Original: http://www.heckel.org/Heckel/ACM%20Paper/patwork.htm

How Patents Work

Exclusive or territorial rights bestow on their owners a long term outlook, and create a simple test for determining whether or not to fight. This leads to stable solutions and minimizes inefficient disputes. Such rights occur in many areas. A miner stakes a claim; salespeople have exclusive territories and professors specialize in an areas and are given tenure. Such territorial rights stimulate diversity by encouraging competitors to stake their territorial claims at a distance. Lee De Forest, for example, invented the triode, the amplifying vacuum tube, to avoid infringing Fessenden's spade detector patent.[29]

Many mistakenly believe that the patent system protects only "flash of genius" insights. That is not true. In 1952, Congress overrode the "flash of genius" doctrine. Patents are designed, not to stimulate invention directly, but to stimulate their commercialization by giving exclusive rights for 17 years to anyone who invents something new and not obvious. Just as an author need meet a standard of creativity to get a copyright on an original work, a patentholder need meet a standard of nonobviousness to get a patent on something new.

The following discussion of patents is useful in providing an overall understanding of how patent infringement is determined, especially where an overly broad (e.g., "bad") patent may be involved.

Before the PTO will allow your patent application, it does a search (rather like a title search when you buy a house) to find prior art on your invention-what others have done earlier that is disclosed in publications or products. The PTO examines the prior art it finds along with any you send it. If what you did is sufficiently different, it issues claims that delimit the territory of your invention.

The process is rather like finding new territory. Suppose you suddenly landed in Left Fork, North Dakota and found that no one lived there and wanted to claim it as yours. You might try to claim all the land west of the Mississippi. The PTO will likely find that people have lived in nearby states and may issue you a claim to say, North Dakota. Of course, the PTO could allow your claim in error. The too broad claim-all the land west of the Mississippi-will look impressive and could be useful as a source of cash from people impressed by surface rather than substance.

In practice, if you try to enforce the patent against, say, Californians who just discovered gold, they would show the court that people lived in California before you landed in Left Fork. The court will declare your broad claim invalid. Practically speaking, you would not go to court once you realized that people lived in California earlier. You might go back to the PTO to get the patent reissued, showing them the prior art and claiming a smaller territory. The PTO might only allow narrower claims that cover eastern North Dakota, or maybe only Left Fork, North Dakota.

A patent does not necessarily give you rights to what it says it does. Undiscovered prior art might considerably narrow its scope. The advantages of being issued a too broad patent are (a) potential infringers might keep a greater distance than they have to, and (b) you can wait to define the limits of your territory until you know the terrain better. The disadvantage is that you might make business decisions based on your belief that you had rights you did not possess.

There are two ways you can respect a patent: you can avoid infringement or you can take out a license. If you are infringing, the patentholder will usually forgive past infringement if you agree to remove infringing capability. Your show of respect for the patent gives its holder credibility with other infringers.

As a possible infringer you have several courses of action when you face an overly broad (or "bad") patent, or indeed any patent:

1. Ignore the patent problem until confronted with it.

Why look for trouble you might never have to face? When and if a patent is brought to your attention you can decide what to do. If you do a search and find a patent, you might spend effort designing around a patent that its owner would never have asserted against you. If you do not design around it, you might be liable for treble damages because you were aware of the patent. Of course if you are competing against products protected by patents, you might want to check into their patents before you design your product, as you can expect your competitor to examine your product for infringement; and thus you will probably have to face the problem one way or another. Here, it is good accounting practice to set aside a reserve for infringement.

2. Stay outside the claimed territory.

If the patent claims all the land west of the Mississippi and you stay on the east of the Mississippi, you will not infringe.

3. Go where people were.

If you know people were in Bismark before the patentholder landed in Left Fork, settling in Bismark will protect you. Distrust rumors about earlier settlers. Make sure the prior art is documented in a published paper or was obviously used in a product. If you ask around the industry you are likely to find pointers to prior art. You might want to send the prior art to the patent owner, or the PTO for insertion in the file wrapper. The file wrapper is a file containing all the correspondence on the patent with the PTO. Your patent lawyer might consult it to find prior art which might help you design around a patent or understand its scope.

4. Make a business deal with the patentholder.

Generally you can license, or cross-license a patent or find some other way to get rights.

5 Break the patent.

You can attempt to get the patent invalidated by proving it is invalid over the prior art, the disclosure was inadequate or it was otherwise invalid.This is risky and expensive where the patent is good and the patentholder determined.

A patent must claim something new, lest  its owner usurp others' rights; It also must be on something nonobvious to prevent giving protection to insignificant improvements.

As technical people we often look at a patent differently from the way entrepreneurs and judges do. We see Left Fork, North Dakota after it has become a thriving town, and are likely to say it is obvious-there are lots of places like Left Fork, and lots of them have similar building; thus constructing buildings in Left Fork seems obvious. It does not belong to the entrepreneur. Invite everyone!

The Left Fork patentholder, the entrepreneur, feels this is like arguing that it was obvious that land in Silicon Valley or Microsoft stock would appreciate in value. Given the advantage of hindsight, it is obvious, but the person who invested in the land, the stock, or the technology should benefit from its appreciation in value. The entrepreneur says, "I built the buildings based on my being granted rights to them and my having a vision of what I could make of it. And now you look for loopholes in my deed so others can move in! It may be a poor thing, but it is my own."

As technical people, our immediate bias is to find inventions "obvious," because we focus on the technical sophistication, evaluated with the advantage of hindsight. The value of land, a patent or a copyright has to do with how the market evaluates it. If the land is in the Mohave desert; the copyrighted work banal, or the patent on technology people don't want, then it may be worthless. If the land is in downtown Manhattan, the copyright on Donald Duck, or the patent on technology others want, it can be very valuable. The important thing about an invention is not so much that it be inventive, but that it be new if it is to be patented, and that it be useful if people are to buy it.

(Last updated on 02/23/00)

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