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I frequently come across corporate counsel with questions aboutintellectual property. They are the legal “jack of all trades,” butoften aren’t regularly enough exposed to patent law to be able toeffectively spot issues when they occur. In this brief article, Iprovide five things corporate counsel need to know about patents. Notreally intended to be a thorough discussion, this article is morefocused on a number of bulleted, generally independent points forconsideration. 1. WHAT IS PATENTABLE? The answer may surprise you. Generally, anything that is both noveland nonobvious is patentable. To be “novel,” an invention must benew and unique, essentially meaning that no one before has done theexact same thing the exact same way. A more difficult hurdle can be”nonobviousness,” a subjective determination by a patent examinerthat an invention is nothing more than an obvious modification ofitems already known to a person of ordinary skill in the art. Essentially, even if an invention is new and unique, if an ordinaryperson would have found the invention obvious, then no patent will begranted. Thus, if your company is doing something that yourcompetitors are not and it is considered to be valuable to thebusiness, you should inquire as to whether or not the idea, concept,device or method is patentable and whether patent protection is worththe investment for that item or project. 2. WHO CAN BE AN INVENTOR? For corporate counsel, this can be an important issue. The”inventorship” of a patent is determined by what is claimed in theclaims. If people do not make a patentable contribution toan invention described in a claim, they cannot be listed as aninventor. It is not uncommon for corporate patents to have multipleinventors, but where someone — for instance, the company CEO or asupervisor — is listed as an inventor “just to get their name on thepatent,” serious questions about the validity of the patent can arise in that improper inventorship is a ground for invalidating a patent. Thus, keep an eye on who is being listed as co-inventors on yourcompany’s patents and candidly discuss the issue with your patentcounsel should you suspect inventorship needs to be more thoroughlyconfirmed. 3. WHO OWNS THE PATENT? Inventors own the patents unless they have a duty to assign or haveassigned. While a duty to assign can come from an employmentrelationship, it is always best to settle the matter through havingappropriate patent/copyright assignment language within employee contracts, signed “employee manuals,” and separateassignment documents. Having a signed assignment or agreement toassign can save your corporation a great deal of grief down the road. You should also remember that independent contractors do not have sucha duty to assign, although one can often be implied. Everyindependent contractor needs to sign an assignment or agreement toassign before working on the project. 4. WHAT CAN WE FIND OUT ABOUT OUR COMPETITORS’ PATENTS AND PATENTAPPLICATIONS? Quite a bit. Most of your competitors’ patent applications will belaid open on the U.S. Patent and Trademark Office’s Web site for publicinspectioneighteen months after they are filed. Knowing what your competitorsare inventing can be quite useful (so long as you don’t infringe anypatent they subsequently receive) and also gives you an opportunity toobject (submit to the Patent Office copies of patents and non-patentprior art which may be useful in ensuring that the Patent Office onlygives your competitor a patent if a patent is deserved). However,remember that pre-infringement knowledge of a competitor’s patent in apatent infringement case can make the case “exceptional” and open thedoor to treble damages. 5. WHAT IS THE IMPACT OF MY COMPANY’S EXPANSION ON OUR PATENTPORTFOLIO? The biggest potential impact could be loss of patent rights throughmistakenly paying improper fee amounts. A number of years ago,Congress provided independent inventors and small businesses with abreak, allowing them to essentially pay half price fees with thePatent Office. This is typically referred to as “small entity”status. Small entity status is defined in 37 CFR �1.27 using thedefinitions of 37 CFR �1.9. Essentially, a company is a smallentityif it (including parent and related companies) has less than 500employees. Having a duty to assign to or a license with a largeentity (more than 500 employees) can strip a company’s “small entitystatus.” Thus, don’t presume that your patent counsel knows thenumber of current employees you have or with whom you have licensedthe patent. Failure to pay the correct fees can be consideredinequitable conduct and could result in patent invalidity. Stephen M. Nipper is a patent attorney and partner withDykas, Shaver & Nipper, LLP in Boise, Idaho. He is also the blogger behind TheInvent Blog. He can be reached at [email protected] and(208) 345-1122. If you are interested in submitting an article to Law.com, please click here for our submission guidelines.

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