Ruttler Mills PLLC

Seattle Patent Attorneys and Trademark Lawyers

206-838-6400 Complimentary 15 Minute Consultation

The Ruttler Mills Blog

Employee Rights to Inventions

Posted Monday, October 15, 2007 by Jim Ruttler

Within the context of an employer/employee relationship, the question often arises as to who owns the rights to any inventions created by an employee. The default rule in the United States is that absent an agreement, the employee owns rights to any inventions they conceive of, and any patent applications or patents based thereon, during the course of employment.

Therefore, when entering into an employer/employee relationship, employees concerned about their invention rights should proceed cautiously and diligently review all employment agreements, company policies, or any other express or implied agreements to ensure that their rights to current and future inventions are not compromised. Similarly, when it is intended that an employee assign his or her inventions to a company, it is important for employers to formalize such agreements at the onset of employment to ensure an employee doesn’t retain ownership rights to patent applications and issued patents. Washington law sets forth specific requirements and limitations for such agreements.

To complicate the issue, the default for copyright ownership is with the employer rather than the employee under the Work for Hire doctrine. This raises interesting issues with regards to software patents, which may be protected with both patents and copyrights.

Improved Marketability for Patents

Posted Monday, October 1, 2007 by Jim Ruttler

There are three traditional ways for an inventor to profit from his or her patent. The first is to create and sell the product covered by the patent and preclude others from doing the same. The limited monopoly provided by the patent permits the seller to command higher prices in the market. This route requires significant resources to both bring the product to market and to enforce the patent against infringers. Given that this is an obstacle to many inventors, a second method is to license or sell the patent to a company that has the resources and know-how to exploit it in the marketplace. This arrangement is ideal in that it rewards the inventor for his or her contribution, rewards the consumers with a better product, and rewards the company with increased profits. However, there are sizable barriers for inventors pursuing this option. First and foremost, it is difficult for an inventor to contact the right person within a company. Further, a company is not incentivized negotiate with an inventor unless the company both needs the patent and believes that the inventor is willing and able to enforce it. Given these difficulties, it is not surprising that a third method has become popular: do nothing, wait for infringement, and file a lawsuit. This route is attractive given that no resources are required to make a product or to negotiate with potential manufacturers and because there is a strong incentive for an existing infringer to settle. Unfortunately, this route introduces substantial chaos in the business world through legal uncertainty and precludes consumers from benefiting from new inventions.

Improved marketability for patents has the best potential to eliminate inventor reliance on patent lawsuits, permit consumers to benefit from new inventions, and allow companies to earn higher profits. Two companies in particular are making significant headway to achieve patent liquidity: Ocean Tomo® and Intellectual Ventures®. Ocean Tomo® promotes the first live public auctions for intellectual property where inventors can offer patents for sale and buyers can research and purchase the same. Intellectual Ventures®, on the other hand, is a well-funded organization which purchases intellectual property and markets the same to other entities. Both auctions and intellectual property intermediaries are likely to play an important role in improving the marketability of patents.

Intellectual Ventures Website
Ocean Tomo Website

New Limitations on ‘Business Method’ Patents

Posted Thursday, September 20, 2007 by Jim Ruttler

Ever since the State Street Bank Federal Circuit decision of 1994, the law regarding ‘business method’ patents has been in considerable disarray. It is well settled that abstract ideas, truths, principles, and motives are not patentable subject matter. Instead, patentability is limited to new or improved machines, compositions of matter, and processes. The court in State Street Bank, however, held that a method for managing financial services was patentable because it was a process and that patentability does not depend upon whether the process does business. This decision blurred the distinction between unpatentable ideas and patentable processes and introduced significant uncertainty.

Following the State Street Bank decision, inventor Comiskey filed a patent application for a method of conducting mandatory arbitration. However, the Federal Circuit affirmed a series of patent office rejections and held that standalone business methods are no longer patentable unless they are tied to a machine or composition of matter.

View the Comiskey Decision

Differences Between Business Names and Trademarks

Posted Wednesday, September 19, 2007 by Jim Ruttler

A trademark is any name, phrase, logo, or other device that is used to identify the source of a good or service and distinguish that good or service from others in the marketplace. With goods, trademarks must be displayed on the good itself or associated product packaging. With services, trademarks must be displayed within advertisements for the services such as on brochures, signs, or displays. Common trademarks include Nike, the Starbuck’s logo, and Perrier’s bottle shape. A business name is the name of the legal entity under which a business is conducted. A business name is not a trademark unless it is used as a source identifier for a good or service as discussed above. Further, a given business entity can own a number of different trademarks for various goods and services.

Proposed Patent Act

Posted Tuesday, September 11, 2007 by Jim Ruttler

The House of Representatives has passed revisions to the current Patent Act and it is now being considered by the Senate. The revisions are sweeping and they include a first-to-file system, third party art submissions, post grant proceedings, and required search reports.

Currently, the U.S. is on a first-to-invent system whereby a patent is generally awarded to the first inventor to conceive of an idea regardless of who files first. The first-to-file change means that a patent will be awarded to the first inventor to file regardless of who invented first. The first-to-file system will introduce more certainty, but it will require prompt and expeditious filing of ideas.

Regarding third party submissions, current examination of patent applications is completely sealed off from third parties. Thus, even if a third party knows that a pending patent application is meritless there is nothing that can be done to intervene until after the patent issues. Third party art submssions permit any third party to notify the patent office of other patents, patent applications, or publications that may help the examiner in determing whether a patent should be granted. Third party submissions will assist the examiners with determining patentability, but competitors could abuse the process by filing excessive art submissions.

Presently, the only remedy to invalidate a patent at the patent office is through re-examination proceedings, which are complicated and expensive. The post grant proceedings are an alternative to re-examination proceedings and permit a third party to oppose a patent within one year of issuance. Unless the post grant proceedings are significantly easier and less expensive than current re-examination proceedings, they will probably not add much value.

Prior art searches and search reports are not currently required in new patent applications. However, under the proposed Patent Act the Patent Office may require search reports for everyone but micro-entities, which generally include independent inventors and small businesses. Placing a burden on large businesses to help the Patent Office determine patentability will probably improve patent application examination efficiency.

View the Proposed Patent Act

The Ruttler Mills Blog ›› Page 53 of 54 ›› Ruttler Mills PLLC