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Could Your Company’s Products Be Infringing on Provisional Patent Rights?

By Timothy E. Nauman, Partner
Fay Sharpe Fagan Minnich & McKee LLP

In 1999 President Clinton signed into law the American Inventors Protection Act, which established the requirement of publication of a patent application eighteen months after its earliest filing date. While the Act was intended, in part, to harmonize the U.S. patent laws with the rest of the world, to end the practice of “submarine patents,” and to promote progress by earlier disclosure of inventions, the Act has significant liability implications for products already on the market because it grants the owner of a patent application “provisional rights.” Once a published application issues as a patent, the patent owner potentially gains the right to claim damages against infringing products made, sold, or offered for sale between the publication date of the application and the issue date of the patent. This means that pending published applications may impact your products and/or processes AND that your organization could be liable for infringement damages!

Three conditions must be met before pre-issuance damages apply under the provisional rights of the patent applicant.
First, the patent must issue. Even though the patent applicant has provisional rights, those rights do not come into force until the patent actually issues. Therefore, if the patent never issues, provisional rights do not materialize.
Second, actual notice of potential infringement is required. The statute requires that a potential infringer be given “actual notice.” As yet the courts have not had the opportunity to interpret the “actual notice” language. However, Congress intended that a patent applicant must take affirmative steps to claim provisional rights. The patent applicant must provide notice identifying which claims in the application are at issue and which product is allegedly infringing those published claims.

Third, when the claims issue, they must be substantially identical to the claims in the published application. As with the actual notice language, the courts have not had occasion to interpret the “substantially identical” language. Again, the legislative history of the Act lends some guidance. Congress stated its intention to use a standard similar to that used in evaluating reissue applications; so it is likely that the scope of the claims needs to be identical, rather than the specific words used. If the claim that reads on your product is amended to change its scope during prosecution of the patent, your product may be safe.

So what steps can you take to protect your company from potential liability?

1.   It pays to be aware – know your products & your competition.
You can only protect your products if you are aware of competing claims. For existing products, and certainly before introducing new products to the marketplace, it pays to conduct a search of issued patents and published patent applications. Your search should key off critical technological aspects of your product, or production processes, and you especially want to know what your key competitors are doing.

2.   Start an “art collection.”
After you become aware of published applications with claims that potentially read on your product, and especially if you have received notice from a holder of a published patent application, you may want to start collecting prior art that may impact the claims. Since provisional rights do not attain unless the patent issues with claims that are substantially identical to those in the published application, your “art collection” is trying to preempt issuance (invalidate the patent) or force scope-changing amendments or support your position to make the product without interference from the published application, i.e. you have a right to practice what the prior art shows.

3.   Know when to “Hold ‘em”
Any member of the public may submit up to ten prior art documents to the patent Examiner once the application has been published. The prior art documents, however, must be submitted within a two- month window after publication of the application so time can be of the essence. But handle with care, you are not allowed to comment on prior art you submitted, and the Examiner may not agree with your assessment of that prior art – so your “art collection” may have more value to your case later in the process.

4.   The more you know the better armed you are.
If potentially troublesome claims are identified in a published application, the written record of the proceedings in front of the Examiner can be investigated. Since the claims must issue “substantially identical” in order for the patent applicant to assert provisional rights, monitoring and evaluating the claims through the prosecution of the application is an important tactic. There are some “do-it-yourself” tools that the USPTO has put in place to make it easier for you to track the progress of claims during prosecution:
The PTO’s “PAIR” (Patent Application Information Retrieval) system: The PAIR system keeps track of patent applications and provides the current file status and file history of a published patent application or patent. After accessing the system at http://pair.uspto.gov, enter an application, patent, or publication number to obtain information regarding events such as the present status of communication mailed by the Examiner, when a response has been filed, and when the application was allowed.
Document Inspection: The USPTO allows for public inspection of specific documents in a patent application file. As long as the Examiner is not actively working with a specific document, you can request a copy of the document to facilitate a knowledgeable analysis of the claims with respect to your product.

5.   Know what infringement might cost.
Presuming that the pre-conditions discussed above are met, the patent owner may only claim a reasonable royalty to compensate for sales made between the publication and issuance dates. There is no ability to claim enhanced damages (up to three times the amount found or assessed) over the provisional period. But the gloves are off once the patent issues!

6.   The “bleeding edge” of litigation.
As noted throughout this article, the courts have not yet had an occasion to interpret the language of the new provisional rights. While the congressional intent for “actual notice” is relatively clear, the “substantially identical” language is more difficult to assess. Once applications published under the Act begin to issue as patents, patent owners will likely begin to assert their attendant provisional rights in court. We are presently on the cusp of such litigation.

7.   If in doubt, get help
The issue of provisional patent rights is murky and complicated and can have a far reaching impact on your products and your business. It is a wise move to get the advice of patent counsel on the preventative steps available to mitigate any potential liability, to evaluate claims of published applications and provide an opinion on potential validity or infringement, and to monitor prosecution of the claims in published applications.