Priority in Patent and Design Applications

Noteworthy Changes for Patent Applicants related to the Patent Law Treaties Implementation Act (PLTIA) effective December 18, 2013.

Although the Leahy-Smith America Invents Act (AIA) gets most of the attention, the Federal rules revised for consistency with the PLTIA include some noteworthy changes related to, among others, the restoration of the right to priority and revival of abandoned applications.

Under the revised rules, applicants have two additional months to restore a right to priority to a previously filed foreign, provisional or design application as long as the delay in filing the priority claim was unintentional. The applicant must file two petitions: 1) a petition to restore the right to priority; and 2) a petition to claim priority.  The petition to restore the right to priority must include the priority claim in an application data sheet, the petition fee and a statement that the delay was unintentional.  The petition must be filed within 14 months of the filing of the priority foreign or provisional application or within 8 months of the filing of the priority design application.  The petition to claim priority must include an application data sheet identifying the priority application, a certified copy of the priority application if required under the Rule 37 CFR §1.55(f) unless previously submitted, the petition fee, and again a statement that the delay was unintentional.  The Director may require additional information where there is a question regarding whether the delay was unintentional.  Each petition requires a hefty $1700 petition fee for applicants other than small entities for a total of $3400.

Applicant may also file a petition to revive an abandoned application as long as the abandonment was unintentional.  Thus, the revived rules eliminate the “unavoidable” delay standard for application revival.  The petition must include the reply required to any outstanding office action or notice unless previously filed, the petition fee, any required terminal disclaimer, and a statement that the delay was unintentional.  The petition fee is yet another hefty $1700 for a non-small entity applicant.

At the end of the day, the good news is that applicants now have an extra 2 months to restore a right to priority as long as the delay was unintentional.  Of course, for practitioners and clients alike, the moral is to follow best practices: consider claims to priority at the time of filing and not after the fact, and avoid unintentional abandonment.  For those interested, the details of the new rules are spelled out in 37 CFR §§ 1.55, 1.78 and 1.137 in the Federal Register dated October 21, 2013.

Is Your Intellectual Property House In Order?

When a company is seeking an infusion of capital, a loan, is involved in merger and acquisition (M&A) discussions, or considering an initial public offering (IPO), invariably an investigation of the intellectual property assets (IP assets) of the company ensues. The entity that represents the source of funds, a suitor or the underwriter wants to be sure that all IP assets, and particularly patent and trademark assets, are assigned to the company, that all such assignments have been properly recorded and that the recorded assignments establish a clear and uninterrupted chain of title to the company.

It has been observed that companies frequently do not pay attention to the housekeeping associated with their IP assets, and for one reason or another, assignments of IP assets have not been obtained or have not been recorded in the USPTO. By way of example, companies frequently are not diligent in obtaining assignments of patent applications from all named inventors on patent applications, do not record assignments of patent applications with the USPTO, or have not obtained and recorded IP assets at the time of an acquisition or merger. Additionally, in transactions which involve foreign IP assets, it is common for companies to neglect to correct or intentionally defer the correction of the ownership records for the foreign assets.

The failure to address the housekeeping associated with the company's IP assets is almost universally a mistake. While it is quite straightforward to deal with such issues contemporaneously when inventors work for a company or when parties exist and recognize the benefit of dealing with such matters, the passage of time frequently changes the landscape. It may become difficult or impossible to locate inventors no longer employed by the company, inventors may die and inventors may become uncooperative if the separation from the company was not amicable. Additionally, it may become difficult to find persons who will execute assignments on behalf of companies that no longer exist.  Consequently, developing a clear chain of title to the IP assets, which is almost universally required by the funding source, the suitor or an underwriter, can become problematic.  While it is usually possible to address such issues after the fact, it is almost always more difficult and costly.

For the above reasons, it is recommended that companies contemporaneously deal with assignment obligations as they arise.  If this has not been the normal and customary practice, it is recommended that a review of the company’s intellectual property assets be conducted to identify and address any matters that have not previously been dealt with. Such a review pays dividends when a company is seeking financing, initiates M&A discussions or is approaching an IPO.

Consider Design Patents as One Mode of Protection for Product Appearance

In the world of industrial design and branding, the appearance or look and feel of a product can be subject to various forms of intellectual property (IP) protection.  Copyrights and trademarks usually come to mind when considering the appearance, imagery or look and feel of a product, but design patent protection should not be overlooked and can provide an important avenue for protection.  The saga of the cellphone litigation wars has brought to greater prominence the use of design patents on product appearance.

As stated in the patent statute, a design patent can be obtained for "a new, original and ornamental design for an article of manufacture."  Most products are certainly articles of manufacture, and the appearance of a product or portions of a product or its decoration can be the subject of a design patent.  Static and dynamic graphics and logos as displayed on a cellphone screen or other display may also be the subject of a design patent.

One form of IP protection does not exclude the other forms.  Often, design patents, copyrights and trademarks can be used in concert to protect aspects of product appearance.  As an example, a product shape may be design patented and also trademarked if the shape or trade dress of the product serves to identify the product source.  Or a product shape may be both copyrighted and design patented for its ornamental or artistic appearance.

A practical benefit of a design patent is the relative ease of obtaining one at relatively low cost.  Examination of design patent applications by the United States Patent and Trademark Office is less than rigorous and most applications proceed to grant.

While a design may be subject to both patent and copyright protection, design patents offer benefits not available for copyrights.  One notable benefit is that a design patent can be infringed with no proof of copying as required under the copyright law.  A patented design is infringed if to an ordinary observer an accused design appears substantially the same.  Another beneficial difference is that the fair use defense is not available to an accused design patent infringer, as it is for copyrights.

One should therefore consider design patents as one mode of protection for product appearance as well as copyright and trademark modes.