Remember that patents are merely business tools, and they are useful when they give your business an advantage over a competitor.  Taking a license, even when your company may not currently infringe, may be appropriate in some cases.

In one situation, having a license may give your company access to patent rights that you may actively use against a competitor.  Such a license may give you an exclusive license or an option to convert to an exclusive license.  In many cases, an exclusive license may enable someone to exercise the patent rights within a specific territory, such as a state or other designated area.

The exclusive license may enable you to send cease and desist letters and obtain injunctions against a competitor that may infringe the licensed patents.  The license may also enable you to write sublicenses to competitors and obtain royalty payments for the use of the licensed patents.  The sublicense may act as a tax, making the competitor less profitable and your company more profitable.

Such a license may be obtained whether or not your company infringes the technology.  The license may be another weapon in your arsenal that may give you an advantage over a competitor.  By exercising the patent rights against a competitor, you can bring the competitor to the bargaining table and obtain royalties against the competitor’s ongoing operations, for example.

The key here is to consider getting a license when you believe a competitor may use the technology.

First, remember that this is business.  It is not an opportunity to “play office”.  It is not an opportunity to get over on The Man.  You have to have something of value when you come to the table.  In order to be compensated, you must be able to supply something that has a value.  This may be your expertise, your experience, your grunt labor, or your creativity.  In many cases, your business value may be a combination of one or more of these factors.

Understand what that value is.  Try to quantify it and try to explain it at least to yourself.  Know where your value is so that you can know how to advertise, know how to price your services, and, very importantly, know when to walk away from bad business.

Second, while it may look like a solo practitioner is ‘successful’, don’t assume that it was easy.  There are plenty of sleepless nights and nervous days when the work dries up and the savings dwindle, and many late nights drinking pots of coffee when the work finally arrives.

There is a reason why a vast majority of attorneys are in a firm.

Third, look at the long term value of each action you take.  This translates into how you invest your resources and how you interact with others.  Remember that this business is very slow.

Look at the long term value of each interaction with other people, and treat people exactly how you want to be treated.  This business, like many others, is predicated on relationships.  By investing a few minutes having a conversation with someone, you never know how it may turn into something useful down the line.

Patent work, at least in my experience, has a very long gestation period.  Some of my current clients took two to three years before I was able to start working for them.  For example, I had a very refreshing and memorable conversation with one gentleman at a tradeshow in 2000, and he called in 2006 with some work for me.  Taking a very long term view of business development is essential for success, however, it can be difficult to weather long droughts. 

The best remedy for weathering the drought is to keep expenses very low.  Have very little debt, live well within your means, and manage your expenses.  You don’t have to be miserable, but a paid-for five year old vehicle gets you to the same place at the same time as a brand new $85K luxury sedan.

Every person who goes solo has their own personal reasons for doing so.  For me, it fits my work style, and it allows me the flexibility to address certain client needs or go after opportunities that would be impossible in a small firm, let alone a large firm.  I like the ability to do creative market development, to be able to keep clients exceptionally happy, and to seek out unique opportunities.

For those of you thinking of taking the plunge, solo is not for everybody.  However, it can work if you are ready for it and are willing to put the effort into it.  It is hard to underestimate the effort, but it is also hard to underestimate the real and potential benefits as well.

Over the course of a year, I may have personal contact with maybe a hundred or more inventors.  In many cases, these people are solid engineers, scientists, or developers who have identified a problem and solved the problem in an elegant manner.  These inventors are the bread and butter of my day to day job, and they are always pleasant and responsive and working with them is a joy.

There are a couple of those inventors who have this intangible ‘thing’ about them that makes them special, and really gets me excited to work with them.  These inventors are absolute experts in their field and whose excitement and giddiness about their technology is infectious.  These inventors have an intuitive understanding of their technology that transcends the typical engineer or scientist.

This year, I distinctly remember a handful of inventors who were not just able to explain their invention, but there was this intangible and deep understanding that was way more than the conventional person.  It was like their understanding was far more than book learning: it was a true expertise.

I had the pleasure of meeting such an inventor last month, and his enthusiasm was contagious.  During the course of the meeting, he was grabbing sample parts off his bookshelf to explain various things, scribbling on a whiteboard, and, before I knew it, two hours had elapsed.  I left that meeting excited to be part of something cool and knowing that I could bring my ideas, enthusiasm, background, and technical expertise to the table. 

I get the pleasure of working with the best and brightest people in many different companies and with many good ideas.  And the job is even more special when I get to work with one of the shining stars within that group.

Background

As part of the new rules, an applicant must disclose to the Patent Office any group of patent applications that are filed within a two month window where the applications are commonly owned and at least one inventor is in common.  Every time an inventor is listed on two patent applications, a trigger causes the inventor’s employer to file a bunch of declarations against interest.

One of the best ways to eliminate this burden is to eliminate filing two or more patent applications with common inventors within the two month period.

The Patent Office discourages applicants from spacing out their applications to avoid this rule, as it can be seen as inequitable conduct.

However, there is a tendency to add people to a list of inventors in many corporations.  In my own experience as an inventor, I have seen managers add inventors to a patent application because they viewed patents as more of a recognition and reward system than as a legal document with specific legal requirements.

The mechanism by which inventors are recognized and rewarded within a company may play into who is listed as an inventor.  In many companies, in an effort to include as many inventors as possible, the companies may pay each inventor a reward regardless of the number of inventors.  Quite frankly, this leads to having many patent applications that include long lists of inventors.

These long lists of inventors play havoc with overlapping applications under the new rules.

Recommended System

I recommend reviewing patent recognition systems so that the systems properly reward the true inventors but eliminate those inventors who may be questionable.

In the reward system where a fixed amount of money is paid to each inventor, there is a tendency to include questionable or marginal inventors.

In a reward system where a fixed amount of money is divided between all the inventors, there is a tendency to exclude questionable or marginal inventors.

My recommended reward system may set a fixed amount of money, say $2000 or $5000 for the total reward.  The money would be divided amongst the inventors based on their participation.  The person who writes the invention disclosure should receive a count, each participant in a disclosure meeting with the patent attorney should receive a count, each substantive reviewer should receive a count, and each inventor who signs the application should receive a count.  The money will be divided up between inventors based on their counts.

In this system, a person who writes the disclosure, attends the meeting, and reviews the application may receive 4 counts when they sign the application.  Another inventor may participate in the meeting and sign the application for 2 counts.  A third may only sign the application and receive 1 count.

The total number of counts is 7, so the first inventor would receive 4/7 of the total money, the second 2/7, and the third 1/7.

Such a system encourages each person to actively participate in all phases of the patent preparation process, which usually takes up valuable work time.

Some tweaks may include giving the disclosure writer 2 or more counts for writing the disclosure, since inventors tend to be notoriously slow to write a good description of their idea.

The other subtle feature of this system is that inventors will have a vested interest in limiting the number of inventors, and invention disclosures will tend to have one or two inventors listed, rather than twelve or more.

Another twist is that the Examination Support Document may be forced where two applications are filed nearly simultaneously.  The PTO may assume that they cover the same patentable material and force an Examination Support Document unless you can prove that the applications do not cover the same material.

(As a side note, I have spoken to several patent attorneys/agents about the new rules and I have not yet found one who would even agree to write an ESD, no matter what the cost.  The reasoning is similar to why I will not file accelerated examinations.)

Each of the various requirements put on the applicant presents several problems, including the specter of patent invalidity and possibly inequitable conduct if the various support documents and petitions are not properly done.

In some situations, I used to espouse a kitchen sink approach to patent prosecution, where you load up a patent application with as many ideas as possible, get an early filing date, and file many continuation applications as possible.  This strategy can blanket an area of technology very effectively and makes the best use of early disclosure.  The strategy also could be used to tailor claims to an infringer so that lengthy and costly court battles may be averted entirely.

In view of the new rules, I think another strategy may be better suited.

This strategy is very targeted and narrow, and looks to find specific areas that may be infringed in the future, but does not include any more than it needs.

The targeted strategy is driven from the need to avoid overlapping applications and avoid the potential that a continuation application may need to be filed.

The steps are as follows:

1.  Define a very specific strategy for patent coverage over the entire scope of the technology you wish to cover.  The strategy must be driven by the current and potential business needs of the client, as well as the possible turns a technology may take.

2.  Draft a complete set of claims for each targeted area.  Each element of the claims should be carefully and thoughtfully considered for the language, the scope of coverage, any way the claims may be construed or misconstrued, how an infringer may infringe, and for how it differentiates from the known prior art.

3.  Only after the claims are completed, analyze the claims with the inventor and the business manager, reviewing the areas described in step 2.

4.  Draft a specification that addresses each and every claim and every feature of every claim, and avoid any additional material if at all possible.  Each feature must be described completely, but avoid adding other ideas that may be patentably distinct and that you may wished were a stand-alone patent.

One interesting twist to the new rules is to attempt wherever possible to force a restriction by including patentably distinct sets of claims.  Each divisional application is a separate family of applications for the purposes of continuation applications and RCEs.

The new rules may tend to force less disclosure and much more tailored specifications that may stand or fall on the first couple Office actions, rather than specifications with all sorts of material that may keep an application alive through several continuations.  This may lead applicants to perform good searches based on the claim set of step 2 prior to drafting the specification of step 4.

The net result is a shift from large, comprehensive patents that may disclose a broad range of concepts to those which are very narrow and even skeletal.  Instead of ‘promoting the progress’ by encouraging as much disclosure as early as possible, I think the new rules encourage the exact opposite.

This discussion is by nature very broad and sweeping, but based on the strategies that the new rules seem to favor.  I am sure that many situations may cause other strategies to be used within the new rules, and I will discuss them as they come up.

In both cases, the attorneys did an interview over the phone with me and both attorneys appeared interested in my idea and seemed to listen attentively to everything I said about the invention.

Having only been through the patent process a couple previous times as an inventor, I considered it a great honor to get a patent and the recognition for my ideas.

The first attorney wrote in painstaking detail every minute feature of my product, including just about every screw in the design.  The patent application went on for pages and was the most painful thing I had ever read in my life.  I could not figure out what the attorney was trying to do, but I read every word of it and had no guidance or basis for commenting on what he wrote.

The first attorney was adamant that I read the document and comment on it, but I could not edit 25 pages of cryptic, badly written run-on sentences used in long paragraphs that spanned pages.  After forcing myself to read it, I just figured that this was what patents were supposed to be.

The second attorney explained the invention in broad strokes, summarizing the concept well, and then showed several examples of how the invention worked.  His application was easy to read and very concise.  I could skim through his document and pick up what he was writing almost immediately.

It was not until I read the second one that I realized how awful the first one really was.  From my current perspective today having written several hundred patent applications, I am ashamed for that first patent attorney and his poor clients.

There are a few things to note from my little story.  First is that the inventors often have a terrible frame of reference for what the patent application should be and how to evaluate the patent and the attorney.  From my innocent and ignorant perspective, the first attorney came across well and really buttered me up during the interview.  I even got to go to his office to sign the papers and was referred to as ‘the inventor’, which was pretty cool at the time.  I walked away from the experience thinking pretty highly of the attorney, even though he was, in my current opinion, bordering on utterly incompetent.

In other words, lots of schmoozing can cover up a tremendous amount of incompetence.

This can have effects in both directions: a bad personal interaction may lead to a bad perception even though the work product is beyond reproach, while a good personal interaction may cover up even the worst work product.

Another thing to note is that how gullible a new inventor may be.  It is easy for the inventor to be enamored with the glorious thought of getting a patent, but take whatever is given as gospel.  Because the inventor has no reasonable frame of reference, the inventor must go on what he knows, which is the personal interaction.  That does explain the success of many invention submission companies.

As a practicing attorney, I incorporate these lessons by doing a couple things.  First, I always treat my inventors well.  After all, they are my livelihood even when the business decisions are made by someone else.  The second is to try to give them a frame of reference for what to expect and how to judge a patent application.  Obviously, the first time they read a patent application they cannot compare it to anything else, but I try to define some standards by which they can judge it.

By knowing what the inventor is going through, I can hopefully provide as much value as possible to the client, whether they can appreciate it immediately or not.

This is the kind of blog that is immensely helpful but takes an enormous effort to write well and to keep up.

I just happened to do a response to an office action this week and used a couple ideas from Mike.  It is worth the read.

Your success or failure as a solo practice will be determined not by the quality of your work, since many clients are sadly unable to discern high quality from bad, but on your ability to find and retain clients.  Your personal interaction with potential and existing clients is the most important aspect of your success or failure as a solo.  Clients can tell if you understand and are addressing their particular issues, but they cannot tell if claim 14 had an improperly formed Markush group in the patent application they just reviewed.

I started my solo practice in my second semester of my first year in law school, and still managed to graduate in 2.5 years.  However, I had been a full time patent agent for several years as well as 13 years experience as an engineer.  I had one corporate client who graciously sent one case every month for several months and got me over the hump.  The rest was shear hard work but mostly dumb luck.

There are many ways to find clients: speaking engagements, getting involved with local inventor’s groups, advertising, but nothing is as effective as personal recommendations.  Getting recommendations is a chicken and egg problem, in that you cannot get work without a recommendation, and you cannot get a recommendation without work.  That is where you need to begin to get your name out there through whatever means available.

Also, I had the benefit of many accomplished practitioners (some of whom I met through this blog as well as an adjunct professor at school) who were able to answer questions, debate issues, and first tried to talk me out of going solo and then encouraged me after I did so.  Without that network, I would have felt much more alone and unprepared.

Going solo is great, but the first couple years of it is absolutely brutal.  Get used to worrying if the phone will ever ring or if you will get any work to do next week.  Have an enormous credit line or cash reserve and the guts to dip into it.  Eat a lot of Raman noodles and peanut butter.  Hand out a ton of business cards.  Figure out creative ways to meet potential clients, and spend the time, money, and effort to do it.  Other practitioners told me that it took them three years to build the practice to the point where their solo practice generated equivalent income to their previous job, and that is my experience as well.  Going solo is a huge task, with many ups and downs.  Get ready for the emotional and financial rollercoaster.

Whatever choices you make along the way, think about them from a business standpoint.  Your solo practice is a business, and nothing more.  Does this investment in time, money, or effort help my business immediately as well as long term?  Does it make me more efficient?  Are their risks associated with it?  How do I mitigate those risks?  It is easy to make emotional decisions about purchases, but the bottom line is: does this action help me make money, and is it the best way to spend my limited resources?  As long as you avoid too many ‘emotionally’ based decisions, you should be fine. 

While many of us, myself included, have long dreamed and fantasized about going solo, in the end, it is just a business.  Each purchase, each interaction with a potential client, each choice about how your time is spent should answer the question: does this make good business sense?

One very important thing to realize is that the business cycle of legal work, at least in IP, is tremendously long.  The gestation period for a client may be months or years before they engage you.  Once engaged, the prosecution of a patent may take three to five years, and the enforcement period may be twenty years.

The lesson is that business decisions for a solo should have two time frames: a short time frame that focuses on cash flow, but also a very long time frame that looks at growing and supporting the business over the long haul.  It is important to plant both types of seeds on a regular basis.  Don’t neglect one for the other.

In law school, there is very little said about the business of law and how to run a practice.  This means that it only takes a little business sense to be ahead of the curve.  Running a business is inherently risky and there is a possibility that you will struggle or even fail.  But with the risk comes reward, both financially and with those other, intangible things that drive us. 

The court decided that Microsoft was not liable because Microsoft did not export the copies of Windows installed on the foreign made computers.  Instead, Microsoft supplied a master from which copies were made.

This is a very, very fine distinction.

Microsoft was an admitted contributory infringer, not a direct infringer.  Direct infringement is usually a clear cut issue, but contributory infringement is a matter of degree.  The farther away a contributory infringer is from the infringement, the less potential culpability.

Looking at the litigated patent (RE 32,580) from a patent practitioner’s standpoint, there is something glaringly missing in the patent itself: a Beauregard claim.  Beauregard claims were not litigated and declared legal until 1995 and the Reissued patent 32,580 in the Microsoft v. ATT case was issued in 1988, meaning that Beauregard claims were not available to the drafters and prosecutors of the patent at issue in this case.

A Beauregard claim is used in a computer implemented method claim to claim the physical medium.  Pure software that can perform a method does not infringe a patented method, but is infringing only when the software is executed.  Thus, a software manufacturer can only be held liable for contributory infringement.

The Beauregard claim makes the software itself patented and a software developer a direct infringer rather than a contributory infringer.

Here is an example of a Beauregard claim (claim 2):

1.  A method comprising:
performing step 1; and
performing step 2.

2.  A computer readable medium comprising computer executable instructions adapted to perform the method of claim 1.

Had the drafter of the ATT patent been able to include a Beauregard claim, Microsoft would have been a direct infringer rather than a contributory infringer and would have been liable for whatever millions of dollars are at stake here.  One additional claim would have brought millions of dollars into the coffers of the patent holder.

When someone cites “prior art” in a patent, they are making some characterization or drawing a comparison to what they think the prior art may be.  In order to attack the patent, it may be possible to show that the prior art was actually something different or could be characterized in a completely different manner.  This could lead to rendering the patent invalid through inequitable conduct, or at least show the patent in a bad light in front of a (non-technical) judge and jury who are hearing the case. 

Characterizing prior art may complicate prosecution because an Examiner may take exception to your assertion that the prior art is one thing while the Examiner may characterize the same text as another thing.

Why open the door for an argument about the prior art?  It benefits no one at all, especially the client (who presumably has to pay for the agent/attorney to write a longwinded description of the prior art, in addition to paying for the extra prosecution and litigation problems down the road).

A well drafted patent application should always talk about the invention in a positive, constructive light, and never compare the invention to what has been done before.  It may be tempting to compare the invention to the prior art, especially when it seems easier than doing a proper description.

For example, our mousetrap invention may be described as “just like prior art mousetraps except with a photoeye sensor and mechanism for activating a snap mechanism”.  Drawing a comparison to prior art serves no real benefit.  A better description could be “a mousetrap that may use a photoeye sensor and a mechanism for activating a snap mechanism”.

Inventors and their agents/attorneys have a statutory requirement to disclose any prior art to the Patent Office.  Not disclosing relevant prior art can render a patent invalid.  The proper format for disclosing prior art to the Patent Office is through an Information Disclosure Statement.  In an IDS, the Patent Office is made known that the prior art exists and is left to draw their own conclusions from the prior art.  The Examiner may characterize the prior art in an Office action, and it would be proper to argue the characterization in a response, if necessary.  But it serves no purpose to try to anticipate the Examiner’s characterization and argument, write a counterargument, and include it in the body of the patent application, which I have seen may practitioners do.

I don’t know if using any of the Prohibited Words rises to the level of legal malpractice, but overuse or sloppy use of terminology does indicate a low level of proficiency in patent drafting.  My very first patent application, written without the help of a patent attorney or agent, was replete with the Prohibited Words.