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).

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.

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Warranties as Effective Marketing Tools

Warranties: An Effective Marketing Tool

Warranties May Be Automatic

When a business sells goods, under the various State versions of the Uniform Commercial Code (UCC), implied warranties attach to the goods sold – unless the UCC’s implied warranties are specifically disclaimed in writing. If your company sells goods to customers in various States and some defective goods were discovered subsequent to the sale, one or more State’s version of the UCC’s implied warranties will apply. In the event of litigation, attorneys for each party will argue for the most favorable jurisdiction and venue. You, as the seller, could be forced to defend a legal action in the buyer’s home venue.

As a general rule, warranties are not applied to services supplied by the company supplying the service. For instance, no warranty is implied by law for a business that assists customers with the purchase of insurance policies, unless that business makes a warranty to the customer.

The Legal Aspects of Implied Warranties

Merchantability

The UCC’s Implied Warranty of Merchantability, in part, reads: “(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section, the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale…”

Fitness for a Particular Purpose

The UCC’s Implied Warranty of Fitness for a Particular Purpose reads: “Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.”

Warranty of Title and Against Infringement

The UCC’s Warranty of Title and Against Infringement reads, “(1) Subject to subsection (2) there is in a contract for sale a warranty by the seller that (a) the title conveyed shall be good, and its transfer rightful; and (b) the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.  (2) A warranty under subsection (1) will be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have.  (3) Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.”

How to Eliminate Implied Warranties

In the majority of instances, the only way to eliminate the application of the various States’ versions of the Uniform Commercial Code to the sale of your company’s goods is to specifically disclaim the UCC’s implied warranties in writing.

Warranty Use as a Marketing Tool

Patented Product vs. Generic Product

As CEO of your company, you believe that invention is the lifeblood of the company and you have budgeted ten percent of annual sales for development, improvement and Patent procurement for the company’s new products. The company’s engineers have developed the third-generation widget which is patented and has also just received FDA approval. The company’s second-generation widget’s Patent expired years earlier and is currently manufactured by generic company competitors. Users of the second generation widget love the operation of the second generation widget manufactured by your generic competitors. Those users also like the price that is several thousand dollars less than what your company sold the second generation widget for before the Patent expired. Other than the UCC’s implied warranties and any other warranty required by law, the generic manufacturers offer no other warranties.

Competing with Generics

Your company’s patented third-generation widget includes radio frequency capabilities, memory, processing means, sensors, etc. not included in your second generation widget. FDA testing revealed that over a span of years, the patented third-generation widget is more durable than the second generation widget. The third generation widget performs healthcare functions impossible for the second generation widget to perform. Costs of the patented third-generation widget to the user are thousands of dollars more than the generic second-generation widget. Your company struggles to have its patented third-generation widget regain and improve its former market share previously achieved with its second generation widget.

Improving Market Share With Warranties

To improve the company’s market share of its patented third-generation widget, the CEO took instruction from the motor vehicle industry. The CEO opted to provide a ten year “bumper to bumper” warranty and commenced advertising that the patented third-generation widget was sold under warranty. The advertisement touted a limited ten-year warranty and superior performance compared to other widgets. Over the years, the marketplace has revealed that for high “price point” goods, generous warranties can improve sales.

Limited Warranties in Lieu of UCC Warranties

A business can offer a limited “bumper to bumper” warranty for its new product while expressly disclaiming the States’ Uniform Commercial Code’s implied warranties and other conditions. Depending on the type of goods and other facts, it is also possible for a business to expressly place limits on liability.

If you have questions about intellectual properties, warranties, and disclaimers, please contact Business Patent Law, PLLC and we will discuss possibilities for your business and intellectual properties.

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

 

Physician Sunshine Laws and Your Business

Physician Sunshine Laws And Your Business

Physician Sunshine Laws and Small Businesses

Does 42 U.S.C. 1320a-7h, known commonly as the “Physician Sunshine Laws-Open Payments” apply to a small business?  Maybe. If Physician Sunshine Laws (Open Payments Laws) are applicable to your business, you may also be surprised how these laws can be applied to your company.

Some States have their own version of physician sunshine laws. In some cases, the State version may apply when the federal version does not.

Many Business Patent Law, PLLC’s clients are involved with the provision of medical devices, supplies, etc. For most Business Patent Law clients, the Physician Sunshine Laws apply to an “applicable manufacturer” that “provides payment or other transfer of value” to a “covered recipient.”

Who Administers Physician Sunshine Laws?

CMS.gov (Centers for Medicare & Medicaid Services) is the Federal Agency that Administers Physician Sunshine Laws (Open Payments). 42 U.S.C. 1320a-7h (b) sets forth penalties for failing to file a required report to CMS.gov.

Who Needs to Report to Under Physician Sunshine Laws?

Subchapter S Company Examples

Does a Subchapter S Company that Manufactures Surgical Sponges for Use in Operating Rooms and Gives Samples of the Surgical Sponges to Medical, Surgical and Dental Practices Need to Report to CMS.gov?

Yes, according to 42 U.S.C. 1320a-7h (e) which reads:

(2) Applicable manufacturer

The term “applicable manufacturer” means a manufacturer of a covered drug, device, biological, or medical supply which is operating in the United States, or in a territory, possession, or commonwealth of the United States.

(4) Covered device

The term “covered device” means any device for which payment is available under subchapter XVIII [Medicare] or a State plan under subchapter XIX or XXI [federal or state plans for medical assistance] (or a waiver of such a plan).

(6) Covered recipient

(A) In general…“covered recipient” means the following: (i) A physician [is a doctor of medicine or osteopathy, a dentist, a doctor of podiatric medicine, a doctor of optometry or a chiropractor – as defined by 42 U.S.C. 1395x (r).] or

(ii) A teaching hospital.

LLC Examples

Does a Limited Liability Company (LLC) Manufacturing and Selling Scalpels Need to Report to CMS.gov?

  1. If the LLC makes quid pro quo sales to dentists, physicians and hospitals? No. (There is no transfer of value or gift.)
  2. If the LLC supplies lunches for the surgical office and the employees? Yes. (The lunches were a transfer of value.)

Does an LLC (having one or more covered recipients holding a minority equity ownership interest) that manufactures radio frequency devices for treatment of the human body need to report equity ownership Interests to CMS.gov? 

It depends.

  1. If a dentist owns 5% equity in the LLC? Yes.
  2. When the wife of a surgeon owns 10% equity in the LLC? Yes. ***
  3. If a pharmacist owns 5% equity in the LLC? No.
  4. When a physician’s assistant owns 5% equity in the LLC? No.

***42 U.S.C. 1320a-7h (a) reads:

(2) Physician ownership

In addition to the requirement under paragraph (1)(A), on March 31, 2013, and on the 90th day of each calendar year beginning thereafter, any applicable manufacturer or applicable group purchasing organization shall submit to the Secretary, in such electronic form as the Secretary shall require, the following information regarding any ownership or investment interest (other than an ownership or investment interest in a publicly traded security and mutual fund, as described in section 1395nn (c) of this title) held by a physician (or an immediate family member of such physician ([immediate family member] as defined for purposes of section 1395nn (a) of this title)) in the applicable manufacturer or applicable group purchasing organization during the preceding year:…

Determining what you need to do in these situations, and what you are legally required to do, can be difficult. If you have questions about your whether your company needs to file reports with CMS.gov, please contact Business Patent Law, PLLC and we will discuss possibilities for your business and intellectual properties.

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Patent Ownership Determination

Who Owns Patents – It Depends

Ownership – Patents

Article 1, Section 8, Clause 8 of the United States Constitution reads: [The 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 Constitution does not, however, address who owns the Patent or Copyright.

When an inventor invents a novel and non-obvious composition, device or method, who owns the Patent?

That depends.

Patent Rights Are Federal, But Patent Ownership Rights…

Under the United States Constitution and Title 35 of the United States Code, the granting and enforcement of Patents are exclusively matters of federal jurisdiction. However, unless owned by a federal entity, the ownership of Patents is a matter of State Law. Intellectual property ownership rights flow from Patents and who owns property rights is usually a matter determined by State Law,

Who Owns The Patent?

The following examples show how different situations impact or can impact the determination of Patent ownership:

Illustration 1

The Inventor is self-employed, invents the invention and is domiciled in State A.

The Inventor owns the entire interest in the Patent’s Intellectual Property Rights.

Illustration 2

The Inventor is an employee of Company B. The Inventor invents the invention while at work on the premises of Company B. Both Company B and Inventor are domiciled in State A.

In most jurisdictions, Company B owns the entire interest in the Patent’s Intellectual Property Rights.

Illustration 3

The Inventor is an employee of Company B and Company B is domiciled in State A. In the Inventor’s garage located in State Z, the Inventor invents the item related to the products sold by Company B.

Some courts would hold that Company B owns the Patent’s Intellectual Property Rights while other courts would hold that the Inventor owns the Patent’s Intellectual Property Rights.

Illustration 4

The Inventor is an employee of Company B that is located in State A. In the Inventor’s garage located in State Z. The Inventor invents an item not related to the anything manufactured or distributed by Company B.

Most courts would hold that the Inventor owns the Patent’s Intellectual Property Rights.

Illustration 5

The Inventor is an Independent Contractor who has worked onsite, on and off, at Company B’s plant located in State P for more than a year. Company B’s headquarters are located in State A. The Independent Contractor invented an improvement to Company B’s patented product in State J.

Some courts would hold that Company B owns the Patent’s Intellectual Property Rights. Other courts would hold that the Independent Contractor owns the Patent’s Intellectual Property Rights. Some States would not have any case law corresponding to this scenario.

Illustration 6

Company B is domiciled in State A and displays its patented product line at a trade show in State N. The chief engineer of Competitor X takes photographs/videos of Company B’s patented product line at the tradeshow. The chief engineer returns to Competitor X’s headquarters with the photos/videos. At the headquarters, located in State Q, Competitor X’s engineering staff invents several improvements to Company’s B patented product line which ultimately results in Improvement-Type Patents for Competitor X.

Courts would hold that Competitor X owns the Improvement-Type Patents – However, a federal court could also determine that Competitor X’s Improvement-Type Patents infringed Company B’s patented product line.

How to Control Ownership of Patents

What can a business do to limit its Intellectual Property from flying out in many different directions?  Next month’s blog will address some of these issues.

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

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Blue Sky Laws Securities and Smooth Sailing

Securities Laws: State Blue Sky Laws and Smooth Sailing

What Are Blue Sky Laws?

Blue Sky laws are another name for State Securities Laws. The first use of the term is unknown, but the first well-known use of the term was in 1917 by Supreme Court Justice Joseph McKenna. Justice McKenna wrote the Court’s opinion in Hall vs. Geiger-Jones Co., 242 U.S. 539 (1917), which upheld the rights of states to regulate securities. He wrote:

“The name that is given to the law indicates the evil at which it is aimed, that is, to use the language of a cited case, “speculative schemes which have no more basis than so many feet of ‘blue sky'”; or, as stated by counsel in another case, “to stop the sale of stock in fly-by-night concerns, visionary oil wells, distant gold mines and other like fraudulent exploitations.”

State Securities Laws

Unless preempted by federal law, each State regulates the securities of a company that are held by a citizen of the State. By way of example, unless preempted by federal law, the shares of an Ohio small business that are held by a citizen of Kentucky can be the subject of both the Ohio and the Kentucky Blue Sky Laws.

For a small business that has shareholders in several States it is wise to utilize a federal preemption to the registration requirements of the States’ Blue Sky Laws when possible.

Is My Small Business Exempt?

If your business has an exemption from the federal securities laws, you may be unclear on whether or not it is automatically exempted from a State’s securities laws.  Security laws are complex. Whether your securities are exempt depends on which federal exemption you use.

A Federal Preemption Strategy for Securities

When circumstances permit, Business Patent Law, PLLC prefers to utilize Rule 506(b) of Regulation D to obtain and exemption from the “Blue Sky” laws.  Use of Rule 506(b):

  • Provides an exemption from the registration requirements of the federal securities laws
  • Provides an exemption from the registration requirements of one or more States’ “Blue Sky” laws
  • Does not limit the amount of capital that can be raised from the private offering
  • Allows your company to offer a single class of stock to an unlimited number of “accredited” investors
  • Reduces governmental and attorneys’ costs associated with your company’s private stock offering

Rule 506 (b) is not the only federal preemption to the Blue Sky Laws, but it is probably a more cost-effective strategy for your small business.

If you have questions about the securities laws, please contact Business Patent Law, PLLC and we will discuss possibilities for your business and intellectual properties.

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

when do patent rights expire

When Do Patent Rights Expire?

Patent rights do not last forever, eventually patent rights expire. A recent Supreme Court decision reviewed the conditions under which patent rights expire and one justice explained why they should. Here’s the information you need to know:

On May 30, 2017, in the case of Impressions Products, Inc. v. Lexmark International, Inc., 581 US ______(2017) 15-1189, the Supreme Court of the United States answered the decade’s old uncertainty regarding the “exhaustion of patent rights” doctrine.(https://www.supremecourt.gov/opinions/16pdf/15-1189_ebfj.pdf)

Impression Products, Inc., Petitioner v.  Lexmark International, Inc., 581 US _____(2017) 15-1189 

In the Lexmark International opinion, the Supreme Court of the United States held that a Patentee could not use patent rights to control the use or sale of the patented article once the Patentee or a licensee of the Patentee had sold the patent article to another.

35 United States Code Section 154(a) – Patent Rights

In the Lexmark International opinion, the Supreme Court wrote, “A United States patent entitles the patent holder (the “patentee”), for a period of 20 years, to “exclude others from making, using, offering for sale, or selling [its] invention throughout the United States or importing the invention into the United States.” 35 U.S.C. § 154(a). Whoever engages in one of these acts “without authority” from the patentee may face liability for patent infringement. §271(a).”

The Supreme Court’s Illustration Supporting the Opinion

Chief Justice Roberts wrote, “But an illustration never hurts. Take a shop that restores and sells used cars. The business works because the shop can rest assured that, so long as those bringing in the cars own them, the shop is free to repair and resell those vehicles. That smooth flow of commerce would sputter if companies that make the thousands of parts that go into a vehicle could keep their patent rights after the first sale. Those companies might, for instance, restrict resale rights and sue the shop owner for patent infringement. And even if they refrained from imposing such restrictions, the very threat of patent liability would force the shop to invest in efforts to protect itself from hidden lawsuits. Either way, extending the patent rights beyond the first sale would clog the channels of commerce, with little benefit from the extra control that the patentees retain. And advances in technology, along with increasingly complex supply chains, magnify the problem. See Brief for Costco Wholesale Corp. et al. as Amici Curiae 7-9; Brief for Intel Corp. et al. as Amici Curiae 17, n. 5 (“A generic smartphone assembled from various high-tech components could practice an estimated 250, 000 patents”).”

Doctrine of Patent Exhaustion and the Patentee’s Rights

In the Lexmark International opinion, the Supreme Court stated, “For over 160 years, the doctrine of patent exhaustion has imposed a limit on that right to exclude. See Bloomer v. McQuewan, 14 How. 539 (1853). The limit functions automatically: When a patentee chooses to sell an item, that product “is no longer within the limits of the monopoly” and instead becomes the “private, individual property” of the purchaser, with the rights and benefits that come along with ownership. Id., at 549-550. A patentee is free to set the price and negotiate contracts with purchasers, but may not, “by virtue of his patent, control the use or disposition” of the product after ownership passes to the purchaser. United States v. Univis Lens Co., 316 U.S. 241, 250 (1942) (emphasis added). The sale “terminates all patent rights to that item.” Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625(2008).”

Conclusion – Patent Rights Expire Stateside and Abroad

In the Lexmark International opinion, a majority of the Supreme Court Justices concluded that the patent exhaustion doctrine applies to both domestic and foreign sales of the patented article, unless the patented article was not purchased from a Patentee or the Patentee’s licensee.

If you have questions regarding Impressions Products, Inc. v. Lexmark International, Inc., 581 US ______(2017) 15-1189 opinion, or when patent rights expire, please contact Business Patent Law, PLLC and we will discuss how the Lexmark International opinion may or may not affect your business and your intellectual properties.

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Leahy-Smith America Invents Act changes Patent Law

America Invents Act (AIA) Celebrates 5th Anniversary

What is the America Invents Act?

The Leahy-Smith America Invents Act was signed into law five years ago today. This legislation changed the legal landscape of patent system in the United States.

Prior to the America Invents Act, the United States was “first to invent” nation – meaning that the first person to invent the invention was presumed by the United States Patent and Trademark Office (USPTO) to be the inventor.

What is the Significance of the America Invents Act?

Pursuant to the America Invents Act, the United States is now a “first to file” nation – meaning that the first person to file the necessary documents in the USPTO is presumed by the USPTO to be the inventor.

How Does This Change My Intellectual Property Needs?

Because of the Leahy-Smith American Invents Act, more and more of my clients are opting to file Provisional Patent Applications.  Under the America Invents Act, filing Provisional Applications eliminates some of the pitfalls that were not a problem for Applicants prior to 2011.

Proponents of the Act say this law streamlines the process and encourages an increase in domestic innovation. Opponents of the Act have claimed that the changes favor large business over micro-businesses and the individual inventor.

To learn more general information about the changes implemented by this law, contact Business Patent Law, PLLC and we will discuss how these rules apply to your inventions.

If you would like to stay abreast of changes and other news that impacts your intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.