The reason for the confusion is that the patent rulings appear, at least to me, to have shifted dramatically. I must mention here that I’m not a patent attorney, and don’t understand all the nuances of the changes, but clearly something is afoot and it may give you a chance to profit from the Internet explosion.

First what has changed? When 1863 Samuel Morse tried to patent the concept of sending messages across great distances. His patent was denied – the Supreme Court ruled that he could not patent an idea. Yet today there are patents on on-line advertising and click through ads. Clearly these ideas could not be patented in 1863.

These rules changed in July 1998, when a federal court upheld a patent for a method of calculating the net asset value of mutual funds in State Street Bank & Trust Co. v. Signal Financial Group Inc. 149 F.3d1368 (Fed. Cir. 1998) cert denied 119 S. Ct. 851 (1999). The court ruled that patent laws were intended to protect any method, whether or not it required the aid of a computer, so long as it produced a “useful, concrete, and tangible result.” Thus with one stroke, the court legitimized both software patents and methods of doing business, opening the way for Internet-related patents. In the six months following the ruling, patent filings for software/Internet business methods increased by 40%, and the PTO created a new classification for applications: “Data processing: financial, business practice, management, or cost/price determination.” The above paragraph is taken from http://www.inc.com/articles/2000/11/20945.html. That article has some additional patents to review, including the patent on click through payments.

Take a look at Google’s patent 8138930 for Advertising Based on Environmental Conditions. This sentence  is included in the patent:  For example, a company selling fishing tackle may have a line of large lures and may thus identify terms such as “lunker”, “sturgeon” and “muskie fever” as keywords to associate with their advertisements for such large lures. Another sentence states: An advertisement may be selected for display if there is a “near” match also, for example if a query includes terms that are known synonyms or mistypings / misspellings of the key word for an advertisement. OK,  idea or technology? Can this be patented? Apparently it can as the patent was issued on March 20th 2012.

The key at one time was that the patent concept was tied to a technological device, but today that might not even been needed. Google may have tied their patent to a device to protect the patent from any future rule shifts. From the patent:  The patent application discloses information about an environmental condition of a remote device which is received an apparatus. The apparatus includes one or more processing devices. Particularly the environmental condition is determined based upon a signal output from a sensor of the remote device or a sensor coupled to the remote device. Further, an advertisement is identified based on the environmental condition and the advertisement provided to the remote device.

My take on this patent is that the environmental condition is that a user enters a search term. It goes onto a computer (with several processing devices) is sent to a web site computer (a sensor coupled to the remote device), that then returns one of more advertisements to the user. The patent in broad terms gives a patent for Google to put those little ads on the right side of your screen when you do a patent search.

Rather than complaining about the sorry state of affairs in our patent office, you should instead concentrate on what this means for you. A computer is a technological device, and apparently anything you do with the Internet that starts at a computer, goes into the Internet, and  then is returned to a computer is fair game for the Internet. That’s why Google, Facebook and others are buying up patent rights. They don’t just tie up a product design or innovation, they tie up an entire business concept, something that has never been patentable before.

So next time you get a great idea of new features or services for the Internet, stop and consult with a patent attorney. You just might be able to get a patent that could turn into millions, or billions. To prove my point, all you need to do is go on the web site uspto.gov or do a Google search for Google patents and look up US Patent Number 8138930. You will see how Google has smartly tied up the world of on-line advertising with one patent.

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Ordinary Observer Test

Design patents and utility patents protect different aspects of protecting a product. Utility patents protect how a product works, which has historically been easier to define, and design patents protect the ornamental design of a product. The courts have had a very difficult time setting a clear and reasonable standard for determining when someone is infringing on a design patent.

In 1872, the case Gorham v. White set the first standard for determining design patent infringement. The court stated that if the designs of two products are so similar that an average customer would confuse them, possibly causing them to buy one thinking it was the other, then that is infringement. This test came to be called the “ordinary observer test.”

Point of Novelty Test

The next major case that defined how design infringement was determined was Litton Systems, Inc. v. Whirlpool Corp. 1984. The “point of novelty test” was added to see if the design had novelty in light of prior art. If novelty could not be proven, there was no infringement. Furthermore, the patentee had to prove that what was being infringed upon was what made the original design patentable in the first place.

Egyptian Goddess v. Swisa

So what has changed with the Egyptian Goddess v. Swisa case? There are two very important changes that have strengthened design patents:

No Verbal Description

Previously, when deciding design infringement cases, the court required verbal descriptions of the design. These descriptions were not only easy to pick apart, but the decisions would often depend more on which parts of the design were focused on in the case than the design as a whole. By removing the burden of coming up with a verbal description, the court allows the pictures in the patent stand for themselves and puts the design as a whole, not just certain aspects of it, in the center of the case. Pictures are much harder to pick apart, since after all a picture is worth a thousand words.

Point of Novelty Test Deemed Unnecessary

The court decided that prior art should be used in determining the scale of infringement, but otherwise the “ordinary observer test” is enough to determine whether or not there is infringement. This takes much of the burden off of the patentee to prove novelty, thereby strengthening his or her design patent.

Will a Design Patent Work for You?

It may, but you will want to contact a patent professional to find out what will work best for your product. Our Patent Associate, Ron Reardon, gives free one-hour consultation for new clients where you can discuss this question.

Related posts:

1. Good News for Design Patent Holders
2. Patent Backlog: How Inventors Can Deal with the Patent Backlog
3. The Patent Reform Act of 2009

To see the announcement along with all its details, click here.

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This may sound strange coming from one who feeds his family by crafting, filing and prosecuting patent applications, but I encourage you to resist the temptation to file a patent application prematurely. Yes, I know that your invention is “the best thing since sliced bread”, that “everyone will want one”, and that there are other inventors who are about to beat you to the Patent Office with the same solution to the same problem. Even if all this is actually true, there are questions that you should ask prior to filing.

How long do you expect your product to sell?

If the answer is 3 years or less, understand that the probability of getting a Utility Patent within those 3 years is remote.

How much do you expect to earn from the sales of your product?

If that number is less than the cost of getting an issued patent (or not substantially greater than that) then this is a no-brainer for not filing.

What is the projected investment required to commercialize your innovation, versus the expected profit?

Whether you plan to form your own company, to pursue a license agreement, or to secure funding from investors, a realistic business case should show that the commercialization of the innovation makes good business sense and provides a better return on investment (ROI) than other options.

Has your invention already been patented?

There are several free patent search web sites available that you can utilize to determine if getting a patent is not in the cards. You can also visit a Patent Depository Library and the librarian will assist you in conducting a search. A professional search that includes both U.S. and Foreign patent documents can then be conducted to supplement your informal search. Just because you do not see your innovation in the marketplace does not mean that it has not been patented. For a variety of reasons, patented innovations are not commercialized.

Is a patent for your innovation prohibited by law?

If more than 1 year has passed since you sold, attempted to sell, used in public or disclosed in public how to make and use the claimed invention, then it is game-over before filing.

What is the expected level of patent protection?

A patentability opinion by a Patent Agent/Attorney can save major heartache down the road. If the best case scenario is very narrow patent protection then an issued patent will have virtually no commercial value and will be easy for competitors to design-around so that they do not infringe.

Are there better options than patenting?

A utility patent expires 20 years from the filing of the application; a design patent expires 14 years from the issuance of the patent; a trade secret, however, has the potential to be maintained forever. A Trademark may be better than a patent in certain circumstances, and can also be maintained indefinitely. First-mover-advantage can be more valuable than patenting in certain cases. Leveraging the market-power of an established industry player might negate the need for a patent due to massive advertising/distribution (“but wait, there is more, order now and we will double the offer…”).

As you can tell by the above questions, business strategy comes first ; the role of intellectual property strategy (patents, trademarks, copyrights, trade secrets) is to support the business strategy. First chart the course of your innovation from introduction and beyond; then determine the role, if any, of patents in that journey.

If after reviewing all the above questions the answer is YES patenting is important to protect the innovation , then the types of patent applications to file, the number of patent applications to file, the number and scope of claims to include in each filing, the timing of the filings, etc. need to be considered. We will explore that set of questions in a future article.

Ron Reardon
Registered Patent Agent

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Ron Reardon

We are pleased to announce that Ron Reardon has become the One Stop Invention Shop’s new Patent Associate! Ron has a very impressive background and we are sure his expertise will be a huge asset to us and to all of the One Stop Invention Shop clients! Take a look at his achievements below:

• Client Base: India, Switzerland, United Kingdom, Alabama, Arizona, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Mississippi, Nebraska, New York, North Carolina, Ohio, South Carolina, Tennessee

• Better Business Bureau (BBB)
• American Intellectual Property Law Association (AIPLA)
• MIT Forum
• IndUS Entrepreneurs (TiE)

Contact Ron at:

Patents & More, Inc.
3356 Station Court
Lawrenceville, GA 30044
Phone: 770-241-4907
Fax: 866-894-3953
Email: rreardon@patentsandmore.com

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3. Introducing Edith G. Tolchin, our Second Associate!

Currently provisional applications give inventors a low cost way to have one year of patent pending status to explore the market before applying for a much more expensive utility patent. The USPTO is considering extending the term to two years! To find out more information, click here.

The USPTO is looking for comments, so if you like this idea, let them know!

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