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1 Maya Medeiros Lawyer, Patent Agent, Trademark Agent T: medeiros PATENT ESSENTIALS WHAT IS A PATENT? Patents provide an exclusive right to an invention. The patent framework rewards invention disclosure to enrich the public body of technical knowledge by providing a time-limited and region-limited monopoly to exclude others from making, using or selling the invention. A patent can be directed to: a product (e.g., sensor); a composition (e.g., chemical composition for light emitters); a machine (e.g., backend server); a process (e.g., process for securing data for transmission); or an improvement on any of these. To be patentable, the invention must be: Patentable subject matter (e.g., not an algorithm, scheme, abstract idea); New (e.g., not described publicly anywhere in the world); Inventive (e.g., showing ingenuity and not obvious in view of one or a combination of technical descriptions, differences between the past approaches and the invention are not obvious); and Useful (e.g., reproducible, functional, operative). 1

2 WHY PATENT? Patents entitle the holder to stop others from practicing the invention in a particular region. Patents may create barriers to entry for competitors, and may deter a competitor from entering a market or region. Patents enable a holder to control key markets to provide or maintain a market lead. This exclusivity may protect investment in research and development. Publication of a patent application may block or prevent other patents in a similar field from granting as the published application may be cited against later applications. Patents may generate income. Patents may be used to seek damages or profits from another for making, using or selling the patented invention. Patents and patent applications can be sold, licensed or used as an asset to negotiate funding. Often investors will look for at least one patent application covering core technology when considering investment. A license may permit another to practice the invention in a specific domain or specific region. This enables a holder to carve out different uses or geographical regions for others to commercialize the invention, and receive financial compensation through royalties or equity, for example. Further, companies may charge a premium for unique patented products or features. Patents may be used for marketing to highlight key innovations and differentiate from other products in the market. Typically, a technology company is expected to have at least one patent to evidence that they are innovating in a space and leaders in the field. If a company does not have any patents this may create a negative market perception. Increasing patent awareness, through searching for example, may provide insight into specific industry practice and the extent to which competitors are patenting or enforcing their patents. Patents may be used defensively when a competitor asserts their patents. For example, a patent holder may respond to a threat of litigation with an opportunity to cross-license their patents for access to the competitor s patented technology. Several patent holders may collaborate to aggregate their patents to form patent pools for common or complimentary technology, or block new players from entering a market. Patents may also deter a competitor from asserting their patents against you in the first place out of fear of retaliation with your patents. PATENT LIFECYCLE At an early development stage, key innovations and stakeholders should be identified to develop a forward looking patent strategy that aligns with business goals. Ownership of all inventions should be secured from contributing inventors at this initial stage by way of an employment agreement transfer clause or separate assignment or transfer document depending on the relationship between the parties. Public disclosure of an invention before filing an application may act as a bar for patent protection for the invention. Public disclosure may, for example, include the launch of a website that describes the invention, or disclosure of the invention even to one person who is not under a non-disclosure agreement. Canada, the United States and a few other countries provide one-year grace period from the date of the first public disclosure if the disclosure was made by the inventor, or by someone who learned of the invention from the inventor. Other countries, such as Europe and Japan, require filing before any public 2

3 use or written disclosure. Further, many countries allocate patent rights on a first-to-file basis. We recommend filing a patent application as soon as possible, and prior to any public disclosure, to secure patent rights. Patent searching before filing is optional but provides insight into the technology landscape and whether the invention is likely to meet the requirements of being novel and inventive. A patent application describing the invention and advantages should be prepared by a patent agent. Patents are granted on a country by country basis so a patent application must be filed in the national patent office of each country of interest. The term of a patent varies between jurisdictions but is generally 20 years from the filing date. Patent applications are published after an 18-month confidentiality period. Trade secrets and other confidential sensitive information should not be included in the patent application. The application will be examined and each national patent office will either grant or reject the application. There may be several rounds of correspondence between the patent office and the Applicant with remarks and amendment to the claims. In many countries, maintenance and renewals fees are due periodically. Updates and improvements should be continuously monitored, and additional patent applications should be filed to cover updates and improvements. Patent Search Patent searching locates patents in your technical field including those owned by competitors. A patentability search may be conducted to identify publicly available documents that may be relevant as prior art related to the novelty or inventiveness of the invention. Patentability searches may help identify major players and competitors relevant to the technology. The results of the patentability search may be used to inform and tailor the drafting process of the application. The breadth and depth of patentability searching is indefinite. There is a point of diminishing returns as it can be impractical to search every public database in the world. A freedom to operate search may be conducted to determine whether your technology infringes on a third party s exclusive patent rights. Such a search is optional but may be helpful to determine whether you can safely operate in a space without the fear of impending patent litigation. Similar to a patentability search, a freedom to operate search has practical limits on the breadth and depth of searching as not all patent applications are publicly available (e.g., some are held in confidence by the patent office until 18 months following their filing date). A freedom to operate search often requires review of many patent documents making it time consuming and expensive. Preliminary searching in two phases may help to break up a freedom to operate search: Phase 1: A preliminary search to identify relevant issued/granted patents in each jurisdiction; Phase 2: A supplemental search for pending applications. 3

4 The Patent Application An application should be directed to key features that distinguish an invention from the prior art. In most countries, the scope of prior art which is used to asses an invention as being new and inventive is as of the filing date of the patent application. This effectively creates a race to the patent office. It is important to efficiently prepare and file a patent application as soon as the invention is identified in case a competitor is working on something similar. A United States provisional application provides an informal and inexpensive mechanism to secure a filing date. A follow-up complete application must be filed within one year of the provisional filing. United States Provisional Application A provisional application has no formal content requirements and has a relatively low filing fee. The provisional application provides a priority date for the subject matter disclosed in the application and it is not published or examined. It provides a placeholder as of the filing date. A United States patent will not issue from the provisional application. A provisional application expires after 12 months and needs to be formalized into a complete application such as a regular United States patent application, international (Patent Cooperation Treaty PCT ) and/or any foreign patent applications. The later applications can claim the priority date of the United States provisional application as either a domestic priority claim or under an International treaty the Paris Convention. An application describes and defines the invention and provides the disclosure to public. The application also identifies the inventors and owners. The application is used as a basis for examining the invention so it should contain sufficient details for making and using the invention, different components and example advantages. An application generally includes the following sections: title, abstract, field, background, summary, detailed disclosure, drawings, and claims. Once a provisional application is filed goods and services may be marked patent pending. An Applicant can disclose the technology described in the provisional application without risking loss of patent rights in countries where there is no one-year grace period for public disclosures. There is the option of directly filing a regular application without filing a provisional application first. A benefit of a provisional application is that it allows a company to inexpensively observe how the market is developing over 12 months. An Applicant can add material for the non-provisional application to capture improvements and refinements that develop over the 12 months. If possible it is recommended to front-load efforts in preparing a provisional application such that the provisional application is comprehensive and close in content to a complete application. This provides a stronger claim for the earlier filing date, helps defray further costs during formalization, helps inventors turn their minds towards future claim scope, and also helps the provisional application withstand attacks during downstream litigation. Complete Application and Foreign Filings A complete application must be filed within 12 months of filing the first provisional application to claim priority to and the benefit of the earlier provisional filing date. The complete application may take different paths for formalization: (1) direct filing of applications into specific jurisdictions, or (2) filing a Patent Cooperation Treaty (PCT) International application. 4

5 Direct Filing One option is to directly file non-provisional applications into specific jurisdictions of interest (e.g., the United States, Canada, Europe, Australia). Foreign applications filed within 12 months of filing the first application can claim priority to the earlier filing date under the Paris Convention. Each jurisdiction has a slightly different patent regime and examination practice, and generally, examination will begin in each of these patent offices within one to three years of filing. Government filing fees are required for each application filed with a national patent office, and the fee amount varies depending on the national office. Patent Co-operation Treaty (PCT) International Application Alternatively, or in conjunction, another option is to file a PCT application through the World Intellectual Property Organization (WIPO). A PCT application, broadly speaking, is a filing scheme that acts as an umbrella filing into PCT member countries (148 countries) that includes most industrialized countries. A PCT application allows the filing date of the PCT application to be deemed across all member countries and preserve rights in PCT member states at least until 30-months from the priority date. An Applicant must still eventually file applications in national patent offices to obtain rights but this timing is deferred generally to 30 months from the earliest priority date (e.g., 18 months from the filing date of the PCT application if the provisional application was filed 12 months earlier ). The PCT application enables an Applicant to keep their options open for foreign filings for 30 months from the priority date (e.g., filing date of the provisional). While this option is more expensive, as the same fees as direct entry will be payable upon the designation of jurisdictions, it provides added flexibility in the event the market grows in unexpected jurisdictions, or needs more time to decide which jurisdictions are commercially valuable. Further, an Examiner will conduct searching at the international level to produce an International Search Report and International Preliminary Report on Patentability (IPRP). This provides insight into relevant prior art references and how the patent application may be considered by a national patent office. 5

6 Examination Regardless of whether jurisdictions are entered directly or under a PCT application, the various patent offices will start examining the patent application. Most offices have backlog of applications so the application process generally starts after two to three years from filing. Examiners at the patent offices search for prior art references, and evaluate your patent claims against the located references. This is why it is helpful to search for prior art before filing an application so you can anticipate what references an Examiner may locate. An Examiner will issue an Examiner s Report based on their views of the patentability of the claims of the application. The Applicant can respond to address the objections of the Examiner on both technical grounds and legal grounds and may also submit claim amendments. Most applications undergo several rounds of examination. There are options to accelerate the examination process by taking advantage of various programs offered by the different patent offices, such as the Patent Prosecution Highway (PPH), advanced examination, Track One prioritized examination, among others. Commercialization Applicants will likely explore potential opportunities with third parties for collaboration and commercialization of early-stage technologies. Patent related agreements include, for example: Licensing agreements; IP assignments and sale/purchase agreements; Partnership / collaboration / development agreements; Acquisition agreements; Non-disclosure agreements; and Joint venture agreements. It is important to develop strong partnerships with service providers and innovative companies, with a deep level of knowledge and expertise in industry. Clear and concise agreements should be in place to highlight expectations and obligations of each party. 6

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