Wealth of Ideas Newsletter

Patent Basics: The Enablement Requirement vs. the Best Mode Requirement

Wealth of Ideas Newsletter, November 2004

Patent law has many nuances, and even some of the most basic requirements of a patent application might be a little confusing. The “best mode” and “enablement” requirements are two such elements of patentability that may need further explanation.

“Enablement” refers to the requirement that a patent enable one of ordinary skill in the art of the invention to practice that invention – to build a prototype or follow the steps of a given business method to achieve the desired result, depending on the type of patent in question. “Best mode” goes a step further: not only should the patent be enabling, but should set forth what the inventor considers to be the “preferred embodiment,” or the best way of practicing the invention at the time the patent application is filed.

The difference between these two requirements becomes clearer when you compare the reasons for them: “The enablement requirement looks to placing the subject matter of the claims generally in the possession of the public. If, however, the applicant develops specific instrumentalities or techniques which are recognized by the applicant at the time of filing as the best way of carrying out the invention, then the best mode requirement imposes an obligation to disclose that information to the public as well.” Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 3 USPQ 2d 1737 (Fed. Cir.), cert. denied, 484 U.S. 954 (1987).

In other words, the requirement to make the patent enabling ensures that the issued patent is actually a useful document from which the public can benefit; the best mode requirement then ensures that the inventor has not withheld information from the public about any “preferred embodiment” of the invention of which he or she may be aware when filing the patent application.

While it’s true that giving up what may be one’s trade secret in order to obtain a patent is difficult, full disclosure is necessary for meeting the enablement and best mode requirements -- so don’t withhold information about the best mode from the patent attorney who drafts your application. The patent examiner may accept your given preferred embodiment at face value, but if the patent is ever litigated, opposing counsel will almost certainly examine the patent with a greater degree of scrutiny than the Patent Office used.

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A New Standard for Willful Infringement

Wealth of Ideas Newsletter, October 2004

Intellectual property law doesn't change quickly, so despite the wealth of patent infringement lawsuits filed each year, precedent-setting cases tend to be few and far between. (Perhaps that also explains why none of the lawyer dramas on television are about patent attorneys.)

So the IP world sat up and paid attention when, on September 13 of this year, the Court of Appeals for the Federal Circuit (the CAFC, which is the "patent court") handed down a decision creating a new standard for what constitutes willful infringement.

The case, Knorr-Bremse Systeme Fuer Nutzfahrzeuge GMBH v. Dana Corporation, et al., was originally in favor of the plaintiff. Although there were no damages because there had been no sales of the infringing product (a type of disc brake), partial attorneys’ fees were awarded. The defendants, Dana Corp., Haldex Brake Products Corporation, and Haldex Brake Products AB, appealed on the grounds that a negative inference should not have been drawn from Dana’s failure to obtain an infringement opinion and Haldex’s withholding of an opinion of counsel. In other words, the defendants argued that these actions did not necessarily mean that they had "something to hide".

The CAFC took the case en banc (in full court), requested additional briefing from the parties as well as amicus curiae briefs, and vacated their ruling of willful infringement, stating that "no adverse inference that an opinion of counsel was or would have been unfavorable flows from an alleged infringer's failure to obtain or produce an exculpatory opinion of counsel. Precedent to the contrary is overruled."

Previously, if a defendant failed to obtain an infringement opinion on a disputed patent or withheld the contents of an existing infringement opinion, the court would almost automatically infer from either of these actions an admission of willful infringement. There were at least two problems with this assumption, namely: 1) perhaps the defendant had a monetary reason for not seeking an opinion (an additional team of lawyers, after all, is not cheap); and 2) allowing the defendant to withhold the contents of an infringement opinion from the court helps to preserve attorney-client privilege.

As the IP world continues to buzz about this new precedent, patent attorneys debate the pros and cons of the CAFC’s ruling. Has the search for truth been subjugated to preserve the sanctity of attorney-client privilege? Or should it instead be considered positive that willful infringement must now be proved by direct evidence?

Either way, two things are certain: the new precedent is here to stay, and this is one case you won’t see on a TV courtroom drama.

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Is My Patent Being Infringed?

Wealth of Ideas Newsletter, September 2004

There are, unfortunately, no "patent police." When a patentee finds a product or process substantially similar to his or her patented invention, the onus is on the patentee to determine if infringement actually exists.

Infringement is measured by the patent’s claims, which are of two types: dependent and independent. Dependent claims follow and refer to an independent claim and incorporate all of its limitations. Thus, if an independent claim is not infringed, neither will be the dependent claims that refer to it. For this reason, infringement analysis typically focuses on the independent claims.

When analyzing a claim for infringement, remember the all elements rule: each limitation of the claim must be met by the accused product or process. The accused structure (or process) may have additional features that are not found in the claim, but it must meet every limitation of the claim in order to infringe it.

There are two types of infringement: literal infringement, and infringement under the doctrine of equivalents. Literal infringement occurs when the claim language literally reads on the accused device or process. Infringement under the doctrine of equivalents may occur when a product or process does not precisely satisfy the language of one or more of the claim limitations, but nevertheless performs the same function, in substantially the same way, for the same purpose as the claim limitation. The application of the doctrine of equivalents may be limited by factors arising during the prosecution of the patent and also by recent changes in the law (the famous or infamous Festo decision). As a result, literal infringement cases are strongly preferred over those where infringement is found only by application of the doctrine of equivalents.

Once an inventor is reasonably certain that his or her patent is infringed, it is important to determine whether the accused device has been offered for sale in the United States (assuming the infringed patent is a U.S. patent). U.S. patents have effect only within the U.S, but a foreign company may be sued in the U.S. for acts performed here.

When infringement is suspected, a patent attorney or contingency patent enforcement firm such as General Patent Corporation International should be consulted to confirm the infringement and plan and undertake an appropriate enforcement campaign.

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Estoppel: The Bark That Can Bite You

Wealth of Ideas Newsletter, August 2004

In a previous article (June 2004 issue), we wrote about the problem of laches – usually linked with estoppel, but not quite the same thing.

Laches results from a patentee’s failure to take action against an infringer in a reasonable time period (see the full article for more about laches). Estoppel, on the other hand, arises when an action of a patentee causes an accused infringer to believe that the patentee has abandoned any claim against him or will not take action against him. It may result when the patentee threatens to take action – and then fails to follow up.

Estoppel is based on the reasonable reliance of the accused on the patentee’s action. For example, the infringer considers the case closed and makes further investment in plant and equipment.

The most common estoppel scenario is that the patentee writes to the infringer, describing the infringement and requesting that the infringer either “cease and desist” or take a license. The infringer then either ignores the letter or sends back the usual response that they aren’t infringing, and they will consider the matter closed unless they hear back from the patentee. If the patentee then fails to follow up, the infringer – logically – considers the matter finished.

As a consequence of estoppel, the plaintiff may be estopped, i.e. barred, from enforcing his patent against this particular defendant. Patentees can prevent estoppel simply by filing suit – so considering the stakes, why wouldn’t they do so?

Some patent holders put off filing suit in the hopes that damages will accumulate over time. But by waiting and thus exposing themselves to a charge of estoppel when they do file suit, these patent holders actually jeopardize whatever damages they may be entitled to and give the infringer an easy defense.

So if you bark (by informing the infringer of the infringement), you have to bite promptly (by filing suit) – or it will come back to bite you! Just make sure you have a good attorney on your side.

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Don't Patent Yourself Out of a Product

Wealth of Ideas Newsletter, July 2004

It happens more often than you would think. An inventor calls our office in the belief that his or her patent is infringed and provides information on the patent, the inventor’s own product, and the infringing product. Then we have to break the news that not only is the competitor not infringing the patent, but the inventor’s own product isn’t even covered by the patent!

The inventor then has a worthless (or nearly worthless) patent and a product with no patent protection – and, thus, no way to protect his or her market share from competitors.

How does this happen? Usually, the story goes like this: the inventor files the patent application before beginning production of the newly invented product. When the invention goes into production, the inventor implements various improvements and modifications, which of course causes it to differ from what is claimed in the patent application. So when the patent issues, it does not cover the “patented” product.

This situation can be avoided, however, by approaching the patenting process carefully. Consider potential variations, modifications, and improvements and include them in the patent application. Seek patent claims which would cover these alternate embodiments of the invention. Remember that patenting is an ongoing process and that filing a continuation or a continuation-in-part, which reflect subsequent improvements on the product, is part of this process. And while we’ve said it before, it bears repeating that “do-it-yourself” patents often lose the inventor more money than they save; an experienced patent attorney can often spot and correct those claims that are unnecessarily narrow.

Although you do not need to patent your product in order to sell it, if your patent does not cover your own product, chances are it won’t cover your competitor’s product either. So proceed with caution, seek a competent patent attorney, and do all that you can to assure that your patent covers the product you ultimately produce.

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Don't Be a "Patent Slacker"

Wealth of Ideas Newsletter, June 2004

In the world of patent infringement lawsuits, one defense often raised by the defendant is “laches.” Although it is frequently mentioned in conjunction with a similar defense, “estoppel,” and although the two are related, laches is not synonymous with estoppel. Laches, from the Old French, means slackness or negligence – a “sin of omission.” In intellectual property law, it is the unexcused failure of a patentee to take action in a timely manner against a patent infringer.

Why does it matter when the patentee brings suit against an alleged infringer? Because an excessive delay may put the defendant at a disadvantage: key witnesses may be no longer available or memories may have dimmed; important documents may be long gone. When laches is found, the patentee is barred from collecting damages accruing prior to the filing of the suit, but is still able to obtain an injunction barring the defendant from further infringement of the patents-in-suit.

Once the laches defense has been raised, the plaintiff may still offer evidence that the delay either was reasonable or not prejudicial to the defendant. Ultimately, the burden of proving laches rests with the defendant, who must prove that there was an unreasonable delay in bringing suit and that this delay prejudiced the defense. However, a rebuttable presumption of laches arises when the patentee waits more than six years from the time when he or she discovered (or reasonably should have discovered) the infringement to file a lawsuit.

The moral of the story: If you sit on your rights for too long, you may forfeit them.

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Making Your Mark

Wealth of Ideas Newsletter, May 2004

Did you ever notice a patent number on a product and wonder why such marking was there? We are accustomed to seeing patent numbers on almost everything, and here's why: by doing so, the patent owner informs the world that the product is patented and thereby puts infringers on notice of the patent rights.

Specifically, placing patent numbers on products (or their packaging, if placement on the product itself is impractical or impossible) is called patent marking and is considered constructive notice. Constructive notice is not a legal requirement, but it is to the patent owner’s advantage. (If the patent owner is not practicing the invention at all, there are no products to mark and thus no marking requirement in order to collect damages.)

If a product is produced and sold without patent marking, the owner must resort to actual notice – notifying the infringer(s) of the alleged infringement, usually via a letter. Constructive notice is preferable to actual notice for two reasons: 1) With actual notice, damages only start from the date that notice is given; and 2) A notice letter may expose the patent-holder to the risk of a declaratory judgment action – a pre-emptive strike wherein the infringer actually sues the patent-holder!

The moral of the story is this: If you have a patent, make sure that your products (and your licensees’ products) are marked with the patent number. The question of whether or not you mark can have serious consequences for your ability to collect damages.

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Have I Got a Deal for You!

Wealth of Ideas Newsletter, April 2004

Anything worth doing is worth doing right, and that certainly applies when developing and promoting an invention. Unfortunately, some inventors have found this out the hard way – by becoming victims of inventor fraud.

For example, in September 2001, the three top executives at American Inventors Corporation (AIC) were sentenced to jail time and hefty fines for swindling about 34,000 inventors out of more than $58 million dollars over a 20-year period. (Ironically, AIC was formed after its founder’s former employer, Imperial Inventors of Chicago, was itself shut down for fraudulent activity in September 1973.)

How can you know whom to trust? For starters, most legitimate companies (though we wouldn’t say all) do not advertise exclusively in the back of supermarket tabloids. Also, inventor protection groups have been formed, such as the National Inventor Fraud Center (www.inventorfraud.com) and the United Inventors Association (www.uiausa.org), both of which keep inventors updated about fraud. Plus, the US Patent and Trademark office is taking an active role this month with an online tutorial on inventor scams on April 29th [2004], and offers a downloadable scam prevention brochure on its website, www.uspto.gov.

In general, if a company is not a law firm and wants to charge thousands of dollars up front for invention promotion services, consider heading for the nearest exit.

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Avast Ye Office Scoundrels!

Wealth of Ideas Newsletter, March 2004

There is something about the nature of information that compels ordinary, honest, law-abiding citizens to copy magazine articles and technical journals, and duplicate computer software without seeking permission from their copyright holders.

If you recognize yourself in this category of office scoundrel, avast, there are organizations searching the seven seas for you.

Copyright infringement most commonly occurs in the office. The piracy of business software alone costs US companies more than $12 billion a year, according to estimates from the Software & Information Industry Association (SIIA), the principal trade association for the software and digital content industry.

The Business Software Alliance, another industry organization dedicated to promoting a safe and legal digital world, reports that thirty-nine percent of the world’s software is pirated, costing America about 118,000 jobs, $5.7 billion in wages, and $1.5 billion in taxes annually.

Defined as the unauthorized reproduction, use and/or distribution of software, piracy affects large companies like Microsoft as well as small independent shareware developers whose livelihoods are tremendously diminished by this growing problem.

The Copyright Clearance Center, Inc. is the largest licensor of text reproduction rights in the world, and offers an easy way to license their clients’ work. The company currently manages rights relating to over 1.75 million works and represents more than 9,600 publishers and hundreds of thousands of authors and other creators, directly or through their representatives.

The Copyright Clearance Center, SIIA and BSA will take action against those who make unauthorized copies of proprietary materials. And the fines are stiff. In 2003, California firms Youbet.com and Innovative Merchant Solutions paid $228,000 and $90,000 respectively for the unauthorized installation of software. And if you think there's no way they can find you, think again -- most of the firms who do get caught are ratted out by their own disgruntled employees or ex-employees.

So although it’s tempting to try getting away with piracy, consider the risks involved – and the fact that licensing revenues help authors, publishers and software companies to continue producing those works that we all enjoy.

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Sometimes, Little Things Mean a Lot

Wealth of Ideas Newsletter, February 2004

Throughout history, certain inventions have profoundly impacted the course of mankind. Movable type, invented by Johann Gutenberg, and the discovery of penicillin are two notable examples.

Movable type, developed long before the institution of patents, not only enabled literacy amongst a greater population, but promoted the development of literature, research, and art – helping to bring about the advent of the Renaissance.

Alexander Fleming discovered penicillin in 1928, when patent laws were already in effect. Yet Fleming consciously chose not to patent his discovery, hoping that his published reports might hasten its development and use.

But what about the little things…everyday objects that have made our lives easier?

Take the package saver. What would life be like without that small circular thing that keeps the pizza from hitting the top of the box? Patented in 1985 by Carmela Vitale, the package saver is unlikely to bring about a new renaissance, but boy are we grateful.

And then there are Post-It Notes. 3M could not find a use for its repositionable adhesive until years later, when a new 3M product development researcher named Art Fry, frustrated by the way his paper bookmarks would always fall out of his books, gave the product its current form.

These small and very practical innovations were not only good ideas, but had marketability – a necessary product characteristic for obtaining an attractive return on investment.

And this little detail is what separates a merely interesting idea or invention from a lucrative one: a market for the resulting product. This, too, is one of those "little things" that can make a big difference.

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