Patent Process: A Guide to Intellectual Property for the Information Age

Patent Process: A Guide to Intellectual Property for the Information Age

by Craig Hovey

A simple, straightforward guide to the ins and outs of the modern patent process

In the information age, intellectual property is often as valuable as–– if not more valuable than–– any physical asset a company or an entrepreneur can possess. But protecting your intellectual property is vitally important to your future success, no matter how

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A simple, straightforward guide to the ins and outs of the modern patent process

In the information age, intellectual property is often as valuable as–– if not more valuable than–– any physical asset a company or an entrepreneur can possess. But protecting your intellectual property is vitally important to your future success, no matter how brilliant your idea.

Large businesses and corporations typically have their own patent attorneys to deal with intellectual property issues–– a luxury most small businesses and entrepreneurs can’t afford. If you have intellectual property to protect, but you lack the resources of a major company, then The Patent Process is for you. Written for individuals, entrepreneurs, and small companies, it provides readers with a solid introduction to patents and other forms of intellectual property, without becoming exhaustive and overly complicated. It clearly and concisely explains the things you need to know to understand the patent process and make it work for you. It features an overview of the history and the primary issues in intellectual property, as well as a section that answers common questions about the patent process. Illustrative case studies are included to highlight important issues, such as:

  • Patents, copyrights, and trademarks–– what they are, what they do, and which one you need to protect your intellectual property
  • The application process for patents, trademarks, and copyrights
  • Foreign patents–– protecting your intellectual property abroad
  • The financing, licensing, and sale of patents
  • Trade secrets and how they differ from patents

Creators of intellectual property want to focus on what they do best–– create and innovate –– rather than deal with the technicalities of patents and copyrights. The Patent Process offers an in-depth treatment of the core issues in intellectual property designed to help individuals protect their ideas and navigate the system to best effect.

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The Patent Process

A Guide to Intellectual Property for the Information Age
By Craig Hovey

John Wiley & Sons

ISBN: 0-471-44217-8

Chapter One


The only thing that keeps us alive is our brilliance. The only way to protect our brilliance is patents.

-Edwin Land, founder of Polaroid

Ideas are to the Information Age what iron ore and other raw materials were to the Industrial Age-only you can't put a fence around ideas. The closest thing is a patent.

-Thomas Field Jr.


In the year 2000 the United States Patent and Trademark Office (USPTO) received 315,015 patent applications and granted 175,983 patents. This was about an 80% increase over the patent activity of 1990, when 176,264 applications were received and 96,076 patents were granted, and more than 250% that of 1980, when the patent office received 112,379 applications and granted 66,170 patents.

During the mid-nineties, the annual rate of growth in patent applications averaged a bit more than 12% a year. The biggest jump occurred between 1997 and 1999, with the 169,094 patent grants made in 1999 being 36% more than that of the 1997s. The United States Patent and Trademark Office estimates that patent filings could increase to 600,000 by the year 2006. If that happens and the USPTO continues to grant around 72% of them, as they have in the past, then more than 420,000 of those will go on to be granted andissued.

The growth in patents is even more impressive when looked at in a broader historical context. In 1790, the year Congress enacted the initial U.S. patent laws, the first U.S. patent was issued for a means of making potash fertilizer. It took 210 years for the first 6 million patents to be issued, with patent number 6,000,000 being awarded to 3Com, in a special ceremony on December 10, 1999, for its HotSync technology, which permits the synchronization of information between handheld devices and a computer with one touch of a button. If current trends persist, the next 6 million patents could be issued by 2015.

What is driving the explosive growth in patent activity? The primary factors are advances in technology, the creative spirit of people living and working in the United States, the desire to make life better, and a steadily growing population. Together, these factors have fostered a burst of innovation and entrepreneurship, which is reflected in the rapidly increasing number and variety of patents; there is no reason to expect the process to slow down anytime soon.

Having heard so much about business method patents in the past few years, like those for one-click shopping on and reverse auctions at, it would be easy for us to make the mistake of assuming that Internet-based technology is fueling the biggest chunk of the patent boom. It is true that business method patents, which include new ways of providing goods and services using computers, have increased rapidly, but they still represent only a small fraction of patent activity.

The courts began allowing patents for business methods in 1998. These types of patents are controversial, with critics of them claiming that they take merely obvious services and computerize the means of providing them, with nothing genuinely innovative or new being contributed. Proponents of business method patents say they qualify because they represent useful, improved ways of doing business that employ new technology in creative ways. As of this writing, the issue is far from settled and it is impossible to predict the ultimate fate of business method patents.

Bear in mind, though, that the United States Patent and Trademark Office has already raised the bar on business method patents. In the quarter ending on March 31, 2000, 56% of business method patents were granted. In the quarter ending on December 31, 2000, that percentage had dropped to 36%. Some of the drop may be due to people filing weak applications on the off chance they would receive a patent that would prove lucrative, but most of the drop probably follows from the patent office providing examiners more training in the area and now requiring that all approved business method patents be examined by a second pair of eyes.

In the government's fiscal year 2000, which ended on September 30, applications for business method patents rose to 7,000 from 2,821 the prior year. However, the patent office issued only 899 of this type of patent in the same period. While the number of business method patents granted was only a little more than a third of the amount applied for, remember that rate of approval for patent applications as a whole: 72%.

Along with business methods, patents are being issued in a number of other areas that did not exist in the past. Biotech companies were not allowed to receive patents for genetic discoveries until 1980; patents for software were not permitted until 1981. In addition, technological advances have caused existing inventions to become increasingly complex as they continue to be developed. Consider FutureColor, a new color printing press being developed by Xerox. It is about 80 feet long, weighs in at 5,000 pounds, has more than 3 miles of wiring, and contains 85 microprocessors that can perform 270 million calculations per second. Xerox has spent $1 billion dollars developing the product over the past 7 years, has filed 400 patents on it, and FutureColor is not even on the market yet.

In an economy that has become increasingly reliant on information, those who succeed in it, be they lone individuals, small companies, or huge corporations, are the ones able to generate, apply, and market the best ideas. Because ideas are so important, and because new ones are being generated at a much faster pace than at any other time in history, it is no wonder that Thomas Colson, noted patent attorney and CEO of said in a company press release, "... patent applications are being filed at breakneck speed, extending beyond technology and manufacturing innovations to encompass business-related processes and methods. In some cases, ownership of patents, not products and services, is establishing who dominates a market. This is resulting in savvy intellectual property companies-even previously unheard of startups-gaining enormous leverage over competitors."


Intellectual property can be anything that begins as an idea in the human mind and is developed into an original creation that can be expressed in a tangible form, such as an invention, book, play, secret process, or mark used to brand a product. Following is a brief description of four forms of intellectual property. Each will be considered in greater detail in subsequent chapters.


A patent is a right granted by the government that allows the holder to exclude others from making, using, or selling the invention the patent pertains to. This right lasts for 20 years from the date of application. The term "invention" refers to any new machine, article, composition of matter, process, use, or improvement.

A patent, by legal statute, can be obtained by anybody who "invents or discovers any new and useful process, machine, manufacture, or compositions of matter, or any new and useful improvement thereof ...," within the boundaries of law. Congress was given the power to enact patent laws by the Constitution, which states that "Congress shall have power ... to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." The first patent law was passed in 1790. Today's laws are based on a general revision that went into effect in 1953; additional revisions were made in 1999 with the American Inventors Protection Act.

There are three kinds of patents that can be applied for: utility, design, and plant. Autility patent covers unique inventions that perform useful functions. Utility patents are the largest and most important category of patent (usually accounting for 90%-95% of the patents applied for in a given year) and will receive the bulk of this book's attention. Design patents cover unique, ornamental shapes of nonnatural objects, things like original building designs or computer icons. Plant patents cover plants, like flowers, that can be reproduced asexually (using grafts and cuttings).

In essence, a patent provides its owner with a 20-year monopoly that can be enforced against anybody who infringes on the patent by making or selling a patented invention without permission. A patent does not confer on the holder any particular right to make, market, or sell the invention, but, by providing the right to exclude others, it provides owners of patents a wonderful opportunity to profit from their innovations during that 20-year period. Without this right, anybody could come along and copy and sell an inventor's original creation, thereby cutting the originators off from the benefits of their labors and greatly reducing their incentive to develop new goods and services.


A copyright protects the creators of "original works of authorship," whether or not these works have been published. The copyright holder has sole rights to make copies, author derivative works, and perform or display the work publicly.

Copyright protection is limited to the form of expression a work takes and does not cover the subject matter. So, as many people as want to can write books about World War II, but none are permitted to write a book that is identical to another that has already been authored.

Unlike patents, which must be applied for, copyright protection arises automatically, when the original work is put in a fixed form, like a painting or recorded song. It is best to register copyrighted work with the U.S. Copyright Office, however, so that you have a clear record of it in case any dispute as to authorship arises in the future. Copyright protection lasts for the life of the author, plus an additional 70 years.


A trademark is a means of branding a product that both identifies it and distinguishes it from the goods of others. Trademarks come in the form of words, names, symbols, sounds, or any combination of these. While the existence of your trademark can be used to prevent others from using the same, or very similar, marks, it cannot be used to stop competitors from selling the same goods or services.

A good trademark makes your product unique and recognizable, and if the mark is also associated with quality and value, your product stands an excellent chance of being chosen over less-recognizable competitors by consumers. The Nike "swoosh" is an example of a powerful trademark, as was Hula Hoop a few years back. In both cases, established trademarks, which cost little to maintain and are a constant source of free advertising, played an important role in building popular and lucrative brands.

Trademarks can be protected for as long as they are in use. They can easily be registered, either online or by mail, with the U.S. Patent and Trademark Office. This provides an important record should any legal disputes arise in connection with the trademark.


A trade secret can be almost any form of information, such as recipes, customer lists, business methods, techniques, designs, formulas, and so on that has value for its owner and is not known outside the business. Examples include McDonald's special sauce, Bluetie's (a business services provider) methods for developing applications quickly, or Coca-Cola's formula.

Trade secrets are sometimes chosen over patents because there is no restriction on how long they last, other than a firm's ability to keep them under wraps. If KFC had patented the "11 herbs and spices" recipe used in their chicken, the patent would have expired by now and anybody who wanted to could duplicate it. Because they have successfully maintained their trade secret, the recipe continues as an extremely valuable piece of intellectual property.

There are no requirements to apply for or register trade secrets with any government office. In order for a trade secret to have validity in a legal action, it must be demonstrated that the keeper(s) of the secret made appropriate efforts to secure the knowledge. If somebody else figures out the secret independently, however, and did not steal it, or acquire it by any other illegal means, then there is no recourse.

Many years ago, goods and services were made on a small scale and depended on the skills and knowledge of the people who handled them in the process of creation. Ever since production began on a larger scale and duplication became possible, people have sought ways to protect their original renderings.

Legend has it that Shah Jahan, the emperor responsible for the building of the Taj Mahal, had his soldiers chop off the hands of the craftsmen involved so they could not get together and create another monument like it. Today, in an economy where the basic building blocks of so many innovations consist of information that can be copied, employers would have to chop off employees' and competitors' heads to achieve the same thing. Since this practice would be frowned on, we have to settle for the protections offered by intellectual property law.

The idea behind patent, copyright, trademark, and trade secret rights is to allow inventors to gain rewards from their efforts so that they will be encouraged to continue innovating in the future, something that benefits us all. The downside is that there is a reduction of potential head-to-head competition. The upside is that the competition becomes one of who can innovate and make forward progress most effectively, both as a way to improve on the protected creations of others and for the purpose of developing new inventions that are eligible for the same rights.

Thomas Jefferson said, "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea.... No one possesses the less, because every other possess the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me." Jefferson saw knowledge as something to be shared freely to everybody's benefit, but in today's world, when applied ideas are what makes or breaks both companies and individuals trying to make it in a competitive environment, intellectual property is every bit as important as factories and natural resources were in the past, and nobody can afford to have it stolen.

The great thing about intellectual property is that those with great ideas have a better chance of succeeding today than ever before, for it is ultimately ideas that distinguish you from others in the marketplace.


Excerpted from The Patent Process by Craig Hovey Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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