# Patent Basics

## Patent-Eligible Inventions

### Learning Objectives

After completing this section, you will be able to
1. Identify the characteristics of a patentable invention.
2. Understand what is not patentable and why.

### What, Exactly, Can You Patent?

Title 35 of the United States Code (the Patent Act) allows anyone who invents or discovers any new, non-obvious, and useful machine, manufacture, process, or composition of matter—or who makes an improvement of any of the above—to obtain a patent.
        35 U.S.C § 101.

These four kinds of patentable inventions fall into one of two categories: They are products or processes.
        Arthur R. Millerand Michael H. Davis,

### Product or Process?

Products are physical things—whether they be machines (a new type of robotic welder), manufactures (an artificial knee made of titanium), or compositions of matter (a new chemical “superglue” for binding materials
      together). In this photo, Elon Musk observes the robotic arms in the Tesla Motors factory. Specialized manufacturing equipment like this are patentable products.
Processes (or methods), on the other hand, are a means to an end—either a means of doing something new (being able to pay for purchases directly from your smartphone), or a new way of doing something old (using “pinch, swipe, and
      zoom” gestures on a touchscreen, rather than clicking drop-down menus, to manipulate text, music, and images on a smartphone).

### You Cannot Patent Ideas

      All patented inventions fit into one of these four categories: machine, manufacture, process, or composition of matter. But not everything that fits in one of these four categories can be patented. And the most
      important reason why one thing is patentable and another is not lies in the difference between ideas and applications.
You cannot patent an idea for a better mousetrap—not unless it can be developed into a new, non-obvious, and useful machine, manufacture, process, or composition of matter that can actually accomplish the task. You may have a
      genius idea for faster-than-light travel, but that will not get you a patent unless you can outline how to develop a tangible process or device for actually doing so, in which case you can seek to patent it.
Put another way, “talk is cheap” when it comes to securing a patent. The U.S. Patent and Trademark Office offers no judgment as to the wisdom or desirability of any particular invention—patent No. 2,882,858
      for a bird diaper is certainly proof of that. But it absolutely will insist that every invention include a tangible device or process for achieving its intended purpose before it deems the invention worthy of a patent.

### Mathematical Formulas Not Patentable

There are other discoveries that fall into the broad category of abstract ideas and are thus unpatentable. You cannot patent a mathematical formula. You cannot patent a law of nature, such as Einstein’s E=MC2. And you cannot patent natural phenomena like electricity (discovered by William Gilbert in 1600) or the Higgs particle that gives all matter its mass (discovered by researchers at the Large Hadron Collider on July 4, 2012). These all exist independently of human intervention, whether we have discovered them or formulated their rules yet or not, and must be freely available to all of humanity for its understanding and betterment.
To restate the distinction, you cannot patent electromagnetism but you can patent a telegraph that uses electromagnetism to communicate rapidly over great distances, as Samuel Morse did in 1840 with patent no. 1647. And although
      you cannot patent light waves, you can patent a fiber optic wire that employs light waves to communicate even more rapidly and over greater distances, as Corning Glass researchers did in 1970 with patent no. 3,711,262.

### Can You Patent Computer Software?

The boundary between ideas and applications might seem clear, but it has become blurred since the advent of computer technology 40 years ago, especially regarding the patentability of software.
To learn more, watch this video from PBS Digital Studios about the first software patent ever awarded and to learn a bit about the debate around software patentability.

### Mixed Verdicts on Software Patentability

The federal courts and the U.S. Supreme Court have tried to clarify the limits of patentability in the computer age. Three Supreme Court cases in particular—often called the “patent-eligibility
      trilogy”—reveal the evolution of its thinking about software patentability.
In 1972, the Supreme Court held in

      that an algorithm in a computer program—in this case, a mathematical procedure executed electronically that was similar to long division with paper and pencil—was in and of itself not patentable. Phenomena of nature, mental processes, and abstract
      intellectual concepts are the basic tools of scientific and technical research, the court noted, and therefore could not be patented lest it foreclose others from using the algorithm and thereby stifle rather than promote technological progress.
      Granting a patent in this case, the court said, would be analogous to having granted Samuel Morse a patent covering all possible uses of electromagnetism in communications, rather than for the specific method and apparatus he actually invented.
The court made a point of saying, however, that its decision did not mean that computer software could not be patented—only that software whose only useful characteristic was an abstract algorithm could not be patented.
The Supreme Court further refined its thinking on software patentability in the 1978 case
        .
      Unlike the attempt to patent all uses of an algorithm in the Benson case, here the use of a software algorithm was limited to a specific application—setting off an alarm during the catalytic chemical conversion of hydrocarbons. This was a specific
      and tangible use of an algorithm, but the Court still ruled the software unpatentable because it felt the application itself was not inventive.

But once again, the Court left the door open: “Even though a phenomenon of nature or mathematical formula may be well known, an inventive application ... may be patented.”
Three years later, the Supreme Court made its third attempt to define the patent-eligibility of software. In
        , the Court ruled that although algorithms by themselves are not patentable, a software program that used algorithms to govern the molding of raw synthetic rubber into cured precision products was in fact patentable because it involved
      “transforming or reducing an article to a different state or thing.”

### The Software Picture Blurs Even More

Taken together, the three rulings appeared for a time to arrive finally at a coherent definition of software patentability—namely, that although algorithms by themselves are abstract concepts and
      therefore unpatentable, software programs may be patented if they employ algorithms to produce a tangible and inventive or transformative result. This view was further augmented by a 1998 U.S. Court of Appeals for the Federal Circuit decision in
        , which extended software patentability to software-enabled methods of doing business so long as these produced a “useful, concrete, and tangible result.”
But this definitional equilibrium was not to last. The “useful, concrete, and tangible result” test in
      State Street Bank
      was rejected ten years later by the same court in
        , which upheld the USPTO’s denial of a patent for a method of hedging risk in commodities trading. The court instead offered a “machine or transformation” test, which allows a software program or business method to be patented only if it
      is implemented on a specific machine to achieve a special purpose that is novel, non-obvious, and useful; it transforms an article from one thing or state to another.
But in its review of
        , the Supreme Court ruled that while the “machine or transformation” test was useful, it was not the only test for patentability. In addition to the “machine or transformation” test, the court decreed (rather vaguely) that any future test
      should be “grounded in the examples and concepts” expressed in its original “patent-eligibility trilogy” of opinions. They thus reaffirmed that business methods may indeed be patentable.

### Finally, a “Pretty Clear” Message

While businesses and the courts were trying to figure out what the other tests for patentability might be, the Supreme Court provided further input with its March 2012 decision in
        . Here, the court ruled that a process enabling physicians to correlate blood test results with medication levels to achieve the most appropriate dosages was ineligible for patent protection.”
But then in June of 2014, The Supreme Court issued what may prove to be its most consequential decision on the patentability of software in the 33 years since
      Diamond v. Diehr.
      In
      Alice v. CLS Bank,
      the Court ruled that taking some activity that people have been doing for centuries—in this case, holding funds in escrow until a transaction is completed—and then merely “doing it through a computer” did not turn this age-old activity into a
      patentable new invention.
At first, many observers believed that the effects of the
      Alice v. CLS Bank
      ruling would be very limited. Only the patent in the suit was invalidated, after all, not all software patents. What’s more, the abstract reasoning of the court in its decision did not provide clarity on how the ruling may or may not apply to other
      kinds of software patents—for example, the sort of software used in manufacturing that was ruled patentable in the 1981
      Diamond v. Diehr
      case.
But by October of 2014, a series of lower court decisions applying the new
      Alice v. CLS Bank
      standard had invalidated 13 additional software patents. As technology policy journalist Timothy B. Lee noted, “The courts are sending a pretty clear message: you can’t take a commonplace human activity, do it with a computer, and call that a
      patentable invention.”
How far reaching will the impact of
      Alice v. CLS Bank
      be? “This doesn’t necessarily mean that all software patents are in danger,” Lee noted, because the patents involved “were particularly vulnerable to challenge under the new
      Alice
      precedent. But it does mean that the pendulum of patent law is clearly swinging in an anti-[software] patent direction.”

### Overcoming the Alice Paradox

By late 2015, however, it was clear that the
      Alice
      ruling was having an impact not only on patent law, but also on the innovation process itself within corporate America.
As John Cronin, a former top inventor at IBM and now the CEO of the innovation-on-demand firm ipCreate, observes: “The highest-value products and services today—the ones that increasingly drive margins in business—involve cloud
      computing, Big Data, machine learning, connectivity, mobility and location-based services, and on-demand and anything-as-a-service software applications and business processes. But ironically, these high-value innovations are also the most difficult
      to patent nowadays as a result of the Supreme Court’s
      Alice
      decision.”
Cronin calls this the “Alice
      Paradox,” and it has left many in-house patent groups struggling for a solution. One thing is clear: To be patentable nowadays, software has to take a genuinely-inventive step and either trigger an action, employ a device, or in some other way
      produce a tangible transformative result.
In addition, smart companies are trying to address patentability issues involving software and business processes much earlier in the innovation cycle, before huge investments are made in R&D that may turn out to be not patentable.

Overall, addressing the “Alice
      Paradox” will be critical for many companies because patenting clearly adds value to a new product or service. In a groundbreaking joint study from Carnegie Mellon University, Georgia Institute of Technology, and Duke University entitled “R&D and
      the Patent Premium,” economists found that “the patent premium for innovations that were patented is substantial. Firms earn on average a 50% premium over the no patenting case, ranging from 60% in the health-related industries to 40% in
      electronics.”
        Ashish Arora, Marco Ceccagnoli, and Wesley M. Cohen,
        “

### The Debate on Software Continues

The debate over the dividing line between patentable versus unpatentable computer software-related inventions continues—in corporate R&D labs and in the courts.
However, there are some who don’t believe that software and business methods should be patented under any conditions. They argue first of all that software is different from other industries—more iterative and more incremental,
      with each advance building upon thousands of previous advances. Therefore, their thinking goes, software should not be entitled to patents that ought to be more properly reserved for truly breakthrough or revolutionary inventions.
There are two problems with this argument. First, as anyone in the semiconductor, chemical, or medical device industries can attest, innovation is no more iterative, incremental, or cumulative in software than is innovation in many
      other industries. Indeed, there are probably just as many or more patents for incremental semiconductor inventions that build modestly upon earlier work as there are patents for incremental software inventions that do the same.
As patent scholar and veteran practitioner Paul Janicke of the University of Houston put it, “There really are no breakthrough inventions—at least not in the sense imagined by these critics. Everything moves one step at a time. In
      fact, every time I thought I encountered a large leap, it turned out that I didn’t know the full extent of the prior art.”
The second problem with their logic is that the Founding Fathers specifically designed the patent system to encourage precisely this kind of incremental invention, so that ordinary people—using only the basic technical skills
      possessed by most citizens—could participate in rapidly developing the economy from the ground up. This was a very different approach than that of elitist European patent systems of the day, and it produced results that the rest of the world very
      soon came to envy (see “Section 1.5: What the U.S. Patent System Wrought”).
As the October 21, 1876, issue of Scientific American noted, “In the aggregate the little things—which in England or the continent would not or could not be patented—probably add more to the wealth and wellbeing of the community …
      than the great things do.” Or to quote Thomas Jefferson himself: “A smaller [invention], applicable to our daily concerns, is infinitely more valuable than the greatest which can only be used for great objects.”
        From Jefferson’s letter to George Fleming in 1815, excerpt from

      Any uncertainty over the validity of incremental patenting was removed once and for all by the Patent Act of 1952. Consistent with the Founders’ intentions, U.S. law now explicitly holds that patent eligibility is not restricted solely to
      revolutionary inventions or “flash of genius” discoveries, but also includes more iterative advances in the state of the technological art so long as these meet the requisite novelty, non-obviousness, and utility criteria.

### Evidence Shows Software Patents Don’t Hinder Innovation

Another argument made by critics of software patenting is that patents stifle innovation and foster monopolization in the software industry. Research, however, suggests that this is decidedly not the case.
        Robert Merges,
        “
      If anything, in fact, the software industry has become even more innovative, more diversified, and more start-up friendly since patenting became common in the 1990s. You need only look at the huge proliferation of highly innovative start-ups in
      today’s social media and apps software fields to see just how erroneous the claim is that software patents stifle innovation. Or consider for a moment the fate of the Blackberry, once dominant but within the space of a couple of years superseded by
      more innovative competing smartphone makers.
Finally, some critics insist that the intangible nature of software ought to disqualify it from patentability. But as noted earlier, the Supreme Court has affirmed repeatedly that although abstract concepts cannot be patented,
      software that employs algorithms to produce a tangible and inventive result—e.g., software that governs the molding of raw synthetic rubber into cured precision products—may be patented.
It’s also helpful to view this issue in a larger context. Forty years ago, 80 percent of the market value of all public companies resided in their tangible physical assets—their plant, equipment, and raw materials. In today’s
      Knowledge Economy, however, it is intangible assets—intellectual property—that make up 80 percent of the market value of public companies.
        Op. cit., Ocean Tomo.

Indeed, the entire history of economic progress on our planet may be described as one long climb by humanity up the ladder of abstraction—from brute force to the subtle use of energy, from wealth derived from tangible resources and
      industrial machinery to wealth derived from ever-more ingenious ways to deploy that energy and those resources. It seems only logical, therefore, to expect that invention itself should follow a similar trajectory—from the realm of the tangible to the
      realm of the intangible.
Ironically, the debate over patents for software, business methods, and other intangible inventions is nowhere more heated than on the Internet, itself an intangible realm in which “virtual” businesses launched with little more
      than hope and electrons (e.g., Facebook) are creating real and substantial wealth in the form of new products, new services, new jobs, and new economic growth for society. Yet strangely, those who have no trouble accepting the Internet as the
      intangible fruit of information age invention seem to get stuck in industrial age conceptions of what should and should not be patentable.
Odd perhaps, but not surprising. The expansion of patentable subject matter into new and more intangible realms has always met with resistance. Patents involving the use of electricity were condemned 140 years ago, as were
      biotechnology patents 30 years ago, and of course software patents when they began to appear in large numbers 20 years ago. In each case, critics warned that these new kinds of patents would hold back further scientific discovery and innovation. Yet
      in each case, innovation and discovery actually intensified and their benefits to society multiplied.

### When Gene-Related Inventions Are Patentable

A similar resistance is also developing toward gene-related patents. These began to be issued in significant numbers after the Supreme Court’s 1980 ruling in
      Diamond v. Chakrabarty, which upheld the first patent on a newly-created living organism—a bacterium for digesting crude oil in oil spills. Since then, patents have been granted for isolated gene sequences, but so far only on
      those with known functions and not on naturally- occurring genes in humans or other organisms. Patents have also been granted for gene sequences used in diagnostic testing, and on gene sequences that have been altered to make them more useful in a
      specific application.
In March of 2010, however, a federal district court judge ruled in the case of
      Myriad Genetics
      that even isolated DNA is fundamentally the same as naturally- occurring DNA and is therefore ineligible for patenting. His ruling was reversed by the U.S. Court of Appeals for the Federal Circuit in July, 2011. But the Supreme Court then set aside
      that decision and directed the appeals court to once again review the case in light of its March, 2012
      Prometheus
      decision. On August 16, 2012, however, the U.S. Court of Appeals for the Federal Circuit once again reaffirmed Myriad’s right to patent the isolated genes BCRA1 and BCRA2, which are involved in most inherited forms of breast and ovarian cancer.
On June 13, 2013, however, the U.S. Supreme Court finally determined in a unanimous decision that a naturally occurring DNA segment is a product of nature and cannot be patented merely because it has been isolated, thereby
      invalidating Myriad’s patents on the BRCA1 and BRCA2 genes. The Court did rule, however, that the manipulation of a gene to create something not found in nature—such as a strand of synthetically-produced complementary DNA (cDNA)—could still be
      eligible for patent protection.
To the average citizen—and perhaps to many patent lawyers as well—all this legal hairsplitting over the limits of patentability in the computer age must seem a bit like the debates in medieval times over how many angels can dance
      on the head of a pin. But two critical points must be borne in mind regarding these debates.
First, no matter what anyone thinks the limits of patentability in an ideal world ought to be, out in the real world where we actually live, software, business method, and gene patents are multi- billion-dollar facts of life that
      businesses ignore only at their peril.
Second, whatever confusion may exist today, the debates over patentability in the computer age will almost certainly be resolved eventually to most people’s satisfaction, just as all previous debates over patentability have. For if
      nothing else, the two hundred year-plus history of the courts and the patent office demonstrate a remarkable ability on the part of these institutions to adapt to the challenges posed by new technologies and new economic conditions.


# Patent Basics

## Criteria for Patenting

### Learning Objectives

After completing this section, you will be able to
1. Identify the criteria that an invention must meet to earn a patent.
2. Understand why non-obviousness is the most difficult hurdle to overcome.

### Can I Patent That?

Before reading this section, please watch the overview video below covering what you can and cannot patent. You can’t patent an idea (like an idea for a better mousetrap), only an application of that idea in a practical invention. Novelty, utility, and non-obviousness—the holy trinity of patents.
Now that you’ve learned what can be patented and what cannot, we will next examine the criteria for determining if a patent-eligible invention actually merits one. These criteria center around three concepts mentioned in the
      previous section and enumerated in the Patent Act: novelty, utility, and non- obviousness.
        35 U.S.C.§101, §102, and §103

Let’s discuss these three concepts in greater detail.

### Novelty

The requirement in Sections 101 and 102 of the Patent Act for novelty in an invention means that to qualify for a patent, a machine, manufacture, process, or composition of matter must not have been previously described or known. Specifically, it must not have been patented, described in an unpublished or published
      patent application, explained in a printed publication such as an article or technical paper, or publicly known prior to the filing date of the new patent application. In addition, it must not have been published, used in public, or offered for sale by the applicant or their colleagues more than 12 months prior to the filing of a patent application.
If any of the above is true of an invention, it is said to have been “anticipated” and cannot be patented. These novelty requirements exist whether the “prior art”—the catchall term for any previous patent, publication, or use—is domestic or foreign.
This does not mean, of course, that your faster-than-light warp drive is unpatentable simply because it was envisioned in a general way in episodes of
      Star Trek
      and its successors’ television shows, and in many
      Star Trek
      books.
“It is not enough that an invention be suggested by the literature,” explains the eminent New York University scholar Arthur R. Miller and his coauthor Michael H. Davis’ in their textbook for law students.
        Op. cit., Miller & Davis.

      “Nor is it sufficient that the literature made the invention inevitable—that bears on the question of non-obviousness. The test, with one major exception, is whether enough of the invention has been disclosed to enable a person skilled in the
      applicable art to duplicate the product or process.”
That one exception, writes Miller and Davis, is public use of the invention. In that case, even a limited disclosure that does not reveal the secrets of the invention can still foreclose a patent if the public use of it “discloses
      the invention’s benefits.”

### Prior Art Must Be Enabling

In the era of social media, the previously mentioned requirements could pose a novelty barrier if not handled properly.
For instance, if you develop a new watch that displays information from an iPhone, and then disclose it on the crowdsourced funding site Kickstarter in order to raise capital from thousands of small-time investors, then you will
      probably want to file a patent application prior to, or certainly no later than a year after, your disclosure of the benefits of your watch to the public.
But in the absence of such public use, disclosure in prior art must be substantial and enabling to be disqualifying.
As patent attorney and writer of the widely read
      IP Watchdog
      blog Gene Quinn explains:

### Utility

As the
      Star Trek
      example suggests, the novelty issue can also touch on the question of utility—the second patentability criteria. Utility has a special meaning in patent law, which is simply that an invention must function and be of some benefit
      qualitatively—although no minimum quantum of benefit is necessary. The landscape of business is littered with companies that have invented not very useful or necessary products. But these may satisfy the requirement for utility if at least someone
      would find them useful.

But snake oil medicines and other products that do not work in any meaningful way will not meet the requirement for utility. “The inventor of an ineffective drug may not obtain a patent merely because he convinces gullible patients
      that it has a non-existent curative effect,” Miller and Davis note. “It is not so much that it lacks a minimum quantum of benefit (the patients may find it subjectively useful), but it is, instead, that it has an impermissible fraudulent quality.”
Even when no fraud is intended, the utility of a product or process must be demonstrate in a patent application—not presumed, but affirmatively demonstrated. Simply put, the thing or the method you have invented must actually work
      as it is intended and claimed to work.
“Forget
      Star Trek
      for a moment,” says Quinn. “On a more mundane level, the USPTO used to deny patents for methods and compositions for re-growing hair. These were seen as lacking utility because re-growing hair was believed to be impossible. Finally, someone was able
      to prove that his method and composition actually re-grew hair on a bald scalp. The patent examiners withdrew their rejection, and patents for such products have issued ever since.”
Interestingly, Quinn explains, since the earlier patent applications on hair-growing products didn’t describe anything that actually worked, they could not be used under the novelty bar to block later patent applications for
      hair-growing products that did work.

### Non-Obviousness

An invention may be new. It may also have utility. But to meet the criteria for a patent, it must also be non-obvious under Section 103 of the Patent Act.
Let’s now dig deeper into the requirements of the concept of non-obviousness.

### Requirements

The requirement for non-obviousness may be illustrated with a fanciful example. If the number 4 were an invented product rather than a mathematical symbol, then even though the number 4 had never been invented before and
      was thus novel, it would still not be patentable. That’s because someone skilled in the art could have put 2 and 2 together to come up with it.
But to offer a more practical example, say you invent a wheeled cart to move office supplies more easily between departments. If this is the first such wheeled office cart in history, you can get a patent for it. But if you then
      decide, “Hey, why not put those wheels on a chair?” you won’t get a patent for it. That’s because combining two such widely-known and available elements would be obvious to anyone skilled in the art of office furniture design.
But things are not so obvious when it comes to inventing a camera phone. Even though it’s composed of well-known and widely-available components, combining the two did satisfy the requirement for non-obviousness because it became
      more than the sum of its parts and met a large and previously-unfilled need in the marketplace. The millions of people who take selfies everyday is certainly proof of that.
There are various ways of presenting evidence that your invention satisfies the non-obvious requirement for patentability. You can demonstrate that the existing elements of your invention, although individually already known, yield
      an unexpected or hidden result. Or you can show that your invention, although composed of well- known and widely available components, when combined satisfies a long-felt but previously unfilled need in the marketplace, thus indicating its
      non-obviousness. Both of these demonstrations of non-obviousness apply to the camera phone example above.

### The One-Click Patent

Some people criticized the so-called “one-click” patent granted by the USPTO to Amazon.com in 1999 for Amazon’s system enabling customers to buy an item with a single click of the mouse—with the payment information
      needed to complete the purchase already having been entered by the user previously.
They contended that although Amazon might have been the first company to employ the process, it was an obvious and inevitable iteration of already- existing mouse-clicking procedures for making a purchase online. The patent office
      reexamined the patent, however, and in 2007 upheld the validity and the bulk of its major claims.
It is important to note that it’s an invention’s function that is often examined to determine obviousness. “Even though it may be obvious that a certain object can be constructed in a certain way, its utility and novelty may lie in
      its functional use, not its construction,” write Miller and Davis. “Therefore, the prior art must be used to determine whether the invention’s new and useful function, not its construction, is non-obvious.”
During the first half of the twentieth century, the courts often saw an invention as obvious when it lacked a “flash of genius” and was merely an incremental advance over the state of the art as opposed to what they imagined would
      be a “revolutionary” breakthrough discovery. But that subjective interpretation of inventiveness was overturned by the 1952 Patent Act, which codified a more objective standard—namely, that whether an invention is developed through laborious trial
      and error or through a eureka flash-of-genius moment has no bearing on its obviousness or non-obviousness.

### Overcoming Patent Hurdles

Taken together, the three patenting criteria—novelty, utility, and non-obviousness—function like the obstacles in an Olympic hurdles race. The utility hurdle is easiest to overcome. The novelty hurdle less so.
      But by far, the highest hurdle facing inventors is non-obviousness.

“The vast majority of all rejections at the patent office are for obviousness reasons,” explains retired Chief Judge Paul Michel of the U.S. Court of Appeals for the Federal Circuit, the main court that handles patent appeals. “And
      it’s not very difficult to see why. Given the millions of patented inventions over the decades, the tens of millions of past and current products on the market, it’s not all that easy to come up with an invention that is not only novel but also truly
      non-obvious to someone with ordinary skill in the state of the art.”
Many believe that the criteria for patenting weakened in the late 1990s and early 2000s, and that as a result, too many poor-quality patents were issued. To the extent this problem exists, one of its likeliest causes is the
      fivefold increase in patent applications that has taken place over the last 30 years without a commensurate increase in USPTO funding, resources, and capabilities.
Despite these challenges, the USPTO has made substantial progress in the last five years in improving examiner training and tools, reducing the backlog of pending applications, and strengthening the quality of the examination
      process for patent applications. This progress has been made despite oftentimes-unclear or contradictory patentability rulings from the courts.
Patent quality is essential to the maintenance of public confidence in the patent system. After all, when property rights (either real or intellectual) are seen as overbroad, ill-defined, or illegitimate, individuals and businesses
      are more willing to trespass on them.


# Patent Basics

## Other Types of Patents

### Learning Objectives

After completing this section, you will be able to
1. Explain the diff ences among utility, plant, and design patents.
2. Describe common patent misconceptions.
Up to this point, we have focused only on the most common types of patents, called
      utility patents, which preclude others from making, using, or selling the invention during the term of the patent, which begins on the grant date and ends 20 years from the filing date (for an average of 17 to 18 years). But in
      addition to these, the Patent Act also provides for two other types of patents—plant patents
      and
      design patents.

### Plant Patents

Plant patents were first created by the
      Patent Act of 1930, which had been proposed by Luther Burbank to protect new species of asexually reproduced plants, mostly
        flowers. These are different than the utility patents granted to bioengineered plants used in agriculture. The United States was the first country in the world to grant plant patents, and even today many countries continue to deny protection for
        plants. Indeed, even some signatories to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) administered by the World Trade Organization (WTO) reserve the right to deny patents for plants.
Although the requirements for plant and design patents are substantially the same as those for utility patents, there are some crucial differences. The most important of these is the substitution of a different test for one of the
      three criteria for patentability discussed in the previous section.
Instead of novelty, utility, and non-obviousness, the criteria for plant patentability are novelty,
      distinctiveness, and non-obviousness. To be patentable, plants must be cultivated rather than found in the wild, and plant patents are granted only to protect a new, distinct, and non-obvious variety of asexually reproduced
      plant—i.e., those grown not with seeds but by grafting, budding, or cutting. A plant need not be useful to qualify for a patent, but it must be distinctive in its color, habit, soil, flavor, productivity, form, or other aspects.

### Design Patents

Design patents are granted to protect new, original, and non-obvious ornamental designs for articles of manufacture. Examples include Apple’s 2009 and 2010 patents—No. D593087
      and
      No. D618677—which covered among other things the unique, rounded-corner design of the iPhone, as well as its 2005 design patent
      No. D504889
      for the look and feel of the iPad. Design patents can be just as valuable as utility patents, as Apple discovered when a jury awarded it $1 billion in damages against Samsung in August 2012, for the latter’s infringement of Apple’s utility and design
      patents. The case is currently on appeal.
Like plant patents, design patents also substitute a different test than utility in their requirements for patentability. Instead of the novelty, utility, and non-obvious requirements for utility patents, the criteria for design patents are novelty,
      ornamentality, and non-obviousness.
It was on the subject of design patents that one example of media confusion appeared. The
      New York Times
      published an article November 16, 2012, declaring in a sensational headline that “Apple Now Owns the Page Turn.” The article claimed that a new Apple design patent “gives Apple the exclusive rights to the page turn in an e-reader application.” According to the article’s author, this showed “just how broken the patent system is.”
Had the author of the article even read an obvious and easily-available source as the Wikipedia entry on design patents, however, he would have learned that design patents are granted only for nonfunctional ornamental designs. In
      fact, says Wikipedia, “design patents can be invalidated if the design has practical utility.”
What Apple actually “owns,” therefore, is not the “page turn” function itself but merely the particular ornamental design of the way a page turn is executed in their devices.
Another example of confused media reporting on patent matters was the February 6, 2013,
      Forbes
      article headlined: “Is the Patent System Broken? Well, Amazon’s Just Patented the Sale of Second Hand Goods.” Amazon actually did no such
        thing, but the author of that article probably made this assumption after reading the abstract of the patent describing its general subject matter. Like many reporters new to patent issues, the author didn’t realize that the abstract tells you
        literally nothing about the exclusive rights conferred by a patent. Only the claims of the patent detail the specific exclusionary rights of the patent holder.

Indeed, when you read the claims of the Amazon patent in question, you discover that Amazon hasn’t claimed ownership of the idea of a “market in second-hand digital goods” at all. Instead, the claims involve merely a very specific
      and novel method of conducting such a market. Meanwhile, Apple, ReDigi, and other firms have patented their own alternative methods of conducting a secondary digital market.


# Patent Basics

## The Patenting Process

### Learning Objectives

After completing this section, you will be able to
1. Describe the steps in the patent application process.
2. Discuss the importance of proper claims drafting.

### Applying for a Patent

Much is at stake in the process of applying for a patent. Depending upon how you draft the claims and write the specification of your application, you could win or lose patent rights at any point in the examination
      process. In addition, any patent rights you win can be worth a considerable amount of money, and can be enforced by the U.S. federal courts.

An applicant must first determine whether to file an application for a utility, design, or plant patent. Then, the applicant must determine their filing status: large entity, small entity, or the new category of micro entity created by the
      America Invents Act of 2011 (AIA). Small entities, which are universities,
        non-profits, and small businesses with fewer than 500 employees who also meet certain other criteria, receive a 50 percent discount on the application fees paid by large entities. Micro entities, which are small entities who have a gross income less
        than three times U.S. median household income or meet certain other criteria, receive a 75 percent discount. These discounts on USPTO fees for small and micro entities do not apply to the attorneys’ fees often involved in applying for a patent, which
        can be significant.

### Provisional vs. Nonprovisional Patent Application

Finally, the applicant must decide whether to file an abbreviated, “provisional” patent application or a complete, “nonprovisional” one. A provisional application consists only of the
      specification describing the invention for which a patent is sought, as well as any drawings that might be necessary to understand the invention. A provisional application is not subject to examination, and is viable for one year.

The chief benefits of a provisional application are twofold. It is much less expensive to file than a regular nonprovisional application—only $1,000 in official fees for large entities, $500 for small entities, and $250 for micro
      entities. It also gives the inventor the benefit of the earlier provisional filing date of the nonprovisional application based on the same specification, while measuring the term of the patent from the nonprovisional application’s filing date.
In a sense, the provisional application serves as a placeholder for up to one year while the inventor does all the prior art searching, claims drafting, and other work required of a full and complete nonprovisional application.
      This priority date placeholder function can be important given that many companies and inventors are working on new products and services aimed at the same markets. This is especially so under the United States’ new “first inventor to file” rather
      than “first to invent” priority regime, which some fear may give an edge to large companies with the legal and financial resources to file early and often. To the extent this concern may be valid, provisional applications can serve to mitigate any
      large company filing advantage.
The main disadvantage of a provisional application is that because the written description cannot be changed when filing the follow-on, nonprovisional application, all the subsequent claims in that follow-on application must be
      completely consistent with the earlier description language. As most inventors can attest, the understanding of an invention and its potential market—as well as the claims best suited to protect it—inevitably evolves and matures over time.
Here’s how an experienced entrepreneur describes the value of a provisional application in the “first inventor to file” environment:
A year might not seem very long. But a lot can happen to markets and to technology in that amount of time. Thanks to the rapid rise of smartphones, for example, it took merely a year for netbooks to go from the “next big thing” to “who cares?”

### The Critical Importance of the Claims

When it comes to filing a full nonprovisional application, the most critical task of the inventor (and patent attorney) is to draft the claims. This is an art in and of itself, one that
      will determine the inventor’s rights and an infringer’s liability.
Each claim serves as a stand-alone definition of the patent coverage—as a sort of mini-patent unto itself. After a patent is granted, a claim is the only thing that someone can be accused of infringing. Accordingly, broad claim
      language is essential if a commercially meaningful patent is to be obtained.
On the other hand, the broader the claim, the more likely it is that prior art may exist somewhere that anticipates the claim or renders it obvious and, therefore, invalidates the claim. So the competent draftsperson submits a
      dozen or more claims, typically moving from broader to narrower scope, in case the broader claims turn out to be disallowed by the USPTO or later invalidated by a court.
Some applicants make the opposite mistake and draft claims that are too narrow—“a programmable multifunction computer in the shape of a metal clamshell,” for example. Such a claim is of little value because others can easily design
      around it simply by using plastic or other nonmetal materials in the design. Some claims are so narrow they are even referred to as “picture claims” because they paint a literal and limiting picture of the invention. You may get a patent with such
      picture claims, but it probably won’t be worth the paper it’s printed on.
The strongest claims usually define powerful functionality. They capture something fundamental or seminal in the functioning of the invention.
A good example is the claims in the aforementioned Amazon one-click patent. The algorithms for “one-click” shopping are not very complicated. Yet the claims capture a very profound functionality—the idea that a user should not have
      to type in credit card and shipping information every time he or she wants to buy something. The consumer-friendly functionality captured in that patent’s claims has won Amazon a lot of customers and made it a lot of money.

### Reviewing the Patent Application

Once the patent application with all necessary forms is filed and all fees are paid, the
      patent examiner
      will review the patent application to determine if the invention meets the statutory requirements for patentability. The examiner will also conduct a search of patent and other databases to determine if the invention appears to be truly novel and
      non-obvious. Once a determination has been made, the patent examiner will send the applicant a document known as a
      first office action, in which the patent examiner approves, rejects, or requires additional information about the claims and/or other elements of the application.
If all the claims are allowed, which is rare in a first office action, the patent prosecution process is complete. A more common next step requires the applicant to respond to the patent examiner’s rejections and requests for more
      information. In this response, the applicant will address all of the examiner’s concerns and either rebut them or amend the application, typically by revising some or all of the claims.
But according to the Manual of Patenting Examination Procedure (MPEP) Section 1.121, “No amendment may introduce new matter into the disclosure of an application.”
        United States Patent and Trademark Office. (2010, July 21).

      Thus, an applicant cannot file an application disclosing a new compound and how to make it, and then later, after discovering that the compound’s structure and method are incorrect, amend the description.
After responding to the office action by perhaps amending the application, the examination process continues until the patent examiner either allows all of the claims or finally rejects them. If all claims are allowed, then the
      patent prosecution process is complete. If some claims are finally rejected, then the applicant’s options at this point are more limited.
According to MPEP Section 706.07, “In the second or any subsequent examination or consideration by the examiner, the rejection can be made final.”
        United States Patent and Trademark Office. (2010, July 21).

      At that point, the applicant must usually choose one of three approaches: Cancel the rejected claims, leaving only allowed claims to issue as a patent; continue the fight by filing what is called a “continuation application” and drafting new claims;
      or appeal to the Patent Trial and Appeals Board arguing that the patent examiner erred in not allowing the claims.
        37 CFR Part 41. Department of Commerce, United States Patent and Trademark Office. (2008).

      Any appeal to the Patent Trial and Appeals Board, as with any other office action, must occur within six months.
        37 CFR § 1.134

Finally, if the patent has been vetted through the patent prosecution process and is ready for issuance, the patent holder must pay the applicable fee. If the applicant pays the issue fee, the USPTO will issue the patent in due
      course. Additionally, utility patents are subject to maintenance fees. These fees are due 3 years and 6 months, 7 years and 6 months, and 11 years and 6 months from the date of the original patent grant. Plant and design patents are also required to
      pay maintenance fees.
        37 CFR § 1.362


# Patent Enforcement

## The Right to Enforce Patents

### Learning Objectives

After completing this section, you will be able to
1. Understand the basic rights of patent owners.
2. Gain an appreciation of the complex process of patent litigation.
Patents issued by the United States Patent and Trademark Office (USPTO) can be enforced by their owners in U.S. federal courts. The USPTO is responsible only for examining and issuing patents—it does not enforce them. It is up to the owner of the patent to enforce it against infringers by filing a civil case in federal court for patent infringement.
A patent owner is called the “patentee.” The patentee has the statutory right to exclude others from making, using, offering for sale, selling, or importing the invention covered by the patent throughout the United States.35 U.S.C. §154(a)(1).ecall that these are rights to exclude others from using the patentee’s invention. The Patent Act does not grant the patent owner the right to practice the invention covered by the patent. Indeed, it may be that the invention, if practiced in the United States, could infringe someone else’s patent! For example, if you obtain a patent on an improvement to a patented product (e.g., a faster-acting version of a patented painkiller), you might not be able to sell the improved product unless you obtain a license under the patent for the underlying product.
Infringement is a strict liability violation—you do not need to know that you are infringing a patent, or that a patent even exists, to be liable for patent infringement. If someone makes, uses, offers for sale, sells, or imports what is covered by a claim of a valid patent, that person is an infringer. Neither lack of knowledge of the patent, nor lack of intent to infringe it, is a defense to patent infringement. 35 U.S.C. §271(a). An exception, where lack of knowledge may be a defense, is indirect infringement, of which there are two principal types: (1) actively inducing someone else to infringe, which requires knowledge of the patent and an intent to cause the infringement (35 U.S.C. §271(b)), and (2) contributing to someone else’s infringement, which requires selling or offering for sale a component to a patented combination knowing that it is specially made or adapted for use as a material part of an infringing combination and that it is not suitable for substantial noninfringing use. 35 U.S.C. §271(c).

Enforcing a patent is almost invariably a long and expensive process. The first step is to decide whether someone is infringing your patent—i.e., making, using, selling, offering to sell, or importing your invention without your permission. To decide whether someone is infringing your patent, the elements of each claim of the patent must be compared with the elements of the potential infringer’s device or process. If the elements of a patent claim match (or “read on”) the elements of the device or process, an infringement has occurred.
Even if some elements of a claim do not literally read on the infringing device, but are sufficiently equivalent in what the device does and how the device does it, they may nevertheless be infringed under the legal rule called the “doctrine of equivalents.”This doctrine prevents an infringer from copying the essence of the invention, but making insignificant modifications in an effort to avoid infringement. If the accused device or process performs substantially the same function in substantially the same way and yields substantially the same result, infringement exists so long as any differences between the claim elements and the accused device are not substantial. A patent calling for an “adhesive” connection (describing glue as the preferred adhesive) could be infringed by a device using a hook-and-loop fastener(e.g.,Velcro). That’s because the hook-and-loop fastener arguably performs substantially the same adhesive function in substantially the same way and with substantially the same result as the glue adhesive.
If a patent owner believes their patents are being infringed, the person typically hires a patent trial lawyer who specializes in enforcing patents. Often, but not always, this is a different person at a different law firm than the lawyer or agent who previously assisted the inventor(s) in obtaining a patent from the USPTO. Once the patent trial lawyer is retained, that lawyer will evaluate the patent and the accused device or process, and will provide the patentee a legal opinion about whether or not an infringement exists. If an infringement is found, the patentee then must decide how to proceed. Several options exist.
2. Demand that the alleged infringer stop infringing, and pay damages for past infringement.
3. Offer the alleged infringer a license to practice your invention for money, called a “royalty.”
4. Ignore the infringement, or postpone any action for a time.
5. File a patent infringement lawsuit in federal court against the alleged infringer.
Each option has benefits and risks, which should be carefully considered before proceeding.


# Patent Enforcement

## Deciding Whether and How to Enforce a Patent

### Learning Objectives

After completing this section, you will be able to
1. Understand the variety of options one has in enforcing patent rights.
2. Appreciate the time and expense involved in doing so.
The decision of how to proceed depends on the patentee’s objectives and a clear understanding of the risks and rewards of each potential course of action. If you do not know your objectives, you cannot decide on a course of action to achieve them.
For example, if your goal is to stop a competitor from offering a competing product that infringes your patent, you have little choice but to file a lawsuit and pursue it to completion. This can easily cost from $1 million to over
      $10 million, depending upon the complexity of the case and the intensity of the defense. If you do not have the resources to pursue such expensive litigation on your own, there are contingency fee lawyers, who may be willing to take your case in
      return for a share of any damages (typically 30 to 40+ percent) that are collected from the infringer. As of 2014, a wide variety of litigation finance firms exist that may be willing to fund your litigation in return for a share of any damage award
      or settlement payment you receive.
        See, e.g., http://www.tennessean.com/story/money/2014/05/20/lawsuit-financingcarves-niche/9306059/
        and
        http://www.patentlitigationfunding.com/litigation-funding.

However, if your goal is to obtain a royalty for the use of your invention, you may be able to negotiate a license agreement without the need for litigation. Even if the infringer balks at an agreement unless you initiate a
      lawsuit, often the lawsuit can be settled via a license agreement short of trial. About 95 percent of patent lawsuits settle before trial, many with the defendant(s) taking a license for which they pay a royalty.
        Jay P. Kesan and Gwendolyn G. Ball, How Are Patent Cases Resolved? An Empirical Examination of the Adjudication and Settlement of Patent Disputes, 84 Wash. U. L. Rev. 237, 254 (2006). Available at: http://digitalcommons.law.wustl.edu/lawreview/vol84/iss2/1

Even small entities and individuals can successfully license a patent without filing a lawsuit if they have a good patent and a reasonable licensing plan. Most prospective licensees know that lawsuits are very expensive and would
      prefer to settle a dispute with a license rather than fight a lawsuit and end up taking a license later. The key is to have a plan, and implement it diligently, with good counsel supporting the effort.
Thus, the first step in deciding if and how you will enforce your patent is deciding what you want to achieve and how much effort, and money, you are willing to devote to the endeavor. The “costs” of enforcement are not limited to
      the out-of-pocket expenses for lawyers and litigation expenses. Any enforcement effort requires the time and attention of the patentee, whether an individual or company, which disrupts normal business activities. The time and attention required
      includes providing information and documents, reviewing pleadings prepared by your lawyers, analyzing information received from your opponent during the litigation, appearing for depositions and other pretrial proceedings, and appearing at trial.
      Just the information and document gathering can consume hundreds, even thousands, of person hours and disrupt the normal operations of virtually every part of an organization.
Enforcing a patent also takes time. Lawsuits typically take two to four years to reach trial. Post-trial proceedings can take another six months to a year, and appeals take several additional years before the lawsuit is “finished.”
On the positive side, successful patentees can reap huge monetary damages for another’s patent infringement, including lost profits, treble damages (i.e., triple the amount of money damages found), and, in exceptional cases, an
      award of the patentee’s attorneys’ fees. Awards of tens to hundreds of millions, and occasionally even billions, of dollars can be achieved, even if they are not typical. If you sell a product or service and are asserting your patent against a
      competitor, you can also obtain an injunction barring your competitor from continuing its infringement. This can reap huge additional rewards, measured in increased market share and pricing power.
Patents not only offer patentees the opportunity to play offense in the marketplace, but also provide a very potent defense against charges of infringement (or other claims) by others. Competitors are wary of attacking businesses
      with extensive patent portfolios. The recent “smartphone wars” are a timely example. After becoming embroiled in patent litigation with Apple and Oracle over its Android operating system and the phones that use it, Google spent $12.5 billion to
      acquire Motorola Mobility in August 2011 to gain access to its extensive patent portfolio so that it would have patent weapons of its own.
      http://techcrunch.com/2011/08/15/breakinggoogle-buys-motorola-for-12-5-billion/

      Google also acquired 1,023 more patents from IBM for an undisclosed amount around the same time.
        http://www.bloomberg.com/news/2011-09-14/google-purchases-1-023-patents-from-ibm-tobolster-portfolio.html.

      Perhaps this was also partly in response to Apple joining with BlackBerry maker Research In Motion (RIM), Microsoft, Ericsson, Sony, and EMC to buy 6,000 patents owned by Nortel for $4.5 billion in July 2011, largely to keep them from falling into
      the hands of competitors like Google and Samsung.
        http://gadgets.ndtv.com/apple/news/apple-ledgroup-buys-nortel-patents-for-4-5-bn-225830.

Expert assistance in making the decision to enforce your patent, and to map out the “who, what, where, when, and how” of doing so, is critically important. A variety of lawyers and law firms specialize in patent trials, from solo
      practitioners to multinational law firms. The choice depends on your needs, means, and objectives.


# Patent Enforcement

## Patent Litigation

### Learning Objectives

After completing this section, you will be able to
1. Understand the pros and cons in deciding who, what, where, when, and how to sue an infringer.
Once a decision is made to enforce a patent via litigation, a complex series of steps begins that determine the “who, what, where, when, and how” of events that will unfold.

### Who

First you decide whom to sue. Many options may exist. If the infringer is a corporation, you can sue it. But you can also sue its owners and/or officers if it is a closely held company or is dominated by a single shareholder or
      manager. If the infringer has subsidiaries, you must choose which of them to include as defendants. Recall that your patent gives you the right to exclude others from making, using, selling, offering for sale, or importing your invention in the
      territory the patent covers. (We will assume for simplicity that you own a U.S. patent; foreign patents can be obtained in other countries and enforcement of those foreign patents is subject to their local laws.) Any person or entity that violates
      one of these exclusive rights is a potential defendant.
Strategic issues should be considered in deciding whom to sue. For example, the location of one or more defendants may make it hard to include them in a lawsuit filed in a place (“forum”) convenient to you. Although the infringer’s
      customers are also infringers (i.e., they “use” the infringing product or service), most patentees disfavor suing customers because these are also the patentee’s customers or potential customers—and suing them may be bad for business. Often, the
      manufacturer or seller of the infringing product or service indemnifies and defends its customers. In other words, in many cases the manufacturer or seller of a product will agree to “cover” its customers in the event of a patent infringement claim.
      So, if the infringing manufacturer and/or seller is already a defendant, you gain little by suing customers, except their ire! Thus, select your defendants carefully, with your desired end result in mind.
Another strategic decision, when more than one infringer exists, is whether to sue them one at a time or collectively.
        Prior to the America Invents Act (AIA) in 2011, joinder rules allowed you to sue multiple infringers in the same lawsuit, even if their products were different. The AIA limited this ability by restricting joinder. Nevertheless, you can still file a
        separate lawsuit against each alleged infringer, and ask the court to consolidate them for discovery and other pretrial purposes. Courts are usually eager to do this because it simplifies their work. The practical effect is almost the same as a
        single case with multiple defendants.

      Common sense might suggest suing them one at a time, to avoid having them gang up on you. But experience shows that suing multiple defendants simultaneously is often a better strategy. It turns out that, in many cases, rather than encouraging them to
      gang up on you, they spend most of their energy trying to sort out differences among themselves and trying to present a united front.
Although the America Invents Act narrowed the joinder rule in patent cases beginning in September, 2011 to cases where a plaintiff can show a “common question of law or fact” as well as a true “transaction or occurrence” between
      the defendants (which must be more than infringement of the same patent), judges still typically consolidate separate cases involving the same patent for their own convenience in handling discovery and pre-trial issues. Thus, proceeding
      simultaneously against multiple defendants can still be an effective strategy.

### What

Which patents (if you have more than one) and which claims of those patents you assert in a lawsuit is another important decision you must make. Twenty years ago, you could simply file a lawsuit against an alleged infringer,
      listing your patent(s) and little more. You could defer deciding which claims to assert against which allegedly infringing products or services until after you received information from the defendant(s) through discovery in the litigation. However,
      courts now routinely require that you provide details in the
      complaint
      you file, or shortly after, about which patent claims are asserted against which product or service, and also that you provide a “claim chart” that details those assertions precisely. Although it is possible to revise these assertions after receiving
      more information during the discovery process, your initial assertions remain in the court’s record and can come back to haunt you if they are not consistent with your revised assertions. Therefore, careful pre-filing investigation and analysis is
      crucial to a successful pursuit of the infringers.
Ideally, hire not only an experienced patent trial lawyer to guide this effort, but also the experts you will rely on in the litigation, and who will testify during the trial on how and why the accused products or services infringe
      your patent(s). Experts can provide essential evidence of the infringement during the trial. Good experts are critical to success in litigation, as much as experienced trial lawyers, but are sometimes surprisingly hard to find. First, you must find
      an expert who is neutral, or at least appears so. Most experts are employed in the same field as the patentee and the alleged infringer, making them potentially unsuitable candidates because they have allegiances to existing companies that suggest
      the possibility of bias. Second, a good expert must not only know their subject thoroughly, but also be able to communicate it to a lay audience (i.e., the nonexpert judge and jury). Such communication skills are not always found in experts with
      strong technical credentials. Finally, you want an expert who has the right skills, but not one who appears to be a hired gun (exemplified by someone who spends most of their time testifying for a fee).
Thus, prepare in advance, and hire experts early in the process, both to assist your preparations and to remain available during the progress of the lawsuit and for trial.

### Where

The selection of where to file is an important, perhaps determinative, decision. As we have noted, patent infringement cases seeking damages can only be filed in U.S. federal courts (as opposed to state courts). If your defendant
      is a private party, the proper location for the case (called “venue”) is the federal district court in the geographic location where the defendant is incorporated or resides, or where the claim arose.
        If the alleged infringer is the federal government itself, or a government contractor, the proper venue is the Court of Federal Claims. 28 U.S.C. §1491 Another forum for enforcing a U.S. patent against imported goods exists at the U.S. International
        Trade Commission (ITC) in Washington, D.C. 19 U.S.C. §1330. The ITC has the power to investigate alleged infringement and bar goods found to infringe from entering the country. This can be a very effective tool against infringing imports, especially
        if all the sources of those imports are unknown. The ITC’s jurisdiction is “quasi in rem” so that the infringing goods themselves provide the basis for jurisdiction, allowing their adjudication and prohibition even if the source of the goods is
        unknown. Proceedings before the ITC are extremely expedited, usually taking 18 months or less, and can be very expensive.

The first two criteria are usually easily determined—i.e., a company’s state of incorporation is a matter of public record, as are the places where it has facilities. The place where the claim arose includes every place the
      infringing product or service is made, sold, offered for sale, used, or imported. If it is a low volume product or service, or is very new or lightly distributed, the proper venues may be quite limited. But typically products or services with enough
      sales to justify a multimillion dollar patent infringement lawsuit are broadly available throughout the country, opening up virtually any federal court as a possible venue.
Thus, you can, and should, select a venue that meets your objectives as closely as possible. Some venues (e.g., the Eastern District of Virginia and the Western District of Wisconsin) have reputations (and rules) for moving cases
      through to trial very quickly, often in less than a year. Speed is desirable in terms of reaching a conclusion quickly, but has its downsides in terms of accelerated costs and maximum disruption to the normal business operations of you and your
      opponent. Other districts exhibit much slower progress toward trial, which may be desirable or undesirable in meeting your particular objectives.
Another factor is experience. Some district courts have handled many complex patent cases, have detailed rules about what must be done to get the case ready for trial, and an excellent track record on appeal. Still other districts
      have reputations for being “plaintiff friendly” or “defendant friendly,” although these reputations are often more “urban legend” than accurate. In any given case, the outcome is dependent on the parties, the facts, the lawyers, and the judge/jury
      assigned.
Experienced patent trial counsel can assist you in making an appropriate choice of venue for your case, taking into account the myriad factors pertinent to your case.

### When

The timing of filing suit is often dictated by when you discover the existence of the infringement and have gathered the required information for drafting a complaint and the necessary initial disclosures. But other considerations
      may be relevant also, such as the timing of industry trade shows, holiday sales pushes, or the financing activities of your opponent. Absent any other constraints or objectives, lawsuits should usually be filed as soon after the infringing activity
      is discovered as possible, given the need to investigate and prepare before filing a complaint.

At the outside, any suit filed more than six years after the infringement began and was reasonably capable of being discovered can give rise to a defense of “laches” and/or “estoppel”by your opponent. In other words,the accused infringer is arguing that you waited too long to bring your infringement claim. It may be necessary for you to prove that the defendant was not prejudiced by your delay. If laches applies, which simply means you waited an unreasonable time tomake your claim, prejudicing your opponent, your damages will be limited to those that arise after you filed your lawsuit. If estoppel applies, which means that you not only delayed, but affirmatively misled your opponent into believing you would not file suit, your claim is barred altogether.
Another issue you face is whether to notify the alleged infringer before filing suit. This seems prudent—demand that the infringer cease the infringement before filing a lawsuit aimed at enforcing such cessation. But such a
      strategy is fraught with pitfalls. First, accusing someone of infringement allows them to sue you preemptively, asking the court for a quick decision that no infringement exists. This type of judicial decision is called a declaratory judgment of
      noninfringement.
        28 U.S.C. § 2201(a); See
      If the accused infringer sues you before you sue them, the accused infringer becomes the plaintiff and can sue in a forum of their choice. Ceding to your opponent the initiative and the choice of forum for the litigation is a strategic blunder that
      could cost you not just that battle, but the war. Second, an old adage applies here: If you are going to kick someone, don’t warn them, because they will prepare to deflect the blow. Patent litigation (like all litigation) is like war, albeit
      civilized war. Ceding to your opponent important strategic advantages, such as the choice of forum and the element of surprise, is costly and can be fatal.

So, do these considerations dictate that you ambush your opponent and appear to be unreasonable by suing without notice? No, a middle ground does exist. Consider filing the lawsuit simultaneously with, or immediately after, making
      a demand that the infringer cease the infringing activities. You can defer formally “serving” the lawsuit on your opponent (that is, providing notice by delivering the complaint) for at least 30 days, and as long as 90 days in some courts. This
      allows you to negotiate with your opponent from a position of strength and with your choice of forum firmly established, without appearing unreasonable.

### How

Once you choose to file suit in federal court, the how is largely dictated by the Federal Rules of Civil Procedure, the Federal Rules of Evidence, and the loal rules of the chosen venue. However, one important decision remains-judge or jury.
        See Rules 38-39, Fed. R. Civ. P.

      Until the 1990s, almost all patent cases were tried to a judge because they were thought to be too complex for juries. but then some enterprising plaintiffs' lawyers decided to request that a jury decide their case, perhaps seeking to take advantage
      of the complexity of the cases and the belief that juries trust patents because they are issued by the federal government after examination by USPTO experts. That has led to the current reality, which is that almost all patent cases filed now request
      a jury trial. Interestingly, statistics show that this trend does not always benefit plaintiffs. Depending on the venue, plaintiffs only win 60 to 75 percent of the time, despite having the advantage of being able to pick what cases they file
      (presumably they self-select only the strongest cases) and where they file them (i.e., they can select what they think is the most favorable forum—often their own hometown).
        PricewaterhouseCoopers, 2013 Patent Litigation Study, at 9;
        https://www.pwc.com/us/en/forensicservices/publications/assets/2012-patentlitigation-study.html.

      Of course, the outcome of a particular case depends on a myriad of factors unique to that case. No party can be assured victory when a jury is involved.


# Patent Enforcement

## Getting Started

### Learning Objectives

After completing this section, you will be able to
1. Understand the various pretrial motions available to parties in a litigation.
Once the decision to file suit is made, and all the factors noted above are considered, the complaint is filed in the clerks’ office of the selected federal court and served in due course on the defendant(s).
        See Rules 3-5, and 7-8, Fed. R. Civ. P.

      The defendant(s) must then decide whether to move to dismiss or transfer the case to a different venue, or file an answer (a response to the infringement claim).
        See Rules 7-8, and 12, Fed. R. Civ. P.

      The defendant(s) can also file a counterclaim, asserting claims back against the plaintiff.
        See Rule 13, Fed. R. Civ. P.

      Motions to dismiss may be based on any number of issues—improper jurisdiction (e.g., the court does not have power over the defendant because it does not reside or do business within the geographic jurisdiction of that court), improper venue (e.g.,
      the defendant does not reside or did not commit any act of infringement in the jurisdiction of the court), failure to state a proper claim, etc.
        See Rule 12(b), Fed. R. Civ. P.

      Such a motion must be accompanied by a legal brief explaining the reasons for the motion, to which the plaintiff can file an opposing brief. The defendant who filed the motion usually has an opportunity to file a reply brief. After the briefing is
      completed, which can take one to two months, the court will decide the motion with an order, either granting or denying it.

Motions to transfer can be filed by a defendant who believes another court would be a “better” place to proceed with the case.
        See 28 U.S.C. §1404(a)

      The factors considered by the court as to whether it or another court is “better” include which court is most convenient in terms of the location of necessary witnesses and/or documents, and whether another court already has experience with the
      subject matter because a related case is pending or was handled there and it can handle the new case more efficiently. Such motions usually fail, but can delay the progress of the case by several months, sometimes longer, while the court considers
      how to rule on the motion. The parties must present detailed arguments about why the case should be moved, or not, and often the court will order oral argument during which each party can present its position and answer questions the court may have.
If no motions are filed by the defendant(s), or if they are denied, the defendant(s) must file an answer, which responds to the allegations in the complaint and sets forth any defenses the defendant(s) may have.
        See Rules 8-9, Fed. R. Civ. P.

      Such defenses can include that the patent is not infringed, that the patent is invalid, that the defendant has a license, that the plaintiff waited too long to file suit (laches) or misled the defendant into believing he or she would not complain
      about the alleged infringement (estoppel), that the alleged infringer is entitled to prior user rights,
        35 U.S.C §273, which provides a defense to patent infringement for someone who can prove, by clear and convincing evidence, that they acted in good faith and commercially used the subject matter of the patent in the U.S. at least one year before the
        effective filing date of the patent or the invention’s first public disclosure.

      or myriad other defenses that may be available.
        See Rules 8-9, and 12, Fed. R. Civ. P.

The defendant(s) may also file one or more
      counterclaims, which are essentially new charges filed against the plaintiff.
        See Rule 13, Fed. R. Civ. P.

      If such counterclaims are related to the subject matter of the initial case, they may be tried at the same time. If not, they may be severed and tried separately, either before or after the initial case.
The plaintiff has an opportunity to file a reply to the answer and an answer to any counterclaim that the defendant(s) file.
        See Rule 7, Fed. R. Civ. P.

      If a counterclaim is filed, followed by an answer, then the defendant(s) can file a reply to the plaintiff’s answer.
        See Rules 8 and 13, Fed. R. Civ. P.

Once these initial pleadings are filed, which usually takes about 60 days from when the initial complaint is filed, the case is considered “at issue” and the pretrial proceedings commence.
Defendants in patent cases are increasingly turning to a strategy of filing requests for
      post-grant review
      in the PTO to derail a patentee’s efforts to enforce the patent. Although beyond the scope of this chapter, a post-grant review essentially asks the PTO to take another look at whether the patent is valid, i.e., whether it should have been granted in
      the first place. The requestor of any post-grant review must present supporting evidence to show that some issue renders one or more of the patent’s claims invalid. The post-grant review request can be either
      ex parte reexamination
      (meaning the patentee does not get to participate) or
      inter partes review
      (in which the patentee is allowed to participate), or
      covered business methods review
      (to review patents that claim a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service). Complex rules govern these proceedings, and
      they changed in 2011 under the
      America Invents Act (AIA), which substantially revised the nation’s patent laws in a number of important ways.
        See the PTO’s discussion of the AIA at
        http://www.uspto.gov/aia_implementation/index.jsp.

The significance to a patentee of an opponent requesting post-grant review is twofold. First, the patentee risks losing its patent if the PTO finds it is invalid, and this is exactly what has happened in a majority of
      inter partes review
      hearings as of March, 2016. Second, a defendant requesting post-grant review usually asks the court to
      stay
      (i.e., temporarily suspend) the patent case filed against it while the PTO evaluates the patent, arguing that the result of the PTO’s actions may either invalidate or modify the patent such that the court should await the outcome before proceeding
      with the litigation. This strategy has been successful in many courts.


# Patent Enforcement

## Pretrial Procedures

### Learning Objectives

After completing this section, you will be able to
1. Understand the multiple procedures involved in the pretrial phase of patent litigation.
2. Appreciate the costs involved and the ways they affect the ultimate trial outcome.
The first steps in the pretrial procedure are the filing by the parties of their “initial disclosures” and the holding of the preliminary pretrial conference.
        See Rules 12, 16, and 26, Fed. R. Civ. P.

      Initial disclosures must provide preliminary information about each party’s positions in the case, and disclose the identity and location of witnesses and documents likely to be relevant to the issues in the case.
        See Rule 26(a), Fed. R. Civ. P.

      These disclosures help frame the “discovery,” or information that the parties can request of each other, which is one of the hallmarks of litigation in the United States and one of the drivers of the expense of litigation. The concept is
      laudable—require each party to disclose the information it has relevant to the case to preclude a “trial by ambush.” But, in practice, discovery can become an endless game of cat and mouse, with costs escalating exponentially. We will talk more about
      discovery shortly.

The preliminary pretrial conference is usually the first time the parties appear in court before the judge, unless there has been a hearing on a pretrial motion (as discussed above). At this conference, the judge discusses with the
      parties the issues likely to arise in the case, the time that pretrial discovery is expected to take, and any issues that make the case unique (such as witnesses in foreign countries that require extraordinary means to obtain their testimony for
      trial). Each party is usually required to submit a report to the court in advance of this conference, proposing what the timeline for the case should be and identifying any unique issues. The court typically issues a
      scheduling order
      at, or shortly after, the pretrial conference, specifying dates by which certain activities must be concluded. This order often “splits the baby” between the plaintiff’s and defendant’s proposed schedules (the plaintiff usually seeks speed while the
      defendant usually seeks delay). The figure below shows a typical scheduling order.
The scheduling order will also usually specify a length of the trial (e.g., 8 trial days), subject to revision at the final pretrial conference. A typical patent trial is scheduled to last from 5 to 20 trial days, but some can take
      much longer. Let’s look at each step of this schedule to understand what is happening.

### Protective Order

Before information is shared between the parties, they usually agree on a protective order, which they will ask the court to enter, that specifies who has access to the confidential information produced during discovery in the litigation.
        See Rule 26(c), Fed. R. Civ. P.

      This is important to all parties, and even third parties that may be asked to produce information during discovery, because sensitive business, technical, and financial information is routinely requested by and produced to each party during the
      lawsuit. The protective order proscribes that the disclosure of confidential information during discovery is limited to lawyers involved in handling the case, outside experts retained by the lawyers to assist them, and court reporters (who record
      testimony during the case), videographers (who videotape deposition testimony, as is now common), and court personnel. It is also typical that certain employees of each party (usually in-house lawyers and/or business people directly involved in the
      oversight of the case) are also permitted to review certain materials, but not financial information of a competitor or future business plans, which are usually excluded from being disclosed to any party employees.
Everyone authorized to see confidential information is under court order to restrict use of the information to the pending lawsuit, not to disclose it to anyone not authorized by the protective order to see it, and requiring that
      all copies be returned or destroyed at the end of the case.

### Discovery

After the preliminary pretrial conference, discovery begins, which results in the exchange of documents, written responses, and witness testimony.
        See Rules 26-37, Fed. R. Civ. P.

A request for production allows a party to demand that another party turn over relevant documents and electronically stored information in its possession or control, as well as an inspection of property (such as a manufacturing
      facility) to take photographs, measurements, and the like.
        See Rule 34, Fed. R. Civ. P.

      Documents and other tangible items can also be requested from third parties (i.e., people and entities not named as a party in the lawsuit) via subpoena.
        See Rule 45, Fed. R. Civ. P.

Interrogatories are written questions that a party can ask of other parties in the litigation, but not of third parties. Such questions can request any nonprivileged information that is relevant to any party’s claim or
      defense—including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable information that may be relevant to the subject
      matter of the litigation.
        See Rules 26(b) and 33(a)(2), Fed. R. Civ. P.

      Interrogatories may also ask for opinions or the legal contentions of another party. The initial limit on the number of interrogatories is 25, including subparts. However, upon a showing of good cause, courts routinely permit additional
      interrogatories in patent litigation because the issues are usually complex.
        See Rule 33(a), Fed, R. Civ. P.

      Answers to interrogatories are binding on the party providing them and may be used as admissions in the litigation, including at trial.
Depositions are interviews used to elicit testimony from witnesses having relevant knowledge.
        See Rules 27-30, Fed. R. Civ. P.

      This is similar to eliciting testimony during a trial, but occurs in a conference room with a court reporter present to record what is said. The judge is not present at depositions, but may intervene if a controversy arises. Testimony can also be
      requested by written questions to a witness, which the witness then answers and returns to the requesting party, called a deposition by written questions.
        See Rule 31, Fed. R. Civ. P.

Although in the United States, it is usually required that testimony at trial be presented live, with the opportunity for the opposing party to cross-examine the witness and for the jury and/or judge to assess each witness’s
      demeanor in person, testimony elicited via depositions during discovery may be used at trial under certain circumstances.
        See Rule 32, Fed. R. Civ. P.

      For example, if a witness dies before trial, or is unavailable through no fault of the party seeking to use the deposition testimony, the deposition may be used as testimony at trial in lieu of live testimony from the witness. Also, the deposition
      testimony of an opposing party or an officer or manager of the opposing party corporation may be used at trial for any purpose. Usually, however, deposition testimony is used primarily to “impeach” a witness testifying live at trial—that is, to show
      that the witness at trial has changed prior testimony from when they gave the deposition. Videotaped deposition testimony is very effective to show to a judge or jury during trial that the witness has changed the testimony—such
      as from “No” to “Yes” or the equivalent!

The parties can also demand that another party admit, for purposes of the pending litigation only, the truth of any facts, opinions, or conclusions, or the genuineness of any documents relevant to any party’s claim or defense. Such
      demands are called requests for admission.
        See Rule 36, Fed. R. Civ. P.

      The responses to these demands are binding on the responding party and can be used to conclusively establish the matters admitted in the litigation, including at trial.

### Amendments to the Pleadings

Once initial information is obtained via discovery, the parties may be permitted to amend or supplement their pleadings (i.e., the complaint, answer, counterclaim, etc.) to address information or issues uncovered during the initial discovery.
        See Rule 15, Fed. R. Civ. P.

      For example, the plaintiff may uncover information about other companies, products, or services involved in the infringement and seek to add them to the lawsuit. A defendant may uncover information about invalidity defenses not previously known to it
      and want to add those to its answer.

### Close of Discovery

This is the date by which all requests for documents, information, and depositions must be complete. It is usually interpreted as requiring that all responses to requests for production, interrogatories, and requests
      for admissions be answered by the end date set by the court, which means that the actual requests must be made sufficiently in advance of this date (typically 31 days—because responses are due to most discovery requests within 30 days) to allow the
      responses to be due before the cutoff date. Any depositions must also be completed by the date for the close of discovery (although the parties usually agree to finish select depositions after this date in order to accommodate scheduling problems).

### Claim Construction Briefing and Hearing

In virtually every patent case, a dispute arises over the meaning of certain language used in the asserted claims of the patents at issue. These are called “claim construction” disputes, and must
      be resolved by the judge before trial. The parties are permitted to provide their competing arguments in briefs to the court, usually after discovery is completed, and make an oral argument on their respective positions to the court at a claim
      construction hearing. These hearings are often called
      Markman hearings, after the name of the case that established that the judge, and not the jury, must decide the proper meaning of disputed claim language.

This is a critical juncture in every patent case because the opposing parties try to craft an interpretation of the claim language that supports their respective positions. Most patent claims are drafted using a range of language,
      from specific to general, in an effort by the patentee (and lawyer) to cover as much territory for the claim as possible. The PTO interprets proposed claims in the broadest reasonable way possible, and then compares their scope with the
      prior art, before allowing them. The goal of the patentee in dealing with the PTO is to get allowed the broadest claims possible, in order to get the broadest patent coverage possible. But the use of broad, general language in claims permits the
      parties in later litigation to argue for different interpretations, depending on their interests at the time of litigation. Thus, a plaintiff seeks an interpretation that is broad enough to encompass the defendant’s products and services so that
      infringement can be proven. In contrast, the defendant proposes a narrow interpretation (or “construction”) that excludes its products and services.

The court resolves the dispute over the meaning of the contested claim terms by referring to the language of the claims, the language and drawings in the patent, and the history of the proceedings in the PTO that led to the
      issuance of the patent. The written record of that history is preserved in what is call a “file wrapper,” so named because all the written documents making up the history are contained in a three-part file folder, the two outer portions of which fold
      over and “wrap” the documents within it. The patentee is bound by what it told the PTO to secure allowance of the patent. The court interprets the language according to its ordinary meaning to someone of ordinary skill in the art to which the
      invention pertains, unless the patentee specially defined the language within the patent or its file wrapper.
Once the claim construction decision is made by the court, the scope of the patent(s) in the case is fixed, and the only remaining issue for trial is whether the claims of the patent(s) as interpreted by the court are broad enough
      to include the accused products and services of the defendant(s).

### Summary Judgment Briefing and Hearing

      Summary judgment
      is a procedure that obviates a trial where one of the parties can show that its opponent cannot win—as a matter of law.
        See Rule 56, Fed. R. Civ. P.

      That is, if one party can show that the evidence is so clear that no fact dispute exists (i.e., no reasonable fact finder, whether judge or jury, could decide otherwise) and that the law requires the case be decided in favor of the party moving for
      summary judgment, the court can decide the case without holding a trial. The judge must decide such motions based only on the applicable law (which the judge determines), the evidence (i.e., documents, interrogatory answers, admissions, and
      deposition testimony) developed during discovery, and the court’s claim construction decision, giving the benefit of any doubt about the facts to the nonmoving party. If the court finds that a fact relevant to the outcome is in dispute, summary
      judgment must be denied and a trial held to resolve that factual dispute.
Understandably, these are hotly contested motions. The moving party hopes to avoid the need for a trial, and the uncertainty a jury introduces, by having the judge decide the case in its favor early on. The nonmoving party wants to
      go to trial, and hope that the fluid events that are the essence of a jury trial will convince the jury to decide the case in its favor.
In recent years, most patent cases are resolved on summary judgment and only a handful go to trial (about 100 per year throughout the country). The primary reason for this phenomenon is the advent of the claim construction
      (Markman) hearing and the decision by the court, before trial, about how the language of the asserted claims must be interpreted. The court’s claim construction decision resolves most of the uncertainty in a patent case, because what the accused
      products or services are, and how they operate, is rarely in dispute by the time discovery concludes.
The end result is that the case is often either settled after the claim construction decision, or decided in favor of one side or the other at the summary judgment stage. If summary judgment is granted, the losing party can appeal
      the decision to the United States Court of Appeals for the Federal Circuit, which is the appellate court to which all decisions in patent cases are appealed.

### Final Pretrial Order and Conference

The final pretrial order is the document that sets forth the “ground rules” for the trial.
        See Rule 16(e), Fed. R. Civ. P.

      It typically identifies all the positions of each party, every issue in dispute in the case that must be resolved by order of the court or at trial, all the documents the parties may seek to introduce into evidence at the trial, and each witness that
      is expected to be called to testify, either live or via their deposition. The judge issues the order based on a draft prepared by the parties and once issued, it defines the issues that may be raised at the trial. If there is to be a jury trial, the
      order can rarely be modified after the final pretrial conference. If the trial is before the judge only (referred to as a “bench trial”), the judge may be more lenient in allowing modifications to the final pretrial order because he is the person
      deciding the case and can adjust more readily than a jury.