Intellectual Property: Patents

February 28, 2022

Intellectual property (IP) is the general term for diverse categories of intangibles that are subject to ownership (legal title) and other rights under state and federal laws in the US, and most other jurisdictions throughout the world. This series discusses the principal categories of IP protected by US law, the nature and scope of the protection afforded, and related procedural considerations.

This series provides an overview of the principal categories of intellectual property (IP) under US law and related practice considerations. It discusses patents, trademarks, copyrights, mask works, and trade secrets. For each of these categories of IP, the series describes the legal authority governing protection, protected subject matter and the scope of protection, the acquisition and maintenance of rights, and enforcement considerations, including for claims of infringement, misappropriation, and dilution

Patents

  1. Legal and Regulatory Authority for Patents
  2. Patentable Subject Matter
  3. How Patent Rights are Secured and Maintained
  4. Scope of Patent Rights
  5. Patent Enforcement
  1. Legal and Regulatory Authority for Patents

US patents are regulated by the US Patent and Trademark Office (USPTO) under the authority of the federal Patent Act, which was enacted in 1952 and significantly amended on September 16, 2011 by the Leahy-Smith America Invents Act (AIA)

. For an overview of the AIA, see Practice Note, Leahy-Smith America Invents Act: Overview.

The US Court of Appeals for the Federal Circuit (Federal Circuit) has exclusive jurisdiction to hear appeals:

  • From decisions by the USPTO concerning the patentability of a pending application or issued patent.
  • Of patent infringement cases, which may only be brought in US federal courts.
  • Of International Trade Commission (ITC) determinations concerning investigations relating to IP.

The USPTO Patents website provides legal and regulatory background information, as well as procedural guidance, relating to patent protection.

  1. Patentable Subject Matter

The USPTO grants three types of patents under the Patent Act:

  • Utility patents protect “useful” inventions that are “novel” and “non-obvious” (35 U.S.C. ยงยง 101 to 103), including:
  • processes;
  • machines;
  • manufactured goods;
  • chemical, biological, and other compositions of matter; and
  • improvements to any of the above.
  • Design patents apply to new, original, and ornamental designs of manufactured articles, which can also be subject to copyright and trademark protection (known as registered designs in some other jurisdictions).
  • Plant patents protect distinct and new varieties of plants (limited to those that can be propagated asexually, by means other than seeds and subject to other specific restrictions).

Utility patents (usually just referred to as patents) are the most common and valuable type. A detailed discussion of plant and design patents is beyond the scope of this series.

Novelty and non-obviousness are central and complex requirements for valid patents under the Patent Act. The US Supreme Court and the Federal Circuit have provided guidelines and standards for these concepts over time by various decisions upholding or invalidating particular patents.

For all patent applications, but not patents issued before September 16, 2011, the Patent Act specifically prevents the issuance

of any patent covering tax strategies or human organisms. In addition, the courts have held laws of nature, physical phenomena,and abstract ideas to be unpatentable. However, abstract ideas-such as mathematical algorithms and business methods-may

be patentable if the claims contain an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application of the idea (see Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)).

  1. How Patent Rights are Secured and Maintain

3a. Prosecution of Patent Applications

The USPTO grants patents on the successful prosecution of patent applications covering the invention. The inventor or a person to which the inventor assigned or is obligated to assign the invention may file a patent application. A patent application is typically prosecuted by a registered patent attorney or patent agent who is admitted to practice before the USPTO.

The AIA moved the US to a first-inventor-to-file system effective March 16, 2013. Under this system, a patent to an invention is awarded to the first inventor to file an application on the invention. Before the AIA, the patent would be awarded to the first inventor, generally based on the date of conception, regardless of the filing date of the application.

A proper patent application must:

  • Disclose in detail one or more embodiments of the invention.
  • Cite any relevant prior art of which the inventor is aware. However, there is no obligation to search for prior art. The Patent Act’s definition of prior art is complex and was significantly amended by the AIA. Counsel must understand both the pre-AIA and post-AIA definitions because the new definition applies only to patents and patent applications having an effective filing date on or after March 16, 2013
  • Enumerate specific claims to be granted. Those claims that are ultimately allowed become the basis for enforcement of the patent.

Patent applications are reviewed for patentability by a USPTO patent examiner in relation to:

  • Novelty and non-obviousness of the invention, determined in reference to the prior art, whether:
  • cited by the applicant; or
  • discovered by the examiner in an independent search.
  • Other statutory requirements for patentability.

A patent application is held by the USPTO in strict confidence until the application is published or a patent is issued. To conform to international standards, the USPTO publishes most utility patent applications, if they are still pending, 18 months after the filing date.

The examiner can:

  • Allow the application to issue as a patent.
  • Initially reject the application (through formal office actions), to which the applicant can respond.
  • Finally reject or allow the application after continued prosecution of the application.

Appeals from an examiner’s final rejection of a patent application can be made to the USPTO’s Patent Trial and Appeal Board

(PTAB) and further to the federal courts.

While the application process commonly lasts two to three years, it can take longer.

3b. Third-Party Administrative Patent Challenges

Any person may use numerous mechanisms to challenge the validity of an issued patent in the USPTO, such as:

  • Ex parte reexamination, which is based on prior art patents and printed publications. Any person at any time may request that the USPTO conduct a reexamination of a patent. The patent owner may also request reexamination to verify the validity of the patent.
  • Post-grant review, which can be based on any ground allowed under patent law. Any person, except the patent owner, may file a petition to institute a post-grant review.
  • Inter partes review, which may be based solely on the ground that the challenged patent is not novel or is obvious in view of prior art patents or printed publications. Any third party may file a petition to institute an inter partes review.
  • Transitional business method patent post-grant review, which may only be instituted where a patent infringement claim has been asserted against the petitioner.
  • Submission of information to the USPTO, which may be made by any person at any time and can include:
  • prior art; and
  • statements by the patent owner in federal court or the USPTO.

Ex parte reexaminations were available before the AIA. The other procedures have been available as of September 16, 2012.

3c. Maintenance of Patent Rights

Once issued, patents are subject to maintenance fees that must be paid to the USPTO in three installments at specified intervals over the term of the patent. Unlike trademark rights, maintaining patent rights generallydoes not depend on the patent holder exerci sing its rights or enforcing the patent against infringers.

Articles made or sold under a US patent may be marked with the word patent or the abbreviation pat. and the assigned number or numbers. A patent owner may also mark a patented product by providing the patent number and product information on a

publicly accessible website. Marking isnot required to maintain patent protection, but failure to mark can limit patent damages in an infringement action.

3d. Transfer of Patent Ownership

Ownership of a pending patent application and any patent that issues from it originally vests with the inventor or inventors. However, the owner of a patent or patent application can transfer title or grant a security interest for value, and documents evidencing transfers and grants can be recorded in the USPTO.

  1. Scope of Patent Rights

A patent holder has the right to exclude others from:

  • Making the patented invention within the US.
  • Using the patented invention within the US.
  • Offering to sell or selling the patented invention within the US.
  • Importing the patented invention into the US.

A patent owner is not required to exploit the patent or license others to do so.

For utility patent applications filed on or after June 8, 1995, a patent has a maximum duration of 20 years from the filing date of the earliest US patent application to which priority is claimed, subject to any terminal disclaimers or patent term adjustments for delays, which may be caused by the USPTO during prosecution or the FDA approving a drug or medical device covered by the patent. Before a 1995 amendment of the Patent Act to conform to international patent standards, the maximum term of US patents had been 17 years from the issue date of the patent.

A patent owner can license any of its rights to others on an exclusive or non-exclusive basis, subject to various terms and conditions agreed on by the parties, for example:

  • License fees or royalties.
  • Restrictions based on:
  • time;
  • territory; or
  • markets.
  1. Patent Enforcement

A patent owner can bring an infringement action in federal district court or, where the importation of infringing goods is involved, before the ITC. The grounds of the action can be any of the following alleged activities by the defendant:

  • Making, using, offering to sell, or selling within the US, or importing into the US, any invention covered by the patent claims (literally or under the doctrine of equivalents).
  • Importing into the US a product made by a process patented in the US.
  • Inducing another entity to engage in direct infringement.
  • Contributory infringement, defined as offering to sell, selling, or importing a component of a patented product or a material or apparatus for practicing a patented process, where:
    • the contributory infringer had knowledge that the component, material, or apparatus was either used or designed for infringement of the patented product; and
  • the component, material, or apparatus does not have a substantial non-infringing use.
  • Supplying in or from the US components of a patented invention intending that the components be combined outside of the US in a manner that would be inducement of infringement or contributory infringement if the combination occurred in the US.

A defendant typically defends a patent infringement action by showing the patent is any one or more of the following:

  • Not infringed.
  • Invalid.
  • Unenforceable due to inequitable conduct by the patent applicant.

A potential defendant to a patent infringement suit may also seek a declaratory judgment on any of the foregoing grounds. The following statutory defenses may be available to a defendant in a patent infringement action:

  • The allegedly infringing use of a drug or medical device was solely for purposes reasonably related to developing and submitting information under a federal law to a federal regulatory agency.
  • The challenged business method was already in use before the effective filing date of the patent. This defense also includes certain manufacturing processes in connection with patents issued on or after September 16, 2011.

The patent rights are exhausted for a later disposition of a patented article that was lawfully acquired from the patent

  • owner or an authorized licensee.
  • The alleged infringer is a physician or related healthcare entity practicing a medical activity.

Equitable defenses, including laches and estoppel, may also be available. The following remedies are potentially available in patent infringement actions:

  • Preliminary and permanent injunctions.
  • Direct damages, including lost profits or reasonable royalties.
  • Enhanced (treble) damages and attorneys’ fees, in exceptional circumstances.

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

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