Patent Basics

Dictionary Items

Term Definition
337 action
A type of administrative litigation which occurs before the U.S. International Trade Commission (ITC).  Under Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337), the ITC is empowered to prohibit the importation of products that infringe a valid and enforceable U.S. patent.  337 actions can be invoked by any domestic industry, including firms that merely license patents.
Term Definition
abstract idea
Abstract ideas are not patent-eligible subject matter.  This judicially developed exclusion was most recently explained by the Supreme Court in Bilski v. Kappos, 2010.
[patent] agent
A non-attorney authorized to act for or on behalf of a patent applicant.  Patent agents must be registered with the USPTO.
An entity that acquires patents for strategic purposes as distinct from protecting a line of business.  Aggregators often license patents nonexclusively to shareholders or other insiders, and then sell the patents to patent assertion entities (PAEs) to monetize.
America Invents Act of 2011.  AIA made modest reforms, most notably moving the U.S. to a first-inventor-to-file system more aligned with foreign practice, but also including expanding prior user rights to all patent-eligible subject matter, and instituting a post-grant review proceeding.
American Inventors Protection Act of 1999.  The AIPA made minor changes to patent law, including requiring publication of most patent applications after 18 months and promoting the USPTO Director to Under Secretary of Commerce for Intellectual Property.
American Intellectual Property Law Association, formerly the American Patent Law Association.  DC-based professional organization that represents the interests of the intellectual property community, including the patent bar.
Administrative Patent Judge. APJs serve on the PTAB.
To permanently transfer rights to a patent application or patent, as distinguished from a license.  Unlike licenses, assignments may be recorded with the USPTO, although approximately one half of all assignments go unrecorded in practice, which has fueled opacity problems in the patent system.
Term Definition
best mode
A rule that the patentee must disclose to the public the best known mode of implementing the invention.  After the America Invents Act of 2011 (AIA), the failure to disclose the 'best mode' is no longer grounds for invalidating a patent, so the requirement is viewed as toothless.
business method patent
While not formally defined, "methods of doing business" were excluded from patentability by judicial rule prior to the 1998 State Street decision.  Business method patents have been subject to extensive criticism and have been subject to special scrutiny by the USPTO (through a so-called "second pair of eyes" review) and now under a transitional review procedure established by the AIA.  Business methods remain unpatentable in most of the world on the grounds that they are not technology.
Term Definition
The U.S. Court of Appeals for the Federal Circuit, commonly referred to as ‘the Federal Circuit.’  The appellate court that has exclusive jurisdiction over patent appeals from district courts as well as the USPTO.  The Federal Circuit was established in 1982 to regularize patent law across the country but has often been criticized for what many perceive as an applicant/patentee friendly bias — especially during its first two decades when its decisions were rarely reviewed by the Supreme Court.  (Also, “Fed Cir”)
carrot licensing
Ex ante licensing.  See ex post licensing.
Code of Federal Regulations.  Unlike most federal agencies, the USPTO lacks the power to promulgate substantive regulations (interpretations of basic patent law); however, it issues regulations on its administrative procedures.
claim construction
See Markman hearing
All patents are categorized into areas of technology with a system of classes and subclasses established by the USPTO.
combination patent
A patent for an claimed invention whose contribution to the art is to combine two existing, possible known components in a new way.  The Supreme Court decision in KSR Int'l v. Teleflex concerned the standard needed to show that a combination was obvious.
covered business method (CBM) review
A covered business method review is an adversarial procedure created by the AIA for challenging patents, similar to an IPR. Like an IPR, the parties argue before an Administrative Patent Judge, not a patent examiner and the challenger must show a reasonable likelihood of successfully invalidating one claim before the PTAB will agree to grant a petition for review. Unlike an IPR, a CBM can challenge a patent not just as invalid due to prior art, but also as invalid because it's an abstract idea or because it fails to adequately define or describe the invention under 35 U.S.C. § 112. A CBM can only be filed against financial product/service patents that do not include a technical invention, while an IPR can be filed against any patent.
A second application for the same invention claimed in a prior nonprovisional application and filed before the first application becomes abandoned or granted.  Continuations are unique to the U.S. and are criticized for giving applicants endless opportunity to wear down patent examiners.  See Lemley and Moore, Ending the Abuse of Continuation Practice.
Term Definition
Department of Commerce.  The parent agency of the USPTO.
doctrine of equivalents
The principle that patent infringement occurs even when the allegedly infringing activity falls outside the literal scope of the patent claims, but its elements are identical or equivalent to each claimed element of the patented invention.
declaratory judgment
A lawsuit in which one party asks the court to resolve an issue and declare its judgment. In patent litigation, a company that thinks it may be accused of infringing may choose to file a declaratory judgment action, asking the court to declare that the patent is not infringed and/or invalid. Filing a declaratory judgment can have tactical, procedural, or financial benefits over just waiting to be sued.
defensive publication
Publication of an invention done to ensure that no one can patent it, since it becomes prior art when it becomes public.  Also called "defensive disclosure."
dependent claim
A claim that refers back to (depends on) and further limits a preceding dependent or independent claim.  A patent typically only states a few independent claims, but many dependent claims which are narrower than the independent claim that they reference.  The narrower the claim, the more likely it is to be valid against prior art, but the less likely it is to be infringed.
design patent
As distinct from a utility patent.  A design patent protects only the ornamental design or appearance of an article of manufacture, but not its structural or functional features.  An ‘article of manufacture’ is a broad term which may extend even to computer icons.  Like utility patents, design patents must be nonobvious but this standard is harder to apply to designs.
direct infringement
As distinct from indirect infringement.  A person directly infringes a patent if she actually performs all of the steps of at least one method claim of the patent; or sells, manufacture, uses, or imports a product that contains all of the elements of at least one system or apparatus claim of the patent. The direct infringer is the one who actually infringes a patent.
One of the primary objectives of the patent system.  In return for the government-granted right to exclude that is embodied in the patent, the inventor must disclose to the public through his patent the invention for which protection is sought.  Inventors unwilling to disclose their invention to the public may instead opt for trade secret protection.
divisional application
A later application for an independent or distinct invention disclosing and claiming (only a portion of and) only subject matter disclosed in the earlier or parent application.
Term Definition
European Patent Office, which is the operating arm of the European Patent Organisation (also EPO), which is an independent treaty organisation that is not part of the European Union, although there is a substantial overlap in membership.
A collection of techniques used by patent owners to extend the life of their patents past the ordinary lifespan.
ex parte
A Latin term, used as an adjective, indicating that an act (typically an adjudicative process) is done at the initiative of one party only, and without notice to other parties or the public.  This term characterizes the patent examination process.
ex post licensing
Licensing demanded after the technology has been independently developed and implemented, also known as stick licensing since it is entered under threat of patent litigation.  Distinguished from ex ante or carrot licensing where the technology is knowingly and voluntarily licensed in advance.
exclusion order
An order issued by the U.S. ITC as a result of a 337 action, excluding from entry into the United States goods found to infringe a U.S. patent.
Term Definition
Fed. Reg.
The Federal Register.  The chronologically ordered gazette of the United States, cataloguing public notices and advisories, proposed and final rules and regulations, and requests for information and comment by the various organs of the Federal Government.  Also abbreviated "FR."
Federal Circuit
file wrapper
The actual USPTO folder into which documents pertaining to the prosecution of a particular patent application are deposited, including correspondence between the applicant and the USPTO, bibliographic information, paper filings, and office actions.  The USPTO file wrapper system has transitioned to electronic form, and much of this information is now available electronically through the USPTO's public PAIR.
final office action (rejection)
An Office action on the second or any subsequent examination or consideration by an examiner that is intended to close the prosecution of a patent application.  However, in practice, a rejection is not conclusive; see continuation.
forum shopping
The practice, by plaintiffs, of picking the most favorable court to file a lawsuit in.
Federal Register.  See Fed. Reg.
"Fair, Reasonable, and Non-Discriminatory" licensing.  A licensing commitment made for standard-essential patents in the context of technology standard setting activities.  See also RAND.
The Federal Rules of Civil Procedure. These are the rules that govern all civil cases in federal courts, including patent infringement cases.
U.S. Federal Trade Commission.  An independent regulatory agency charged with consumer protection and competition policy, which conducted several influential studies on how patents work in practice.  Authored several key studies: 2003’s To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy [PDF] and 2011’s The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition [PDF].
Term Definition
An attempt by a patent owner, by threatening litigation, disproportionate damages, or injunction/exclusion of a product, to extract payment from a producing company greater than the value of the patented technology.
Term Definition
Information and Communications Technology.  Similar to "IT" (information technology) but explicitly includes telecommunications technologies as well as computing.
Image File Wrapper.  The electronic version of a patent application's file wrapper.
independent claim
A claim that does not refer back to or depend on another claim.  See dependent claim.
indirect infringement
As distinct from direct infringement.  A person indirectly infringes a patent if she either contributes to or induces someone else to directly infringe the patent. Contributory infringement means that the indirect infringer knew about the patent and essentially provided some key piece of the infringing product that doesn't have any other purpose. Induced infringement means that the indirect infringer induced someone to infringe the patent and knew that the actions she induced would be direct infringement.
Intellectual Ventures
The largest patent aggregator, currently holding around 40,000 patents.  Closely associated with co-founder Nathan Myhrvold.  IV is often viewed as a patent assertion entity, although much of its activities are conducted through spinoffs, and the company is at least nominally in the business of producing inventions in-house.  See our posts on Intellectual Ventures.
inter partes reexamination
An adversarial reexamination procedure for challenging an issued patent. Like ex parte reexamination, the procedure is before patent examiners, whose decisions can be reviewed by the PTAB. The AIA replaced this with inter partes review . See also reexamination.
inter partes review
An adversarial procedure created by the AIA for challenging patents. Intended to be similar to a court proceeding, the parties argue before an Administrative Patent Judge, not a patent examiner. The challenger must show a reasonable likelihood of successfully invalidating one claim before the PTAB will agree to grant a petition for review.
A proceeding, formerly conducted before the USPTO Board of Patent Appeals and Interferences, to determine priority of invention between applications that appear to cover the same invention.  Interferences occurred under the first-to-invent system that was changed to first-inventor-to-file by the America Invents Act of 2011.
international application
An application filed under the Patent Cooperation Treaty (PCT).  This establishes global priority among applications, but there is no such thing as an international patent.
Term Definition
Japan Patent Office
Term Definition
Markman hearing
A hearing before the judge to determine the meaning of words in the patent claims. (The hearing is named for Markman v. Westview Instruments. This determination is known as "claim construction."  Claim construction is critical to defining the scope of a patent so that validity and infringement can be determined.  Claim construction is reviewed by the Federal Circuit de novo (that is, without deference to the district court). As a result, district court claim construction decisions are reversed by the Federal Circuit 30-40% of the time.
USPTO's Manual of Patent Examining Procedure.
Mutually Assured Destruction.  A Cold War-era metaphor used in the context of patent practice to refer to the possibility that any assertion of patents by one business entity against another will be countered with assertions of patents held by the original defendant.
maintenance fees
Fees for maintaining in force a patent based on an application filed on or after December 12, 1980.  See MPEP 2500 for more.
Term Definition
A requirement for patentability based on 35 U.S.C. § 103 of the Patent Act. An invention cannot be an obvious variant of something that is already known, that is, the invention must not be obvious to a "person having ordinary skill in the art" (PHOSITA).  Also known as an "inventive step" outside the United States.
A requirement for patentability, based on 35 U.S.C. § 102(a) of the Patent Act. An invention cannot have been disclosed, offered for sale, or used publicly more than a year before seeking a patent.
Non-Practicing Entity.  A broad term associated with trolls but now disfavored because it includes universities and legitimate technology developers that seek to license technology in advance rather than after a producing company has independently developed it.
Term Definition
post-grant review
A procedure by which a third-party may contest issuance of a patent at the USPTO within a short period (9 months) after issuance.  Introduced to the U.S. by the AIA. The EPO has a similar procedure.
The term applied when a patent application or issued patent is made public.  Normally required 18 months after filing.  A feature unique to the U.S. patent system allows patent applicants who limit their application solely to the United States to delay publication until the patent is issued by the USPTO.
Patent and Trademark Office, informally used interchangeably with USPTO.
Patent Trial and Appeal Board.  Reviews adverse decisions of examiners on written appeals of applicants and appeals of reexaminations, and conducts inter partes reviews and post-grant reviews.  The Board also continues to decide patent interferences, as it was known as the Board of Patent Appeals and Interferences (BPAI) before the AIA.
provisional patent application
An application for patent filed in the USPTO under 35 U.S.C. § 111(b) that allows filing without a formal patent claim or any information disclosure (prior art) statement.  This is essentially a placeholder for a later-filed non-provisional application. The non-provisional application must be filed no later than one year after the provisional application in order to be treated as being filed on the provisional filing date.
Patent prosecution is the process of applying for a patent, along with any further proceedings before the USPTO.
pro se
Latin term used to refer to an individual who represents himself in a legal matter.  Patent applicants do not have to use a patent agent or attorney but can prosecute a patent application on their own.
A patent assertion entity (PAE) used indirectly by a producing entity to assert patents against rivals. The privateer is better positioned to damage the rival because it is not vulnerable to counterassertions (as a non-producing entity it cannot be liable for patent infringement) and need not be concerned with adverse publicity.  The producing company may spin off the privateer, sell it patents, or support it in other ways.  See Ewing, Indirect Exploitation of Intellectual Property  Rights By Corporations and Investors: IP Privateering and Modern Letters of Marque and Reprisal.
prior art
Prior art is the knowledge in the field of a patent that was publicly available before the patent was filed.
Term Definition
Reasonable and Non-Discriminatory.  See FRAND.
Request for Continued Examination. First established by the AIPA, RCEs enable a patent applicant to extend his or her efforts to obtain the patent after final rejection of the application by the examiner.  By paying a fee and filing an RCE, an applicant can start over. There is no limit to the number of RCEs that an applicant can file. Like continuations, RCEs have been criticized for allowing applicants to wear down examiners, and for creating backlog at the USPTO.  Notably, the patent bar resisted efforts by the USPTO to reform continuation and RCE abuse between 2007 and 2009.
The process by which the USPTO conducts an examination of a patent after it has issued, undertaken upon written request by a member of the public who establishes that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request.  The pre-AIA standard was that there be "substantial new questions of patentability"  presented as to the previously issued patent.  Sometimes abbreviated "RE."
Royalty-Free.  A standard that can be implemented without payment of any kind, or commitment to license a patent for implementation in a standard with no payment required.
Term Definition
stick licensing
See ex post licensing
submarine patent
Prior to a reform that changed the patent term to 20 years from filing, a patent was active for 17 years from the date it issued. During this period, patent applications were not published. By delaying the issue date of a valuable patent, an applicant could wait until an industry had developed and only then let the patent issue. The industry would then be vulnerable to massive extortion. These hidden patents are colloquially known as "submarine patents." The most famous holder of submarine patents is probably Jerome Lemelson.
Standard-Essential Patent.  A patent that a participant in standards development process declares to be essential to the practice of the standard.
Standing Committee on Patents.  The committee of the World Intellectual Property Organization (WIPO) with jurisdiction over patent law, including the PCT.
software patent
A generalized term referring to patents whose subject matter extends to computer-implemented code, which have been the subject of great controversy, including but not limited to how they interact with open source software.  Although software patents are often denigrated, there is no accepted definition.  However, there are a variety of methods for identifying software patents for empirical analysis.  See Bessen, A Generation of Software Patents.
The section of a patent that provides a description of the invention and the manner and process of making and using it.  It must enable the "person having ordinary skill in the art" to reproduce and use the invention without undue experimentation. A patent's claims are interpreted in light of the specification.
State Street
A highly controversial 1998 decision by the Court of Appeals for the Federal Circuit that summarily abolished the longstanding rule against patents for methods of doing business.
Term Definition
The Agreement on Trade-Related Aspects of Intellectual Property, an annex to the World Trade Organization (WTO) Agreement of 1994.  TRIPS established minimum standards for intellectual protection that is generally perceived to reflect the interest of developed economies in exporting more robust protection for intellectual property rights.
An entity in the business of being infringed — by analogy to the mythological troll that exacted payments from the unwary.  Cf. NPE, PAE, PME.  See Reitzig and Henkel, Patent Trolls, the Sustainability of ‘Locking-in-to-Extort’ Strategies, and Implications for Innovating Firms.
Term Definition
United States Code.  The patent laws are in Title 35, so that Section 101 is referenced as 35 USC § 101.
United States Patent and Trademark Office.  See also PTO.
United States Trade Representative.  An office in the Executive Office of the President responsible for negotiating and enforcing agreements on trade.
An invention must useful to be patentable. Very few inventions are invalidated as lacking utility. Perpetual motion machines, for example, are typically found invalid for lacking utility.
utility patent
As distinguished from design patents and plant patents.  Generally, references to 'patents' are to utility patents.
Term Definition
World Intellectual Property Organization.  A UN treaty organization based in Geneva that seeks to harmonize international protection of intellectual property.
The World Trade Organization, a treaty organization launched in 1994 as a more formal and effective follow-on to the General Agreement on Trade and Tariffs (GATT).  See also TRIPS.

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