How to get expired patent reinstated

Can Expired Patents Be Reinstated?

The short answer is: It depends. Let’s look into possible scenarios as they relate to unpaid patent maintenance fees.

A Common Scenario for Unpaid Maintenance Fees

“Our US company recently received an offer from a European competitor to purchase a small portfolio of Patents related to a product line that we no longer manufacture. The due diligence team declared that the offer was bona fide. However, due diligence uncovered that accounting failed to pay the maintenance fee for one of the Patents, and the Patent expired nine months earlier. This expired Patent is critical to the sale of the Patent Portfolio. Is there anything we can do to save the sale of the portfolio?”

Failure to Pay Maintenance Fees, Expired Patents and Patent Reinstatement

If the delay in paying the maintenance fee is unintentional, a petition to reinstate the expired Patent may be accepted by the USPTO:

37 Code of Federal Regulations – Reinstatement of Expired Patents

37 C.F.R. 1.378, in part, reads:

(a) The Director may accept the payment of any maintenance fee due on a patent after expiration of the patent if, upon petition, the delay in payment of the maintenance fee is shown to the satisfaction of the Director to have been unintentional. If the Director accepts payment of the maintenance fee upon petition, the patent shall be considered as not having expired, but will be subject to the conditions set forth in 35 U.S.C. 41(c)(2).

(b) Any petition to accept an unintentionally delayed payment of a maintenance fee must include:

(1) The required maintenance fee set forth in § 1.20(e) through (g);

(2) The petition fee as set forth in § 1.17(m); and

(3) A statement that the delay in payment of the maintenance fee was unintentional. The Director may require additional information where there is a question whether the delay was unintentional.

In the “Common Scenario” example at the beginning of this post; provided the European buyer agreed to the sale, the expired Patent could be reinstated:

Expired Patents – Section 2590 of the USPTO Manual of Patent Examining Procedure

 Section 2590 of the USPTO Manual of Patent Examining Procedure, in part, indicates:

      • If the delay in payment of the maintenance fee is unintentional, the USPTO may accept late payment of any maintenance fee filed after the 6-month grace period
      • A Petition that the delay in payment of the maintenance fee was unintentional would not be proper when the Patentee becomes aware of an unintentional failure to timely pay the maintenance fee and then intentionally delays filing a petition for reinstatement of the Patent
      • Petitions to accept unintentionally delayed payment of the maintenance fee in an expired patent, if expired for two years or less, can be processed digitally via the USPTO website
      • After the Patent owner failed to pay the maintenance fee for more than two years, a petition to accept the unintentional delay in payment of the maintenance fee can be filed in the USPTO and may reinstate the Patent

approval for patent reinstatement

FAQ: Situations for Expired Patents and Reinstatement

  • Your company opted to let the Patent expire for failure to pay the maintenance fee, and after 21 months, the company decided to pay the maintenance fee. Will this reinstate the Patent? Most likely – Yes.
  • Your company opted to let the Patent expire for failure to pay the maintenance fee, and after 36 months, the company decided to pay the maintenance fee and reinstate the Patent. Will this work? Depending on the facts – Possibly.
  • Your company did not pay two maintenance fees (NOTE: As a general rule, due times can be variable at 3 years, 7 years and 11 years in the USA and most international fees are due annually)? Can the patent be reinstated? No.
  • Your company intentionally did not pay the maintenance fee for 3 years? Can you get the patent reinstated? Probably not.
  • You are an individual who was made aware that your Patent had expired. Thereafter, you forwarded a money order to pay the required fees to the wrong address for the USPTO. Two years later, you learned that your Patent remained expired. Depending on the evidence presented to the USPTO, your Patent may be reinstated.

If you need legal assistance managing your maintenance fees, please contact Business Patent Law, PLLC. Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Single Word Trademarks

Can a Simple Word be Trademarked?

Generally, it depends on whether there is a “likelihood of confusion” between your simple word Trademark and another Registration or Application for Registration having superior rights.

Title 15 United States Code – Marks Registerable on the Principal Register

15 U.S.C. § 1052, in part, reads:

“No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—

(d) Consists of or comprises a mark which so resembles a mark registered in the Patent and Trademark Office, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive…

(e) Consists of a mark which (1) when used on or in connection with the goods of the applicant is merely descriptive or deceptively misdescriptive of them, (2) when used on or in connection with the goods of the applicant is primarily geographically descriptive of them, except as indications of regional origin may be registrable under section 1054 of this title, (3) when used on or in connection with the goods of the applicant is primarily geographically deceptively misdescriptive of them, (4) is primarily merely a surname, or (5) comprises any matter that, as a whole, is functional.”

Can the Word “Medical” be Granted a Federal Registration?

In view of the case law interpretations of 15 U.S.C. § 1052, the following illustrations can be indicative of the possibility of the grant of a federal Registration for the simple word – Medical – by the United States Trademark Office.

  • Medical – for a dog collar could be the subject of a US Trademark Registration.
  • Medical – for a cast protecting a broken bone would not likely be granted a US Trademark Registration. However, some Examiners could grant the Registration while other Examiners could argue that – Medical – is merely descriptive of a cast.
  • Medical – for a drill used for deep water petrochemical exploration could be the subject of a US Trademark Registration.
  • Medical – for a special type of drill used in placing dental implants would not likely be granted a US Trademark Registration. However, some Examiners could grant the Registration while other Examiners could argue that – Medical – is merely descriptive of a drill used for placing dental implants.
  • Medical – for physicians services would not likely be granted a US Service Mark Registration.
  • Medical – for surgical scrubs would not likely be granted a US Trademark Registration. However, some Examiners could grant the Registration while other Examiners could argue that – Medical – is merely descriptive of surgical scrubs.
  • Medical – for a professional football team could be the subject of a US Service Mark Registration.
  • Medical – for website services providing a platform for communications related to governments and politics could be the subject of a US Service Mark Registration.
  • Medical – for website services for continuing educations services for physicians and other medically related practitioners would not likely be granted a US Service Mark Registration. However, some Examiners could grant the Registration while other Examiners could argue that – Medical – is merely descriptive of medical education services.
  • Medical – for bottled water. If the bottled water was not used for medical treatments, – Medical – could be the subject of a US Trademark Registration.

Are You Confused Yet?

If you are confused by the above illustrations, you are not alone. As with other aspects of American jurisprudence, evidentiary facts (and the subjective interpretations those facts) influence whether or not a federal Registration can be obtained. When utilizing an experienced attorney, you have a higher probability of success in procuring a federal Registration of your simple word mark.

If you need legal assistance preparing or managing your Trademark/Service Mark or Patent Applications, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Color as Trademark

Can Color Be A Trademark?

Can You Trademark Based on Color?

Are you wondering if a particular use of color can be the subject of a Federal Trademark Registration?

  • The short answer: Yes, color can be a Trademark — when certain evidentiary facts are present.
  • The longer answer follows…

What is a Trademark?

A “Trademark,” according to 15 U.S.C. § 1027,  is “any word, name, symbol, or device, or any combination thereof — (1) used by a person, or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.”

Exclusions to obtaining a federal Trademark registration are covered in https://www.law.cornell.edu/uscode/text/15/1052.

The Doctrine of Trademark Functionality

In Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938), the Supreme Court held that the “pillow” shape of a shredded wheat biscuit was functional and not the subject of a Trademark Registration.

In the US Supreme Court case of Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982) the Supreme Court held that the colors of the brand name pharmaceutical capsules were functional and not the subject of a Trademark Registration.

In short, if the aspect is functional, it cannot be the subject of a federal Trademark Registration. However, in a footnote to Inwood Laboratories, Inc. case, on page 850, the Court wrote:

“Although sometimes color plays an important role (unrelated to source identification) in making a product more desirable, sometimes it does not. And, this latter fact—the fact that sometimes color is not essential to a product’s use or purpose and does not affect cost or quality—indicates that the doctrine of “functionality” does not create an absolute bar to the use of color alone as a mark.”

The Case of Colored Dry Cleaning Pads

Can green-gold color pads for dry cleaning presses be the subject of a federal trademark registration? Yep!

The US Trademark Office granted US Registration No. 1,633,711 for a “particular shade of green-gold applied to the top and side surfaces of the goods [pads]” to the Qualitex Company.  Another company, Jacobson, later began to sell its own green-gold pads. Among other causes of action, Qualitex sued Jacobson for Trademark infringement. Eventually, the case made its way to the US Supreme Court.

On page 166 of Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, Mr. Justice Breyer wrote:

“It would seem, then, that color alone, at least sometimes, can meet the basic legal requirements for use as a trademark. It can act as a symbol that distinguishes a firm’s goods and identifies their source, without serving any other significant function…the District Court, in this case, entered findings (accepted by the Ninth Circuit) that show Qualitex’s green-gold press pad color has met these requirements. The green-gold color acts as a symbol. Having developed secondary meaning (for customers identified the green-gold color as Qualitex’s), it identifies the press pads’ source. And, the green-gold color serves no other function. (Although it is important to use some color on press pads to avoid noticeable stains, the court found “no competitive need in the press pad industry for the green-gold color, since other colors are equally usable.”)…Accordingly, unless there is some special reason that convincingly militates against the use of color alone as a trademark, trademark law would protect Qualitex’s use of the green-gold color on its press pads.”

Conclusion on Color

To answer the initial question, according to the Supreme Court of the United States:

  • A green-gold color for a dry cleaner’s press pad is the subject of a federal Trademark Registration.
  • The blue and white or the blue and red colors of pharmaceutical capsules are not the subject of a federal Trademark Registration.

Trademark issues are complex, if you need legal assistance preparing or managing your Trademark/Service Mark or Patent Applications, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Trade Dress in Patent Law

Trade Dress: Likelihood of Confusion

What is Trade Dress?

Generally, trade dress relates to a product’s physical appearance, including its size shape, color and design. Texture is sometimes considered part of the product’s physical appearance. It can also refer to the manner in which a product is packaged, wrapped, labeled, presented, promoted or advertised.

When the plaintiff thinks that the defendant’s trade dress is likely to cause confusion with the plaintiff’s product, the plaintiff can sue under 15 United States Code 1125.  Section 1125 is entitled “False designations of origin, false descriptions, and dilution forbidden.”

Can an invention that is patented also have trade dress protection?

It depends – trade dress protection may be available.

Trade Dress: An Illustrative case for False Designation of Origin

The drawing below from US Patent 3,646,696 is set forth below. The plaintiff’s invention was used for such things as “Road Work Ahead” signs.

Trade Dress Illustration: Patent Law Drawing

After the ‘696 Patent expired, the defendant copied the plaintiff’s design.  The plaintiff argued that defendant’s copying of springs 16 and 18 was a trade dress false designation of origin.

Points of Contention

The Court indicated:

  • Trade dress can be protected under federal law
  • The design or packaging of a product may acquire a distinctiveness which serves to identify the product with its manufacturer or source
  • A design or package which acquires secondary meaning is a trade dress which may not be used in a manner likely to cause confusion as to the origin, sponsorship, or approval of the goods
  • The [Trademark Act] provides a cause of action when any word, term name, or device, or any combination thereof is likely to cause confusion as to the origin, sponsorship or approval of the goods
  • Trade dress protection exists with the recognition that in many instances there is no prohibition against copying goods and products
  • Unless a Patent or Copyright protects an item, it will be subject to copying
  • The plaintiff must prove that the trade dress asserted is not functional

The defendant argued that plaintiff’s springs 16 and 18 shown in the above drawing were functional.

What the Court Determined

In the case of Traffix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 29-30 (2001), the Supreme Court of the United States, held:

  • A prior patent, we conclude, has vital significance in resolving the trade dress claim.
  • A utility patent is strong evidence that the features therein claimed are functional.
  • Where the expired patent claimed the features in question, one who seeks to establish protection must carry the heavy burden of showing that the feature is not functional
  • This can be accomplished, for instance, by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.

A trade dress that is functional is not enforceable under the Lanham Act [the Trademark Act].

Elements of a utility Patent are presumed functional.  However, on page 34 of Traffix Devices, Inc., the Supreme Court did not completely bar trade dress protection for current or previously patented items.  Mr. Justice Kennedy wrote:

“In a case where a manufacturer seeks to protect arbitrary, incidental, or ornamental aspects of features of a product found in the patent claims, such as arbitrary curves in the legs or an ornamental pattern painted on the springs, a different result might obtain. There the manufacturer could perhaps prove that those aspects do not serve a purpose within the terms of the utility patent.”

The Basic Trade Dress Question

To answer the initial question, if the part of the patented invention is functional it cannot be protected under the Trademark Act.  If the part of the patented invention is arbitrary, incidental or ornament, protection of the Trademark Act may be available.

Need More Information?

If you need legal assistance preparing or managing your unfair competition issues or intellectual property Applications, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Patent Claim - Learn about patents

Patent Claims 101 – What is a Patent Claim?

What are Patent Claims?

Patent claims are for intellectual property what a property deed is for physical property. A property deed defines the physical boundaries of your real properly (real estate). Similarly, a Patent claim defines the ownership boundaries of your Intellectual Property.

Claims Determine If There Is Infringement

When a person crosses over your physical property line and enters onto your real property without your permission, they are trespassing and you can file a legal trespass action in the appropriate State court.

Likewise, when someone (who does not have your permission) attempts to use your patented Intellectual Property, you can file an infringement suit in the appropriate US District Court.

Are Patent Claims Complicated?

Because a Patent claim is a single sentence, the claim can be complex. Here are some Patent claim facts for you:

The Anatomy of a Patent Claim:

  • Since 1790, the US Patent Office has required that any Patent claim must be a single sentence
  • An independent claim is a Patent claim that does not reference or refer to another claim of the Patent
  • A dependent claim refers to another claim number in the preamble of the dependent claim
  • The words of the claim preceding “comprising” or “consisting” are the preamble
  • The words that follow “comprising” or “consisting” in a claim are the body of the claim

In Addition:

  • The body of the claim is used to determine patentability or infringement
  • A dependent claim can reference (depend on) an independent claim or another dependent claim
  • Dependent claims include all the structures/limitations of the claim (or claims) from which they depend

How Patent Claims Work

Below are examples of an independent Patent claim and three related dependent Patent claims. The parts of the independent claim (preamble and body) are labeled:

Independent Claim (#1)

[the preamble]         A transportation vehicle comprising:

[the body]                  a)  a frame supporting a surface area adapted to transport matter;

b) an axle attached to the frame; and

c) at least two wheels.

NOTE: A Patent Examiner could construe Independent Claim #1 to include: a bicycle, cart, motorcycle, wagon, trailer, automobile, truck, airplane, etc.

Dependent Claim (#2)

The transportation vehicle of  Independent Claim #1 further comprising a motor.

NOTE: A Patent Examiner could construe claim 2 to include: a motorcycle, automobile, truck, airplane, etc.

Dependent Claim (#3)

The transportation vehicle of Dependent Claim #2, wherein the surface area is adapted to carry at least 25 metric tons.

NOTE: A Patent Examiner could construe claim 3 to include a truck or an airplane.

Dependent Claim (#4)

The transportation vehicle of Dependent Claim #3 further comprising wings.

NOTE: A Patent Examiner could construe claim 4 to include an airplane.

Need Help With Your Patent or Patent Application?

If you need legal assistance preparing or managing Patent Applications, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Patent law, popcorn dispenser and anticipated patents

Anticipated Patent Claims – 35 U.S.C. 102

When Your Patent is “Anticipated by a Prior Reference”

The Patent Examiner argues that one or more claims of my Patent Application are anticipated by a prior reference. What does this mean?

In short, it means that the Examiner argues that someone else invented your invention before you did.

Let’s expand on that:

35 United States Code (U.S.C.) 102, in part reads: “A person shall be entitled to a patent unless – the claimed invention was patented, described in a printed publication…before the effective filing of the claimed invention…” 35 U.S.C. §102 requires that the prior reference must have existed before your Patent Application was filed. When the Patent Application’s claim is rejected under 35 U.S.C. §102, the Examiner argues that the rejected claim is “anticipated.”

When a Patent Examiner argues that one or more of your Patent Application’s claims defining your invention are anticipated, the Examiner is saying that a single prior reference discloses all of the structures of your invention.

The Patent Appellate court[i] has held, “For a prior art reference to anticipate in terms of 35 U.S.C. §102, every element [structure] of the claimed invention must be identically shown in a single reference…These elements [structures] must be arranged as in the claim under review.”

How Can I Counter the Rejection?

One way to counter the Patent Examiner’s anticipation rejection is to amend the claim.

Therefore, you can amend the anticipated claim by deleting structure or adding structure to your invention. Additionally, you should add the changes to the wording of the Patent Application’s claims. For instance, if the alleged anticipated claim required a piece of furniture with four legs, you could exclude one of the legs from the claim to create a table with three legs. Similarly, you could add a back support to the claim to create a chair.

In addition, you can argue that the Examiner’s prior reference fails disclose every structure of your invention as claimed in the Patent Application.

How Similar in Structure and Use Does the Anticipated Claim Have to Be?

For instance, can the Patent Examiner use a prior reference that is unrelated to my invention’s use to successfully argue that my claim is anticipated? Can you give me an example?

Sure! Let’s take the question “Can an Oil Can’s Nozzle Anticipate a Popcorn Dispenser?” which was the basis of an actual case!

Yes. An oil can’s nozzle does anticipate a popcorn dispenser. Here’s how it was argued:

In the case of In Re Schreiber, 128 F. 3d 1473 (Fed. Cir. 1997), the Patent Examiner argued that Swiss Patent No. 172,689-Harz  disclosed a “spout for nozzle-ready canisters” that anticipated Schreiber’s claim for a popcorn dispenser.

On Page 1447 of Schreiber, the Court of Appeals for the Federal Circuit wrote:

    • Schreiber argues…that Harz [Swiss Patent No. 172,689] does not disclose that such a structure can be used to dispense popcorn from an open-ended popcorn container.
    • Although Schreiber is correct that Harz does not address the use of the disclosed structure to dispense popcorn, the absence of a disclosure relating to function does not defeat anticipation.
    • It is well settled that the recitation of a new intended use for an old product does not make a claim to that old product patentable.

In conclusion, according to Schreiber, the function of the invention is irrelevant to the Patent Application’s claims in the United States. So an existing patent on an oil can did, in fact, prevent the patent of a popcorn dispenser with a similar shape, despite the completely different function.

Patent Law Can Be Confusing

If you need legal assistance with responding to a USPTO Office Action, please contact Business Patent Law, PLLCBusiness Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

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[i] In Re Bond, 910 F.2 831, 832 (Fed. Cir. 1990).

Legal cease and desist letter on patent infringement

Cease and Desist Letters

I have received a cease and desist letter

The letter claims that my company is infringing a US Patent.  Can you (and your company) ignore the letter? I wouldn’t recommend ignoring a letter. If your company ignores the cease and desist letter, your company could regret not responding to that letter.

How do I know if the cease and desist letter is valid?

An experienced patent attorney can assist you in determining if the claim of infringement has merit. Among other things, your patent counsel will review the United States Patent and Trademark Office (USPTO) record regarding the Patent. Additionally, your attorney will compare your company’s allegedly infringing goods and/or services against the USPTO record.

It is also wise to have your legal counsel prepare an opinion regarding whether or not your company’s goods or services are infringing the potential plaintiff’s Patent.

What are my company’s options?

When responding to an allegation of patent infringement, use experienced counsel. Your patent attorney may recommend any of the following options and/or actions. For example, you (or your company) could:

  • Secure an agreement with the Patent holder stating that your company’s goods and/or services do not infringe the Patent holder’s Patent
  • Enter into a license agreement with the Patent holder
  • Establish a cross-license agreement with the Patent holder
  • Phase-out and cease the use of your company’s allegedly infringing goods and/or services
  • Your company and the Patent holder may agree to mediation or arbitration
  • Join with other third parties receiving a similar cease and desist letter from the Patent holder and collectively litigate against the validity of the Patent holder’s Patent
  • Institute a USPTO Post Grant Procedure against the patentability and/or validity of the Patent holder’s Patent
  • In a federal district court, institute a Declaratory Action Judgment action against the Patent holder
  • After the Patent holder has instituted an infringement action against your company’s goods and/or services in a federal district court, counter-claim that the Patent holder’s Patent is invalid
  • After litigation is commenced in the federal court system, settle the matter

Costs to the company

As a general rule, costs for a USPTO Post Grant procedure are much less than the costs of litigating in the federal court system.  The costs associated with USPTO Post Grant procedures and mediation or arbitration can be similar.

If you have received a cease and desist letter and need legal assistance, please contact Business Patent Law, PLLC. Likewise, if your company believes another company has infringed your Patent and you need to send a cease and desist letter, please contact Business Patent Law, PLLC and we will discuss possibilities for your business.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

foreign nations and US LLCs and tax law

Foreign Owner – US Limited Companies

Can United States Limited Liability Companies be Owned by Foreign Members?

Yes. The United States allows citizens of foreign countries to own a US Limited Liability Company (LLC). A foreign owner can own an equity ownership interest of one hundred percent or a fractional interest.

Is it Advantageous for a Citizen of Foreign Nation to Own a US LLC?

Yes. Ownership of a US Limited Liability Company (LLC) allows a foreign citizen to participate in the largest single economy on earth.

For the purposes of this post, what is referred to as a US LLC is, in fact, a LLC created under the laws of one of the Fifty States or the District of Columbia. Some States allow the formation of a Professional Limited Liability Company (PLLC). A PLLC is a specific type of LLC.

Taxation of US LLCs

Business Patent Law, PLLC does not provide specific tax counsel for its clients. However, we can offer some general principles regarding foreign ownership of US LLCs:

  • Most nations tax the income of their citizens, regardless of jurisdiction where the income was generated.
  • Under US federal tax law, LLCs are considered “pass-through entities” for tax purposes.  This means that profits and losses are passed through to the owners of the LLC.
  • As a general rule, most LLCs are required to pay some type of taxes and/or fees in the State of the LLC’s organization and any other State in which the LLC does business.
  • State law taxes and fees vary from state to state and are usually less than US federal taxes.

Does the US Participate in Tax Treaties with Other Nations?

  • Yes.
  • Before purchasing ownership in a US LLC, a potential foreign owner should seek legal and tax counsel in both the owner’s home nation and the United States.
  • The United States has enacted tax treaties with different nations.
  • Different tax treaties produce different tax consequences for the foreign owner of a US LLC.
  • Among other things, the tax treaties can control what is taxed or is not taxed and payment of taxes in the United States and the foreign owner’s home nation.

Does a Foreign Owner of a US LLC need to register with the IRS?

It depends on the Tax Treaty between the foreign owner’s home Nation and the United States.

As a general rule, a foreign owner owning 25% or more of the US LLC will need to register with the US Internal Revenue Service (IRS). When the foreign owner is required to register with the IRS, the foreign owner must secure a Foreign Taxpayer Identification Number (FTIN). It can take several months for the IRS to issue the FTIN.

Under some tax treaties, an owner of less than a 25% equity interest in the US LLC may not be required to register with the US IRS.

Under some tax treaties, an owner of less than a 25% equity interest in the US LLC may not be taxed on the owner’s profits from the US LLC. However, the foreign owner will likely be taxed on the LLC’s profits in the foreign owner’s home Nation.

If the US LLC should file certain documents related to foreign ownership and does not file the documents with the IRS, the IRS will financially penalize the US LLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you have questions about equity ownership of a US LLC, please contact Business Patent Law, PLLC and we will discuss possibilities for your business.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

US Patents Held By Foreign Companies

Foreign Companies and US Patents

Can Companies Outside the United States Obtain US Patents?

Yes. The United States has the largest Gross Domestic Product on earth. Foreign Companies that do not have a physical presence in the United States can sell their goods or services in the United States.

For most foreign companies, sales in the US market improve earnings for the foreign businesses.

Advantages of US Patents for Foreign Businesses

  • The United States has a long history of enforcing domestic or foreign Patentees’ rights
  • Granting a US Patent gives the Patentee the right to file a legal action to stop third parties from making, using or selling their patented invention
  • Under Title 35 of the United States Code, a foreign Patentee can sue an alleged infringer in a United States District court and win damages

Options for Foreign Companies

Foreign Companies filing a US Patent Application in the United States Patent and Trademark Office (USPTO) may:

  • Initially file the US Patent Application in the USPTO
  • File a Patent Application in their company’s jurisdictional Patent Office followed by the subsequent filing of the US Patent Application (prior to the expiration of the treaty deadline)
  • Initially file a Patent Cooperation Treaty (PCT) Application in the USPTO followed by the subsequent filing of the US National Stage Application (prior to the expiration of the PCT Treaty deadline)
  • File a Patent Application in your company’s jurisdictional Patent Office followed by the subsequent filing of a PCT Application claiming priority to the initially filed jurisdictional Patent Application
  • Prior to the PCT Treaty deadline, file a US National Stage Application in the USPTO which claims priority to the PCT Application filed by your company that claimed priority to the initial Patent Application filed by your company in its jurisdictional Patent Office

Basic Requirements for Foreign Company Patent Filings

  • English language translation/transliteration of the jurisdictional Patent Application or PCT Application – if the language of the as-filed jurisdictional Patent Application or PCT Application was not English
  • Pay USPTO Processing Fees
  • Submit Specifications and Drawings
  • Claims – usually presented in an “Americanized” preliminary amendment format to increase clarity and minimize USPTO Processing Fees
  • Provide Inventor(s) Declaration(s)

If all this sounds a bit complex, we can help. Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you have questions about filing your company’s US Patent Application, please contact Business Patent Law, PLLC and we will discuss possibilities for your business.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Business Taxes in 2019

Your Business Income Taxes

In the United States, businesses pay income taxes

For millennia, governments have taxed businesses and individuals. Payment of taxes on income generated by business is a quarterly/annual requirement in the United States. For as long as the business remains active, it will pay taxes. The filing of returns and the payment of income taxes can sometimes overwhelm small businesses owners.

As a small business owner, it may be possible to minimize taxes, by using a different business structure.

Select the way your company will be taxed

Some options for your business include:

  • C-Corporation (Inc.)
  • C-Corporation – Subchapter S
  • Limited Liability Company
  • Sole Proprietorship
  • Partnership

Selecting your company’s jurisdiction

Where you choose to incorporate or organize your company will impact your taxes.

If your company does business in several States, they will usually require you to pay taxes on income generated in each State.

Companies can, however, “shop” for States that do not have an income tax. In 2019, South Dakota and Wyoming do not impose State corporate income taxes or State individual income taxes.

Some jurisdictions give more favorable tax treatment to businesses incorporated/organized in that state which also have their principal office in the State, as compared to those formed in another State.

But, beware, in some States, lower State business income taxes may increase the total amount of Federal business income taxes.

Product logistics, the availability of qualified employees, energy costs and natural resources can sometimes dictate which State you select to incorporate or organize your business.

Federal Income Taxes for C-Corporations

C-Corporations are taxed on profits.  A shareholder receiving a C-Corporation’s profit distribution will also pay income tax on the profits received.

The Tax Cuts and Jobs Act of 2017 capped the maximum tax rate for income generated by a C-Corporation at 21%.

Federal Income Taxes for Pass-Through Legal Entities

Subchapter S Corporations, Limited Liability Companies and Partnerships are known commonly as “pass through” entities.  Profits and losses generally pass through to the owners of the legal entity, so this income will be declared on the owners’ individual income tax returns.

With some exceptions, the Tax Cuts and Jobs Act of 2017 allows a Qualified Business Income Deduction of up to 20% of Qualified Business Income for sole proprietors and pass-through entities.

What is Qualified Business Income?

Qualified Business Income is the net amount of qualified items of income, gain, deduction and loss from any qualified trade or business. Only those items included in taxable income are counted and these items must be effectively connected with a U.S. trade or business. Items such as capital gains and losses, certain dividends, and interest income are excluded from Qualified Business Income.

Most growing companies eventually reach annual revenues where the combination of business counsel and tax counsel can improve the bottom line for your company.

Business Patent Law, PLLC does not provide tax counsel for specific matters, but does provide business counsel for businesses.

If you have questions about your company’s business structure, please contact Business Patent Law, PLLC, and we will discuss possibilities for your business.

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