Why Can’t We Practice Our Own Patent?

This is a common question.  Just because your company owns a patent doesn’t necessarily mean that you can practice what is covered by the patent. Sound crazy? It’s true. A patent is a negative right. Generally speaking, a patent gives the owner the right to preclude others from making, using, selling, offering for sale and/or importing what is protected by the patent during the term of the patent.  However, a patent does not guarantee that the patent owner can make what is covered by the patent without infringing someone else’s rights.  A simple example illustrates this point. Company A invents the first inflatable bicycle tire.  Company B comes up with the idea of adding a valve stem to the tire so that the tire is more easily inflated and Company B is awarded a patent on a bicycle tire with a valve stem as it is a new, useful and non-obvious improvement to Company A’s patented tire.  Then, Company B makes its first tire with a valve stem and receives a cease and desist letter from Company A alleging infringement of Company A’s broader (or more dominant) patent for just the tire. Company B has a problem as it has manufactured Company A’s patented tire. It doesn’t matter that it added anything to it (i.e., the valve stem) as Company A’s patent broadly covers any inflatable bicycle tire.  Company B is not left without some leverage however.  Should Company A desire to make a tire with a valve stem (because it is a much more compelling product for consumers), it could not do so without Company B’s permission. In the end, the companies would probably cross-license the use of their respective patents.  How could this scenario possibly have been avoided? While many of the more dominant patents would have been uncovered during the patent application process for Company B’s patent, it is advisable to have a “prior art” search of existing patents conducted, especially if your company is thinking about actually manufacturing the product. The breadth of any existing patents can be assessed so that you can ensure that your company is not walking into a landmine. Another option is to commission a “freedom to operate” opinion by a patent attorney.  In this context, the patent attorney will scour a sea of patents that are possibly relevant to your idea and will give you an assessment of how crowded the space is before you move forward with manufacturing your invention.  This type of a search differs from a “prior art” search in that it is much broader in scope and will entail looking for any patents that might address any aspect of your invention vs. just looking for patents that are essentially for the same invention (e.g., looking for any patents that are for just a valve stem used in any context vs. conducting a prior art search to find patents on a tire with a valve stem). In the end, you just need to remember that a patent does not grant you the right to practice the patented invention. It allows you to prevent others from doing so. If you plan on practicing your invention, you should strongly consider hiring someone to conduct a review of the existing prior art (e.g., patents) so that you don’t run into later problems.

Software Developers Beware

It has been interesting to follow Lodsys’ (a patent holding company) pursuit of Apple app developers for patent infringement.  It has been reported that Apple took a license to the patent-at-issue from Lodsys and now, Lodsys is sending cease and desist letters to various Apple app developers.   According to various sources, Apple allegedly required use of the allegedly infringing technology by the developers so certain groups are calling on Apple to indemnify the developers.  Read the Electronic Frontier Foundation’s take on the issue. What is the take away from this scenario? If you are developer and are required to incorporate some sort of technology into your software app, it would be smart to try to negotiate some sort of indemnity provisions to avoid the situation described above.  While this may be difficult as the developers are not often in a position of power to negotiate such terms, they need to be aware of what may transpire without such protections in place.

But You Didn’t Know About It So You Shouldn’t Disclose It….

An issue that we have dealt with over the years is whether information disclosed in a published patent application can be claimed as a trade secret. The argument is that although the information is in the public domain, the receiving party would never have found it. The Fifth Circuit recently addressed this issue. Read a good discussion of the case.  It is not surprising that the Court concluded that information contained in a published patent application was not protectable as a trade secret under Texas law. However, there is a lesson here. Companies should make sure that their NDAs contain carve outs for any information that is ultimately disclosed to the public by the disclosing party. This way, it will make it harder for the disclosing party to claim that something that it disclosed to the world in its patent application is somehow a trade secret.  Further, they should conduct their own investigation by searching the USPTO’s website for any relevant, published patent applications/patents owned by the disclosing party and should get representations from the disclosing party that the information, which is being disclosed, has not already been publicly disseminated and is not the subject of a patent application.  

Five Common IP Misconceptions

In my practice over the last decade, I have seen companies fall victim time and time again to the same IP pitfalls.  Here are a five things to keep in mind when trying to build and protect your brand or technology: 1)  Just because a domain name is available with a registrar does not mean that you can use it without consequence.  2) Owning a patent does not guarantee that you can practice the invention covered by the patent. 3) Just because you paid an independent artist to create your logo doesn’t mean you necessarily own it. 4) Sending a simple cease and desist letter is not without risk. 5) Patents may not always cover what they appear to state as they sometimes contain significant printing errors. I will explore each of these topics in more detail in upcoming posts. Stay tuned.

Take Your IP To The Next Level….

Companies often do not seek a coordinated strategy when approaching their IP and regulatory needs. Can this come back to haunt a company? Perhaps. We’ve all seen the following scenario. Many companies choose scientific-sounding names for their products to create an air of credibility with consumers. These products allegedly have been developed after or are based on “years of scientific research.” Understanding the value of a registered trademark, these companies instruct their counsel to file a trademark application with the U.S. Patent and Trademark Office for the product’s name.  After receiving an office action indicating that the mark is rejected because the mark is viewed as being descriptive, the company counters that the mark is fanciful and really doesn’t have any meaning in order to get the registration. Then, there is an FTC investigation over substantiation for some of the efficacy claims about the product. The company could be in a predicament. It needs to show the FTC that it has “competent and reliable scientific evidence” for its product’s claims.  However, it has now admitted to another government agency that it made up the name.  While this is certainly not damning evidence of deception, this may not help the company’s chances of convincing the FTC that it has complied with the law. You can see how this innocent act may be viewed by the FTC.  Not only did the company make up the suspect claims, it even made up the scientific sounding name to further deceive consumers. Certainly, companies should not forego making valid arguments to get trademark registrations. However, they should make sure that nothing is being said that could later detract from any arguments that they need to make should an FTC investigation arise.  Companies should harmonize their IP and regulatory strategies in order to minimize any later issues.