Royalties and Taxes

Royalties and Taxation

What are Royalties?

In Revenue Ruling 81-178, 1981-2 C.B. regarding royalties, the Internal Revenue Service stated:

“To be a royalty, a payment must relate to the use of a valuable right. Payments for the use of trademarks, trade names, service marks, or copyrights, whether or not payment is based on the use made of such property, are ordinarily classified as royalties for federal tax purposes.”

Patents, Trademarks & Copyrights are Valuable

Patents, trademarks, and copyrights are valuable. Intellectual property portfolios of Patents, Trademarks and Copyrights are assets of your company and can provide a stream of royalty income for your company.

26 Code of Federal Regulations (CFR) 1.61-8 – Rents and Royalties

CFR 1.61-8, in part reads, “(a) In general. …Gross income includes royalties. Royalties may be received from books, stories, plays, copyrights, trademarks, formulas, patents, and from the exploitation of natural resources, such as coal, gas, oil, copper, or timber.

  • License agreements of Patents, Trademark and Copyrights are contracts that include royalty payments to the owner of the intellectual property.
  • License agreements can have long term benefits for both the licensor and the licensee.
  • Royalty agreements can be difficult to negotiate and understand.
  • It is wise for parties to license agreements to be represented by independent counsels.

Business Patent Law, PLLC does not practice taxation law. However, in view of US federal taxation laws, royalties are generally treated as passive ordinary income.

Under certain circumstances, transfers of Patent rights are treated as capital gains

26 Internal Review Code (IRC) 1235, in part, reads:

(a) General A transfer (other than by gift, inheritance, or devise) of property consisting of all substantial rights to a patent, or an undivided interest therein which includes a part of all such rights, by any holder shall be considered the sale or exchange of a capital asset held for more than 1 year, regardless of whether or not payments in consideration of such transfer are—

(1) payable periodically over a period generally coterminous with the transferee’s use of the patent, or

(2) contingent on the productivity, use, or disposition of the property transferred.

If you need legal assistance with your company’s license-royalty agreements or intellectual property matters, please contact Business Patent Law, PLLC.

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

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Precise Patent Claims

Patent Claims Must Be Written Precisely

Overcoming the Examiner’s Rejection

The Patent Examiner stated that our claims did not particularly point out and distinctly claim our invention. Can we overcome the Examiner’s rejection?

Whether Applicants can overcome the Examiner’s rejections of the claims, depends on the evidence.

35 U.S.C. 112, in part, reads:

(a)      In General:

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, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.

(b)      Conclusion:

The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.

Be Precise

35 U.S.C. 112 requires Applicants’ claims to precisely claim the subject matter of the invention. When the Examiner argues that the Applicants’ claims failed to particularly point out and distinctly claim the subject matter the inventors regard as the invention, in effect, the Examiner argues that the claim language is unclear or uncertain.

An Unfixable Rejection

Example of an unfixable 35 U.S.C. 112(b) claim rejection: Applicants’ claimed subject matter is not disclosed and enabled in the Specification and Drawings. By way of illustration, Applicants claimed a chair with arms and the Application does not disclose a chair with arms.

A Potentially Fixable Rejection

Example of a potentially fixable 35 U.S.C. 112(b) claim rejection: Applicants used terminology in the claims not utilized in the Specification.

Other examples of fixable 35 U.S.C. 112(b) rejections:

    • Applicants incorrectly numbered the claims
    • Applicants failed to provide an antecedent basis before associating the word “the” or “said” with a claimed structural element
    • Applicants erroneously referenced element 1 of the invention as element number 2 and referenced element number 2 as number 1
    • In a third claim, Applicants referenced a second claim that depended from more than one previous claim
    • Applicants over utilized the conjunctions “and”, “but” or “or”
    • Applicants claimed structural elements are not interconnected

If you need legal assistance procuring your Patents and other intellectual property rights, please contact Business Patent Law, PLLC.

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

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Improvement Patents on Spoons

Improvement Patents

Can Improvements on An Existing Patent be Patented? 

There are two key features of Patents and Improvement Patents in the United States:

  1.  The Patent Application must claim an invention is novel over the prior art and
  2.  It must also claim an invention that is non-obvious in the prior art

Basic parameters for an Improvement Patent’s validity in most countries other the United States are:

  1. The claimed invention must be novel over the prior art and
  2. It must have an inventive step, in view of the prior art

In the United States and foreign jurisdictions, one of the attributes of patent counsel is their ability to persuade Patent Examiners that the client’s Patent claims are novel and nonobvious or include inventive step and therefore are patentable.

Can Utility Improvement Patents for a Simple Invention (a Spoon) be granted?

Yes.

For clarity, a utility Patent is based on the invention’s structure and/or function rather than its nonfunctional appearance.  Design Patents would be directed toward ornamentation of a spoon.

Selected Examples of Utility Patents for Spoons from 1899 to the Present

 

1899 – Egg Spoon

 

1899 - Egg Spoon

 

 

1905 – Spoon

 

1905 - Spoon

 

 

1968 – Spoon

1968 - Spoon

 

 

2012 – Musical Spoon

2012 - Musical Spoon

 

2014 – Hair Spoon

2014 - Hair Spoon

It is estimated that spoons with handles have existed for at least three thousand years.  Humans still find ways to modify the basic spoon’s structure to obtain Patents for their new inventions.

If you need legal assistance procuring your Patents and other intellectual property rights or managing your maintenance fees, please contact Business Patent Law, PLLC.

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

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When is a Patent Obvious

What is an Obvious Patent Claim?

What does it mean when a Patent Examiner or Adverse Party argues that the Claim is Obvious?

Since the United States’ legal system is adversarial, winning an obvious-type Patent case can be difficult. In view of shifting burdens of persuasion, American jurisprudence requires admissible evidence, testimony and arguments to prove a case before a court or an administrative agency such as the Patent Office.

Under the US legal system:

  • When a Patent Examiner argues that a Patent Application’s claim is obvious, the Examiner argues that the claim is not patentable.
  • When an adverse party argues that the Patent’s claim is invalid, the adverse party argues that the Patent’s claim is obvious and, therefore, invalid.

35 United States Code 103 – Statutory Obviousness

35 U.S.C. 103 reads:

“A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.”

The US Supreme Court’s Standard for Determination of When a Claim is Obvious

“Obviousness is decided as a matter of law based on four basic factual inquiries, as set forth in Graham v. John Deere Co., 383 U.S. 1…(1966), and elaborated in KSR International, Co. v. Teleflex Inc., 550 U.S. 398…”  Those inquiries are:

  1. The scope and content of the prior art
  2. The level of ordinary skill in the field of the invention
  3. The differences between the claimed subject matter and the prior art, and
  4. Any objective indicia of unobviousness, such as commercial success or long-felt need, or failure of others.

In a Pharmaceutical Composition, is the Replacement of a Carbon Functional Group with a Sulfur Functional Group Obvious?

  • In the case of In re Rousuvastatin Calcium Patent Litigation, 703 F. 3d 511, (Fed. Cir. 2012), the defendants argued that replacement of the known simple hydrophobic carbon functional group with a lesser known simple hydrophilic sulfur functional group was obvious.
  • The Patentee argued that at the time the pharmaceutical compound was invented there was no reasonable expectation of success for use of the simple hydrophilic sulfur functional group in reducing cholesterol levels.

On page 518 of the Rousuvastatin Calcium Patent Litigation case, the Court of Appeals for the Federal Circuit (the Patent appellate court) affirmed the District Court’s ruling that the Patentee’s claim was not obvious and that the Patent was valid and enforceable.

If you find the “obviousness” legal standard confusing and need assistance, please contact Business Patent Law, PLLC.

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

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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.

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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.

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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.

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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

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