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What the heck is a Retroactive Foreign Filing Licence, and why should you care?

/ Bill McFarlane / Articles

Does your company employ US residents, and do those employees or contractors sometimes invent while they are living or working in the United States? Then take note.

Did you know that any United States (US) Patent naming that person as an inventor may be liable to be invalidated – just because a Foreign Filing Licence had not been obtained from the US Patent and Trademark Office (USPTO) prior to filing in another country?

Whether you were aware of the regulations or not, the USPTO administratively examines every US patent provisional and non-provisional (complete) application to determine if the subject matter is of importance to the security of the US.  The details in the patent application could include anything from a method of making a deadly virus, the method of providing unbreakable digital security or the parts and method to make a nuclear explosive.

If someone were to apply for a patent for such methods or devices, the US Government would want to know sooner rather than later. And it’s more than just a concern for the US Government; most countries have a patent application vetting process. If the idea in a patent requires classification as a secret (so it does not become published), it is within the powers provided by the respective patents Act  to prohibit the publication of that patent and prevent the grant of a patent until the patent subject matter is no longer considered a secret. (Refer to an earlier article I wrote on this subject here)

For that reason and others, the USPTO reviews every patent application filed in the US. In most cases, the patent application will proceed into the USPTO system and will have a licence to do so. If you look carefully at the patent filing receipt which is issued by the USPTO, you will note the explicit mention of a Filing Licence. Without even touching on the US resident issue or discussing inventions ‘made’ in the US, you can already see that all patent applications create much more activity than many people would have ever thought necessary.

Why you must file with the USPTO

 The US Government has declared it essential for an American resident (or anyone located in the US) inventing while in the US, to file for a licence before they have filed for their invention overseas (a non-US application). Note that this only applies if the US resident or other person was in the US when they conceived and put the invention into practice, which is not just the making of a prototype but potentially includes the drafting of information that ends up in the patent specification assuming the invention has not been reduced to practice.

How does that affect Australian companies?

You might be wondering how that affects a company based in Australia, and what that might mean for you. In Australia, it is common to file an Australian provisional patent application and within 12 months file a PCT application, which within 30 months of the provisional filing enters into the US as a national phase patent application. The US foreign filing licence law also affects Australian companies if they file by other patent filing routes, and subsequently file a US patent application.

If there is no foreign filing licence and one of the inventors is a US resident and they invented (or made the invention) while in the US, there must be an application to the USPTO for what is termed in this case a Retroactive Foreign Filing License under 37 CFR § 5.25.  This retroactive license empowers the USPTO to authorise those patent applications which were inadvertently filed overseas before the US application was filed. This is assuming you did not know you had a duty to request the Foreign Filing Licence before you filed the Australian provisional.

 US residents who invent and what that means for your business

As mentioned, it is not uncommon for a patent application in the US to eventually become granted, naming that US resident who invented while in the US as an inventor (and it does not matter what level of inventorship was involved). If there is no Foreign Filing License issued by the USPTO, the Granted patent will be declared invalid as soon as the patent is challenged. No ifs, No buts – INVALID.

Another critical point is that the US law relates to the concept of an invention ‘made’ in the US. This means that anyone who is in the US and invents, automatically triggers the need to obtain a Foreign Filing Licence or a Retroactive Foreign Filing Licence.

Foreign inventors studying or working in the US

A resident of another country attending a university in the US is a great example of how the Foreign Filing License laws play out. Although they arenot a US resident, any invention conceived or developed in the US will need a Foreign Filing Licence, and they’ll need it before they file in their own country.

Another scenario of concern is when an Australian resident visiting the US to work temporarily conceives or develops the invention while in the US and then returns to Australia. Any intention to file for a patent for the invention ‘made’ in the US will trigger the need to obtain a Foreign Filing Licence, again technically before filing in their country of choice.

 What should you do if you already have a US patent pending or Granted?

To deal with the US resident issue:

Consult with your inventor/s and find out if they are a US resident and whether they were living or working in the US when the invention was created or prototyped. If so, check with your attorney to determine if a Foreign Filing Licence exists for that invention’s patent.

To deal with the non-US resident issue:

Consult with your staff and find out which country they were in when they conceived and brought into practice or created a prototype of the idea that has become the subject of a patent (in any country, but more importantly the US). If ‘made’ in the US, then check with your attorney to determine if a Foreign Filing Licence exists for that invention’s patent.

If you are just venturing into the patent realm and you are employing, or plan to employ a US resident, or your firm contracts a US resident to invent who also happens to be working in the US for you, then keep this sobering issue in mind. If any of your staff are intending to travel to the US and intend to invent while there, you also need to ensure this is a consideration. If your patent attorney does not raise the issue, you need to.

If a foreign filing licence is not in place and it should be, you need to act quickly. You must present your case with complete honesty and candour to the USPTO to seek and obtain a Retroactive Foreign Filing Licence – that step may save your patent and your job.

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What is the Defence Trade Control Act and why should I know?

/ Bill McFarlane / Important Updates

Did you know that sending an email overseas may find you in breach of the Defence Trade Control Act 2012 and that you will be personally liable? Did you know that a penalty for such an act without a licence includes imprisonment?

Australia takes seriously its international counter proliferation obligations, using Australian export control laws to ensure Australia exports responsibly. Australia’s export control policies are in place to enable the export of defence and strategic goods where it is consistent with Australia’s national interests and international obligations.

The Defence Export Control Office (DECO) is the government entity that supervises these obligations as defined in a number of Acts and the one that is the subject of this article is the Defence Trade Controls Act 2012. The DECO web site, from which passages of this article are included, is http://www.defence.gov.au/DECO/Notices.asp#N2 .

The Defence Export Control Office (DECO) is responsible to the Minister for Defence for regulating the export of defence and strategic goods and technologies and importantly for you and the patent attorney profession this includes the export of information about controlled goods and technologies by way of electronic email.

The implementation date for the application of this Act is 17 May 2015, so you have plenty of time to set procedures in place in your working environment so that you, your staff or colleagues are not going to fall foul of this Act.

Thus, the inclusion of such information in an academic paper, patent specification or even an email containing such information, sent overseas or copied to someone, such as a fellow researcher or patent attorney overseas, is prohibited unless a license to do so is obtained before the act of export. It does not matter to where overseas the export of the information is made, so it does not matter that it may only be sent to someone in what most would consider an allied nation such as the United States of America.

Interestingly, an email containing the same information sent and received within Australia is not an export.

More specifically if you want to know whether the information is of the type that MUST be licensed before exportation, the first point of enquiry is the Defence and Strategic Goods List (DSGL) http://www.defence.gov.au/DECO/DSGL.asp .

This list contains all controlled items in relation to the arms control treaties and international export control regimes to which Australia is committed, and identifies specific Australian goods and technologies. The important issue is to realise that information that discloses certain technical details of these goods and technologies is information subject to the Defence Export Controls Act 2012.

The DSGL is made up of two parts.

Part One covers defence and related goods – these are goods and technologies designed or adapted for use by armed forces or goods that are inherently lethal.  These goods include:

  • military goods – goods or technology designed or adapted for military purposes; and
  • non-military lethal goods – equipment that is inherently lethal, incapacitating or destructive such as non-military firearms, non-military ammunition and commercial explosives and initiators.

Part Two covers strategic goods and technologies developed for commercial needs but may be used as part of a military program, for the development or production of a military system or weapons of mass destruction. This is also known as the Dual-Use List.

This document is 361 pages long and unless you are continually required to deal in such matters, it has been a welcome initiative of DECO to provide a web interface to assist concerned and responsible persons to check if their goods or technology fall within its ambit. Thus it is important for academics, their administrators, inventors and patent attorneys to make the check and determine if a planned export will require a licence or at least a further discussion with DECO to determine the circumstances. The web site is http://www.defence.gov.au/deco/ .

DECO has indicated that every effort will be made to assess enquiries and applications within a reasonable time frame, but clearly, the earlier before the planned or intended export you conduct a check or contact DECO the better. It will be unrealistic to expect DECO, to properly assess your situation within hours or days if the type of information is not clearly identifiable as being a restricted export or requires authorisation of an export licence.

Once formalised, the progress of individual cases is closely monitored and reported to the applicant. Applicants are consulted early in the application process and throughout the process and are provided the opportunity to present all relevant information that can assist in making an assessment of the application for a licence or indeed the necessity for a licence. Where it is determined that an application requires inter-agency consultation, applicants are provided with written advice explaining the process and that advising time frames may extend beyond 35 days.

The export control systems in place and the types of goods and technology are continually evolving and must be constantly monitored and updated by DECO into the DSGL. Australia’s export control policies and procedures are therefore regularly reviewed to take account of changes in our strategic circumstances. Thus it is the responsibility of you and your patent attorney to check and recheck the DGSL or enquire with DECO as required.

As stated above the implementation date for the application of this Act is 17 May 2015, so now is the time to create procedures for you your working environment so that you, your staff or colleagues are not going to fall foul of this Act. DECO is relying on education as the main instrument of encouragement to Australians and punitive measures will not be taken. However, DECO has indicated that repeat and intentional export of such information will be met with the full force of this very important law.

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Inventive Mobile Phone Applications?

/ Bill McFarlane / Articles

There are a number of questions that arise when considering this issue. Some of them are fundamental issues: whether software related inventions in the mobile phone application space are patentable subject matter; should the patent be directed to a method or a device or a system; what needs to be included in a supporting patent specification; etc.?

First, what is a phone application? Well it can be a number of things but t ypically it is characterized by the existence of software designed to operate on a mobile platform, such as for example, a mobile phone but which also includes phablets, tablets and portable computer devices. The functionality of the software is merely a matter of the imagination of the developer. That functionality may include interaction between the user and the device only, or interaction of the user or the application with a remote server (which may be cloud based) while using or not using features included in the device such as GPS and accelerometer sensors. Easily overlooked is the specific software located at the server designed to do a number of things including interaction with the mobile platform and backend services such as a payment gateway; maintaining one or more databases, serving the user experience, serving data to purchasers of user data, etc.

Clearly, the functionality of the software may be patentable and claims to a method incorporating the minimum essential steps of the functionality may be available. A method claim patent will allow defense of the unauthorized copying of the functionality by an application that replicates that functionality even if there is no copying of the code – copying of the functionality is the key. It is unlikely that the device itself will be patentable as it is a known device. However, it may be that there is a special interaction of the software with one or more of the in-built mobile platform sensors. It may as also be that there is a special interaction of the application with a remote server and the combination of the application and the remote server is special. What is useful to understand, is that to prove infringement readily, every one of the steps of a method claim must be performed by a single entity. Therefore, it is necessary to create claims that represent the steps performed by either the mobile platform and/or the server.

It may be that there is a money making aspect of the application, e.g. the way the user pays for a digitally based service or virtual product. This can best be defined as a business method involving a system, a computer and/or computer software.

In some countries, the examples given above will not be patentable subject matter and in some countries the functionality alone, or a combination of hardware and software may be patentable. However, it is still necessary that the claimed invention is novel and non-obvious to those skilled in the art as is the case with any computer-related invention.

What needs consideration when reviewing the mobile application is an assessment of what is the essential function, that step or those steps, which provide the commercially valuable aspect of the business behind the mobile application. A flow chart of the process steps is useful, as is a critical review of: which steps are important; which are essential; which are not required; and those that provide essential as opposed to desirable functionality. It will also be useful to identify the smaller step elements that make up one or more of the larger steps. The level of abstraction required to describe the steps can be high and the use of concise and accurate language is useful. However, a more detailed description will need to be provided if there is to be a patent applied for. Some of the other readily available information includes user definition, wireframes, flow charts, screen shots, etc.  All this information will assist you and your Madderns attorney to explore the options available.

Of course, a patent is not the only Intellectual Property (IP) to consider, since copyright will automatically subsist in the code (source and machine code), with no formal application required although in the United States registration is possible and recommended. Yet further, if the server performs the commercially valuable functionality, it may be practical to treat that software as commercially confidential and thus a trade secret, since no user or competitor will be able to access that software. For many mobile applications, a unique and memorable trademark is the most important factor in a mobile application’s success. Note that eventually there will be a public release of the patent specification disclosing all of the important details of the invention and how to implement it.

With more than a million applications (apps) out there – is it worthwhile obtaining a patent for a mobile application? How long do you need the advantage of a patent, 6 months, a year or more? Is your idea useful to other mobile applications or mobile phone companies such that you will be able to license it to others? Well that is a commercial decision based on numerous factors. In my experience, the filing of a provisional patent that will last just one year usually provides enough time to make a better decision in light of the market and competition at the time.

As you should now better appreciate, the question of patentability of a mobile application is not unlike the question of whether a computer related invention is patentable.  What functionality is commercially important will determine the starting point of such a determination. You will also be able to consider and investigate whether the idea is already the subject of a patented. Consult with your attorney to discuss your mobile applications’ patentability and its trademark before it is offered on-line or offered in any form to others.

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A rose by any other name would smell as sweet – Patent claim terms that did not end up with the meaning the drafter wanted

/ Bill McFarlane / Articles

There are a few things that keep patent attorneys up at night and one of them is the choice of words when drafting a claim. Sometimes “one word” can make all the difference to the enforceability or validity of a patent.

This is a general information article meant for a non-legal readership so it may be useful to set the scene. When an inventor brings their idea to an attorney one of the many tasks but one of the most important is to define the invention. A claim is a one-sentence definition of the crux of the invention, which must be clear and succinct, and supported by the matter described in the rest of the specification. There will only be the minimum number of essential features in the claim. The claims of a patent define the invention to which the patentee is entitled the right to exclude others exploiting.

The words of the claim are carefully chosen to define the invention. However, as is the way of patent opposition or litigation each side will sometimes need the words to have a particular meaning that benefits their position. The other side will argue before the patent office or the court that all or just one of the words has a different meaning to the one the drafter thought it had, especially if the term turns out to mean that the patent is not valid in light of a particular meaning. Then there are times that a phrase or just one word needs to have a meaning that benefits the patent holder to make the alleged infringers’ product or method fall within the scope of the claim. It all comes down to claim interpretation, which is determined by the Hearing officer or the Judge/s as considered through the eyes of the person skilled in the particular art.  Interestingly, not all the Judges in a case necessarily agree but that is a topic for another article.

This article does not include a discussion of all the relevant issues for this topic, such as ambiguity, lack of clarity, or lack of support. Yet further, other related issues include but are not exhaustive: mechanical equivalents, essential and inessential element, etc.

There are many cases to illustrate this issue and the following were of interest to the writer.

Let me illustrate some phrases that did not quite work as the drafter intended.

(more…)

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How to keep a secret: prohibition orders on patents

/ Bill McFarlane / Articles

Patent applications are normally published, and the information in them made publicly available, eighteen months from the earliest priority date. However, the patent system in Australia empowers the Government to deem a patent as SECRET, in which case publication of any of the details of the patent is prohibited until such time as the ‘prohibition order’ is rescinded.

In Australia, the Commissioner of Patents can order the prohibition of publication of all information in relation to a patent application and from that point IP Australia will not make any information about the filing public. The mechanism for invoking the order can vary; typically the Department of Defence will make a request to impose a prohibition order in respect of a particular patent application. Alternatively, IP Australia may consider that a patent application discloses information that may be SECRET according to the Department of Defence information classification system. IP Australia will then make that application available to the Department of Defence for assessment and, if any part of that disclosure meets the relevant criteria, a prohibition order is placed on the application.

Once a prohibition order is placed on an application it will be dealt with in accordance with the requirements of the Act. An Examiner with security clearance will examine the specification to determine whether it is in order for allowance, and then issue an Examination Report or a Notice of Allowance if allowable. However, from that point on the application is suspended in the application phase and is not processed further. Furthermore, whilst the prohibition order remains in place, publication or communication of any of the subject matter of the patent application is prohibited or restricted, thereby effectively preventing commercialisation of the invention.

The period of the prohibition order may be as long as the potential life of the patent, in which case the patent will never be enforceable. However, once the Department of Defence no longer considers the information secret the prohibition order can be rescinded and the patent application is placed into the normal patent system by being advertised accepted and then published in the usual way. If there is a commercial application of the previously classified patent, it will then be possible to exploit the value of the patent during its remaining life.

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