A FAIR DAY’S PAY, FOR A FAIR DAY’S WORK…

…so the Labour Movement said.  Admittedly, legal work is not equivalent to a stoker’s daily toil, not by a long shot. And I know because I have done both.

The problem with service-based industries, such as patent agency work, is persuading the client that a lot of thought – we like to say “considering” or “cogitating – has to go into a brief before pen is put to paper. How do we justify fees for that? In fact, how do we prove to the client that it took 8 hours of reading before we actually did something constructive, like writing or giving advice?  Unless the client has a webcam or is shadowing you, there is no way of proving this happened other than the tangible end product.  This is where pre-work meetings with the client are vitally important to dispel accusations of billing jiggery pokery.  During the first meeting, it behooves the patent agent to fairly and plainly explain to the client what the nature of the work entails and that the end product – a patent application, a response to an office action or an opinion – is not only the end product of hours of writing, but also it reflects hours of reading and thinking.  The client should be made fully aware of the volume of reading that must be done along with the numerous drafts prepared and edited until the agent considers the final product sufficiently well crafted.

This process leads us inevitably down the rabbit-hole of hourly rates. i.e. what the patent agent charges per hour of work done. In most law firms or patent agencies, the client is typically billed in six-minute increments of the hourly rate, which can lead to some very strange numbers on an invoice. This is made even more complicated when multiple associates together with paralegals, all on different hourly rates, stick their professional oar into your file. An anachronistic way of billing in my opinion. This is the main reason why my firm, IPSIS, Inc. charges a flat fee per brief.  We’ve been in this business for a long time. We know roughly how much consideration (thinking) we must do before we put pen to paper (or finger to keyboard) and how many hours it will take to complete the draft.

So what then would you consider a fair and reasonable price for our services?  Well, think of the reason you came here in the first place.  You wanted an expert.  Someone who knows the ropes and has done this sort of thing hundreds, if not thousands of times before.

We patent agents are highly skilled, well some at least, craftsmen and women. Most have spent years at university getting degrees, some higher degrees such as PhDs, and then taken it upon themselves to do many more years of training as underlings at law firms or patent agencies. When all is said and done, we come out of the sausage machine, torn, shredded, squashed, but our writing skills are finely tuned; and our rhetorical skills sharpened to a glistening point. After all that pain and suffering, we expect to be paid accordingly because ours is a profession that demands perfection, no matter what.  So please don’t expect a good patent application to be drafted, edited and filed for anywhere LESS than $3000 to $5000.  Our skill and knowledge of the patent legal minefield will shine like the shiniest thing you’ve ever imagined, and you will be amazed by what we can accomplish.  Someone coming along promising patent drafting nirvana for less than $3000 will not deliver the goods.  If they do, the goods will likely be bruised, rotten or well past their sell-by date.  Yes, $3000 to $5000 may sound like a lot, but if you really want damn good protection and your business depends on this, it is worth the money.  If handled correctly, the $3000 to $5000 could be returned to you many-fold, if your patented product/system/method is bought by Very Big Company X Ltd or licensed exclusively to Even Bigger Company Y Ltd.

In another post, I will discuss the important groundwork you must do before even thinking about obtaining a patent.  Watch this space folks!

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Determining Patent Quality – What Every Investor Must Know Before Concluding Any Financial Transaction

A bit of a long one today I’m afraid.  Pertinent because I am starting a new venture (IP3 Partners – please feel free to check out http://www.ip3partners.wordpress.com) with a good friend of mine and what follows is what we’re doing.   A bt of a diversion away from the usual patent drafting and prosecution tomfoolery, but this, dear friends, is a killer. Neglect this at your peril, for behind every smiling face there lurks a rotten smell, often hidden until too late and your hard earned wonga vanishes quicker than a Jehova’s Witness after being told “Thanks. Thanks and all that, but I’m not really that interested.”

So please, read on and if you feel a burning desire to contact me, you can at philipswain@ipsisip.com or info4ip3partners@gmail.com.

A company’s IP particularly its patent portfolio, is a key value indicator. In any commercial transaction, for example, an M&A transaction, a licensing deal or any round of financing. It is important to identify and accurately assess patent quality and value by answering the following questions:

  • Do existing patents and patent applications cover and protect the company’s products, services and research areas?
  • Are the company patents enforceable against a competitor?
  • Are the patents a potential source of licensing revenue?
  • Are divisional, continuation-in-part, continuation applications, reissue applications, re-examination or any additional patent applications warranted?
  • What is the patent portfolio worth in the context of the value of the company as a whole?

A number of scenarios exist in which a business may wish to assess the quality of a patent owned by another company. The risk of infringing a third-party patent depends upon that patent’s applicability, the strength and breadth of its coverage and whether its validity can be challenged. It is important to evaluate the quality of another company’s patents to answer the following:

  • Is the technology in a crowded field?
  • Will a competitor’s patents affect the company’s decision to launch a product or carry our R&D?
  • Are in-licensing opportunities available for a patent?
  • Should the company acquire or merge with a competitor?
  • Should the company ensure its own portfolio is defensible or for negotiating strength given a competitor’s patents?

A due diligence analyzes information about a target company’s intellectual property portfolio and assesses the risks, exposure and benefits associated with the proposed transaction.

The outcome will determine whether the benefits and risks of the transaction fit into the buyer’s strategic short and long-term business goals. To accurately assess patent quality, five key areas should be considered:

Subject matter

It is important to consider the subject matter addressed by the patent and whether it is related to one’s own market or technological area. The patent may have some general intrinsic value, and certain companies are interested in acquiring patents regardless of the technological area. However, unless it is directly relevant to the company’s business, it is likely a waste of time to assess it.

Claims – scope of exclusivity

Claims are the most important feature of a patent. Claims define the limits of the property right conferred by a patent. Therefore, once a company determines that the patent’s subject matter warrants further analysis, the next step is to study the claims.

A good set of claims defines the invention with varying scope. Each claim should provide a different breadth of coverage. Broad claims cover the overall inventive concept. Other claims, such as dependent claims, introduce limitations relating to particular examples of the invention. While such claims provide narrower coverage, the patent holder may be more successful defending narrower claims against invalidity attacks based on prior art. An alleged infringer usually challenges patent validity whenever a patent holder asserts the patent against it. Thus, it is important for a patent holder to have a  patent attorney/agent create a claim tree, which shows claims of differing scope and breadth as fallback positions.

Another issue is whether the claims include all of the invention’s parallel and alternative forms. Typically, patents should include a combination of method claims (a sequence of steps, such as a process or business method), system claims (an apparatus, functional architecture or machine) and computer program product claims (software encoded on a medium, such as a disk). In pharma patents, composition of matter claims (generic formula, sub-genus and specific compound), process claims, and method of use (methods of treating a disease) claims are a bare minimum.

The company also should examine whether the claims specify steps to be performed by more than one party, entity, person or machine. For patents involving multiple entities (such as client/server architectures), it is important to include separate claims for the steps performed by each entity. For example, one set of claims may cover steps performed by the client, and another set may cover steps performed by the server. A competitor then could be liable for infringement by operating or selling just the server or just the client.

In general, any invention involving communication or interaction between nodes, entities, components or users should include separate claims for as many of these entities as is practicable. This avoids any requirement that the infringer sell or operate all entities.

One also should note whether the claims include “means plus function” language. Such claims define an element of a system according to the function it performs, rather than merely its structure. However, the scope of such claims is narrower than it would appear, due to statutory language specifically limiting such claims to the description in the specification, plus equivalents. Although there is nothing wrong with including “means plus function” claims, it is important to also include other claim formats.

Specification

A patent’s specification can have a significant effect on its scope and validity. Courts will read the claims in light of the specification and use the specification for guidance about the terminology used in the claims and what the applicant intended the claims to protect. If the specification contains limiting language, a court may read those limitations into the claims, even though the claims do not recite those limitations. One should be wary of so-called “patent profanity” – words like “essential”, “critical”, “must have” are examples of limiting language.

One should review the specification for completeness. A patent must describe the “best mode” of practicing the invention known to the applicant at the time of filing. It must describe the invention at a level of detail sufficient to allow an individual having ordinary skill in the art to recreate the invention. If doubt exists as to whether the description is sufficient, then the patent’s value is questionable; a defective specification can lead to invalidation of the claims.

Prosecution history

The prosecution history of an issued patent provides information as to the claims that the patent holder originally filed, the number of office actions, responses and interviews that took place and the rejections, arguments and amendments that were made.

In the US, this information can have a dramatic impact on the value of a patent and can reveal vulnerabilities that are not immediately visible. Amendments made during patent prosecution can disqualify a claim (or a claim element) from having its scope expanded under the so-called “doctrine of equivalents”, which otherwise can extend a claim’s coverage beyond its literal language.

An infringement defendant can use the prosecution record as a basis for construing the claims narrowly, arguing that such statements in the record indicate what the applicant intended to patent (and the examiner intended to allow) and that the court should read the claims in light of such statements. In general, excessive arguments, characterizations and assertions during prosecution may increase the risk that a patent’s scope may be deemed questionable if challenged.

Priority date and Prior Art

In the “first-to-file” era, patents with earlier priority dates are more valuable than later-filed patents because the earlier filing date means that less prior art is available to defeat the patent.

In considering the priority date, one should investigate what prior art existed at the time, as well as what products may have been launched before the application was filed. In the United States and Canada, an inventor must file a patent application within one year of any public disclosure of the invention. Therefore, it is important to consider what disclosures may have been made more than one year before the application’s filing date (or priority date).

If relevant prior art does exist, one should investigate whether the applicant properly cited the art to the examiner in the course of the patent’s prosecution. Art that was considered by the examiner may make the patent stronger, because there is a presumption that the patent is valid over art that was considered, although the presumption is rebuttable. However, in the United States, if the applicant knew of relevant art but failed to cite it, then the patent may be invalidated due to the applicant’s failure to fulfill the duty of candor, which requires an applicant to disclose any relevant art of which he or she is aware in the course of prosecution.

Patents that claim priority from other patents or applications are subject to additional avenues of attack. If a patent claims priority from an earlier provisional application, and the provisional application fails to fully support the claims, then the priority claim can be defeated. Similarly, a patent that claims priority as a continuation or continuation-in-part can lose the benefit of the earlier priority date if the specification of the parent application does not adequately support its claims. Therefore, for any patent that claims priority from another patent or application, one should review the specification of any parent application.

Conclusion

Assessing a patent’s value is a multifaceted exercise that often requires the skill and expertise of an experienced patent practitioner. However, the points discussed above are crucial in such analysis and a good starting point in any attempt to ascertain the overall value of a patent

Patent Agent Trainees

How to scare the living daylights out of a patent agent trainee:

SA:  Could you please send me a writing sample?

Trainee: Sure thing.

SA:  I’m sorry to be so blunt, but you couldn’t write your way out of a paper bag.

Trainee (looking like I’ve just killed her parents):  What??  What’s wrong with it?

SA: Where do I start?  Antecedents.  Ever heard of them?

Trainee:  I had an Aunt Millicent.  She died last year.  Consumption I think it was.  Loved painting.  Had lots of cats and…..

SA:  (muttering to himself) No, no, no.  Not Aunty Cedents.  Antecdents.  As in “a” followed by “the”.

Trainee:  Er..

SA:  And Semi-colons.  You know about those I hope.

Trainee:  Er….

SA: Ambiguity?

SA: Clarity? (An aside.  I’ve always loved the word “clarity”.  A charming way to say that one is a trifle tipsy.  As in:  “O’er m’lud, I’ve drank too much bordeaux and so I feel a bit clarity”.  You might need to be of English from England to get that.)

Trainee:  Er..

SA:  Listen, to pass the exams, you need to know this and know it well.  You will not pass your exams with such infantile knowledge of the English language.

Trainee (visibly shaken): *Gulp*

Good grief. If there’s such a thing

Extremely bloody hell. It’s become a bit of a drag these days to earn ones daily crust fleecing punters. I have decided, as a side gig if you will, to write for fun. And if anyone decides to shove some wonga in my bank account as a result, then my work may well be done. Writing for fun is the antithesis of the usual bombastic prose about intellectual property and dastardly patent examiners. Writing for fun involves touching on subjects that one wouldn’t necessarily bring up in mixed company or at dinner parties.  Bodily fluids, functions and the darker side of the human condition are the things I write about. Some I’ve experienced first hand, some I’ve only ever heard of. Frottage for one. I’ve heard of it. Giggled about it, but never partook. Trapped gas and irregular bowels are, however, something that I have recently and dare I say very painfully become closely acquainted with. This condition, or so I thought, was the reserve of gentlemen of a certain age (and some would say a certain sexual persuasion). Not so.  A while ago, major abdominal surgery to removal a certain anatomical region that sounds like Wrexham, a dull Welsh town, continues to play havoc with the tripes.  You see the Universe, in its infinite wisdom, decided to give me a gift of what is known euphemistically as the Big C.  Thank you, kind sir. That was very generous of you. You see, every two weeks, I arrived dutifully at the “Clinic” to be pumped full of noxious poisons designed to kill and cause vomiting on an olympic scale. There then followed four days of hell in which I was bummed into submission by a radioactive cock that was shoved without lube – that might have caused disruption of the radiation beams – into and up my “coming out hole”. Talk about a #MeToo moment. Leaping forth several surgeries later and more poison, I am here, still. The legacy of endless intestinal problems and some level of post-traumatic stress disorder keep me from doing the things I love. It came to a point recently when I thought of Duke Orsino: “[E]nough, no more. ‘Tis not so sweet now as ’twas before”.  A daily routine of lying on one side of the bed, groaning and moaning, straining and swearing is oft the best remedy to expel methane.  Pills, I’ve heard, speed up the process, but alas all they seem to do is speed the lining of Generic Pharma’s pockets. Which brings me to the point of today’s post. Timely, if you will, since it’s been a while since I put middle finger to keyboard in the faint hope of bashing out something funny and useful. Doctors are very skilled at treating patients. Surgeons are deftly surgical with their scalpels. All true. But what patients really need, and this may be considered a plea, becomes very acute after they have been through the horrors of diagnosis, poisoning, slicing and chundering, is post Big C care. This is where it really would make a difference. It’s not immediately obvious because one tends to put on a brave face, but deep down, a lot of us are scarred physically and scarred very deeply mentally, often to the point of suicide.  Big pharma would do well to listen or at least take the time to ask their consumers, how does this end up affecting you long term? They don’t of course and in so doing, they create a sizeable chunk of the population who my well fall off the “well wagon” into a depression so deep that even the most skilled psychiatrist would have problems bringing them back from the brink

WE HAVE DESIGNS ON YOU

Perception is everything, or so it seems.  The other day, I caught Festo hammering together some old bits of wood.  “A new coffee table, sire” came a muffled voice from amidst the varnish fumes.  Rather an eye-catching piece, I thought, just the ticket on which to plonk ones keys, magazines, coffee cups and other ephemera.  Worthy of a design patent?  Perhaps, but let’s first dispel a common misconception about such protection.

Design patents are seen by many as offering rather weak protection compared to utility patents.  Really? Well try telling that to Apple who recently stung  Samsung to the tune of $1.05 billion (that’s billion, not million) for damages largely related to design patent infringement.  A nice little earner indeed and one reason, if not the reason, to consider supplementing your patent portfolio with an extra level of protection.  Interestingly, the products at issue were also covered by more than 200 utility patents.  Talk about an extra helping of pudding.

Yes, I know, gentle reader, you will leap out of your armchair, or wherever it is you park you gently powdered bottom, and say “but this is only one case”.  Yes, we know that, but considering the recent upturn in design patent application filings in the US, it seems to us at Frogspawn Hall companies are now starting to recognize the value in this underused, yet valuable piece of IP.  In short, broad and robust design patents are powerful tools.  Clients should recognize the necessity of incorporating design patents into their patent protection and enforcement strategies.  Oh, and an added bonus, they are relatively cheap to obtain and don’t spent years languishing in the black hole commonly known as patent prosecution.

ALL FOR ONE AND ONE FOR ALL…EVENTUALLY

After a 40 year whirlwind romance, the 24 member states of the European Union finally signed an agreement which ushers in the long awaited single European patent. However, like anything to do with European cooperation these days, several countries, notably Spain and Italy, did not sign for “language concerns”; I suspect this is a smokescreen since both countries are up to their necks in more pressing economic problems.  Poland did not sign for economic reasons – I thought patents were supposed to foster economic growth; Bulgaria did not sign for domestic administration reasons (I have no idea what this means.  “Trouble with domestic staff?”, Festo amusing himself as always).

The agreement is supposed to ensure the uniform applicability of patent law throughout the territories of the signatory countries.  With the aforesaid opt outs, how can this be so?

On the positive side, thanks to a new court, with seats in Paris, London and Munch, multiple court cases will now be avoided with regard to the same patent in different member states. The court’s headquarters will be in Paris, with somefunctions in London and Munich. Infringements of patents in life sciences will be heard in London, whilst engineering and physics-related cases will be dealt with in Munich.  The new court should also prevent contradictory court rulings on the same issues. It will likewise significantly reduce the cost of patent litigation. The agreements now need to be ratified into the law books of the participating members states before the new European unitary patent comes into force on 1 January 2014, provided the European Union doesn’t collapse in meantime.

THERE’S A LOT TO BE SAID FOR BREVITY

Festo tends to babble on a bit sometimes.  Lots of business about thrift and penny-pinching.  I once knew a girl called Penny Pinching, but that’s for another time.  The word thrift got the old grey matter churning and led me to think about legal documents and how they are known for pompous, stuffy and sometimes ambiguous language.  Now I’m the sort of chap who likes to woo with sickly serifs and what have you, but this type of patois has no place in patents.  Badly drafted patent applications can rob Joe Punter of a potential goldmine.  Draft an application badly and you could find yourself on the pointy end of an invalidity opinion.

Let’s face it, the patent business is all about communication.  If you can’t communicate clearly, you might as well spend your twilight years picking the weevils out of biscuits (I can always count on Festo to inject a bit of levity).

The descriptive part of the application should be drafted clearly using a top down approach.  I use the term “inverted triangle”, as Festo will tell you.  To wit, a broad description of the “big” features first, followed by a smoothly graded descent into specific examples.  Use so-called patent profanity at your peril, lest you fail to have enough Band-Aids to patch a self-inflicted wound.  Patent profanities include naughty no no words such as “essential”, “critical”, “preferred”.  These can be construed as limiting language, and we don’t want that now do we?

Clarity saves Joe Punter money because it leads to a smoother ride through the patent office, and makes for a product that is easier to sell or license.  So, be careful with your metaphors, write with clarity, and above all keep your nib free of fluff.

CARPE DIEM

Festo and I eschew the hair-shirt approach to life.  We believe that we can live life to the full if we adopt the adage: “Eat, drink, and be merry, for tomorrow you may die.”  Everything in moderation by all means, but planning a life of abstinence on the basis that we might prolong it for another ten or fifteen years doesn’t appeal at all. To deny ourselves the pleasure of a good cigar, or an excellent bottle of claret and an exquisite single malt is a poor return for longevity, and if we die ten years younger than our hair-shirt neighbour, so be it.  In our hectic, deadline-driven learned profession, knowing when to say “when” is vitally important.  Stress and fatigue are real killers.  A lack of extra-curricular activties dulls the brain, makes for a listless, unhappy employee, and robs us all of a happy and productive life.  Work hard by all means, but work smart and know that tomorrow is another day.

PATENT BOX OR FLOGGING A DEAD HORSE?

Patent Box is the UK government’s new, as of April 2013, regime that will allow companies to apply a reduced 10% corporate tax rate to profits attributed to patents and certain other similar types of intellectual property (supplementary protection certificates, regulatory data protection and plant variety rights).  The Patent Box will apply to worldwide income from existing as well as new patents.  The Patent Box is therefore expected to benefit a large number of innovative UK companies, encouraging them to retain existing patents and invest in developing new patented technologies in the UK.  The Patent Box will encourage companies to locate the high-value jobs and activity associated with the development, manufacture and exploitation of patents in the UK. It will also enhance the competitiveness of the UK tax system for high-tech companies that obtain profits from patents.  This seems like great news for the UK.  So why doesn’t Canada try something similar?  As many R&D companies will tell you, Canada’s SR&ED system – the organ for dishing out tax credits for research and development costs – is flawed.  Selection criteria are vague at best, reviews are borderline Kafka-esque, and some applicants are wont to abuse the system.  Instead of trying to resuscitate the old horse, why not cart him off to the knacker’s yard and inject something new and fresh, like Patent Box (Beaver Box perhaps?), into our flagging R&D sector.  It’s the right thing to do.  Even the UK with its pallid economy is trying to kickstart innovation.  Canada really should follow suit.

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