* Why Startups Should Always Do Patent Searches

The USPTO will never require mandatory patent searching. But I can dream.

Erik J. Heels

The single biggest thing that the USPTO could do to improve patent quality and reduce the power of patent trolls would be to require patent applicants to do a full patent search before filing patent applications.

But the USPTO will never do this.

My firm, Clocktower, does patent searches as a rule before filing any kind of patent application. Most of my colleagues do not. I’ll explain the two schools of thought.

A client recently asked why we did not disclose 100% of the found patents from our patent search to the USPTO. The short answer is that it would have been unethical to disclose cumulative references to the USPTO. The longer answer involves considering why most patent lawyers choose not to do patent searches in the first place.

Under the current patent rules (37 CFR 1.56, Duty To Disclose Information Material To Patentability, commonly referred to as Rule 56), everyone associated with the filing of a patent has a duty to disclose material prior art to the Patent Office. Rule 56 states, in part:

Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section. The duty to disclose information exists with respect to each pending claim until the claim is cancelled or withdrawn from consideration, or the application becomes abandoned…. Under this section, information is material to patentability when it is not cumulative to information already of record or being made of record in the application…” (Emphasis added.)

The Manual of Patent Examining Procedure (MPEP), the huge document that the USPTO uses to teach the law to patent examiners (most of whom are not patent attorneys), elaborates on the main issues as follows:

1. Many people, including patent attorneys, inventors, and assignees, have a duty to disclose under Rule 56 (MPEP 2001.01).

2. Information that is material to patentability should be disclosed, but not cumulative material (MPEP 2001.05).

3. The duty lasts unless/until the patent issues. “The duty to disclose information, however, does not end when an application becomes allowed but extends until a patent is granted on that application.” (MPEP 2001.04)

The rule about not submitting cumulative information exists so that patent attorneys will not try to hide material information by burying it in a pile of immaterial and cumulative information. So just as it is unethical to withhold material information from the USPTO, it is unethical to hide the material needle in a cumulative haystack. How do you know when something is cumulative? Easy. Your material references are the closest ones, the ones that, alone or in combination, include key features/benefits of your product. Hopefully you have one key feature/benefit that is unique to your product, because the features/benefits of your product become the elements of your patent claims. Cumulative references add nothing to the patent conversation.

The duty to disclose, however, is not a duty to search. Logically, therefore, you should not do a patent search, right?

Wrong.

The patent laws are shaped by large companies and their lobbyists. Large companies file thousands of patent applications per year. If a patentability search costs $1000, then the annual costs to large companies are significant. $1000 per search x 1000 patent applications per year = $1M per year. A million dollars here, a million dollars there, pretty soon you’re talking real money.

The large patent bar review companies cater to large companies and their large law firms. Collectively, the advice given by the large bar is NOT to do a patent search. While it is true that the less one discloses to the USPTO, the more likely it is that a patent will issue, this head-in-the-sand approach produces poor quality patents and puts the products based on those patents at risk.

And while it is also true that found patents can put a company at risk for triple damages (if they are later found to have willfully infringed a found patent), the only companies that are “worth” suing for patent infringment are large deep-pocketed companies.

For most startups, the calculus is quite different.

If you’re broke, then you are typically not a target of patent lawsuits. And if you’re really worried about getting sued, then get intellectual property (IP) insurance.

If your startup is hanging its hat on one or more pieces of IP, then it behooves you to do a patent search. Consider the possible outcomes of a patent search:

1. Prior art found, including expired patents, that includes all of the features of your product. In this case, your product cannot be patented because it is covered by expired patents. This means that you cannot patent it, but neither can anyone else. So skip the patent but proceed with your product launch plans. The good news is that for the cost of a patent search, you just saved yourself the (much more expensive) cost of filing a patent application.

2. Prior art found, excluding expired patents, that includes all of the features of your product. In this case, your product cannot be patented because it is covered by pending and issued patents. And if you launch your product, then you put yourself at risk of infringing other patents. The good news is that for the cost of a patent search, you just saved your company. Time to pick a new product.

3. Prior art found that does not include all of the features of your product. While a patent search cannot find everything (such as provisional patent applications and filed/unpublished applications), you have done your due diligence and found what you could find. So you can proceed in good faith with both your patent application and your product launch.

4. Prior art found that does not include any of the features of your product. Either you have a groundbreaking invention (which is highly unlikely) or you are trying to patent something that is not patentable (which is more likely). Go back to the drawing board and figure out what you did wrong.

In some cases, patent applicants become aware of material prior art after the initial patent search. And they sometimes want to abandon their patent application over concerns that their patent will infringe another patent. But a patent cannot infringe another patent. Only a product can infringe a patent. In this case, a cross-licensing agreement may be the best approach. Or a new product.

The large bar’s advice about patent searches, therefore, is largely irrelevant to startups.

The large bar is also wrong about many other patent prosecution strategies, such as omitting certain sections from the patent application. Since the Patent Act section regarding requirements of the specification (35 USC 112) does not say anything about a “summary of the invention” section, then you can safely omit that section, right? Wrong again.

I like to call this wrong-headed thinking “drafting to the exception,” where patent litigators try to reverse engineer a train-wreck patent lawsuit into patent prosecution advice that will avoid future train wrecks. A better way to avoid train wrecks is to “draft to the rule,” namely: write better patent applications in the first place.

We will never achieve clarity in patent applications by obfuscation, subterfuge, and jumping where the fence is the lowest (that’s a Finnish expression). We can achieve clarity in patent applications by writing patent applications in plain English. By doing patent searches, even though the letter of the law does not require them. By being honest. By being ethical.

After all, if you always tell the truth, then you never have to worry about an alibi.

Don’t hold your breath waiting for a mandatory patent search requirement. It’ll never happen. But I can dream. Until then, I continue to march to the beat of a different drummer. The startup drummer.


Erik J. Heels is a patent and trademark lawyer for Boston startups, Red Sox fan, MIT engineer, and musician. He blogs about technology, law, baseball, and rock ‘n’ roll at ErikJHeels.com.

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