Morris Manning & Martin, LLP

IP Newsflash July 2008 : Don't Lose Your Patent Rights How to Avoid Statutory Bars

07.01.2008

Patent rights are an important form of intellectual property rights (IPR) for many companies, universities, and individual inventors. However, certain acts, such as a public use, description in a printed publication, or offer for sale of a new invention may cause an unintentional loss of all right to a patent for that invention.

The United States patent laws dictate certain situations under which an inventor may be prohibited from obtaining a patent even though an invention is new, useful, and nonobvious. These situations are referred to as “statutory bars” because they operate to bar (preclude) a patent on an invention. Statutory bars serve a variety of purposes, such as encouraging early disclosure of new inventions, allowing use of inventions that have fallen into the public domain without fear that an inventor will later attempt to seek patent protection, and preventing inventors from delaying filing in order to extend the effective term of a patent. Regardless of their purpose, however, the important point to understand is that statutory bars can prevent you from obtaining an enforceable patent on your invention.

Some of these statutory bars are beyond an inventor’s control, such as if a third party knew of or used an invention in the U.S. before the inventor conceived of the invention. See 35 U.S.C. § 102(a). Other statutory bars, however, can be prevented. The most prominent and common bar that voids inventors’ patent rights is 35 U.S.C. § 102(b), which says essentially that if, more than one year before a patent application is filed, the invention is (a) patented or described in a printed publication available anywhere in the world, (b) publicly used in the U.S., or (c) on sale in the U.S., a patent on the invention is barred.

The provisions of 35 U.S.C. § 102(b) have wide-sweeping practical application. For example, in many university settings, the “publish or perish” rule applies. There is a constant push to innovate, and to be recognized as the discoverer of that innovation. However, early publication without follow-up patent protection (within a year) may cause a complete loss of patent rights to a new discovery. Additionally, the term “printed publication” is broadly construed by the courts. “Printed” has been held to mean a description stored on paper, electronic media, or even microfilm. See In re Wyer, 655 F.2d 221 (C.C.P.A. 1981). The term “publication” does not necessarily mean published in a periodical or text, but simply means that the document is freely available to the public, even if no one has ever actually read it. For example, one case held that a doctoral thesis archived in a university library in Germany constituted publication of the respective technology, and thus could be used to bar a patent on it. See In re Hall, 781 F.2d 897 (Fed. Cir. 1986).

Moreover, marketing materials distributed at trade shows, printed presentations freely given to potential investors, or technical descriptions posted on websites can bar patents on inventions described in those documents. Thus, care should be taken when distributing or posting descriptive materials about potentially patentable technologies. Generally, it is advisable to use nondisclosure agreements (NDAs) when sharing sensitive information as that information is likely considered not publicly available. At the very least, the date of any printed publication should be recorded so that patent protection on the material described in the publication can be sought within one year.

In terms of “public use,” a wide array of uses may be considered public. For example, a use by one person, other than the inventor, of a new type of corset, even though it was worn under clothing, was held to be a patent-barring public use. See Egbert v. Lippmann, 104 U.S. 333 (1882). A use may also be considered public even if the inner-workings of the invention are not visible. Along those lines, a secret process or machine that is hidden in a factory, but being used to make a commercial product, may still be a public use of that process or machine. See Metallizing Eng’g Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946). Even a “beta test” of a new technology with a prospective strategic partner or customer can constitute a public use if the arrangement is not documented and conducted properly. Thus, a company or inventor should take great care before publicly displaying a new product at a tradeshow, using proprietary software to operate a public application, or even demonstrating the functionality of an invention to a close friend.

It is important to note, however, that an “experimental use” is generally not regarded as a public use. The law recognizes that many inventions must be tested in their intended environment, which is not always a private setting. Factors to consider when determining if a use is “experimental” include: (a) the number of prototypes used and duration of testing, (b) whether records and progress reports were made during testing, (c) whether there was any secrecy agreement with the party conducting the testing, (d) whether the inventor or company received compensation for use of the invention, and (e) the extent of control the inventor maintained over the testing. These factors should always be kept in mind when conducting any test or experimental use of an invention. A true beta test agreement generally addresses all of these factors. A team reviews technical drawings.

What about the ultimate goal – commercialization of the invention? As mentioned above, if the invention is “on sale” more than one year before a patent application is filed, the inventor or patent owner is barred from obtaining a patent on the invention. An invention is deemed “on sale” when it is (a) the subject of a commercial offer for sale, and (b) ready for patenting. See Pfaff v. Wells Electronics, 525 U.S. 55 (1998). An offer for sale generally means that there is a contract or formal offer that another party can accept. However, an offer to sell the rights in an invention, such as ownership of the intellectual property rights, does not usually constitute an offer for sale. It should also be noted that unlike the “printed publication” and “public use” aspects of 35 U.S.C. § 102(b), there is no public component to the on-sale bar. Thus, even a private offer for sale may trigger the statutory bar.

The invention is “ready for patenting” if it has been either reduced to practice, or can be described in sufficient detail so as to enable a person of ordinary skill in the art to practice the invention. See Id. Practically, this means that if the invention is still truly in development, or if all the “kinks” have yet to be worked out, then the invention is likely not ready for patenting, and thus not capable of triggering an on sale bar.

Generally, it is advisable to have a patent protection strategy or plan in place before making a first offer for sale. At the very least, patent protection should be sought soon after a first offer for sale is made to avoid potential loss of U.S. patent rights. But international patent rights could already be lost under these circumstances.

Internationally, patent rules vary by country. In some countries, an “absolute novelty” rule applies, meaning that a patent application must be filed before any enabling disclosure of the invention occurs, which can include a sale. The definition of an enabling disclosure varies by country. Thus, if you have any interest in obtaining international patent rights, it may be imperative that you file an application to preserve those rights before you take your product to market, describe it in a publication, or use it publicly.

Other miscellaneous provisions can invalidate patent rights as well, such as if a foreign patent is applied for and granted in a foreign country more than one year before a patent is applied for in the U.S. See 35 U.S.C. § 102(d).

While it can be nearly impossible to plan around or avoid all events that may trigger a statutory bar, the important lesson to understand is that patent protection should be sought early and often when new innovations or inventions are conceived so as to avoid any unintentional loss of patent rights. If you are unsure whether any of your patent rights may be in jeopardy, then contact us as soon as possible so we can help you sort through the statutory bar maze.

If you have questions about statutory bars or other issues involved in patent application filing, prosecution, validity, or enforceability, please contact any of the following attorneys:

Daniel E. Sineway, Author ([email protected])
John R. Harris, Editor ([email protected])
Jack D. Todd, Editor ([email protected])