't a website help inventors sell or license patents and other types of intellectual property on the Internet?" It should also be no surprise that the answer to that question is now, "Yes."
According to the National Science Foundation's report entitled Science and Engineering Indicators 2000, total U.S. receipts from all trade in intellectual property reached $33.7 billion in 1997. This level extended a decade of steady increases that has resulted in a doubling of U.S. receipts since 1990. One large company, IBM, shocked the world recently when it announced that it alone now generates more than $1 billion a year from technology licensing. USA Today recently reported that, "By some estimates, companies are sitting on $1 trillion a year in untapped licensing fees."
Other large businesses, small businesses and independent inventors want to climb aboard this gravy train, and Web-based patent marketplaces are being created to serve them. This article describes a few of those websites.
One of the first websites to be up and running is The Patent & License Exchange (pl-x.com). This business has attracted a stellar management team and board of directors, which includes Bruce A. Lehman, the former Commissioner of the United States Patent and Trademark Office (USPTO) and Assistant Secretary of Commerce (1992-1998). Its stated goal is to provide "the tools necessary to create the safest marketplace in the world for intellectual property rights-patents, copyrights, trademarks, trade secrets and know-how." While high-volume clients are clearly preferred, individuals are allowed to subscribe to the service as a special status subscriber called (no surprise here) an "Inventor." pl-x.com is currently waiving all subscriber fees through June 2001. Thereafter, subscribers will be charged an annual fee of $5,000 for not-for-profit organizations and $15,000 for for-profit entities. A commission, that ranges from 17.5 percent of the total transaction value for small transactions to 5 percent for large transactions, is due to pl-x.com from escrow upon the closing of a sale or license of intellectual property by subscribers. For pure royalty deals, subscribers have the option of paying a commission of 5 percent of each royalty payment, up to a total commission of no more than $200,000 on any single pure-royalty transaction closed on pl-x.com.
Another Web-based patent marketplace is the yet2.com website, a Dupont spin-off. The least expensive way to use this site is to pay an annual membership fee of $500 which allows the member to list up to five technologies on the site. Additional listings cost $100 each. A commission of 10 percent of the total value received is due to yet2.com, with a $5,000 minimum (due within 30 days of the close) and a $50,000 maximum per transaction.
IBM's Delphion Intellectual Property Network has long been an outstanding patent search website. Now inventors who want to tag their patents as being available for licensing can purchase a "Licensing Button" at a cost of $150 per patent per year. A pink dot appears next to the patent every time the patent appears in a search list or a detailed view. The pink dot is linked to a web page that can contain contact information and a link to the inventor's website.
PriceWaterhouseCoopers has launched a patent marketplace called The Intellectual Property Exchange (ipex.net). The IPEX Board of Trade service allows subscribers to list or describe intellectual property rights and technology they are interested in buying, selling, licensing or trading. An annual fee of $200.00 per technology listed is charged to corporate account holders. There is no charge for university account holders to list their technologies on the Board of Trade.
CorporateIntellegence.com will soon launch a patent marketplace called PATEX (patex.com). PATEX plans to deliver targeted exposure of intellectual properties to the global patent and technology licensees marketplace and a professional sales program to target and raise the profile(s) of featured properties. I will also include tools and services for facilitating transactions and a discussion forum for the exchange of ideas within the global licensing community. Those interested in participating in the PATEX beta program are asked to e-mail firstname.lastname@example.org
The National Inventor Fraud Center (inventorfraud.com) maintains a listing of "GOOD Guys," some of which are commission-based, invention-promotion websites. Other GOOD Guys provide fee-based invention promotion services. An inventor with little experience in marketing would be well advised to use such fee-based services to develop the marketing materials he needs to post on patent marketplace websites.
While some of the above services are clearly more comprehensive than others, and patents are not an easy sell, I suspect that many small businesses and independent inventors will soon find Web-based patent marketplaces a cost-effective component of their patent marketing effort.
II. IS IT NEW? IS IT MINE?
The references (e.g., patents and other publications) discovered during a novelty search can provide a pretty good idea of the "state of the art" in the field of your invention. This information can also provide answers to two important questions facing an inventor: "Is my invention patentable?" and "Can I (or my licensee) practice my invention without infringing someone else's patent?" While these questions cannot be answered with absolute certainty because no search will find every publication, public use or offer for sale related to your invention, a review of novelty search results can significantly reduce your risk of investing in the wrong (someone else's) invention.
The first issue to be addressed is patentability. If your patent practitioner has prepared some preliminary patent claims that have focused a professional novelty search on the essential features of your invention (as I do), you can ask yourself, "Does any single reference anticipate my invention as it has been claimed?" and "Does any combination of references render my claimed invention obvious?" If the answer to either of those questions is "Yes," you can ask yourself, "How can I modify my invention (and/or claims) to avoid the references." I always encourage the inventors with which I work to tackle these questions first, before I do, both as an exercise in learning the "rules of the game" and for reasons of economy.
In order for a claimed invention to be unpatentable because it was anticipated, a single prior art reference must expressly or inherently disclose each and every element set forth in the patent claim. In essence, there must be no difference between the claimed invention and the invention disclosed in the prior art reference, as viewed from the perspective of a person of ordinary skill in the art. While, the teachings of prior art references may not be combined to establish anticipation, the reference must be enabling in that it must place the claimed subject matter in the possession of the public. You will note, however, that anticipation can be prevented by adding a single element to your claimed invention.
The legal standard for obviousness is more difficult to apply. A claimed invention is obvious in view of the teachings of a combination of references (more than one reference) if a person having ordinary skill in the art would have considered it so on its date of invention. A non-obviousness determination is based on four factual predicates: (1) the scope and content of the prior art, (2) the differences between the claimed invention and the prior art, (3) the level of ordinary skill in the art and (4) other objective indications of non-obviousness, such as commercial success of the claimed invention, long felt but unresolved need, etc. These factors and how to apply them were discussed in my December, 1999, newsletter which is posted on my website and to which I refer interested readers.
If a useful invention is neither anticipated nor obvious in view of the references found in a thorough novelty search, it is very likely that it is patentable. Just because an invention is patentable, however, does not mean that its inventor can practice it with impunity. This is because a patent confers a "negative right" on its owner, the right to exclude others from practicing a claimed invention. Thus, it is possible (and not uncommon in "crowded arts") for an inventor to have invented a patentable improvement to an invention that has already been patented by someone else. To practice his own invention in such a situation, the inventor must have the permission of the owner of the existing, issued patent, or suffer the consequences of patent infringement. Likewise, to practice the improved invention, the original patentee must have the permission of the owner of the improvement patent.
Because the potential for infringement can influence patent strategy, the second issue to be addressed is patent infringement. Infringement is the unauthorized making, using, importing, offering to sell or selling of a patented invention in the U.S. during the term of an issued patent. One may also be liable for infringement by knowingly inducing another to infringe (e.g., by selling a material part of a patented invention) or by otherwise contributing to infringing conduct.
In determining infringement, the focus is on the claims of the issued patent because the claims alone define the bounds of a patent owner's "right to exclude." In that each element of a claim is material and essential, infringement of a patent claim requires, without exception, that an accused product or process contain each claim element (sometimes called a "limitation") or its equivalent. Only a single claim need be infringed for one to be liable for patent infringement. (This fact emphasizes the critical importance of how your own claims are drafted, i.e., how each word in each claim is chosen and used. It also explains why claims of varying breath–broad to narrow--and using different terminology and formats are a good idea.) The logic of a finding of infringement is such that one cannot avoid infringement by adding an element to an accused device, because each "limitation" would still be found in the accused device.
When a court is asked to determine whether a patent claim has been infringed, it first construes the claim to determine its scope and meaning and then the claim (as properly construed) is compared to the accused product or process. Each of the words in a claim is given its ordinary meaning, unless the patentee has used the word in a different manner. For this reason, it is necessary to review the way each of these words is used in the rest of the issued patent, i.e., the specification and drawings.
Often a patent claim will use "means-plus-function" language to recite a limitation. Such language has the form "means for doing something." When such language is used, the limitation is "construed to cover the corresponding structure, material or acts described in the specification and equivalents thereof." The Court of Appeals for the Federal Circuit (CAFC) has ruled that "[t]o determine whether a claim limitation is met literally, where expressed as a means for performing a stated function, the court must compare the accused structure with the disclosed structure, and must find equivalent structure as well as identity of claimed function for that structure." The CAFC has defined "equivalents" as resulting "from an insubstantial change which adds nothing of significance to the structure, material, or acts disclosed in the specification." (This is why the specification of a patent must include a "mind dump" by the inventor of all possible structures, materials, or acts that could be used to practice his invention, even sub-optimal ones.)
Regardless of the form of the claim, courts may find infringement when there are insubstantial differences between the claim language and the accused device under the "doctrine of equivalents." Under the doctrine of equivalents, each element of an infringing device "performs substantially the same function in substantially the same way to obtain the same result as the claimed invention." This test is founded on the notion that, "if two devices do the same work substantially the same way, and accomplish substantially the same result, they are the same, even though they differ in name, form or shape," but it focuses on the individual elements recited in a patent claim rather than on the invention as a whole. While the "function, way, result" test often suffices to show infringement, other objective evidence may also be relevant.
If, in analyzing an issued patent to determine whether practicing your invention would infringe its claims, you (or I) discover a "close call," I would refer you to a patent attorney experienced in patent litigation to obtain a legal opinion on the possibility of infringement and on the validity of the issued patent. (Only an opinion prepared by such a patent attorney is accepted by the courts as a defense against a charge of willful infringement.) In most cases, a more exhaustive, expanded "infringement/validity/right-to-use" search is warranted because more is at stake (e.g., product development costs or an infringement defense). Often, such an analysis also obtains and considers the written record of prosecution of the issued patent (termed the "prosecution history") to see if statements by the inventor or his representative are on file that limit the meanings of the words in the claims. (This fact emphasizes the critical importance of what is placed in that record during prosecution of your own patent.)
While professional novelty searches can seem to be a costly diversion to some inventors, searches produce information that is critical in making both legal (how should this claim be worded?) and business (should I try to patent this?) decisions. Any inventor who plans to spend thousands of dollars on the preparation and prosecution of a patent application is well advised to spend hundreds of dollars "up front" to safeguard his larger investment. The scope of the patent claims that will define and limit his power to exclude others from practicing his invention is at stake. Furthermore, participating in a review of search results can also provide a valuable learning experience to an inventor who will soon be asked to review the claims in his own patent application.
III. THE ANATOMY OF A PATENT CLAIM
Many lay persons have difficulty understanding patent claims. It is no wonder, then, that the U.S. courts have reserved for themselves (not the members of juries) the task of claim interpretation when a patent is being enforced or when its validity is questioned in court. Inventors, however, must be able to interpret patent claims because they are part of a team that is choosing words for each claim that will serve as a "fence" around the inventors' intellectual property. The purpose of this article is to make that difficult task a little easier.
It may sound like an oxymoron, but a patent claim is a "definite abstraction" of an invention. A claim "boils down" (or abstracts) a physical embodiment (or variation) of an invention into its essential parts, which may be individual structural features or process steps, and describes how those parts interrelate to accomplish the function of the invention. Thus, to interpret a claim, one must be able "step back" and view those individual parts and interrelationships.
A patent claim must be definite, too. This is necessary because allowing indefiniteness (fuzziness or lack of clarity) to creep into a claim would confuse those who need to know where the "boundaries" of a patentee's intellectual property were located. That would not be fair.
Because natural language has limitations, the decisions of U.S. courts have, in effect, created a variant of English that is used in patent claims, by establishing specific claim structures and clearer definitions for some terms that are often used in patent claims. Understanding these structures and definitions (also known as "patentese") greatly facilitates claim interpretation.
Let's tackle claim structure first. Grammatically, every claim is the object of the phrase "I claim" or "We claim" as if each claim completed a single sentence that begins with one of those phrases. Claims typically have three principal components: a preamble, a transitional phrase and a body. Most commonly, the preamble is a short introductory phrase that frames the context of the claim and that may set out the environment or intended function of the invention. An example of a preamble is, "A method for interconnecting a plurality of processors and a memory." Generally, the preamble does not limit a claim unless it "gives life and meaning" to the claim.
The second component of a claim is the transitional phrase. Three transitional phrases are commonly used: "comprising," "consisting of," and "consisting essentially of." Each of these phrases has a different and definite meaning, as explained below.
The third component is the body. The body of a patent claim contains all the "features" or "elements" or "limitations" of the invention that are material to its patentability. Typically, the text or clause that sets out each feature is indented and/or set apart by punctuation for ease of interpretation. The body describes exactly what each feature is or how it functions and how it interrelates with the other features in a "thigh bone is connected to the knee bone which is connected to the shin bone" sort of way. Thus, the body of a claim recites the elements of the invention and describes how the elements structurally, physically or functionally cooperate with one another to make up the invention. Each feature is introduced with a definite article (e.g., "a" or "an") the first time it is used. Thereafter, each feature is referred to with an indefinite article (e.g., "the") or with "said." So, the reader can always tell when a feature that has already been introduced is being referred to again.
Now, for some definitions. The terms "comprising," "which comprises," "including," "containing," "which contains," and "characterized by" mean "including at least the elements listed." The less frequently used phrases "consisting," "which consists of" or "constituting" mean "limited to exactly the same elements listed." Thus, a claim that incorporates the transitional phrase "comprising" is "open" in that it is interpreted to mean that more features can be added to the claimed invention and the claim would still be infringed. For example, a claim that "comprises" some elements, one of which "consists" of a finite ("closed") list of sub-elements, can also have other elements (with or without sub-elements) that are not listed. The transitional phrase "consisting essentially of" finds principal application in the chemical arts. It is intermediate between open and closed and means the invention "includes the elements listed and may include other elements, but only if the other elements do not materially affect the basic and novel characteristics of the invention."
In patentese, the term "a" means "one or more" unless the specification or claim context makes it clear that "a" means "a single." The term "plurality" means "more than one." The terms "about" and "approximately" means that a number or numerical range recited in a claim is not critical.
Each independent claim stands alone and is interpreted solely by understanding the limitations it expresses. Each dependent claim (each claim with a preamble like "The method of claim 3" followed by a transitional phrase or that refers back in some other way to another claim) is interpreted to also include all the limitations of the independent claim(s) from which it depends.
Here is an example of one independent claim and two dependent claims that were included in the famous Harvard onco-mouse patent (U.S. Patent No. 4,736,866), one of my favorites:
1. A transgenic non-human mammal all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage.
11. The mammal of claim 1, said mammal being a rodent.
12. The mammal of claim 11, said rodent being a mouse.
Note that the transitional phrase of claim 1 is "contain" and, thus, "open," and that each of the dependent claims adds a limitation to the broader first claim, thus narrowing the breadth of each claim in the series.
It is often said that claim drafting is an "art" passed down from one member of the "guild" of patent practice to another. In fact, some patent practitioners write claims in a way that suggests an attempt to obscure the invention. In any case, understanding the basic anatomy of patent claims is a skill needed by all successful inventors. I hope this article is successful in removing some of the mystery of claim interpretation for you.
Robert M. (Bob) Hunter, Ph.D.
Licensed Professional Engineer
Registered Patent Agent