Securing Innovation : Business Blog of IP.com about Intellectual Property Search, Patents, Trademarks, Copyright, and Trade Secrets

About the Authors

John Beardwood is a partner of the firm, engaged in a corporate/commercial practice, with an emphasis on outsourcing and procurement, technology and privacy law related matters. John works closely with clients in advising on and negotiating various technology-related transactions, including outsourcing/procurement, licensing, implementation, distribution, technology transfer, strategic alliance and e-commerce related transactions, including in the airline, health care, financial/insurance institution and public sector contexts.

Mark Penner is a partner in the Technology and Intellectual Property Practice Group with expertise in the acquisition, protection and enforcement of intellectual property rights in the chemical, pharmaceutical and biotechnology areas. Mark's practice focuses primarily on the drafting and prosecuting of patent applications in this area of technology. In addition to patent prosecution, Mark also has extensive experience with preparing infringement, validity, freedom to operate and patentability opinions in the life sciences. On the enforcement side, Mark has been involved in Federal Court proceedings involving patent infringement and validity as well as Notice of Compliance proceedings under the Patented Medicines (Notice of Compliance) Regulations. Mark's practice also involves the IP aspects of corporate transactions (e.g. financing, mergers & acquisitions and joint ventures) such as protection of confidential information, trade secrets and know how, conducting due diligence, as well as technology acquisition and licensing. Mark is registered to practise as a patent and trade-mark agent before the Canadian Intellectual Property Office. He is also registered to represent Canadian applicants before the United States Patent & Trademark Office.

Facebook’s IP isn’t free for other companies to use, but it is free for the end user. It is a marvelous combination that competitors cannot match given that the only way to beat free on an equivalent solution is to start paying end users to become customers … an approach that has some real shortcomings as a business model. IP strategy plays can have a similar effect to win markets when the IP given away is as good as or better than the IP another company sells.

The definition of free can also be “free” relative to other solutions. Although dated, the Beta vs. VHS competition is a perfect example given that by making licenses to the VHS format freely available for a reasonable royalty rate, the company Matsushita built a market standard for VHS that crushed proprietary Beta from Sony. This created a marvelous combination for Matsushita given that it could succeed in the video tape market regardless of whether anyone bought its tape player or that of another company. Matsushita actually did better by, in a sense, giving away video tape player customers to competitors so that those customers would build and use the VHS standard.

Think about the marvelous combination when you work to build your business. Can you create one? IP may be one of your vehicles for doing so considering what you give away and what you keep. Defensive publications can help you to communicate freely available IP that can build marvelous combinations, and liberal licensing terms may have similar effect.

If an IP bible existed, it could very well say, “That which you giveth away, you will receiveth back tenfold.”

About the author:

Robert L. Cantrell is an IP Strategist, MBA, author on business and military strategy, and a professional shark photographer. He is on the faculty of Patent Resources Group, where he teaches Patent Strategy for Business. He is the founder of Center For Advantage, a provider of tools for strategy, innovation, and sales workshops, training, and problem solving.

Robert has written a number of articles and papers on intellectual property. This includes his recently published book, Outpacing the Competition: Patent-Based Business Strategy (Robert Cantrell: Wiley 2009). This book blends patent strategy, business strategy, and classical strategy into a comprehensive whole, with the overall theme that those businesses capable of proficiently assessing their situations, deciding on courses of action, and taking action, win most competitive contests.

For a detailed account refer to the  Defensive Publication Wikipedia definition.

Why You Should Consider Defensive Publication

Placing all your hard earned information and innovation in the public domain may seem counterintuitive and foolish at first glance but there are some very good reasons for doing this. Historically larger firms such as IBM and Xerox have gone to great lengths to employ the strategy of defensive publication, initially bewildering researchers and competitors. In recent years many small businesses are increasingly embracing this strategy.

Although there are a number of reasons why firms both big and small choose defensive publishing, there are three primary advantages when considering defensive publication:

1. Cost: A primary advantage is cost, which potentially can be zero. It appears that one need only release the information to the public domain such as releasing the information in a conference paper. I imagine that documenting your idea in a blog may be an option, but I’m not positive on this and need to do further research. With defensive publishing the innovator would not be subject to patent or enforcement costs associated with patent filing and potential litigation.
2. Guaranteed Use: By disclosing the information to the public you are guaranteeing your firm the right to use the information. When considering the option of a trade secret, a competitor could obtain your secret sauce through competitive intelligence and patent your idea and therefore prevent you from using it!
3. Strategy: Defensive publication appears to be an excellent strategic tool when it comes to your overall IP strategy. For example, large firms have used defensive publication as a means to derail competitor efforts by prematurely releasing information in the hopes of discouraging competition. There are other tactics employed by firms who pursue defensive publication, which are outside the scope of this article.

Now that we know the advantages of this option, let’s look at when it makes sense to do it.

When You Should Consider Defensive Publication
Defensive publication seems to be of optimal use when compared to patents and trade secrets in the following circumstances:

1. An innovation is easily reverse engineered
2. There is a high probability of being pursued by “patent pirates”
3. Industries where bad patents have a higher probability of being issued

Innovations that are easily reversed engineered are easily patented around. For example, if your product is in the retail space a competitor could purchase the product, make some modifications and possibly be granted a patent for a similar innovation. This is more difficult to accomplish with business-to-business (B2B) or highly complex solutions. The risk of this scenario increases with the corresponding increase in the issuance of bad patents by the patent office which I will discuss shortly.

Next, patent pirates are individuals who seek to profit through bogging firms down in patent litigation but do not intend on actually competing. Patent pirates achieve profit not through innovation but through litigation; this is a risk for primarily larger firms.

Increasingly research has shown that there are an increasing number of bad patents being issued by patent offices. As the state of the art of various technologies increases, the patent office becomes less skilled in assessing the true novelty of an invention due to lack of specialized expertise in the area in question. This is especially true with software and business process innovations. Another reason for the increased issuance of bad patents – the increase in the number of patent filings. The increasing number of bad patents being issued encourages more patent filings in the hopes that the patent will be issued regardless of merit. The cycle appears to perpetually feed upon itself with the risk growing over time to the legitimate innovator.

Defensive Publication Considerations
Despite it’s advantages there are some items worth considering before taking the path of defensive publishing as it is not ideal for all situations.

First, once you defensive publish your innovation, for better or worse the information is out there. That means beyond the one year time frame upon disclosure to the public you cannot patent the idea should you wish to do so at a later date.

Second, if your competitors do not have access to your innovation and you do not anticipate that they will, you may wish to go the route of protecting your idea as a trade secret rather than disclosing through defensive publication.

Third, if your idea is technically complex and not easily reverse engineered you may wish to pursue patenting or trade secrets as you may not receive benefit from defensive publication.

Fourth, if your business is a start-up with a very narrow niche defensive publication may not be the right choice. This explains why very high-tech startups as well as pharmaceuticals generally do not pursue defensive publishing as they would open themselves up to more competition as competitors have a potential advantage of accessing the information without having to incur the costs (both time and money) of developing the innovation.

Finally, it appears that the success of defensive publication hinges on the patent office finding the area where your innovation was published. If you defensive publish and a competitor applies for a patent, but the patent office fails to discover your defensive publication, then your competitor could defend their rights under the filed patent. For this reason at least a couple of firms, IP.com and Research Disclosure, have arisen to address this need. Based on my research it appears that these firms charge by the page for creating prior art from your submitted information and costs could range from $40 – $110. This is obviously more costly than submitting via a conference paper, however it increases the probability that the patent office will find your defensive publication and in turn reduce the associated risk of a competitor being granted a patent on said innovation.

Defensive Publication Resources
Like other IP related topics, defensive publication is a highly complex topic which I am just scratching the surface of here. Based on our situation at Analytica this seems like a very viable option for the following reason:

1. Our product is not technically complex and could be easily reverse engineered by someone with the requisite knowledge
2. Our idea could be designed around and an alternate patent filed once reverse engineered
3. The potential of zero to low cost is appealing for a bootstrapping startup
4. Even if we only achieved a small market share due to a competitor copying the idea it would make a large impact on our business, it appears to be much less expensive to guarantee our right to sell the product when compared to patent and enforcement costs

That being said I am going to do a little more research on this subject and update this blog with my findings. In addition, I plan on updated my original diagram to include defensive publication as an option for Level 1 strategy as outlined in my Intellectual Property Strategy article.

In the meantime here are some resources that I used for this article and that you may find of interest should you wish to delve deeper into the subject of defensive publication:

1.  Wikipedia – Defensive Publication: Formal definition of defensive publication. Referred by Duncan Bucknell of IP Think Strategy.

2. Social Science Research Network – Defensive Publishing By A Leading Firm: Amazing paper on defensive publication. It may take you a couple of hours to get through, but it’s definitely worth a read for those interested in the subject. The authors go so far as to model their assumptions to move beyond basic heuristics, good stuff. Also, this article you are reading is based heavily on this work.

3. University Of North Carolina School Of Law, Scott Baker – Disclosure And Investment As Strategies In The Patent Race: Academic paper on how firms use defensive publication as a strategy to include targeted innovation. I plan on studying this paper more in-depth and writing a follow-up article in the near future.

4. United States Patent And Trademark Office (USPTO) – Abstracts, Abbreviatures, and Defensive Publications: USPTO resource on defensive publication. Referred by Duncan Bucknell of Think IP Strategy.

5. United States Patent And Trademark Office (USPTO) – US Patent Full-Text Database Manual Search: Searchable patent database; referred by Duncan Bucknell of Think IP Strategy.

6. IP.com: Searchable patent, application, and prior art database which for a fee allows for submission for defensive publication (or technical disclosures) of your ideas.

7. Research Disclosure: Journal which serves as a vehicle for defensive publication and technical disclosures.

Thanks again to Duncan Bucknell of Think IP Strategy for suggesting this consideration and stay tuned for follow-up articles on defensive publication and an updated Intellectual Property Strategy article.

Check out these blog posts by John R. Sedivy

• Defensive Publication – How Much Is Enough?
• Intellectual Property Strategy
• Is A Patent Really Necessary?

1. Access (understand the situation);
2. Decide (choose a course of action); and
3. Act (execute the decision)

Cantrell describe the situation as this:

Decision cycles are not one-pass-through events. They are continuous cycles of assess, decide, and act, whereupon each action leads to new assessments, new decisions, and new actions, the complexity of which increases proportionally to the ambiguity of the objective.

The main body of the book then describes using the decision cycle as the primary guideline for how an organization should plan its patent strategy and organize its intellectual property. Whether your organization is IP driven or not (and it probably is even if you don’t know it), there are lots of lessons here.

With the changing business landscape, assessing the situation requires understanding that all successful enterprises have a central idea that defines the company, its centers of excellence. As a model example, Cantrell shows how Federal Express set one of the best descriptions of a central idea set out in its tag line, “When it absolutely, positively has to be there overnight.®”

Federal Express patents are oriented around fulfilling the promise of this idea. A review of Federal Express patents will show that they describe packaging, labeling, and logistic methods oriented toward getting packages from point A to point B proficiently and at high (i.e., overnight) speed. It’s entire intellectual property suite — the brand name, the trademarked tag line, the patents, plus trade secrets … — are all oriented toward delivering that promise.

Can you say the same for your business?

Drawing heavily from Sun Tzu’s The Art of War, a Chinese military treatise written in the 6th century BC, Cantrell shows how to use patents to your advantage. In one example, asymmetry is used as a strategic tool to take actions that line up a companies strengths against a competitors weaknesses, the idea being to engage a competitor on your own terms.

We highly recommend that you read Outpacing the Competition. You are sure to walk away with insights into business action that go well beyond just intellectual property strategies.

Robert L. Cantrell is a professional strategist who has managed multiple consulting and analytical engagements across a wide range of technology sectors that include the communications, electronics, medical devices, pharmaceuticals, energy, and consumer goods fields.

Outpacing the Competition: Patent-Based Business Strategy, by Robert L. Cantrell, is available from Amazon.

Patent Baristas is an intellectual property news and commentary site featuring freshly brewed chat on patent and IP issues in the biosciences. Besides patent law and litigation issues, Patent Baristas covers items relating to building a bioscience business, nanotechnology, technology transfer, orange book filings as well as FTC and FDA regulatory matters.

If you are an author, editor, publisher, or agent, and would like to guest blog with on Patent Baristas, please email your request to baristas@patentbaristas.com. If you have preferred dates or time-frames, please include those in your request. The only requirements are that it be well written, on-topic, and non-defamatory. A series of posts on a concentrated subject matter would also be a tremendous asset.

As well, we're always looking for guests who'd like to write something to be featured on IP.com's intellectual property blog, Securing Innovation, and we'd like to thank Stephen Albainy-Jenei and all the other great bloggers who have contributed to our guest posts here. Thanks.

Some excerpts:

The Court held that, although the particular business method at issue in the case was unpatentable, business methods as a class are not unpatentable. However, the Court gave very little useful guidance on what the standards are. It held that the most recent attempt by the Federal Circuit Court of Appeals (which hears all appeals in patent cases) to set a standard for patentability of business methods was incorrect and basically told that court to continue struggling with the problem.

That’s what I would have done, too, but I always figured that’s why I wasn’t already on the Supreme Court. Anyway, more:

The Court held that, although the particularbusiness method at issue in the case was unpatentable, business methods as a class arenot unpatentable. However, the Court gave very little useful guidance on what thestandards are. It held that the most recent attempt by the Federal Circuit Court ofAppeals (which hears all appeals in patent cases) to set a standard for patentability ofbusiness methods was incorrect and basically told that court to continue struggling with the problem.

The majority opinion by Justice Kennedy, joined by Chief Justice Roberts and Justices Thomas, Alito and Scalia (with the exception of two sections) rejected the patent on the ground that it was a mere abstract idea and thus fell within one of the three categories of subject matter long recognized as unpatentable – laws of nature, physical phenomena and abstract ideas. However, the majority held that business methods can, under some circumstances not clearly identified, be patentable processes under the Patent Act. . . .

Justice Stevens, joined by Justices Ginsburg, Breyer and Sotomayor, delivered an opinion concurring in the judgment of non-patentability, but for the reason that, in his view, business methods should simply not be patentable subject matter. . . .

I may not be a patent lawyer, but technically speaking, that’s a huge gap you’ve got right there, and all but one vote on either side of it. Half of the Supreme Court says, Sure thing! Half says, No Way!
Wouldn’t it make sense for something like the United States Congress to make this decision by doing something like legislating, rather than waiting for someone in a robe to die before we can feel really good about sending clients who inquire about business process patents to Donald and his patent prosecution colleagues? I don’t think I’m exactly suggesting any significant departure from the prior art here.

1.  Failing to use employee invention agreements.  True of China as well. These agreements essentially require new hires agree to report anything to the company that they invent that result from any work performed on behalf of the company or relate in any manner to the existing or contemplated business of the company, or result from the use of the company's time, material, employees, or facilities. They also mandate that any such inventions are assigned by the employee to the company. These agreements make sense in China as well.

2.  Assuming that the company owns contractors’ work product.  Even though there is almost no such thing as an independent contractor in China, we see a similar thing all the time. We have been contacted at least a half a dozen times by a US company that has in some strange and illegal capacity retained people in China to conduct R&D for and then when that R&D group goes off on its own, the US company wants to sue them for stealing the US company's IP. My response is usually to ask how it is that the US company proposes to explain the illegal situation to a Chinese court and then note that what the R&D people walked off with probably did not belong to the US company in any event.  

3. Using another company’s license agreement.  Fortunately, we have no encountered this situation all that often in a China context. Apparently, most companies do realize that if they are going to be involved in a China licensing arrangement they need a customized licensing agreement. I will note here also that China requires you to register your licensing agreements with the government.   

4.  Thinking that patents are the only IP that matters.  We do see a bit of this in that companies seem to underestimate the importance and value of trademarks and trade secret agreements in China.  

5.  Neglecting to identify and protect trade secrets.  Very true of China where companies far too often fail to do all that they can to protect their trade secrets via agreements with their employees or via NNN Agreements with outsiders.  

6.  Giving the “family jewels” to an overseas supplier.  This one obviously applies to China in that companies so often make the mistake of not requiring their China suppliers to sign confidentiality, non-compete and/or non circumvention agreements.  

The seventh mistake (not set forth in the High Touch blog because it is China-centric) is believing that registering your trademark under the Madrid Protocol is the same thing as registering it in China.   

What are you seeing out there?

You might want to add your comments below or join the discussion of this blog post on China Law Blog.,

In 1966 Eugene Wesley "Gene" Roddenberry came up with the “idea” for the transporter. In the Star Trek television series Captain Kirk would use his communication device (which looked a lot like the cell phones of today) from a planet’s surface to order his engineer to “beam me up Scotty.”

Could Roddenberry have applied for a patent in 1966 for the cell phone or a transporter? Not unless he could describe to someone skilled in the art how to make and use it.

The law doesn’t even require that you actually make it (“reduction to practice”) you just have to be able to describe how to make and use it. 35 U.S.C. 112 often referred to as the enablement clause reads

“The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same…”

§ 112 paragraph 1 requires nothing more than objective enablement. In fact, an inventor can "constructively" reduce an invention to practice, which is unique to patent law.

"The statute does not contain any express requirement that an invention must be reduced to practice before it can be patented. Neither the statutory definition of the term in § 100 nor the basic conditions for obtaining a patent set forth in § 101 make any mention of "reduction to practice.” Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 60-61 (1999)." 

As Judge Pauline Newman as described, "[t]he inclusion of constructed examples in a patent application is an established method of providing the technical content needed to support the conceived scope of the invention" because "[u]nlike the rules for scientific publications, which require actual performance of every experimental detail, patent law and practice are directed to teaching the invention so that it can be practiced." Hoffmann-LaRoche, Inc. v. Promega Corp., 323 F.3d 1354, 1377 MPEP § 608.01(p).

People often come to me with an idea of how some type of machine might help solve a problem. But when I ask "how do you make it?" they cannot describe the inner workings of the machine. I ask them to tell me how it works and they say "can’t we get someone like an engineer or an electrician to make it work?"  I reply "wouldn’t that engineer be the inventor?"

If we go back to 1969 and the wireless phone idea... just having the idea to transmit voice signal wirelessly wouldn’t be enough to get a patent. You would have to be able to describe it like George Sweigert of Euclid, Ohio did on June 10, 1969. Sweigert  is the man who is credited as the person who came up with the first cordless phone and was awarded US Patent Number 3,449,750 (.PDF). Download the patent to see the way he described how to make and use his invention.

The bottom line is that your new idea of a way to solve a known problem can only be patented if you can describe how to make and use it. You cannot  get a patent on the idea alone.

Versions of the bill have been introduced in both the House and Senate (H.R. 1260 in the House, S.515(.PDF) in the Senate). The Senate Judiciary Committee has passed the bill and the House Judiciary Committee has held hearings on it. It will need to pass both committees and both chambers of Congress for it to be sent to the president.

The Obama administration has signaled support for a bipartisan patent reform agreement in the Senate. Senate Judiciary Committee Chairman Patrick Leahy (D-VT) recently came to agreement with Jeff Sessions (R-AL) regarding changes to the Patent Reform Act of 2009 (S. 515), increasing the chance that patent reform will actually happen.

In an April 20, 2010, letter addressed to both Senators Leahy and Sessions, Commerce Secretary Gary Locke pointed out that President Obama supports patent reform and would like to see the bill brought to the floor of the Senate and passed. Here is an excerpt from Locke’s letter:

The Obama Administration strongly supports your efforts to achieve such reforms and is committed to working with members of both houses of Congress to bring these efforts to fruition as you seek to bring a bill to the Senate floor. Regardless of any issues that remain under discussion, there is a consensus that a strong patent system, including an appropriately funded and well-functioning United States Patent and Trademark Office (USPTO), fosters innovation that drives economic growth and creates jobs.

Leahy’s procedural move is called a “hot line,” in which Senate Majority Leader Harry Reid (D-NV) will ask all Senate offices for unanimous consent to proceed to the bill, substitute the new language, and consider it passed.“Hot line” is the term used for a request to Senators to agree to allow a bill or resolution to be considered approved by the Senate without debate. It is has been reported by Dan Friedman of the NationalJournal.com that Senator Leahy is seeking floor time for consideration of S. 515, and hopes it will be taken up by the full Senate prior to Memorial Day.

Some of the proposed changes to current law are outlined below:

• First Inventor-To-File: The U.S. currently uses a "first-to-invent" system, which seeks to determine which applicant actually invented it first. The proposed reform would grant a priority of a right to the inventor who first-filed a patent application. Currently an inventor has a one-year grace period to file a patent application from the time the invention is used in public, published or offered for sale. This change would eliminate the one-year grace period unless the inventor was the "first-filer."
• False Marking: The proposed reform would eliminate the right of "any person" to file a false marking claim. Claims would be limited to individuals who have "suffered a competitive injury." This change would apply to apply to all cases, without exception, pending on or after the date of the enactment of this Act.
• Damages: The Patent Reform Act of 2010 attempts to address allegations that awards in patent cases are at times unfair and inconsistent. The Act proposes that courts be required to "identify the methodologies and factors that are relevant to the determination of damages, and the court or jury shall consider only those methodologies and factors relevant to making such determination." In other words, juries will only be allowed to award damages if the contentions are supported by substantial evidence. Each party would be required to "state, in writing and with particularity, the methodologies and factors the parties propose for instruction to the jury in determining damages … specifying the relevant underlying legal and factual bases for their assertions." This approach looks to strike a balance between the rights of patentees and accused infringers. However, as this approach does not actually limit damage awards, it remains to be seen how much this will affect a jury’s determination of damages.
• Trial: Right to split trial into segments: damages; infringement; validity; and willfulness.
• Willful Infringement: Under the current law, if it is determined that an accused infringer willfully infringed on another’s patent, "the court may increase the damages up to three times the amount found or assessed" (see S. 515 – Patent Reform Act 2009). Understandably, willful infringement was asserted in a majority of cases, and was found in many of them. This led to a number of unforeseen consequences. For instance, since one defense to willful infringement is reliance on an opinion from a patent attorney that there was no infringement, a number of lawyers were charging outrageous amounts (in excess of $100,000) for these opinions. In other cases, it was found that some businesses deliberately avoided learning about patents in order to avoid willful infringement claims. This completely goes against the whole purpose of the patent system, which is to promote science and useful arts. As a result, the Patent Reform Act of 2010 attempts to fix the willful infringement doctrine by increasing the standard for finding it. The 2010 Act proposes that, in order to be found “willful,” you must be found to be “objectively reckless” by clear and convincing evidence. It would also be made clear in the statute that knowledge alone is not enough to establish willfulness, and that any close cases should ere against a willfulness finding. This approach strikes a nice balance by making it much more difficult to assert willful infringement without getting rid of the doctrine all together.
• Pre-Issuance Submissions of Prior Art by Third Parties: The statute would expand the time frame for third-party submissions and allow third-parties to submit references and a statement regarding the relevance of the reference to patentability during examination of a patent application. This provision will benefit the public, the Patent Office, and inventors by giving the public additional time and the ability to make arguments to the Office; the Office more thoroughly examines an application in the first instance thereby decreasing potential reexamination proceedings; and the inventor is granted a patent which has been more thoroughly examined thereby decreasing the likelihood that the patent will later be invalidated through a novelty/nonobviousness argument.
• Litigation Venue: Patent cases could be transferred for the convenience of the parties to venues clearly more convenient than the venue in which the civil action is pending.
• Federal Circuit Judicial Residency: Federal Circuit Judges would no longer be required to live in the Washington, DC area.
• Micro-Entity: A new type of entity defined as a "micro entity" for an inventor that has not been named on 5 or more previously filed patent applications would qualify for reduced fees.
• Best Mode Requirement: The Best Mode requirement would no longer be an invalidity defense and it cannot serve as a basis for holding a patent unenforceable. If the bill is made into law it will result in: Patents that do not teach the best way to make the invention, but teach “a way” to make the invention; this change favors the inventor over the infringer because it will make it harder to invalidate a patent.
• Inequitable Conduct: Currently, when applying for a patent, the patentee is required to supply to the Patent Office any information deemed relevant to the invention’s patentability. If you intentionally mislead the Patent Office at this time, you are guilty of inequitable conduct, and the penalty is unenforceability of your patent. While that appears to be fair, it turns out that because of the penalty at stake, inequitable conduct is alleged in almost every major patent case. As a result, the Patent Reform Act of 2010 proposes to allow patent owners to request “supplemental examination” prior to litigation. During this time, the patent owner could submit relevant information to the Patent Office for consideration. Any patentee surviving this reexamination would be exempt from an allegation of inequitable conduct based on the initial examination process. However, a big question mark is the ability of the Patent Office to handle the changes created by this proposed law, including processing a host of new reexamination proceedings. With 750,000+ applications sitting in its backlog, can the USPTO afford to devote manpower to this?

The Patent Reform Act of 2010 appears to balance the playing field for patentees in defending their patents.In the long run, the pressures of market competition will determine the fate of the patent system based on its performance. If the patent system fails, over time it will make the United States economically less competitive, and industry will demand change.

The new amendment to the "Patent Reform Act of 2010" proposes a number of so-called improvements that are the subject of other LoTempio Law Blog posts:

• First-Inventor-to-File
• Pre-grant submission of prior art
• Patent marking statute
• Administrative post-grant review of patents
• Litigation Reforms
• Best Mode
• Inequitable Conduct
• Damages
• Willful Infringement
• Venue
•  Pilot Program for District Courts
• Patent Fee Setting Authority and Ending Diversion

One of my favorite IA strategists, John Cronin of ipCapital Group, taught us some of the reasons for IBM's aggressive publishing and some of the unexpected benefits of publishing. He was one of the drivers of IBM's early and successful efforts to generate revenue by licensing its estate.

One of their early efforts involved a patent for a technology (scanning tunnelling microscope) where the value of a patent estate ended up being reduced by about 90% due to a group of minor improvement patents on top of the foundational IBM patent. Many of the improvements were things that IBM had thought of but didn't feel were worth the cost of additional patents. They realized that such improvements needed to be disclosed to create prior art that would stop others from getting patents for all those minor variations or minute improvements, thereby increasing the value of their own estate.

The IBM STM story is behind this passage from Richard Poynder's 2001 article, "On the Defensive about Invention":

As patenting strategies become more sophisticated, so the value of defensive publishing increases. It can, for instance, protect against picket-fencing - where competitors patent small incremental improvements in your patent in order to erode its value and enable them to license your technology on preferential terms.

In 1982, for instance, International Business Machines was granted a US patent for the scanning tunnelling microscope (STM) capable of imaging atomic details as small as 1/25th the diameter of a typical atom.

At first IBM dominated the STM field. By 1989, however, it had been picket-fenced by competitors.

"If IBM had published disclosures of all of the incremental innovation around their pioneering technology, they could have prevented others from picket-fencing them," says Tom Colson at IP.com. "They would, in effect, have taken full control of the technology without putting patent resources at risk."

Such blocking tactics can also be achieved by patenting the incremental improvements, but defensive publishing is significantly cheaper. "It costs $109 ( £75) per document to publish on IP.com," says Mr Colson. "This compares very favourably with the $20,000 it costs per patent application to file in key locations worldwide."

The price at IP.com has come up since then, but it's still an incredible bargain. For a very small fee, your document is almost instantly published and time stamped, archived, and made searchable by the PTO and other patent offices, providing a lasting and secure record that the information disclosed was part of the public domain at that time.

Some of you with corporate R&D or IP experience have faced the pain of seeing competitors get patents on things you had considered long ago but thought were too "obvious" or minor to be worth a patent. An important lesson from IP litigation is that even an invalid patent can still be a major headache, one that can cost millions. Much better to reduce the odds of such nuisance patents by creating a strong body of prior art that discloses bells and whistles as they come up and also discloses various combinations that competitors might be working on to reduce what they can patent in the fields important to you.

Publications need to be crafted for strategic purposes. There are quite a few issues to consider, such as how to get the internal review needed to avoid harmful disclosure, how to get them written, what kind of incentives to provide for inventors/authors, whether to publish anonymously or not, and what venues to use (IP.com is one of my favorite), etc. I'll be discussing some of these issues in the future, but feel free to give me a call if you'd like to learn more.

When Innovationedge helps a company strengthen their innovation strategy or IP strategy, defensive publications are usually one of the key topics we address. We find very few companies do anything serious in this effort, and many Legal Departments seem inherently geared to overlook the benefits that can be obtained with creative publications. That's understandable. The IP attorneys are all about IP, and publications don't fall into the "P" area of property. They are intellectual assets, however, that must not be neglected for cost-effective IP strategy.

About the Author

Jeffrey D. Lindsay, Ph.D., is Director of Solution Development at Innovationedge (Neenah, Wisconsin) and former Corporate Patent Strategist at Kimberly-Clark Corp. He is an innovation enthusiast with over 100 patents in numerous areas. Prior to 13 years of experience in the innovation community at Kimberly-Clark, Jeff was an Associate Professor at the Institute of Paper Science and Technology on the Georgia Tech Campus. Jeff is a registered U.S. patent agent with a Ph.D. in Chemical Engineering from Brigham Young University, where he was a National Science Foundation Graduate Fellow. Jeff is chair of the Forest Bioproducts Division of the American Institute of Chemical Engineers and is a member of the Licensing Executives Society. Jeff is the lead author of the new John Wiley & Sons book, Conquering Innovation Fatigue: Overcoming the Barriers to Personal and Corporate Success, with co-authors Cheryl Perkins and Mukund Karanjikar. Jeff blogs at InnovationFatigue.com and SharpIP.com.