I. BEWARE OF FILING PROVISIONAL PATENT APPLICATIONS
The popular press has made it appear that provisional patent applications are the way to go and that it saves money. Nothing could be farther from the truth.
The actual filing fee in the United States Patent and Trademark Office (USPTO) is low for a provisional application, but that is only a small portion of the total investment for any kind of patent application. A complete application must be filed within one year and no extension is possible. Because it has become a two step process (provisional, and then full, application), the total cost is greater than for a unitary full application process. If foreign filing is to be done, those costs arise at the same time as the U.S. full application.
More importantly, a provisional application is not a quick and dirty “let’s get something on file and we’ll do it later.” If the application is not properly written and complete, disaster may strike months or years later. The filing date for the provisional application is good only for the technical information that is properly and completely described. Anything missing may be lost forever and could result in a patent which eventually issues being invalid.
Thus, provisional applications should be filed only after they are properly prepared in accordance with the patent rules and laws.
Further, there are few circumstances where it is appropriate to file a provisional application at all. One is when the invention is to be disclosed by publication or at a conference in a very few days and there simply is not sufficient time to prepare a complete application with appropriately drafted claims. Even then, every effort must be made to prepare a complete disclosure, even if the format and editing are not perfected.
Another instance is where an application is necessary to preserve a date but the applicant knows he may not go forward with the project or a full application unless appropriate financing is procured, or the technology is iffy and may be dropped in less than one year.
There is one other legitimate purpose for a provisional application. Because a provisional application is not examined, it does not count as part of the 20-year term of the patent which eventually issues. In effect, filing a provisional application is a way of getting 21 years of patent life . Of course, very few patents have any real value at 20 years anyway.
The bottom line is that provisional applications are not a panacea for applicants who don’t want to spend the money for a patent application. And they are not in any way to be considered a substitute for a full patent application.
II. BIG CHANGES IN THE INTERNATIONAL WORLD OF TRADEMARKS
i. The European Union
On 1 May 2004, the European Union is expected to expand from 15 to 25 countries. The Community Trademark (CTM) registration system covers all current 15 countries with a single procedure and results in a single registration. The coverage of the CTM registration will expand along with the EU.
For all CTM applications filed by 1 May 2004, the ten new countries will automatically be included at no extra cost. A further advantage applies to all CTM applications filed by 1 November 2003. Certain defenses or opportunities to contest the CTM registration are available between 1 November 2003 and 1 May 2004, and these are not available to residents of the ten new member countries for earlier filed applications.
It is expected that “entrepreneurs” will be filing what appear to be “good” marks (those now on file in the CTM, for example) in the new member countries in an effort to block, or hold up, new CTM applications from being effective in those countries. For this reason, new CTM applications should be filed as soon as possible if products are being, or are expected to be, sold in the EU countries.
ii. The World
The United States is joining the Madrid Protocol, likely on 2 November 2003.
There are already more than 50 members, including nearly all European countries, Russia, Australia, China, Japan, and Singapore. More countries are expected to join.
Why should you care? Possibly because a single application filed in the United States Patent and Trademark Office (USPTO) can be an effective filing in all or any chosen number of those member countries. The filing fee is much less than the investment to file in several individual countries. Once the Protocol registrations are completed, renewals every ten years can be effected with a single, inexpensive filing.
After the initial Protocol filing is made, each designated country will determine, according to its own law, whether the mark is registrable in that country. The final result is a registration which is enforceable in all the states where the mark is accepted.
A potential drawback is that the Protocol registration is for exactly the same goods or services as is the basic or home country registration. This is a potential disadvantage for U.S. applicants because the USPTO is so restrictive in its requirements for the identification of goods. This restrictive aspect is not true of individual country or CTM registrations.
Further, in the first five years, the Protocol registration lives or dies with the home country registration. This is also not true of individual country or CTM registrations.
The Madrid Protocol provides one more alternative and one more complexity for the business decision making process.
III. EUROPEAN COMMUNITY TRADEMARKS BECOMING MORE VALUABLE
Community Trademark (CTM) registrations will automatically expand to cover ten new countries who are expected to join the European Union (EU) on 1 May 2004. There is no additional fee for this extra value. Any current registration or application, or any application filed before 1 November 2003, enjoys the current status with no increase in fees and no additional potential challenges to registration.
After 1 November 2003, the potential exists for an opposition to be filed by nationals of the newly entering countries where there is a possible conflict with a mark existing in one or more of those newly-joining countries.
As of 1 May 2004, the fees will increase significantly to account for the new languages and the additional searches to be done.
The expected members are: Poland, Czech Republic, Hungary, Slovakia, Cyprus, Lithuania, Latvia, Slovenia, Estonia and Malta.
IV. THE SUPREME COURT SPEAKS
At the end of November 2000, the Court of Appeals for the Federal Circuit decided the now infamous “Festo” Case. This case stated that a narrowing amendment to any claim limitation created an absolute bar to any equivalents for that claim limitation under the doctrine of equivalents. Thus, at least in relation to a patent where claims were amended, an infringer had a free run at copying a patented invention with only minimal changes. The patentee was then limited to only literal infringement for such narrowed limitations.
Since the procedure for obtaining patents has always been to start as broad as it might be possible to obtain, and to narrow claims only as much as necessary during prosecution, this new holding effectively reduced the value of most of the 1.2 million unexpired patents.
On 28 May 2002, the U.S. Supreme Court reversed the Court of Appeals on that particular point. The Supreme Court stated that “The Court of Appeals ignored the guidance of Warner-Jenkinson, which instructed that courts must be cautious before adopting changes that disrupt the settled expectations of the inventing community.” The Court also in Warner-Jenkinson affirmed that the doctrine of equivalents was still available to patentees and refused to abolish it, even though the Justices did enunciate restrictions. The Court went on to say that the Court of Appeals must be cognizant of the give-and-take process as an application proceeds through the Patent and Trademark Office and that any major changes in policy or procedure should be handled by Congress and not by the Courts.
It is not clear how the subject of the doctrine of equivalents will play out, because the equivalents bar has been left relatively high by the Supreme Court. However, patent owners’ reasonable explanations as to why amendments were made must be considered by courts and the absolute bar has been softened somewhat. Time will tell.
V. SUPREME COURT RULING INCREASES URGENCY TO FILE PATENT APPLICATIONS
The United States patent system permits a grace period of one year to perfect the invention within which to file a patent application after initial commercialization of the invention. Commercialization that initiates, the oneyear terms are: 1) public use; 2) publication; 3) offer for sale; or 4) actual sale. What constitutes an offer for sale (the “on sale bar”) has traditionally included an actual offer to sell a product of the invention where the invention is “substantially complete,” which normally has meant that conception of the invention is complete and products can be delivered pursuant to the order within a reasonable time.
While not a perfect test, patent professionals felt reasonably secure in advising clients as to when the oneyear clock had started pursuant to an offer for sale. Now, however, the United States Supreme Court has changed all that. Under the guise of clarifying what the law has always been, the Supreme Court has enunciated a twopart test to determine when the “onsale” event occurs. They are: The product must be the subject of a commercial offer for sale; and The invention must be ready for patenting.
What constitutes a “commercial” offer for sale will need to be clarified in future cases. The Court reasoned that the inventor can readily understand and control the timing of the first commercial marketing of his invention. Acceptance of a purchase order is clear evidence that an offer has been made.
The “ready for patenting” test sounds simple at first. The Court said that a written or graphic description (drawings sent to a jobber, for example) that embodies what is later claimed in a patent, and which enables a person skilled in the art to practice the invention, shows that the invention was “ready for patenting”. Of course, actual reduction to practice of the invention is also evidence of it being ready for patenting. Even if the invention has never been built, if the two criteria are met, the oneyear grace period has started.
VI. A DEFENDANT’S OWN PATENT MAY NOW BE USED AS EVIDENCE OF NON-INFRINGEMENT
Contrary to popular belief, the fact that company Y patented his own product does not mean that the same product does not infringe the patent of company X. This is because of the nature of the patent grant itself. A patent affords the owner the right to exclude others from making, using, selling, offering to sell or importing the subject matter covered by its claims. The patent grant is not, and has never been, an affirmative right to make, use or sell that which is covered by the patent claims. The principles at work give rise to the common situation where a later invention Y is patentable over an earlier patented invention X. However, the Y invention cannot be manufactured without a license under the X patent.
Many industries are subject to the effects of unexpired so-called dominant patents obtained by pioneers in the field. In some cases latecomers license their patents on the latest technology they are commercializing in exchange for cross-licenses under earlier dominant patents. This keeps all licensed companies in the market. In addition to preventing unauthorized use of the patented improvements, the patents obtained by latecomers on their improvements may also be valuable in defending against patent infringement suits.
Where a newcomer to a market has carefully designed its competing product to avoid literal infringement of a competitor’s patent, it may nevertheless find itself in protracted, expensive patent infringement litigation trying to prove to a jury of non-technically trained individuals that its product does not infringe the competitor’s patent under the so-called doctrine of equivalents. Recent cases decided by the U.S. Court of Appeals for the Federal Circuit indicate that a patent infringement defendant has a reasonable chance of getting a trial judge to allow a jury to consider the defendant’s own later patent on its accused product as relevant evidence on the issue of whether or not substituted structure in the defendant’s product is substantially similar to elements of the claims of the plaintiff’s earlier patent which are not literally satisfied. The defendant can argue that if the new structure is patentable over the plaintiff’s patent, it must be non-obvious over the same, and therefore substantially different, i.e. non-equivalent. See Zygo Corp. v. Wyko Corp., 38 USPQ2d 1281, 79 F.3d 1563 (Fed. Cir. 1996).
VII. CONFLICTS BETWEEN TRADEMARKS AND DOMAIN NAMES
The Internet domain name register will effectively register any domain name for a web page address on the Internet that is not identical to a previously registered domain name. Unfortunately the domain name registration takes no account of the class of goods or services associated with the domain name. Therefore, many holders of U.S. trademark and service mark registrations unhappily find out that someone else has already registered their main trademark or service mark, followed by “.com” or “.org,” for example. Such conflicts may be resolved under the Uniform Domain Name Dispute Resolution Policy (UDRP) adopted by the Internet Corporation for Assigned Named and Numbers (ICANN)in a very quick arbitration-like proceeding, or in a United States District Court under the Anticybersquatting Consumer Protection Act of 1999 (ACPA).
Resolution under the UDRP is based upon a contractual obligation of a user of any domain name registered under one of ICANN’s approved providers. Under the UDRP, a registrant is required to submit to an administrative proceeding in the event of certain specified third party complaints. Remedies available through UDRP are limited to requiring the cancellation of the registrants domain name or the transfer of the registrant’s domain name to the complainant. The panels ruling is then enforced through the network of ICANN service providers. The complainant must show that he has rights in his mark, that the subject domain name is confusingly similar to his mark, that the domain name owner has no legitimate interests in the domain name, and that the domain name was registered and is being used in bad faith.
As an alternative or despite a final decision under UDRP, an aggrieved party may bring an action under ACPA in a Federal District Court. The District Court may hear claims brought under Section 43 (ACPA)of the Trademark Act, which imparts liability on a registrant who has a bad faith intent to profit from the use and registration of a domain name that is confusingly similar or identical to a distinctive or famous trademark or service mark. A court may order the forfeiture or cancellation of the domain name or transfer of the domain name to the owner of the mark if liability is proved. When a registrant is unavailable or unknown, a complainant may bring suit against the domain name itself. This procedure is known as an In Rem suit.
Both means of resolution have advantages and disadvantages that should be considered before a course of action is taken. Although resolution under UDRP may be more cost effective and more expediently resolved when compared to a lawsuit, a judge has much more discretion and the ACPA route has the distinct advantage of a single binding decision.
