Patent - Marketing Strategy

In this article we're going to discuss the tricky aspect of marketing strategy when applying for a patent.

Getting a patent is a tricky process under normal circumstances. Under laws of the United States a company or person is entitled to a patent unless the invention was on sale in the country for more than one year prior to the application date of the patent. This applies to both sales and offers of sales. Therefore, companies conducting marketing campaigns must be careful not to destroy their patent rights. In a perfect world, application for a patent should be filed before any sales begin. But then that would hurt the company's bottom line because that ultimately puts profits on hold. In a competitive marketplace this could spell disaster for the company.

Therefore, it is important for a company to understand just what it is that starts the one year clock ticking. In other words what can they do and what can't they do in order to avoid their product being put on the timer?

In order to answer that question we have to understand what exactly, according to law, starts the clock running. There are basically two conditions. The first one is that the invention must be ready for patenting at the time of the sale. If it can be shown that the inventor had sufficient drawings that would enable another person to use the invention then this would satisfy the first criteria.

The second criteria is that there has actually been an offer for sale. In other words, the inventor or company that owns the invention approaches another company and offers to sell them the invention. This can either be in the form of a letter to the other company or in an actual physical meeting between the two companies. Usually the meeting follows a letter.

In the form of a letter the owner of the invention will usually draw up a letter stating that they have such and such an invention and go on to say that they feel this is something that would enhance their business. In the letter they would describe what the invention does and how it would help them. They would then ask the other company to get back to them if interested.

When it comes to the meeting the inventor will bring drawings of his invention and present them to the company interested in acquiring the invention. Maybe the inventor even has a working prototype he can show them. This is always a plus. Companies actually like to see that the invention they are interested in works.

Where the law comes in, and this is where inventors can delay the clock, is that the following items do not fall within the two criteria. Solicitation of customer pricing information from distributors and sales representatives; publication of preliminary data sheets and promotional information on invention features; communications to sales representatives; sales representatives providing customers with preliminary data sheets; and sales representatives' requests for customer samples.

Therefore, an inventor can engage in any of the above activities and NOT start the one year clock running. This allows the inventor to get as much preliminary leg work done for his patent without actually "technically" starting the process.

This is important information for any inventor to have if he is trying to gain as much ground in his quest for a patent as possible.

Your Independent guide to Patents

Patent - Business Method Patents - Part I

In this first of a series of articles we're going to discuss a specific type of patent called a business method patent.

If a company develops a new method for conducting an e-commerce business they may be able to prevent other companies from using this method for almost twenty years.

The truth is, since 1998 an increasing number of software and Internet companies have been issued patents for designing new ways of doing business. Examples would be new online ordering processes or a unique Internet advertising method. These kind of patents which are usually the combination of software and business methods are called business method patents or Internet patents.

The reason these patents are important is because a company that develops such a patent can keep other companies from using these business methods for 17 years. And if the owner wants, he can make additional money from the patent by licensing out to other companies. If there is a large enough market, the company may make more money from the licenses than from the patent itself.

A very good example of a business method patent is Amazon.com's 1-click payment method. This system allows a customer to bypass the traditional address and credit card forms as long as the customer has an account with Amazon. After clicking on the payment button the order automatically goes through. This patent was granted to Amazon.com in September 1999. The patent number is U.S. Pat No. 5,960,411.

Business method patents are actually a part of a larger family of patents called utility patents. These protect inventions, chemical formulas, processes and other discoveries. A business method is technically classified as a process. The reason is because it is not a physical object like a machine or some form of chemical compound.

During most of the last century the patent office issued very few business method patents. The reason for this is that they claimed that a process could not be patented if it was an abstract idea. The same thing was also said about software because software was said to be unpredictable algorithms.

That all changed in 1998. In July of that year a federal court upheld a patent for a method of calculating the net asset value of mutual funds. The court ruled that patent laws were intended to protect any method regardless of what it was, even an idea. As long as it produced a useful, concrete and tangible result. With this ruling the court made idea and software patents a reality again. After this ruling, business method patents increased by 40%. Also, that year, the U.S. Patent and Trademark Office created a new classification for business method patents. The classification is stated as "Data processing: financial, business practice, management or cost/price determination."

Many patents since this time have been issued for online shopping programs, Amazon's 1-click being the best example. However, because of the gray area of these patents, not having a physical product, an additional layer of review was added to the patent determination process. Technology specialists have been hired specifically to review these type of patent applications.

In the next article in this series we're going to discuss how to go about applying for a business method patent.

Michael Russell
Your Independent guide to Patents

Patenting Bioresearch And Drug Development In the Wake of The U.

Andres F QuintanaThe U.S. Supreme Court recently issued a landmark patent decision giving drug companies more leeway to develop new medicines, ruling that compounds patented by rivals do not bar them from starting research on new competing medications. The unanimous ruling in Merck KGaA v. Integra Lifesciences I, Ltd., set aside a lower-court ruling for patent holder Integra LifeSciences Holdings Corp. Integra had sued Germanys Merck KGaA for patent infringement for using several of Integras RGD peptide patents in identifying promising new tumor inhibiting drugs. The peptides are biological compounds containing two or more amino acids and form the constituent parts of proteins. Integra had offered Merck licenses on the patents, but Merck declined. At trial, Merck KGaA argued that its use of the patents was protected by 35 U.S.C. 271(e)(1), the so-called safe harbor provision of the patent statute, which protects the use of generic patents in work that is reasonably related to the development and submission of data to the Food and Drug Administration (FDA). The primary purpose of the law was to bring generic drugs to market sooner. If competitors were permitted to use the patented drugs for research and clinical trials, they could have generic versions readied when the patent expired. The law gives patent holders seventeen years of protection, and the delay for research could, and often does, add years to that time. Following a jury trial, the district court ruled that Merck KGaA infringed on Integras patents and that the safe harbor provision did not immunize Merck KGaA against liability.
The U.S. Court of Appeals for the Federal Circuit, the chief patent appellate court, affirmed last year, construing the safe harbor provision narrowly to only include clinical trials leading to FDA drug approval. In recent years, the Federal Circuit has reasoned that Congress intended only to promote the growth of generic drugs when it passed the exemption in 1984. According to the Federal Circuit, to qualify for the exemption, the otherwise infringing activity must directly produce information for submission to the FDAs safety and effectiveness approval processes. In this case, Merck KGaA was not performing clinical tests to supply information to the FDA, but only general biomedical research to identify new pharmaceutical compounds. Therefore, the research being performed by Merck KGaA was not solely for uses reasonably related to clinical testing for the FDA.
The U.S. Supreme Court disagreed with the Federal Circuit. The Court held that the FDA exemption for research is much broader, and drug companies should have more latitude to investigate innovative drugs, not just generics, so long as the research is reasonably related to the process of developing information for future drug submission. According to the Court, there is no room in the statute for excluding certain information from the exemption on the basis of the phase of research in which it is developed or the particular submission in which it could be included. The provision is now understood to permit most uses of patent-protected inventions related to the generation and submission of any data for FDA approval.
The Supreme Courts ruling constitutes a major victory for drug companies, since they can now begin drug discovery experiments and research faster, potentially saving millions of dollars in licensing costs associated with startup research. Practically, the ruling should also promote drug discovery research sometimes caused by late patent expiration dates or complex and multi-faceted licensing negotiations. Had the Supreme Court found for Integra instead, however, many pharmaceutical companies would have been forced to either suspend preclinical research programs or relocate relevant departments to countries with historically looser patent protections. Thus, the ruling should further encourage more drug development here in the United States rather than outsourcing it to foreign countries.


Andres F. Quintana is a partner in the intellectual property and litigation department of Beverly Hills, California-based Ervin, Cohen & Jessup LLP. He may be reached at aquintana@ecjlaw.com

Do You Need Your Business Name Trademarked

 

Do You Need Your Business Name Trademarked November 2001
By Bob Brolhorst

A name is important to a business. It's so important, in fact, that names can
be trademarked, which means they're owned. Kind of like domain names, once
it's used it's gone. But you can't trademark a person's name if it doesn't
belong to you. I could not trademark Jay Leno no matter how hard I'd want
to try.

You apply for a trademark through the Department of Commerce. You can
either do it yourself or hire an attorney. I did it myself to save money. Once
the application goes in, you can use "tm" after the slogan or name to indicate
you lay claim to it. It takes up to one year to get permission and the
certificate from the Department of Commerce, although their goal is to
shorten that to a matter of 4-6 months, but it was worth every penny of
investment.

To own a name or a slogan, to make it truly yours, to gain the recognition that
marketing that slogan can give you, trademark it and protect it. Every seven
years, renew it.

Yes, trademarks are necessary, because it gives you an identity, a goal, and a
source of pride toward what you took your time and money to protect your
business.

What can happen if you don't trademark your business name? You could be
given a court order to reliquish part or all of your profits from a product
that you sell. How is this possible?

Let's say for an example that you use a business name that has been
trade marked by another company. By law, if this other business owner
finds out that you are selling products under her/his business name and
you are taken to court a judge can rule that you give up all your profits
to the business owner that has the business name trademarked.

Bob Brolhorst
Wave 5 Marketing
bbrolhorst@wave5marketing.com
http://www.wave5marketing.com