Consumer products and IP (Part 2): what’s a patent got to do with it?
Consumer product companies face unique exposure to utility patent infringement. Patents can impact multiple aspects of consumer products, from manufacturing and shipping to compositions and use.
Active patent management strategies can help avoid liability while simultaneously protecting rights. Understanding these consequences and strategies can provide companies a legally-enforceable marketplace advantage.
What is a utility patent?
Utility patents grant owners an exclusive right to stop others from making, using, selling, offering to sell, and importing the claimed invention. Utility patents also open up possibilities for the owners to obtain damages resulting from others’ infringement.
The protected invention can be any new and non-obvious process, machine, article of manufacture, composition of matter, or improvement. For example, a utility patent could cover:
How do I obtain a utility patent for my product?
The process for obtaining a patent is simple on a high-level but can be exceedingly complex in practice. Upfront costs can provide long-term benefits since patents rights can last for nearly two decades. (See 35 U.S.C. § 154).
First: the filing
In the United States, a proper application necessarily includes:
- Specification containing a description and claim(s) of the invention
- Drawing(s), when necessary
- Oath or declaration
- Prescribed fee(s)
When to file the application is an important decision that should consider factors such as the field of the innovation, the stage of development, and the length of the typical developmental cycle for the product.
Third: where to file
Patent rights are regional, and owners can only enforce patents in the issuing country. Strategically picking jurisdictions in which to file the patent application helps companies get protection where they need it and avoid unneeded application and maintenance fees.
If the claimed invention is found patentable as filed, a patent can be issued and published, thereby granting enforceable rights. More often, the application is initially rejected, leading to what amounts to a negotiation with the patent office with the goal of identifying patentable subject matter.
The patent is granted, what’s next?
After the office grants the patent, the owner has two main enforcement strategies.
Patents provide a proactive means to challenge—and stop—competitors’ practices and resulting products. Pre-litigation strategies, such as cease-and-desist letters, can ask or contractually obligate competitors to stop infringing activity or to provide payments for use of the patent owner’s rights.
For litigation in the United States, damages can include:
- Reasonable royalties or lost profits
- Treble damages for showings of willful infringement
A patent owner can license or assign patent rights to others. This allows owners to receive financial compensation while competitors can avoid costly litigation.
Can a patent be canceled or invalidated?
In the normal course, a U.S. utility patent expires twenty years from the first filing date. In other cases, a U.S. patent can expire, be abandoned, or be challenged and invalidated. For example, if an owner does not pay required maintenance fees, the patent expires and becomes unenforceable. Other times, a patent owner may decide to expressly abandon the patent. Alternatively, a competitor can invalidate a U.S. patent through one of a variety of mechanisms including inter partes and post-grant review, or during the course of a litigation. In the United States, the United States Patent and Trademark Office (USPTO) or a federal court can invalidate a patent and thereby eliminate a patent owner’s ability to assert enforceable rights.
What do patents mean for consumer product companies?
Consumer product companies can take advantage of protection and assertion strategies—or be subjected to them. Taking advantage of the system can be as simple as making sure you have proper assignment clauses in employment agreements or as sophisticated as an invention disclosure solicitation and incentive program that helps your company identify potential protection and assertion opportunities.
Companies wishing to avoid being subjected to other’s patent rights should proactively review products during development so that appropriate adjustments can be made prior to product launch.
A company should seek guidance from counsel when considering ways to protect both their business and their innovations. Similarly, if a competitor asserts a patent against the company, guidance from counsel can help determine potential litigation risk and damage exposure.