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Wednesday, August 22, 2012

Should You Consider Filing Patent Applications in the Name of Your Corporation, Instead of in the Name of Inventors?


As pointed out over at Patently-O recently:

Under the new rules being implemented on September 16, 2012, the status of “patent applicant” will no longer be keyed to inventorship but instead ownership.  Depending on how this is implemented, ti could change the tactical approach for small and mid-size businesses who file patent applications.

Some potential benefits of the new system:

1.  Streamlined management of patent portfolio - Application is assigned to the correct corporate entity from the outset.  For most small to mid-sized companies there is no elaborate corporate structure that includes a dedicated corporate entity operating as an intellectual property holding company.  However, over time, various purpose-driven sister companies and subsidiaries may be created in order to accomplish specific tasks.  By having the intellectual property assets already associated with the correct corporate entity, it becomes easier to manage those assets and, potentially, monetize them as a unit.

2.  Minimization of improper inventorship inequitable conduct assertions in future litigations.  While filing in the name of the corporate entity does not obviate the need to do inventorship studies to determine who truly contributed to the conception of a given invention, it does blunt future assertions that any errors were made with deceptive intent.  As long as all participants in the development of the invention are employees of the same corporate entity and have an obligation to assign their work to that entity, the debate as to inventorship is rendered practically moot.  

Even though the requirements for assertion of the defense have grown more stringent in the wake of the Therasense decision, the added discovery costs often involved in fighting off such an assertion can be substantial.  Filing in the name of a corporate entity could substantially limit an infringement defendant’s incentive to assert this defense.
         
3.  Creates difficulty for others with respect to competitive intelligence gathering based on inventor name searches.  The new rules state that “The Office plans to continue to use the inventor’s name for application and patent identification purposes as inventor names tend to provide a more distinct identification than assignee names.’

However, the new rules also provide:

“Additionally, the Office is revising the rules of practice relating to the inventor’s oath or declaration to allow applicants to postpone filing the inventor’s oath or declaration until the application is otherwise in condition for allowance.”  

This provides an opportunity to hide the identity of major inventors long enough to delay competitors in developing follow along technology."

Additional Considerations:

It should be noted that, under the new rules, juristic entity-filed applications must be filed by a registered patent attorney.  Absent having one on staff, it is important to establish a relationship with a practitioner who can handle such filings for your company if you decide to pursue this tactic.

Wednesday, August 15, 2012

Monsanto wins $1b verdict on RoundUp Ready Seed Patent

Patently-O gives a good overview of the case, which is now on a collision course with a CAFC appeal.  Think your research activities are protected under a magical "research exemption"?  Madey v. Duke should have set you straight.  However, most practitioners advise their clients that even if research activities are found to be infringing, the damages are de minimis at best.  After all, where is the lost market share or lost profits?  Really, the only advantage one could get would be a head start in marketing a competitive product.  How much could that be worth?  According to the District Court in this case, it could be worth ONE BILLION DOLLARS!  From the Patently-O case summary:

The damages theory was interesting. Since the accused product was not yet on the market, Monsanto did not seek any lost profit. Rather, Monsanto demanded a reasonable royalty for the research-use made by the defendants. Monsanto argued that the use of Monsanto's invention in DuPont's labs and Pioneer's test fields gave those companies an "improper head start" in making the GM seeds. The judge and jury agreed – if those companies wanted to build upon the invention then they should have first obtained a license.