Many inventors wonder if they can skip all this “patent stuff” and simply approach a company with a raw, unpatented idea in hopes of getting that company interested in using their idea.  Ideally, the company would sign a non-disclosure agreement with the inventor promising to keep the invention secret, hear what the inventor has to say, and then pay the inventor a lot of money for the use of their idea.  That would surely simplify things.

Unfortunately, this scenario almost never occurs in the real world.  Most established companies have a policy of never signing non-disclosure agreements with independent inventors, and of not listening to the ideas of inventors unless those inventors have issued patents or patents pending (filed patent applications).  The reason is actually quite clear when you think about it from the perspective of the company.  Let’s assume that the company is internally developing a new product, a new mouse trap.  Suddenly, an independent inventor comes to the company and tells them he has a great idea for a new product.  The company signs a non-disclosure agreement with that inventor and the inventor then discloses to the company an idea for the same mouse trap that the company already has under development.  If, a year later, the company comes out with the new mouse trap, there is now a high likelihood that the inventor will sue the company for breaching the non-disclosure agreement.  The inventor will assume that the company stole his idea even though, in reality, the company developed the mouse trap in-house. 

Clearly, savvy companies will not take the chance of this happening.  You can’t blame them.

After you submit a patent application to the U.S. Patent and Trademark Office (USPTO), your invention is officially “patent pending” and you may use that term when describing the invention to others.  In fact, because of the large backlog of cases at the USPTO, your invention is likely to stay “patent pending” for several years. 

So what kind of protection do you have when your invention is patent pending?  Is it safe to market your idea to others?  Can they simply steal your invention from you once you disclose it to them?

Inventors will be glad to hear that the term “patent pending” actually carries a lot of weight when it comes to stopping others from stealing inventions.  If an inventor has a patent pending for an invention and a company begins to use that invention without his permission, the inventor can proceed to get the patent issued and sue the company for patent infringement.  Patent damages start to accrue from the date that the application is published 18 months after it is filed.  Moreover, the inventor can get triple damages if he can prove the infringement was willful.  Finally, the inventor may also get an injunction against the company, thereby stopping the company from selling any more of the infringing product. 

All this is not good for the offending company.  By the time the infringement case is over, that company may have to pay triple damages, have to quit selling the product, and lose all its development and marketing costs.

For this reason, you are likely to find that most companies are not likely to rip off your “patent pending” invention if they believe you have a good chance of eventually getting a patent.  These companies will recognize that it is better business to simply buy or license the patent rights from you than steal the idea from you and face the consequences.

My firm is regularly asked to render legal opinions on issues related to patents.  There are several different types of patent opinions: 

Patentability Opinion.  A patentability opinion is typically requested when a client wants to learn the likelihood of obtaining a patent on a new device, method, composition, etc.  It is usually prepared before a decision is made to proceed with a patent application.  A patentability opinion is based on a search for prior art.

Right-to-Use Opinion.  A right-to-use opinion is usually requested when a client wants to know whether that client’s new product or process infringes any active patents.  In other words, the client wants to know whether its new product or process will potentially expose the client to a lawsuit for patent infringement.  This opinion may help the client decide whether or not to move forward with the new product or process.  A right-to-use opinion is based on a search for active patents.

Non-Infringement Opinion.  A non-infringement opinion is frequently requested when a client wants assurance that it is not infringing a particular patent.  The patent may be owned, for example, by the client’s competitor. 

Infringement Opinion.  An infringement opinion may be requested by a patent holder when the patent holder wants to know if someone else is infringing the patent holder’s patent.  This opinion may help the patent holder decide whether to file suit for patent infringement.

Validity Opinion.  A validity opinion is usually requested by a client who is concerned about infringing a particular patent and wants an opinion on the validity and enforceability of that patent.  A validity opinion may also be requested by a patent holder that is considering a lawsuit against an infringer.  The patent holder may want assurance that its patent is valid and enforceable before taking on the costs of enforcing its patent.

Some TV commercials and websites offer the inventor the ability to file a “patent application” at extremely low cost.  One example is LegalZoom(TM) which, at the time of this writing, offers the inventor the ability to file a do-it-yourself patent application for only $199 plus the fees charged by the U.S. Patent Office.

This may sound like a good deal until one understands exactly what one is getting for one’s money.  In almost all cases like this one, the vendor is only offering to file a “provisional” patent application for the inventor.  A provisional patent application is very different from a non-provisional patent application.  Unlike a non-provisional (regular) patent application, a provisional patent application is automatically abandoned after one year.  It is never examined and never matures into a U.S. Patent.  So in order to obtain a U.S. Patent, a non-provisional patent application must be filed within one year of filing the provisional patent application.  If you do not follow up in this manner, the provisional patent application will simply expire and you will have achieved nothing.

What a provisional patent application does do is allow the inventor to obtain a “priority date” without the need to initially file a full-fledged non-provisional patent application.  In other words, it gives you an extra year to work on the non-provisional patent application.  Typically, the earlier the priority date you can get for your invention, the better off you are.  Generally any developments by others after the priority date of your particular patent application cannot be used to reject your invention as being not novel or obvious. 

The other thing that must be understood about provisional patent applications relates to the quality of the application.  Many inventors believe (and I think some of the vendors want you to believe) that a provisional patent application can be informal and can be quickly put together without regard to quality or scope.  This is far from true.  In order to obtain a valid priority date for your invention, a provisional patent application must contain most of the elements found in a non-provisional patent application.  It must, for example, explain your invention in enough detail that someone else could practice your invention “without undue experimentation.”  As a result, a provisional patent application should not be something that is casually thrown together.  Rather, preparing an effective provisional patent application may require about the same time and effort as preparing a non-provisional patent application.  For this reason, I advise most of my clients to forego the filing of a provisional patent application unless there are some special circumstances that allow only a provisional patent application to be filed (for example, insufficient financial resources or insufficient time).  The overall cost of initially filing a provisional patent application and then following up with a non-provisional patent application a year later will necessarily cost more than initially filing a non-provisional patent application and skipping the provisional application altogether.

There is a common misconception about patents. Many, if not most, people believe that a patent grants to its holder the right to practice an invention. This is actually not legally correct. In actuality, a patent provides to its holder what might be called a “negative right.” More specifically, a patent provides to its holder only a right to prevent others from practicing the patented invention rather than the right to actually use the invention. In other words, when the patent holder discovers that another entity is utilizing that inventor’s patented invention (i.e., when the patent holder discovers that the other entity is “infringing” the patent), the patent holder has the legal right to stop that other entity (the “infringer”) from continuing to do so. The patent holder may also often sue the infringer for at least some of the profits the infringer has gained from using the invention in violation of the patent.

Notably, when threatened with being stopped from continuing to use the invention in this manner, an infringer will often try to make a deal with the patent holder in order to avoid expensive litigation and in order to continue using the invention. The infringer may, for example, try to buy or license the patent from patent holder. A license is, in effect, a contractual agreement that the patent holder will not sue the entity licensing the patent (the “licensee”) for patent infringement as long as the licensee continues to pay for the license and operates within any limitations in the license agreement. Obviously, such a deal may be very lucrative for the patent holder. As a result, the patent holder should always be on the lookout for possible infringers.

The fact that a patent does not provide to its holder the affirmative right for the holder to employ the invention himself may be very significant. There may be circumstances where, for example, a patent holder owns a perfectly legitimate patent but does not have the right to actually practice the invention in that patent without permission from another patent holder. This may happen where the patents of others interfere with the patent holder’s own patented invention. Let’s assume that you as an inventor make an improvement to a fuel injector that works with a particular engine design that was patented by someone else. You certainly have the right to patent your new fuel injector. However, you will not be able to effectively use that fuel injector invention without infringing on the engine patent. So, in that case, you might try to obtain a license from the holder of the engine patent so that you can exercise your own patent. In such a situation, the engine patent has becomes what is commonly called a “dominant patent” over your fuel injector patent.

Not surprisingly, most people are not aware of what goes into obtaining a patent.  The following paragraphs describe the typical tasks involved in obtaining a patent in the U.S. 

Patentability Search.  Prior to preparing and filing an application in the U.S. Patent and Trademark Office (USPTO), a patentability search may be conducted, but it is not required.  The search is designed to discover if any prior art exists that would render the invention unpatentable.  If the prior art search uncovers one or more prior art references that appear to render the invention unpatentable, then, for the relatively small price of the search, the inventor has discovered that a patent application on the invention would not likely succeed and can avoid further patent expenses.  On the other hand, if the search results are positive, then the inventor has attained some level of confidence for success in going forward with a patent application.  Beware that a positive search result is not an absolute guarantee of success in obtaining a patent.  There is always the possibility that more relevant prior art will be uncovered later in the process, such as during the USPTO’s examination of the application. 

Patent Application.  To obtain U.S. patent rights, an inventor must file a patent application for the invention in the USPTO.  The application must be in a specific format that includes a background section, a summary, a detailed description, a claims section, and, in most cases, drawings. The description must be sufficiently detailed to allow someone “skilled in the art” of the invention to make and use the invention.  The claims define the legal bounds of the enforceable invention rights and therefore must be drafted very carefully.  

Prosecution.  Once a patent application is filed with the USPTO, it is reviewed by an Examiner who forms a position as to whether the invention is patentable.  The Examiner explains his or her arguments in one or more “Office Actions.”  The time between application filing and receipt of the first Office Action is typically about 12-24 months, depending on the type of technology involved.  Quite often, the first Office Action is a rejection of the application for one or more reasons.  If the application is initially rejected, the applicant may respond by arguing against the rejection and/or amending the claims to avoid the issues cited by the Examiner.  After reviewing the applicant’s response, the Examiner will issue a second Office Action in which the application is again either allowed or rejected.  If the application is rejected again, there are other steps that may be taken, dependent upon the nature of the rejection, to convince the USPTO that a patentable invention is described therein.  

Issue.  If the application is allowed, the USPTO requires payment of an issue fee before issuing a patent.  The patent issues approximately four months after the issue fee has been paid.  Usually it takes about 1½-3 years from the filing of an application until the final disposition (i.e., issuance of a patent or abandonment of the application) is reached, although in some cases it can take even longer.  

The other day I had an opportunity to contact Harley-Davidson Motor Co. about an invention.  The invention involves an idea for a new motorcycle windshield.  Not only did I act as the patent attorney for that idea, I also happen to be the inventor too.

It was very interesting to see how H-D responded to my request.  They immediately sent me a document entitled: “Idea Submission Agreement for Submitting Ideas to Harley-Davidson Motor Company.”  I was told that without signing this agreement, H-D had no interest in hearing about my invention. 

The terms of the Agreement are quite straightforward, and I would assume that the Agreement’s terms are pretty similar to terms you would find coming from any other large corporation.  If you happen to own a U.S. Patent or have filed a patent application for the idea you are submitting, nothing in the Agreement is really too daunting.  H-D is happy to consider your idea.  If they want to use your invention, they will negotiate with you to either license your patent or buy it from you in full. 

The trouble begins if you do not have a patent on the idea you submit.  In that case H-D’s Agreement takes on a different tone:

Absent the identification by you of patent rights or copyrights in your submission, any decision regarding compensation for your submission, even if it is used, shall be in Harley-Davidson’s sole and exclusive discretion.  Your submission of materials, which are not the subject of valid patent rights or copyrights , to Harley-Davidson constitutes your dedication of such materials to Harley-Davidson Motor Company for its use in any manner without compensation to you except as volunteered by Harley-Davidson Motor Company in its sole and exclusive discretion.

In other words, if you submit your idea without first obtaining patent protection, you are in fact voluntarily giving your idea to H-D outright.  The only promise you will receive in return is that H-D will compensate you for your idea at H-D’s “sole and exclusive discretion.”  That doesn’t sound good.  Although I cannot speak about H-D specifically, one can imagine that most corporations will not volunteer to pay out money when they don’t have to.  Most corporations are just not that generous. 

Fortunately, my submission was in the form of U.S. Patent and I can sleep well knowing that neither H-D nor anyone else can legally use my idea without seeing me first.  We will see if H-D likes the idea enough to go to the next step.