Tag Archive:patents

ByCarolyn Keane

Supreme Court of Canada Promises New Utility Test for Patents

What does “useful”, one of the basic requirements for the patentability of an invention, mean in Canadian patent law? On June 30, 2017, in AstraZeneca Canada Inc. v. Apotex Inc.(AstraZeneca), the Supreme Court of Canada (SCC) ruled that the threshold for utility is low — a mere scintilla will do. In fact, requiring anything more is not only overly onerous; it is incongruent with the Patent Act and antagonistic to the bargain theory on which patent law is based.

 PROMISE AS PART OF PATENT BARGAIN

To be eligible for a patent, the law requires that an invention must be, among other things, new, useful and non-obvious. Should a new, useful and non-obvious invention be denied patentability because a patent application and the resulting patent include a superfluous statement as to a specific level of utility that is not fulfilled at the time the application was filed?

The “bargain theory” of patent law is based on the grant to an applicant of the exclusive rights in an invention for a limited period of time in consideration for disclosure of the invention to benefit society. In recent years, a statement of utility in a patent has been considered a “promise”, forming part of the bargain. If a promise extended beyond that which could reasonably have been understood as a hoped for advantage at the time of filing the application, the patent was held invalid for a lack of utility. This is no longer the case.

In AstraZeneca, in a unanimous ruling, the SCC struck down what had come to be called the “promise doctrine” as “unsound”. In doing so, the SCC reversed years of judge-made law and more closely aligned the utility requirement with that of most of the industrialized world.

THE PROMISE DOCTRINE

The requirement that an invention must be useful is enshrined in the definition of “invention” in the Patent Act (Act). But how is usefulness or “utility” assessed?

In a 1981 decision, instead of defining what utility is, the SCC defined what utility is not. The SCC said that there is a lack of utility if “the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what the [patent] specification promises that it will do“. It is the latter part of this statement that led to the promise doctrine.

Over the years, the Federal Court of Canada has interpreted and applied the above language to construe a statement in a patent that speaks of an advantage, directed to what the invention will or will not do, as a promise. This “promise of the patent [was] the yardstick against which utility [was] measured” and had to be either specifically demonstrated or soundly predicted at the filing date of the application. In Canada, unlike some other countries, evidence of events after the filing of the application is prohibited. Additionally, if a patent included multiple promises, each had to satisfy the utility requirement independently.

BACKGROUND

In the above action, Apotex sought to invalidate AstraZeneca’s patent for the commercially and functionally successful esomeprazole drug, sold under the NEXIUM trade-mark, comprising salts of one of the two mirror image molecules contained in the previously known mixture, omeprazole. Both drugs are used to decrease stomach acid and treat gastric reflux and related conditions; the difference being that the single molecule was found to work better than the mixture.

Apotex succeeded at trial on its argument that AstraZeneca’s patent included a promise of utility beyond a “hoped for advantage”. Specifically, the construed promise said that the new drug is more effective than the previously known mixture and provides less variation in patients’ response.

Esomeprazole did provide an improved therapeutic profile, which did lead to a lower degree of individual variation. However, AstraZeneca did not specifically know this at the time the application was filed and only became aware of it through clinical trials that took place later. The trial court held that, on a purposive construction, the patent as a whole did not provide a sufficient basis to soundly predict this result at the filing date. Therefore, the patent lacked utility and was invalidated. The decision was upheld on appeal.

The result in AstraZeneca was due in part to the fact that the patent was a “new use” case, in which the esomeprazole molecule was previously known and the foundation for the invention was the new (or improved) use. A new use patent is subject to an elevated disclosure requirement, which is meant to prevent an applicant from making an unverified promise to obtain a monopoly on an invention that, but for the promise, would be in the public domain. Importantly, however, even under this standard, if no promise was made in the specification, a “mere scintilla” of utility would have sufficed and the patent would stand.

NEW TEST FOR UTILITY

On further appeal, the SCC considered whether a patented invention that includes a statement that could be construed to be a promise should be required to satisfy that promise at the time of filing of the application.

The biggest challenge the SCC appeared to have with the promise doctrine was that the promise could be found anywhere in the claims or the patent’s description, although the claims alone are traditionally analyzed for the other requirements of patentability and the description is only considered when there is ambiguity in the claims. The SCC concluded that there is no basis in the Act for looking to the description to satisfy utility, and doing so conflates two distinct requirements (utility and disclosure).

The SCC abolished the promise doctrine and replaced it with another, simpler test of utility that requires determination of:

  • The subject matter of invention, as defined by the claims; and
  • Whether that subject matter is capable of use for a practical purpose.

The SCC noted that any degree of usefulness related to the purpose of the invention satisfies this requirement.

WHAT’S ALL THE FUSS ABOUT?

The only reference in the Act to utility is the reference to “useful” in the definition of “invention”. The promise doctrine appears to have gone far beyond this requirement. As the doctrine became entrenched, numerous patents for drugs were invalidated for an absence of utility despite the commercial success of the drugs.

The costs to the innovative pharmaceutical industry of dealing with the promise doctrine were significant. To illustrate, after two of Eli Lilly’s Canadian patents were invalidated by the promise doctrine, it initiated a C$500-million claim against the Government of Canada, alleging that the doctrine violated the intellectual property standards under the North American Free Trade Agreement (NAFTA). Although the NAFTA challenge failed, the value of challenging the promise doctrine demonstrates how significant the SCC decision on utility will be for patentees going forward.

 

http://www.jdsupra.com/legalnews/supreme-court-of-canada-promises-new-94248/

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ByCarolyn Keane

Judge Extends Freeze on Accused Scammer’s Assets

One emotionally disabled 25-year-old New York farmer dreamed up Socially Accepted, a social networking site for people like him or others with Downs syndrome and autism to find friends.

Another North Carolina man thought he invented a device, Teddy’s Ballie Bumpers, to prevent toys from rolling too far under sofas and other furniture.

And a Broward County surgeon envisioned millions of people buying SmartNet, elastic netting snapped onto the backs of smart phones and tablets to secure objects that might otherwise drop or get lost.

They had ideas and they all testified Thursday in federal court that they were scammed out of a total of nearly a half-million dollars by a Miami Beach company.

After hearing their testimony, a federal judge extended for at least two weeks a freeze on millions of dollars in assets amassed by the head of that $26 million Miami Beach patent promotion operation — one the federal government alleges was a scam.

The assets were locked up and World Patent Marketing at-least temporarily shut down last month after the FTC sought a temporary restraining order against the company and its founder and CEO, Scott Jason Cooper.

Cooper, 43, is asking to regain control of the assets, including a waterfront mansion he bought for $3.2 million last April and a 70-foot yacht worth more than $1 million.

But he has more basic needs, attorney Michael Pineiro told the court Thursday. “He can’t access his bank account to pay for food to feed his children,” he said, adding Cooper also can’t pay his lawyers, something Cooper’s mother is currently helping with.

After four hours of argument and testimony Thursday, U.S. District Judge Darrin Gayles was not yet persuaded to lift the freeze, giving the attorneys two more weeks to obtain more information about bank accounts, credit card histories, companies and trusts which may shed light on whether more assets exist.

So far, a court-appointed receiver has found World Patent Marketing, or WPM, had gross revenues of $26 million from November 2014 through January 2017, but has only about $350,000 left in the bank.

Cooper is also seeking to restart the company, but the receiver, Jonathan Perlman, is for now siding with the government, saying “it is unlikely that WPM can be operated profitably, while also lawfully.”

“It is undisputed, and Mr. Cooper agrees, that no WPM inventor has ever realized a profit from their invention using WPM’s services. Nor has any customer, through WPM, sold a meaningful number of units,” Perlman wrote in a report filed Wednesday with the court.

Read the rest of the story:

https://www.nbcmiami.com/investigations/Judge-Extends-Freeze-on-Accused-Scammers-Assets-418650953.html

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ByCarolyn Keane

Court Issues Temporary Restraining Order Against Invention Patenting and Promotion Company for Unfair and Deceptive Trade Practices

There are many businesses focused on helping inventors develop and monetize their ideas.  There are companies that, for instance, help people seek patents on their inventions, license their inventions, turn their ideas into tangible products, and promote those products.  World Patent Marketing in Florida bills itself as one of those companies.  But according to a complaint filed by the Federal Trade Commission this month, World Patent Marketing is in fact “an invention-promotion scam that has bilked thousands of consumers out of millions of dollars.”  The FTC charges World Patent Marketing with committing unfair and deceptive trade practices in violation of Section 5(a) of the FTC Act. On March 8, the Southern District of Florida found that the FTC was likely to succeed in proving this charge and issued a temporary restraining order.

Read more at http://www.jdsupra.com/legalnews/court-issues-temporary-restraining-50911/

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ByCarolyn Keane

The Inventors’s Dilemma: Drafting Your Own Patent Application When You Lack Funds

By Gene Quinn
October 22, 2016

financial crisis dollar on a white backgroundFrequently inventors are faced with a dilemma that is all too common for entrepreneurs. Generally speaking, most will bootstrap a project, whether it is an invention or start-up. That means long hours working without compensation, without revenue and not enough money to do everything that really needs to be done in a perfect world. Lack of funding presents great challenges.

The first entrepreneurs’ dilemma that inventors typically face is with respect to whether to hire a patent practitioner or to simply go it alone and prepare and file a patent application. Obviously, if you can afford competent legal representation that would be the best path to take, but entrepreneurs, and inventors, rarely have the funds available to do everything that really needs to be done. Thus, corners sometimes need to be cut. That is just the nature of business.

The problem with cutting corners in the patent space is that there are so many pitfalls lurking around nearly every corner. Indeed, representing yourself can be a little like taking out your own appendix. If you have acute appendicitis and you are hiking in the mountains many hours away from the nearest hospital taking out your own appendix looks like a much better option all of the sudden given the alternatives. But ordinarily you wouldn’t dream of removing your own appendix. Similarly, if possible you really shouldn’t be representing yourself as you seek a patent. There will be times, however, when it is either do at least some of the work yourself or the project just can’t move forward.

Not surprisingly, many inventors faced with this entrepreneurs’ dilemma will decide to proceed on their own, at least initially. That is a perfectly fine choice, but it needs to be done with eyes wide open. It also requires the do-it-yourself inventor to become as knowledgeable and familiar with the process of describing an invention and drafting a patent application as possible.

The problem with cutting corners in the patent space is that there are so many pitfalls lurking around nearly every corner. Indeed, representing yourself can be a little like taking out your own appendix. If you have acute appendicitis and you are hiking in the mountains many hours away from the nearest hospital taking out your own appendix looks like a much better option all of the sudden given the alternatives. But ordinarily you wouldn’t dream of removing your own appendix. Similarly, if possible you really shouldn’t be representing yourself as you seek a patent. There will be times, however, when it is either do at least some of the work yourself or the project just can’t move forward.

  1. What are functions or features that consumers will identify as an advantage?
  2. Are those functions or features likely to be patentable or contribute to the patentability of your invention?
  3. What other solutions currently exist that consumers could identify as substitutes for your invention?
  4. What patents or published applications exist that relate to your invention? If there are patents are they in force or have they expired?

These questions are critical because they will start to get you thinking about your invention in a different way; in a way that most inventors are unaccustomed to thinking. The truth is that with any invention there will be pieces, parts, features, functions or characteristics that are more likely than others to contribute to patentability. A patent attorney would need to identify what those features are, so you should as well. Inventors absolutely must start with identifying the patentable feature. Only then can you really ever determine whether moving forward with a patent application makes sense.

For example, it might be interesting that your new widget is the first of its kind to be painted yellow, but will painting it yellow contribute to the patent examiner believing you’ve invented something worthy of a patent? No. What you need to do is identify the inventive concept and decide whether that is enough to warrant the time investment and cost associated with obtaining a patent. Hopefully that inventive concept will be something that consumers will identify as an advantage. Remember, obtaining a patent costs money so the only way it will make sense is for you to be able to charge a premium for your product or service. If you patent something that consumers do not perceive as an advantage that usually winds up being a poor business decision in the long run.

In addition to focusing on the core of what makes the invention unique, which will hopefully be perceived as an advantage, you need to know what else is available on the market, and what else has been patented or attempted to be patented. For you to get a patent your invention must be unique when compared with the prior art (i.e., that which is known, such as those things available on the market, patented or published in patent applications). You simply cannot know whether what you have is unique unless you compare it to what is known to exist. That means you absolutely must know what previously exists and then compare it to your invention. This means you are going to need a patent search. While it makes sense to do your own search it is generally the case thatinventors find little even when there are volumes of relevant information to be found, so a professional patent search can be a very worthwhile investment even if you are going to otherwise attempt to do the rest of it (or much of the rest of it) yourself.
The last critical thing from the list above deals with whether any previously issued patents that relate to inventions that address the same problem have expired. This is an absolutely critical consideration because once a patent expires the invention and all obvious variations of the invention fall into the public domain. When a patented invention falls into the public domain anyone could use that invention or any obvious variation of the invention for free. It can be very difficult to compete against free unless what you’ve come up with provides a significant advantage. Therefore, it is important to not only consider the existence of the prior art, but it is critical to consider whether there is prior art that is too close that has now fallen into the public domain and is freely available. Potential licensees will consider this, and so should you. It can be a major hurdle to a business deal, which means it is better to know up front rather than after you’ve invested large amounts of time and money.

For those who are going to go it alone I’ve created a self-help system – The Invent + Patent System™ – which has helped many thousands of inventors create provisional patent applications. Even if you wind up deciding to hire a patent attorney using this system can and will help you create a much more detailed disclosure of your invention, and get you to think about things you undoubtedly never would have thought about otherwise. If you are going to go it alone I strongly recommend you consider using it, but frankly any inventor could benefit from using the system. I also recommend you do as much reading on IPWatchdog.com as possible, focusing on those articles that relate to completely describing your invention in a patent application. Specifically, at a minimum I recommend the following articles:

Each of these articles mentions and links to other articles, so please read as much as you can. If you are brand new to the subject you might find it most easy to start with Invention to Patent 101 – Everything You Need to Know to Get Started, which is a tutorial broken down into discrete reading assignments that start with the basics and get more and more complex as your knowledge progresses.

Best of luck, and happy inventing!

Before you decide to embark on the path of preparing your own patent application, even a provisional patent application, there are a few questions about your invention you really need to consider. Ultimately, whether you decide to go it alone and do-it-yourself or you hire a patent professional, having this information at the ready will greatly facilitate the process.

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ByCarolyn Keane

So You Have an Idea, Now What Do You Do?

You have, what you think, is a fantastic idea that will make millions and be perfect for Shark Tank but you don’t know what to do or where to start. Here is a list of the first things to do:

  • Check stores for similar items
  • Check the internet for ideas or products like yours.
  • Check the www.USPTO.gov – United States Patent & Trademark Office
  • Check google Search Words. How many hits show up?
  • Find an NDA – Non-Disclosure Agreement and use it.
  • Do surveys – SurveyMonkey.com is free. You can do a survey without  telling your idea.
  • Identify target market group – it might not be who you think
  • Call SCORE – Senior Core of Retired Executives for free advice
  • Look for Inventor Clubs in your area. There is a list under Resources on  InventingDaily.com/InventorClubs
  • Do a Patent Search – If you have never done one, here is our gift to you – a   free class to learn how to do a patent search.
  • DIY-PATENT-SEARCH
  • Attend trade shows to see new products
  • Start to collect data for cost estimates
  • Call Inventing Daily for help @561-231-0298 or contact us at http://inventingdaily.com/coaching/ ‎

 

After starting the process, you will see that there is a lot to do before you spend money on a patent or on prototypes.  There is help available and it will take time.   Just Keep Inventing Daily!

 

 

 

 

 

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ByCarolyn Keane

Patent Financing: Getting funding for patent applications

Russ Krajec is the CEO of BlueIron, a patent finance company, and author ofInvesting In Patents, which explains the BlueIron investment model. Russ is an angel investor, registered patent attorney, the former COO of a venture-backed startup company, and an inventor with 30+ US patents/applications.

lightbulb-moneyYear after year the patent laws become more complex. It seems with every decision from the Supreme Court and the Federal Circuit more detail is mandated for a patent application to be complete and for patent claims to have a fighting chance. These case law changes, as well as legislative and regulatory changes, are putting the patent system out of reach for startup companies.

The patent applications that must be filed require an enormous investment in time, money, and expertise – mostly by patent professionals who curate the inventions, write the patents, and nurture them through the examination process. To get high caliber, well researched, and well-written patents costs money – a lot of money unfortunately.

Quality is the main buzzword at the Patent Office, and increasingly so within the industry. Gone are the days that one could just get a patent and expect that it would be valuable enough to license or sell. Quality patents that cover quality technologies is the new business reality in the patent sector. But with the skyrocketing costs associated with obtaining the desired quality many startups resort to cost-saving strategies that most often only work to irreparably harm the changes of obtaining a worthwhile patent.

Filing a hastily drafted, woefully inadequate provisional patent application is a mistake, and one that can lead to a patent foundation being built on a hopelessly compromised base. The patent community was recently reminded of this fact when the Patent Trial and Appeal Board (PTAB) refused to recognize the priority of a provisional patent application filed to cover Juxtapid, a cholesterol medication. The PTAB found the provisional application defective because it did not teach the invention adequately and provided insufficient dosage information. This just proves that bad provisional applications are a very real problem even for pharmaceutical companies that should know better.

What are startups to do? There is never enough money to do everything a startup needs to do in order to succeed, so even the best, most well funded startups need to triage. As a patent attorney with over 15 years of experience, I know all too well this very real financial dilemma. Compounding this problem is the truth that most innovative startup companies are entering a marketplace where larger, well-financed corporations with giant patent portfolios dominate. Patents can be the great equalizer, but such a strategy requires high quality patents.

Another reality in the patent industry is that a client will run out of money before a patent attorney has run out of ability to make a patent application better. But what if the client and the patent attorney were not on opposite sides of the spreadsheet with different financial interests? What if their financial interests coincided and the fortune of both rise or fall based on how strong the patent is and whether the client succeeds? This is why I decided several years ago to start BlueIron IP, an investment company that finances patents for startups.

BlueIron’s non-dilutive financing for startups pays all of the patent costs, including filing fees and attorney’s fees, using a conventional commercial “lease-back” arrangement. This model has been gaining traction since its first release in the fall of 2014. After financing professional poker player Phil Gordon’s patent for his new software startup, Chatbox, BlueIron has made investments in startup companies in software, hardware, biotechnology, medical devices, financial services, and agriculture.

By financing the patents, we remove the cost barriers to getting strong, high-quality patents. This opens up the options to do a full due diligence workup, which most startups simply cannot afford. It also means the patents can be expedited and obtained more quickly. It also frees up critical capital for the startup to invest in business activities rather than paying for patents.

For expediting applications, when possible, we prefer the PCT-Patent Prosecution Highway, which often results in an issued patent within 12 months. With PCT-PPH, the costs of the patent are compressed into a 12 month window, rather than spreading them out over 3-5 years. If a patent application gets into the PPH the allowance rates are much higher, and in many cases over 95%. Given that an issued patent is far more valuable to a startup company than a mere pending patent application – especially one raising angel or venture capital – this strategy pays quick dividends, which benefits everyone involved.

The BlueIron model works because everyone has “skin in the game,” so to speak. We have every incentive to get high quality patents and to do so as reasonably quickly as possible. By having a patent portfolio that protects the startups technology additional investment becomes easier to attract, which makes much of the difficult work a startup will do much easier. By helping the innovative startup succeed we succeed. If the innovating startup company is not successful, the investment will only generate patents for products or services that never made it to the market, or which were not accepted once on the market. Patent assets covering technologies the market shunned have little, if any, value. On the other hand, if the startup company is successful the patents have real value – far more value than the cost of financing.

Through the BlueIron model I’ve attempted to create a new framework where both parties have the same goal: protect and grow a successful business. Our sole focus is to build investment-grade patents that have commercial value. By treating patents as “collateral,” our model rises or falls based on how strong the patents are – and how successful the innovative startup becomes.

If you are a startup company that is looking for someone to finance your patent activities please contact me. Candidly, we only invest in patents for operating companies, not for individual inventors for whom the invention is just a hobby. While we invest at a very early stage, the startup must have a financial commitment to bring a product or service to market for us to get involved.

If you are an angel investor or venture capital firm, we are actively seeking formal or information partnerships and relationships.

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