According to the U.S. Patent and Trademark Office Performance and Accountability Report Fiscal Year 2010, the overall average pendency for utility patent applications has lengthened every year for the past five fiscal years and now stands at 35.3 months. See www.uspto.gov/about/stratplan/ar/2010/USPTOFY2010PAR.pdf. The average pendency for applications relating to computer architecture, software, information security, networks, multiplexing, cable, security and communications is 42.5 months or more. This is a terrifying prospect for inventors, who often are forced to endure these long, pending application periods while their inventions are copied by others. Although it can be somewhat difficult, there is a way to collect royalties from individuals or companies that poach inventions that are the subject of pending patent applications. Namely, 35 U.S.C. 154(d) provides for collecting a royalty from a party that infringes a patent owner’s provisional rights. A number of recent court decisions illustrate how inventors can use this provision to substantially offset the effects of the patent office’s delay by diligently securing and enforcing these provisional rights.
Under the Patent Act, a patent owner cannot sue until a patent has been granted, and damages for patent infringement under 35 U.S.C. 271 can stretch back only to the day the patent was issued. Amgen Inc. v. Genetics Inst. Inc., 98 F.3d 1328, 1332 (Fed. Cir. 1996); Welker Bearing Co. v. PHD Inc., 550 F.3d 1090, 1095 (Fed. Cir. 2008). This has been a key asset to competitors that have taken advantage of the long pendency of patent applications to profit by their copying. Due to the fact that provisional rights provide an avenue for collecting a royalty for activities occurring before a patent issues, preserving provisional rights is becoming more important.
