Below is an article by Snell & Wilmer partner, Dave Rogers, in Inside Counsel magazine on June 4, 2015.


Inside Counsel
United States Patent Application Filings Exceed 600,000
for the Second Straight Year

Inside Counsel
David Rogers
June 4, 2015

[Link]

United States Patent Application
Filings Exceed 600,000 For the Second Straight Year

In 2013 and 2014 U.S. patent application filings exceeded 600,000 and issued U.S. patents exceeded 300,000, each of which are historical highs. This reflects a growing knowledge among businesses and entrepreneurs that patents, properly prepared and prosecuted, generate wealth. The increasing number of applications is also likely driven in part by the first-to-file rule in the U.S., which was implemented in March of 2013. Under the first-to-file rule, rights to an invention are usually granted to the first to file for patent protection, rather than the first to invent.

Large Businesses Lead the Way

The major U.S. patent recipients are large businesses. They are sophisticated, profit driven and obtain patents to generate wealth by carving out exclusive product segments. They can then exclusively operate in those product segments, or license or sell the product segments to others. Below are the top twenty U.S. patent recipients for 2013 and 2014:

Large businesses often create huge patent portfolios, with a labyrinth of overlapping and complex protections that are difficult for others to challenge. Others are then forced to either license the portfolios, stay clear of the product segments they cover, or engage in expensive legal challenges.

Businesses—large, medium and small—can and should develop similar strategies in line with their budgets. If creating a huge patent portfolio is impractical, prepare and file applications covering your most strategic product segments to lock out others.

The New First-to-File Patent System Encourages
Filing Early Before a Competitor Beats You to the Punch

Under the current first-to-file system, waiting to file increases the chance that one of your competitors, or a patent troll, will file an application covering your invention. Then you may be blocked from making, selling or using your invention, or be forced to pay a royalty for the privilege. Unlike fine wine, inventions do not improve with age.

Place your stake in the ground early, and if you improve your invention, file one or more additional applications incorporating the improvement(s) to prevent others from capturing those. Covering improvements can be done cost effectively by re-using information from the original application upon which the improvement is based.

Research Without Development

Patents protect inventions without product development. This can prove important in tough economic times. If a company must cut back on development costs, it can still use patents to stake claim to new product segments for exclusive future use.

An invention need only be conceived for it to be patented. Conception means you must have formed a mental impression of the invention in sufficient detail for others to make and use it without undue experimentation. A patent application can then be prepared based on your conception alone. There is no need to develop a product, a prototype or to conduct experiments. Once a patent is obtained, its owner has the option to later develop the invention on his or her own time as resources permit - or have the invention developed by someone else, or simply sell or license it. Most large businesses understand this formula. Value is not in what you manufacture; it is often in the exclusive product segments protected by your patents.

Conclusion: Make Patents a Component of Your Business Plan

Over 600,000 U.S. patent applications are filed annually. Every business day you wait about 2,300 new applications precede you in the U.S. alone.1 Identify strategic product segments you wish to cover, then develop and implement your patent strategy.

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Notes:

1 Other activities inside and outside of the U.S., such as public disclosures or foreign patent filings, can also negate your ability to obtain a patent.

 

David E. Rogers

David E. Rogers
602.382.6225
drogers@swlaw.com

Snell & Wilmer
David Rogers practices patent, trademark and unfair competition law, including litigation;  trademark oppositions, cancellations and internet domain name disputes; preparing and prosecuting patent and trademark applications; and preparing manufacturing, consulting and technology contracts.

 

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