FAQ: Understanding Invention Development Companies This FAQ is intended to answer frequently asked questions about the many companies that offer to develop one's invention. Most of the comments below are specific to the United States, but may have some applicability to other countries as well. Send comments and suggestions to oppedahl@panix.com. This FAQ is Copyright Carl Oppedahl 1993. It may be freely copied and retransmitted on the condition that contents of the FAQ and its copyright notice remain unaltered. ----------------------------------------------------------- Topics covered in this FAQ: 1. What is an invention development company? 2. What are some of the warning signs of an invention development company? 3. What is an Invention Disclosure Document? 4. What is the difference between an Invention Disclosure Document and a patent application? 5. How may I write to to the U.S. Patent Office? 6. How can I find a good patent agent or attorney? 7. Can't I apply for a patent myself? 8. What does "patent prosecution" mean? 9. How much does it cost to apply for a patent? 10. What are the time limits for applying for a patent? 11. So there are only sharks out there? 12. What will happen if I try to license my invention without filing a patent application? ----------------------------------------------------------- 1. What is an invention development company? There are many invention development companies out there, and most, in my experience, are dishonest, manipulative companies that simply rip off innocent inventors. A handful, perhaps, are honest and deliver good value, but those are the exception. The newspapers, magazines, and Better Business Bureau files are filled with reports of innocent people who were duped into handing over thousands of dollars of their hard-earned money for the futile hope that an invention development company would genuinely market their inventions. The U.S. Patent Office defines the following terms at 37 C.F.R. 10.23(17): "Invention developer" means any person, and any agent, employee, officer, partner, or independent contractor thereof, who is not a registered practitioner [agent or attorney admitted to practice before the U.S. Patent Office] and who advertises invention development services in media of general circulation or who enters into contracts for invention development services with customers as a result of such advertisement. "Invention development services" means acts of invention development required or promised to be performed, or actually performed, or both, by an invention developer for a customer. "Invention development" means the evaluation, perfection, marketing, brokering, or promotion of an invention on behalf of a customer by an invention developer, including a patent search, preparation of a patent application, or any other act done by an invention developer for consideration toward the end of procuring or attempting to procure a license, buyer, or patent for an invention. "Customer" means any individual who has made an invention and who enters into a contract for invention development services with an invention developer with respect to the invention by which the inventor becomes obligated to pay the invention developer less than $5,000 (not to include any additional sums which the invention developer is to receive as a result of successful development of the invention). "Contract for invention development services" means a contract for invention development services with an invention developer with respect to an invention made by a customer by which the inventor becomes obligated to pay the invention developer less than $5,000 (not to include any additional sums which the invention developer is to receive as a result of successful development of the invention). 2. What are some of the warning signs of an invention development company? Beware if the work the company proposes to do calls for an Invention Disclosure Document rather than a genuine patent application. Beware if the company proposes that its main service will be publicizing the invention in a newsletter. Beware if the company proposes that its main service will be giving you a list of "leads", namely names and addresses to which it suggests you write. Beware if the company is not able to tell you that an attorney or agent registered to practice before the U.S. Patent Office will be preparing a patent application as part of the services to be performed. Under rules of the U.S. Patent Office, a patent agent or attorney registered to practice before the Patent Office is forbidden to: "Represent[] before the Office in a patent case either a joint venture comprising an inventor and an invention developer or an inventor referred to the registered practitioner by an invention developer when (i) the registered practitioner knows, or has been advised by the Office, that a formal complaint filed by a federal or state agency, based on any violation of any law relating to securities, unfair methods of competition, unfair or deceptive acts or practices, mail fraud, or other civil or criminal conduct, is pending before a federal or state court or federal or state agency, or has been resolved unfavorably by such court or agency, against the invention developer in connection with invention development services and (ii) the registered practitioner fails to fully advise the inventor of the existence of the pending complaint or unfavorable resolution thereof prior to undertaking or continuing representation of the joint venture or inventor." (37 C.F.R. 10.23(17).) 3. What is an Invention Disclosure Document? Quoting from section 1706 of the Manual of Patent Examining Procedure: The Patent and Trademark Office accepts and preserves, for a limited time, "Disclosure Documents" as evidence of the dates of conception of inventions. A paper disclosing an invention and signed by the inventor or inventors may be forwarded to the Patent and Trademark Office by the inventor (or by any one of the inventors when there are joint inventors), by the owner of the invention, or by the attorney or agent of the inventor(s) or owner. It will be retained for two years and then be destroyed unless it is referred to in a separate letter in a related [patent] application within two years. The Disclosure Document is not a patent application, and the date of its receipt in the Patent and Trademark Office will not become the effective filing date of any patent application subsequently filed. However, like patent applications, these documents will be kept in confidence by the Patent and Trademark Office until a patent is granted. This program does not diminish the value of the conventional witnessed and notarized records as evidence of conception of an invention, but it should provide a more credible form of evidence than that provided by the popular practice of mailing a disclosure to one self or another person by registered mail. A Disclosure Document is available to the public when an application which refers to it issues as a patent. CONTENT OF DISCLOSURE DOCUMENT Although there are no restrictions as to content and claims are not necessary, the benefits afforded by the Disclosure Document will depend directly upon the adequacy of the disclosure. Therefore, it is strongly urged that the document contain a clear and complete explanation of the manner and process of making and using the invention in sufficient detail to enable a person having ordinary knowledge in the field of the invention to make and use the invention. When the nature of the invention permits, a drawing or sketch should be included. The use or utility of the invention should be described, especially in chemical inventions. PREPARATION OF THE DOCUMENT The Disclosure Document must be limited to written matter or drawings on paper or other thin, flexible material, such as linen or plastic drafting material, having dimensions or being folded to dimensions not to exceed 8 1/2 by 13 inches (21.6 by 33 cm.). Photographs also are acceptable. Each page should be numbered. Text and drawings should be sufficiently dark to permit reproduction with commonly used office copying machines. OTHER ENCLOSURES In addition to the fee described below, the Disclosure Document must be accompanied by a stamped, self-addressed envelope and a separate paper in duplicate, signed by the inventor, stating that he or she is the inventor and requesting that the material be received for processing under the Disclosure Document Program. The papers will be stamped by the Patent and Trademark Office with an identifying number and date of receipt, and the duplicate request will be returned in the self-addressed envelope together with a notice indicating that the Disclosure Document may be relied upon only as evidence and that a patent application should be diligently filed if patent protection is desired. The inventor's request may take the following form: "The undersigned, being the inventor of the disclosed invention, requests that the enclosed papers be accepted under the Disclosure Document Program, and that they be preserved for a period of two years." DISPOSITION The Disclosure Document will be preserved in the Patent and Trademark Office for two years and then will be destroyed unless it is referred to in a separate letter in a related patent application filed within the two-year period. The Disclosure Document should be referred to in a separate letter filed in a pending application by identifying the Document by its title, number, and date of receipt. Acknowledgment of receipt of such letters is made in the next official communication or in a separate letter from the Patent and Trademark Office. Unless it is desired to have the Patent and Trademark Office retain the Disclosure Document beyond the two-year period, it is not required that it be referred to in a patent application. FEE A fee of $10 (37 CFR 1.21(c)) is charged for filing a Disclosure Document. Payment must accompany the Disclosure Document when it is submitted to the Patent and Trademark Office. WARNING TO INVENTORS The two-year retention period should not be considered to be a "grace period" during which the inventor can wait to file his [or her] patent application without possible loss of benefits. It must be recognized that in establishing priority of invention an affidavit or testimony referring to a Disclosure Document must usually also establish diligence in completing the invention or in filing the patent application since the filing of the Disclosure Document. Inventors are also reminded that any public use or sale in the United States or publication of the invention anywhere in the world more than one year prior to the filing of a patent application on that invention will prohibit the granting of a patent on it. If the inventor is not familiar with what is considered to be "diligence in completing the invention" or "reduction to practice" under the patent law, or if he has other questions about patent matters, the Patent and Trademark Office advises him to consult an attorney or agent registered to practice before the Patent and Trademark Office. A Directory of Registered Patent Attorneys and Agents Arranged by States and Counties titled ATTORNEYS AND AGENTS REGISTERED TO PRACTICE BEFORE THE U.S. PATENT AND TRADEMARK OFFICE is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Patent attorneys and agents may be found in the telephone directories of most major cities. Also, many large cities have associations of patent attorneys which may be consulted. (end of quotation from Manual of Patent Examining Procedure) 4. What is the difference between an Invention Disclosure Document and a patent application? There is a world of difference. A patent application has the prospect of leading to an issued patent; the disclosure document does not. It is extraordinarily easy and inexpensive to file a disclosure document yourself, and there is little need to pay someone else to do it for you. A patent application, on the other hand, is not easy to do yourself, and the Patent Office fee is much higher. 5. How may I write to to the U.S. Patent Office? United States Patent and Trademark Office Washington, DC 20231-0001 6. How can I find a good patent agent or attorney? One of the best ways to find a good patent agent or attorney is by a referral from a trusted friend or associate. Ideally the agent or attorney you choose should have a technical background consistent with the technology of your invention. There is something to be said for choosing a patent attorney who has litigated patents; he or she is perhaps more likely to bear in mind the ways that patents are interpreted in court. Ask to see sample issued patents that have been obtained through his or her efforts. Searches in online computer databases may help you evaluate candidates. To check references of an attorney or agent you could search in Lexis or Dialog for patents prosecuted by the candidate, then contact the inventors and ask them whether they would recommend the candidate to others. You could search the candidate's name in legal databases such as Lexis or Westlaw to see if he or she appears in reported court cases involving patents. Interview the candidate to determine his or her level of technical knowledge. You would probably not want to have to spend long hours at his or her billing rate explaining simple background information if a different candidate can be found who is quick to understand your technological area. 7. Can't I apply for a patent myself? Yes, you can. It is called applying pro se. Perhaps one-fifth of all issued U.S. patents were applied for pro se, and some of them are actually well written. Most inventors find, however, that an experienced patent agent or attorney can add value in many ways in preparing a patent application, both in bringing past experience to bear in drafting claim language, and in assisting the inventor in appreciating all the inventive aspects of the invention. Furthermore, the agent or attorney is likely to be methodical about following and meeting Patent Office due dates, where a pro se applicant might miss a due date at some point during prosecution. 8. What does "patent prosecution" mean? Patent prosecution means preparing and filing patent applications, and taking the many subsequent steps involved in progressing toward issuance of a U.S. Patent. 9. How much does it cost to apply for a patent? If you apply pro se the largest single expenditure is typically the Patent Office filing fee of some $300 or more. If you retain a patent agent or attorney you can expect to pay for many hours of that person's time at some standard billing rate, leading to total costs as of filing the application of some higher amount. Depending on the billing rate and the time required it is common for a patent application to cost $2000-$3000 at the low end of the scale, or $10000-$15000 for a complex application. Patent agents and attorneys vary in billing rates and in billing practices. Some, although not very many, will quote a fixed price for preparation of a (utility) patent application. 10. What are the time limits for applying for a patent? No U.S. patent will be granted on an application if the invention was disclosed in a printed publication anywhere in the world more than a year before the filing of the application. Furthermore, no U.S. patent will be granted on an application if the invention was sold or offered for sale in the U.S. more than a year before the filing of the application. For those who are interested in also obtaining protection in countries other than the U.S. it is important to bear in mind that the patent application should be filed prior to any public divulgation of the invention. For these reasons it is wise to consider setting a goal of getting the patent application on file prior to any public disclosure or sale. Even if the invention has not been publicly divulged there are reasons to file a patent application sooner rather than later. Filing the application sooner will help to some extent in prevailing over others who happen to have developed the invention independently and who also file a patent application. 11. So there are only sharks out there? No, thank goodness. The overwhelming majority of registered patent attorneys and patent agents are well-intentioned. Among organizations other than patent attorneys who cater to inventors, this writer has heard good comments about two: 1. The Wisconsin Innovation Service Center, 402 McCutchan, University of Wisconsin at Whitewater, Whitewater, Wisconsin 53190, telephone 414-472-1365. I have heard that for a modest fee (under $100) the center will give a good-faith appraisal of the development prospects for an invention. 2. Arthur D. Little in Cambridge, Massachusetts. I have heard that ADL has a subsidiary that treats inventors fairly in return for a share of the eventual commercialization proceeds. I would be interested to hear from anyone who has had good or experiences with either organization, or with any invention development company. 12. What will happen if I try to license my invention without filing a patent application? Large well-known U.S. companies routinely return invention submissions unread, typically enclosing a brochure explaining the company's unwillingness to consider any invention unless the inventor first signs a form agreeing to release the company from any obligations other than to pay for patent rights. With such companies it is unworkable to proceed without having filed a patent application on the invention. By Carl Oppedahl, patent lawyer Oppedahl & Larson 1992 Commerce Street #309 Yorktown Heights, NY 10598-4412 telephone: 212-777-1330 email: oppedahl@panix.com Comments and suggestions should be sent to oppedahl@panix.com. -- Carl Oppedahl AA2KW Oppedahl & Larson (patent lawyers) Yorktown Heights, NY voice 212-777-1330