Patent Process Outline

In conjunction with the inventor(s) and possibly the input of a patent attorney, OTC Technology Development Associates decide whether or not to pursue patent protection for a given invention. Associates make their determination based upon questions including:

• Is the invention competitively superior and commercially viable?
• Is there a well-defined market for the invention?
• Has the inventor or OTC been in contact with a company or companies
• expressing an interest in licensing and developing the invention?
• If a patent is deemed to be important for commercialization, is there any prior art to impede successfully prosecuting a patent?
• Does the University have obligations to any sponsors of the research?

The patent decision process is initiated when a faculty member discloses an invention to OTC. The process can extend up to 30 months from the first filing.

Provisional Patent Application

The first decision to be made is whether UNC should file a provisional patent application. Under United States patent law, a provisional application is a legal document filed in the United States Patent and Trademark Office (USPTO), that establishes an early filing date, but does not mature into an issued patent unless the applicant files a regular non-provisional patent application within one year.

There are several triggers to filing a provisional patent including: publication, presentation at a conference, or any type of public disclosure. In addition, as of March 2013, claims on intellectual property will be based on “first to file” rather than “first to invent.” If a new invention is part of a portfolio, with a licensee in place and willing and able to pay for the application, OTC will file the provisional application. If not, the decision will be made by the OTC project manager in coordination with the inventor.

Non-Provisional Patent Application

Within 12 months after a provisional application is filed and where UNC has been covering patent costs, a second decision must be made about whether to move forward with a fully drafted non-provisional patent application (a PCT or U.S. only). A few months prior to the 12-month deadline, the OTC Technology Development Associate will coordinate an OTC review taking into account any updates from the inventor and which may include discussions with Department representatives and external subject matter experts. If the consensus is to move forward with a fully drafted application, the Technology Development Associate will also lay out expectations about what must be accomplished in the next 18 months before the final filing or prosecution decision must be made. If OTC does not recommend that the patent application be maintained, a variety of third party options can be considered with the inventor; or alternatively, OTC can license the technology back to the inventor (outright assignment is prohibited where federal funds were used in the research that resulted in the invention).

Ideally, at the end of the 30-month period, the technology would have been licensed and a licensee would pay for all patent filing and prosecution. If not, as the third step in the process, OTC will again evaluate and make a recommendation about the technology, based on its promise but also progress that has been made since the initial review. If the reviewers are enthusiastic, the recommendation to continue with patent filing and prosecution will require a patent funding plan.

Provisional Patent Applications

A U.S. provisional application for patent is another form of U.S. national application for patent filed in the USPTO. It provides simplified filing with a lower initial investment with one full year to assess the invention’s commercial potential before committing to the higher cost of filing and prosecuting a non-provisional application for patent. It allows filing without a formal patent claim, oath or declaration, or any information disclosure (prior art) statement. In general, a provisional patent application provides a means to establish an early effective filing date in a non-provisional patent application, thus holding an invention’s “place in line” while the inventor decides whether or not to pursue a non-provisional patent.

A provisional application for patent (provisional application) is effective for 12 months from the date the provisional application is filed. The 12-month pendency period cannot be extended. Therefore, an applicant who files a provisional application must file a corresponding non-provisional application for patent (non-provisional application) during the 12-month pendency period of the provisional application in order to benefit from the earlier filing of the provisional application. The corresponding non-provisional application must contain or be amended to contain a specific reference to the provisional application within the required time period.

In addition, it is recommended that the disclosure of the invention in the provisional application be as complete as possible. Although the written description and any drawings filed in a provisional application need not be identical to the disclosure of a later-filed non-provisional application, the later-filed non-provisional application is only entitled to the benefit of the subject matter covered in the provisional application.

Non-Provisional Application for a U.S. Patent

A non-provisional application for a patent can be made to the Director of the United States Patent and Trademark Office (“USPTO”) and typically includes:

1. A written document which has a specification (description and claims), and an oath or declaration
2. Drawings in those cases in which a drawing is necessary; and
3. Filing, search, and examination fees.

The specification is one part of the patent application and must conclude with a claim or claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as the invention. The portion of the application in which the applicant sets forth the claim or claims is an important part of the application, as it is the claims that define the scope of the protection afforded by the patent. More than one claim can be presented provided each of the claims is different. The claims can be presented in independent form (e.g. the claim stands by itself) or in dependent form, referring back to and further limiting another claim or claims in the same application.

The costs associated with preparing and filing a non-provisional U.S. patent application can vary greatly depending on the complexity of the technology and the completeness of the disclosure provided to the patent attorney, among other factors. In general, the cost of an application is based on the amount of time required to prepare the application. As a general estimate, a patent application can require 40 hours or more of attorney time, resulting in an initial attorney fee cost of around $7,000 to $14,000 not including filing fees. Of course, applications for more complex inventions require more time to prepare and thus can cost more. These initial cost estimates do not include required government filing fees and drawing fees.

An application for patent is not forwarded to a patent examiner for examination until all required parts, complying with the rules related thereto, are received. If any application is filed without all the required parts for obtaining a filing date (incomplete or defective), the applicant will be notified of the deficiencies and given a time period to complete the application filing (a surcharge may be required)—at which time a filing date as of the date of such a completed submission will be obtained by the applicant. If the omission is not corrected within a specified time period, the application will be returned or otherwise disposed of; the filing fee if submitted will be refunded minus a handling fee as set forth in the fee schedule.

All applications received in the USPTO are numbered in sequential order and the applicant will be informed of the application number and filing date by a filing receipt.

The filing date of an application for patent is the date on which a specification (including at least one claim) and any drawings necessary to understand the subject matter sought to be patented are received in the USPTO, or the date on which the last part completing the application is received in the case of a previously incomplete or defective application.

Examination of Applications and Proceedings in the U.S. Patent and Trademark Office

Applications, other than provisional applications (discussed later), filed in the United States Patent and Trademark Office (USPTO) and accepted as complete applications are assigned for examination to the respective examining technology centers responsible for the areas of technology related to the invention. Applications are taken up for examination by the examiner to whom they have been assigned in the order in which they have been filed or in accordance with examining procedures established by the Director. The average time between the date an application is filed and when it is first taken up for examination is currently around 20 months, but depending on the workload in the particular technology area, this time can be up to 3 years or more.

Examination of the application consists of a study of the application for compliance with the legal requirements and a search through U.S. patents, publications of patent applications, foreign patent documents, and available literature, to see if the claimed invention is new, useful, and non-obvious and if the application meets the requirements of the patent statute and rules of practice. If the examiner’s decision on patentability is favorable, a patent is ultimately granted.

Restrictions

If two or more inventions are deemed to be claimed in a single patent application, and they are regarded by the Office to be of such a nature (e.g. independent and distinct) that a single patent should not be issued that includes more than one of the inventions, the applicant will be required to limit the application to one of the inventions. The other invention may be made the subject of a separate application which, if filed while the first application is still pending, will be entitled to the benefit of the filing date of the first application. A requirement to restrict the application to one invention may be made before further action by the examiner.

Office Action

Once the patent application is taken up for examination, a patent examiner will examine all claims in the patent application. The applicant is notified in writing of the examiner’s decision by an Office “action” which is normally mailed to the attorney of record. The reasons for any adverse action or any objection or requirement are stated in the Office action and such information or references are given as may be useful in aiding the applicant to judge the propriety of continuing the prosecution of the application.

If the Examiner concludes that the claimed invention is not directed to patentable subject matter, the claims will be rejected. If the examiner finds that the claimed invention lacks novelty or differs only in an obvious manner from what is found in the prior art, the claims may also be rejected. It is important to understand that the patent prosecution process is adversarial in nature and the majority of patent applications are initially rejected. It is very common for some or all of the claims to be rejected on the first Office action by the examiner; relatively few applications are allowed as filed.

Applicant’s Reply

If the applicant decides to continue the prosecution of the application, the applicant must request reconsideration in writing, and must distinctly and specifically point out the supposed errors in the examiner’s Office action. The applicant must reply to every ground of objection and rejection in the prior Office action. The reply must appear throughout to be a bona fide attempt to advance the case to final action or allowance. A mere allegation that the examiner has erred will not be received as a proper reason for such reconsideration.

The applicant may amend the application as specified in the rules, or when and as specifically required by the examiner. The specification, claims, and drawing must be amended and revised when required, to correct inaccuracies of description and definition or unnecessary words, and to provide substantial correspondence between the claims, the description, and the drawing. All amendments of the drawings or specification, and all additions thereto must not include new matter beyond the original disclosure. Matter not found in either the drawings or the specification cannot be added to the application even if supported by a supplemental oath or declaration. Such new matter can be only shown or claimed in a separate application.

In amending an application in reply to a rejection, the applicant must clearly point out why it thinks the amended claims are patentable in view of the state of the art disclosed by the prior references cited or the objections made. The applicant must also show how the claims as amended avoid such references or objections. After reply by the applicant, the application will be reconsidered, and the applicant will be notified as to whether the claims remain rejected or objected to, or whether the claims are allowed, in the same manner as after the first examination. If the examiner again considers the claimed invention to not be patentable, the second Office action usually will be made final.

Overall, each Office action and the prior art references cited therein must be carefully studied by a patent attorney and a detailed response must be prepared. The time involved in preparing and filing a response can vary greatly depending on the issues involved. Generally, this procedure can often take around 10 to 20 hours of attorney time and can cost from around $3,000 to around $6,000 or more in attorney time. Also, additional filing fees may be incurred at various stages with the filing of responses.

Time for Reply and Abandonment

The reply of an applicant to an action by the Office must be made within a prescribed time limit. The maximum period for reply is set at six months by the statute which also provides that the Director may shorten the time for reply to not less than 30 days. The usual period for reply to an Office action is three months. A shortened time for reply may be extended up to the maximum six-month period. An extension of time fee is normally required to be paid if the reply period is extended, and the amount of the fee is dependent upon the length of the extension and also on the entity status (small or large). Extensions of time are generally not available after an application has been allowed. If no reply is received within the time period, the application is considered as abandoned and no longer pending. However, if it can be shown that the failure to prosecute was unavoidable or unintentional, the application may be revived upon request to and approval by the Director. Revival requires a petition to the Director, and a fee for the petition, which must be filed without delay. The proper reply must also accompany the petition if it has not yet been filed.

Final Rejection, Appeal, and Continued Examination

If the examiner persists in the rejection of any of the claims in an application, or if the rejection has been made final, the applicant may appeal to the Board of Patent Appeals and Interferences in the United States Patent and Trademark Office. An appeal fee is required and the applicant must file a brief to support his/her position. An oral hearing will be held if requested upon payment of the specified fee.

If the decision of the Board of Patent Appeals and Interferences is still adverse to the applicant, an appeal may be taken to the Court of Appeals for the Federal Circuit or a civil action may be filed against the Director in the United States District Court for the District of Columbia. The Court of Appeals for the Federal Circuit will review the record made in the Office and may affirm or reverse the Office’s action. In a civil action, the applicant may present testimony in the court, and the court will make a decision.

As an alternative to appeal, in situations where an applicant desires to avoid the time and expense of appeal and instead pursue continued prosecution of the patent application and likely consideration of different claims or further evidence, a request for continued examination (RCE) or a continuation application can often be filed. The costs to do this can vary also and the fee is typically equivalent to a new application filing fee.

Allowance and Issue of Patent

If, upon examination of the application, or at a later stage during the reconsideration of the application, the patent application is found to be allowable, a Notice of Allowance and Fees Due will be sent to the applicant or to applicant’s attorney, and a fee for issuing the patent and if applicable, for publishing the patent application publication, is due within three months from the date of the notice. If timely payment of the fee(s) is not made, the application will be regarded as abandoned.

The Director may accept the fee(s) late, if the delay is shown to be unavoidable or unintentional. When the required fee is paid, the patent issues as soon as possible after the date of payment, dependent upon the volume of printing on hand. The patent grant then is delivered or mailed on the day of its grant, or as soon thereafter as possible, to the inventor’s attorney or agent if there is one of record, otherwise directly to the inventor. On the date of the grant, the patent file becomes open to the public for applications not opened earlier by publication of the application.

Maintenance Fees

All issuing utility U.S. patents are subject to the payment of maintenance fees which must be paid after the patent issues to maintain the patent in force. These fees are due at 3½, 7½ and 11½ years from the date the patent is granted and can be paid without a surcharge during the “window-period” which is the six-month period preceding each due date, e.g., three years to three years and six months. A six-month grace period immediately following the due date is provided when the maintenance fee may be paid with a surcharge. Failure to pay the current maintenance fee on time may result in expiration of the patent.

Many foreign patents offices require the payment of annuity fees, which are periodic payments similar to maintenance fees except that they must be paid during the pendency of the application and not just after issuance as in the U.S.