TerraLex Cross Border Patent Guide

In the United States, the main sources of patent law are as follows. These sources collectively form a legal framework for patent procurement, protection, and enforcement in the United States.

United States Constitution, Article I, Section 8, Clause 8: This clause, often referred to as the Intellectual Property Clause, empowers the United States Congress “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” This clause provides the foundation for the federal copyright and patent systems. As to patents, Congress may grant inventors exclusive rights to their discoveries in order to “promote the progress of . . . useful arts” i.e., to encourage technological innovation, advancement, or social benefit. The United States Congress has protected patents in some form under federal law since 1790.

Patent Act (35 U.S. Code): This is the primary statutory authority governing patents and patent applications in the United States. This Act took effect on January 1, 1953, and outlines the requirements for obtaining a patent, and the procedures for patent application and examination. It also governs the enforcement rights conferred by a patent. The Act applies to all applications for patents filed on or after such date and to all patents granted on such applications. It further applies to proceedings on pending applications and granted patents. The Act has been amended a number of times since its enactment in 1953, including the America Invents Act.

19 U.S. Code § 1337 - Unfair Practices in Import Trade: Section 337 prohibits unfair methods of competition relating to the importation of goods into the United States. The United States International Trade Commission (ITC) has jurisdiction to investigate alleged violations of Section 337. Investigations conducted by the ITC include claims regarding intellectual property rights, including allegations of patent infringement by imported goods.

Case Law: Court decisions, particularly those from the United States Supreme Court and the Court of Appeals for the Federal Circuit, play a significant role in interpreting and shaping patent law. Precedents established by these courts influence the application and interpretation of patent statutes.

United States Patent and Trademark Office (USPTO) Regulations (37 C.F.R.): The USPTO is the federal agency responsible for examining patents. The USPTO issues these regulations, which provide detailed procedures for patent examination and practice before the office, including processes such as reexamination, reissue and inter partes review. The USPTO also issues “Guidance” on interpretation of the law as it applies to the foregoing.

International Agreements and Treaties: The United States is a party to a number of international agreements and treaties, such as, inter alia, the Patent Cooperation Treaty (PCT), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the Hague Agreement. These treaties influence U.S. patent law. The PCT, for example, provides a process for seeking patent protection internationally, and outlines a framework for filing foreign applications based on an original US filing and for entering the US based on an original foreign filing. The Hague Agreement is an international registration system which offers the possibility of obtaining protection for up to 100 industrial designs in designated member countries.

California provides specific regulations governing employee inventions. Other states have enacted similar regulations, including New York, North Carolina, Washington, New Jersey, and others. These laws generally govern the circumstances under which an employer may require assignment of inventions by employees where the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information is unenforceable. Some states require that the employer must provide written notification to the employee that the invention assignment agreement (which may be part of an employment agreement or PIAA) does not apply to any inventions that qualify under the applicable law.

Utility patents may be obtained for any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. Design patents may be obtained for new, original, and ornamental designs for articles of manufacture. Plant patents may be obtained for distinct and new varieties of plants that are asexually reproduced. To be patentable, the invention must also satisfy the statutory requirements of patent eligibility, novelty, non-obviousness, and adequate disclosure.

Patent protection is generally unavailable for abstract ideas, laws of nature, and natural phenomena, including naturally occurring products that lack markedly different characteristics from those found in nature. Furthermore, inventions that fail to satisfy the statutory requirements of novelty, non-obviousness, utility, or adequate written description and enablement are not patentable. Design patents do not protect designs dictated solely by function or designs lacking ornamentality.

Yes, software-related inventions may be patentable in the United States. However, software claims must satisfy the patent-eligibility requirements of 35 U.S.C. §101 and generally must be directed to a technological solution or improvement rather than merely an abstract idea implemented on a computer. Each application is evaluated on its specific facts and claim language.

The U.S. Patent Office recently published guidance stating that an AI-assisted invention may be patentable if a natural person “significantly contributed to the claimed invention”. The guidance is not legally binding but provides some insight on how the U.S. Patent Office will evaluate patent applications covering AI-assisted applications.

A patent application filing should include: 1) specification, 2) drawings, 3) claims, 4) an abstract, 5) a title, 6) an application transmittal form, 7) a fee transmittal form, 8) an application data sheet, and 9) an inventor oath or declaration. All of the documents should be filed together to the U.S. Patent Office. The inventor oath or declaration may be filed later but will incur a late fee.

The normal time period until the first patent examination will depend on the complexity of the invention as well as the backlog of the art unit of the U.S. Patent Office that will be examining the patent. Generally, the normal time period will be about 1 year to 18 months until the U.S. Patent Office will issue its first Office action following the first patent examination. The normal time period until the patent issues will also depend on the complexity of the invention and the backlog of the art unit as well as the number of rounds of examination required by the Patent Office to obtain a notice of allowance. Generally, the normal time period will be about 2 years to 3 years until the patent issues.

In addition, the USPTO offers Track One Prioritized Examination, which allows applicants to obtain substantially accelerated examination upon payment of an additional fee and satisfaction of applicable requirements. Track One is available for original utility and plant patent applications, as well as certain continuing applications. The USPTO's goal is to provide a final disposition (allowance, final rejection, appeal, or abandonment) within approximately twelve months of prioritized status being granted.

Yes. In addition to Track One Prioritized Examination and the Patent Prosecution Highway (PPH), the USPTO offers several other mechanisms to accelerate examination. For example, an application may be made special based on an inventor's age (65 or older) or health. The USPTO also periodically offers technology-specific accelerated examination programs, such as programs for cancer immunotherapy, climate change mitigation technologies, and certain semiconductor technologies. The availability and requirements of these programs may change over time. In practice, Track One Prioritized Examination and the PPH are the most commonly used mechanisms for obtaining accelerated examination.

Yes. Like other PPH jurisdictions, if an applicant receives a notice from a first patent office that at least one claim is allowable, the applicant can request fast track examination of corresponding claim(s) in a corresponding patent application that is pending at the U.S. Patent Office.

Utility and reissue patents are subject to maintenance fees. Design patents are not subject to maintenance fees. Fees for maintaining an original or any reissue patent are due at 3.5 years, 7.5 years, and 11.5 years after the date of issue of the patent. The maintenance fees for each due date are currently $2,000, $3,760, and $7,700 respectively. Reduced maintenance fees are available for applicants that are deemed a small entity or a micro entity. For example, the maintenance fees for each due date for a small entity applicant are $800, $1,504, and $3,080 respectively. The maintenance fees for each due date for a micro entity applicant are $400, $752, and $1,540. These amounts are subject to change.

To qualify for protection under a utility patent, the invention must be directed toward a new and useful 1) process, 2) machine, 3) manufacture, or 4) composition of matter. To qualify for protection under a design patent, the invention must be directed toward a new, original, and ornamental design for an article of manufacture. To qualify for protection under a plant patent, the invention must be directed toward the discovery or asexual reproduction of any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber propagated plant or a plant found in an uncultivated state. Additionally, the invention must be novel and nonobvious when compared with prior art.

A patent owner has the right to exclude others from making, using, offering for sale, selling, or importing into the United States the invention claimed in the patent.

Patent law grants ownership of the patent to the inventor. As patent owner, the inventor has the right to exclude others from making, using, offering for sale, selling, or importing into the United States the invention claimed in the patent. If a patent has more than one inventor, each inventor may be a co-owner of the patent.

The term of a utility patent and a plant patent is 20 years from the U.S. filing date. If the utility patent claims priority to a prior non-provisional application, the term of the patent will be measured from the filing date of the prior non-provisional application. If the U.S. application is a national application of a PCT application, the term will be measured from the filing date of the PCT application. For design patents filed on or after May 13, 2015, the term is 15 years from the date of patent grant.

No. However, for certain pharmaceutical products, medical devices, food additives, and similar regulated products, limited patent term extension may be available under 35 U.S.C. §156 to compensate for a portion of regulatory review delays.

The inventor is the first owner of a patent. If a patent has more than one inventor, each inventor is a co-owner of the patent absent an assignment from the inventors.

Yes. Ownership of a patent can be divided among two or more separate individuals or entities. Each co-owner has the right to right to sell, transfer, assign, license their portion of the patent. All co-owners of a patent must act together as a composite entity in patent matters before the U.S. Patent Office. Additionally, all co-owners must act together to assert a patent infringement claim. Also, there is no duty of accounting among co-owners.

The owner of the patent should transfer, assign, or license a patent through a written agreement. The assignment or transfer of the patent should be recorded with the U.S. Patent Office.

A party directly infringes a patent if that party makes, uses, sells, or offers to sell a patented invention within the US or imports a patented invention into the US. A patent is infringed if a single claim is infringed. For a claim to be infringed, the accused product or process must include or practice each and every element of the asserted claim either literally or under the doctrine of equivalents.

In addition to direct (above) and indirect (below) infringement under the Patent Act, there are other theories of infringement. These include infringement under the Hatch-Waxman Act, infringement for exporting component parts of a patented invention (requiring a showing that all or a substantial portion of the components of an invention were exported and actively inducing others to combine the components outside the US in a manner that would infringe if the combination occurred in the US), and infringement for importing, selling, offering for sale, or using a product made outside of the US by a process patented in the US.

Under theories of indirect infringement, a party that does not directly infringe a patent may still be liable for indirect patent infringement if that party: (1) actively induces another to infringe the patent (Inducement); or (2) supplies a component or material used to infringe the patent (Contributory Infringement).

A party induces infringement if it actively and knowingly aids and abets another's direct infringement. Accordingly, inducement requires a showing of both direct infringement of the patent (by another), and that the accused party knowingly induced the direct infringement by the other party and had specific intent to encourage the other's direct infringement.

A party contributorily infringes a patent if the patent owner can show that: (1) there is direct infringement by another; (2) the accused party had knowledge of the patent; (3) the component provided by the accused has no substantial non-infringing uses; and (4) the component is a material part of the claimed invention. The claim requires a showing that the accused infringer had knowledge that: (1) the patent exists; and the component's use in the combination infringes the patent.

The Doctrine of Equivalents provides that a product that does not literally infringe may still infringe if it is equivalent to the claimed invention. For the doctrine to apply, the missing claim element and the substitute element in the accused product must either be: (1) insubstantially different (known to be interchangeable), which is determined at the time of infringement; or (2) found to perform substantially the same function, in substantially the same way, and achieve substantially the same result. Equivalence is evaluated on an element-by-element basis and not from the perspective of the invention as a whole. Prosecution history estoppel may bar the applicability of, or limit the scope of, any equivalents and should be evaluated.

Medical/Surgical Procedures: Physicians and surgeons enjoy some protection against patent infringement liability in in certain circumstances under 35 U.S.C. § 287(c). These protections generally don’t extend to a patented machine or medical device used in such procedures. Also, device manufacturers/suppliers could be liable for inducement to infringe if they direct or influence doctors to infringe a patent.

Medical/Surgical Procedures: Physicians and surgeons enjoy some protection against patent infringement liability in in certain circumstances under 35 U.S.C. § 287(c). These protections generally don’t extend to a patented machine or medical device used in such procedures. Also, device manufacturers/suppliers could be liable for inducement to infringe if they direct or influence doctors to infringe a patent.

Patent Exhaustion: The doctrine of patent exhaustion, also known as the “first sale doctrine,” is a legal doctrine that limits the extent to which patent holders can enforce patent rights downstream after an authorized sale. It may prevent patent owners from collecting royalty payments on the product multiple times from different parties.

Two basic remedies are available to a patent holder who successfully proves infringement of a patent claim. These are monetary damages and injunctive relief. Monetary damages for patent infringement can include compensatory damages and enhanced damages. In addition, the patent holder may be able to recover costs and attorney fees in certain circumstances. Compensatory damages generally may be in the form of a reasonable royalty and lost profits. A reasonable royalty determined in an infringement action is based a number of factors, but generally amounts to the royalty that a reasonable patent holder and reasonable accused infringer would agree to in an arms-length license negotiation on the eve of the alleged infringement.

In addition to damages based on a reasonable royalty, a patent holder who competes with the infringer for sales of the patented product or process may also seek to recover its lost profits. Lost profits are intended to compensate the patent holder for lost sales or price erosion due to the infringer's competing sales of infringing products. But in order to receive lost profits damages, the patent holder must prove that there was a reasonable probability that, “but for” the infringement, it would have made the infringer's sales.

Enhanced damages are authorized by Section 284 of the Patent Act and may be awarded at the court’s discretion. Courts have found enhanced damages to be appropriate in “exceptional cases,” such as the infringement is “willful.” under the Patent Act, a court may award reasonable attorney fees to either the patent holder or alleged infringer as a prevailing party in exceptional cases.

Injunctive relief in the form of either a preliminary or permanent injunction, if awarded, prevents the accused infringer from importing, making, using, selling, offering for sale, or importing into the US any product that infringes the subject patent. Injunctive relief is not automatic, and its application requires balancing of equitable factors including whether the patent holder suffered irreparable harm and whether Conventional remedies such as monetary damages, would be sufficient to compensate for such injury.

Patents that are registered, but not patentable (e.g., invalid or unenforceable) can be challenged in a variety of ways. Such challenges are available in various forums, such as in court or in front of the US Patent and Trademark Office (USPTO). Post-grant challenges can be mounted at the USPTO. Post-grant challenges are mechanisms that allow third parties to contest the validity of a patent after it has been granted by the USPTO. These include Post-Grant Review (PGR), Inter Partes Review (IPR), and Covered Business Method (CBM) Review. They are conducted before a panel of experienced and highly qualified administrative law judges at the USPTO’s Patent Trial and Appeal Board (PTAB). These challenges are powerful tools for invalidating patents that should not have been granted and offer alternatives to costly litigation. Oftentimes, the judge in a parallel Federal District Court case will grant a stay of the court's litigation proceedings while the validity is 'tried' in front of the USPTO. This can offer dramatic cost savings to the defendant and can deter frivolous litigation in the district court.

Another challenge at the patent office is an Ex Parte Reexamination (EPR). Ex parte reexamination is another process available through the U.S. Patent and Trademark Office (USPTO) to challenge the validity of an issued patent based on substantial new questions of patentability (SNQs). The EPR focuses solely on patents and printed publications and is another alternative to district court litigation. Like the above-mentioned post-grant challenges, judges in a parallel district court case are also generally likely to grant a stay of the court's litigation proceedings while the validity is reexamined in front of the USPTO.

Challenging a patent in a U.S. district court typically arises as part of a patent infringement lawsuit, and such challenges typically allow for broader arguments as compared to USPTO proceedings mentioned above.

A patent can be invalidated in the district court on several grounds. First, a patent can be challenged for lack of novelty under 35 U.S.C. § 102 if the invention was disclosed in prior art, such as earlier patents, publications, or instances of public use or sale before the filing date. Similarly, under 35 U.S.C. § 103, a patent can be challenged for obviousness when the claimed invention would have been obvious to a person skilled in the art based on prior art. Another frequent ground of attack is based on a lack of patent-eligible subject matter under 35 U.S.C. § 101, which applies to claims covering abstract ideas, laws of nature, or natural phenomena. Additionally, challenges under 35 U.S.C. § 112 can be raised where the patent lacks sufficient written description or enablement, or if the claims are indefinite. Patents can also be challenged on the basis of improper inventorship. And, Improper priority claims can also render a patent invalid if the patent relies on an incorrect or unsupported filing date.

The aforementioned attack for lack of patent-eligible subject matter under 35 U.S.C. § 101 is often brought as an early motion to dismiss the pleadings and can be a powerful and cost-effective tool for shutting down litigation early before costs mount.

In addition to invalidity arguments, patents can be challenged as unenforceable due to what is referred to as inequitable conduct. For instance, inequitable conduct occurs when the patent holder withholds material prior art or provides false information to the USPTO with intent to deceive, which requires proving both materiality and intent. Patent misuse, such as engaging in anticompetitive practices or improperly extending the patent’s scope, is another potential basis for unenforceability.

Infringement and invalidity may be decided in the same proceeding. However, this is not always the case and may depend on the proceeding. In the case of District Court litigation, questions of infringement and invalidity may be decided in the same case and the particular questions may be adjudicated in different parts of the case. For example, the case may be bifurcated or certain motions may be brought and heard addressing either infringement or invalidity individually or together. It is not unusual for a jury to hear and decide questions of infringement and invalidity as part of the same trial.

Other proceedings, such as post-grant proceedings before the Patent Office and Patent Trial And Appeal Board (PTAB), are focused on the question of invalidity. For example, Ex Parte Reexamination, Inter Partes Review, and Covered Business Method Review proceedings are focused on invalidity and have specific rules governing the conduct of each proceeding.

As noted, the US patent system provides for the possibility of obtaining a preliminary injunction against an accused infringer to halt activities prior to final adjudication on the merits. The United States’ Federal Rule of Civil Procedure (FRCP) 65 provides for two forms of preliminary injunctive relief: (1) preliminary injunctions; and (2) temporary restraining orders.

A preliminary injunction, typically determined at the onset of a litigation, preserves the status quo, and protects the parties' rights pending the outcome of a decision on the merits of the underlying complaint. TROs are rare in patent cases and offer the relief of preserving the status quo while the court decides whether to issue a preliminary injunction.

The standard for a temporary restraining order or preliminary injunction is typically a four-factor test, which differs among the courts. The Federal Circuit considers: (1) likelihood of success on the merits; (2) whether the moving party is likely to suffer irreparable harm absent the injunction; (3) harm to the moving party if the court does not issue an injunction versus harm to the non-moving party if the court grants an injunction; and (4) whether the injunction would serve the public interest.

Temporary exclusion orders and temporary cease and desist orders may be available in certain exceptional circumstances under Section 337 investigations, which are conducted by the US International Trade Commission pursuant to 19 U.S.C. § 1337.

Generally, patent infringement is not a criminal offense in the United States and does not give rise to criminal penalties. Patent infringement is ordinarily addressed through civil litigation, where remedies may include injunctive relief, monetary damages, enhanced damages for willful infringement, and attorneys' fees in exceptional cases. By contrast, U.S. copyright, trademark, and trade secret laws provide for criminal penalties in certain circumstances. However, conduct related to patent rights may give rise to criminal liability under other laws, such as those involving fraud, theft of government property, false statements, or economic espionage, depending on the facts.

Reasonable Royalty Damages: The basic measure of damages for patent infringement is "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer" (35 U.S.C. § 284). Royalties may be awarded as a lump sum payment in full for the infringer’s use of the patented invention and as a running royalty. As set of 15 factors known as the Georgia-Pacific factors are often used to assess what constitutes a reasonable royalty. These factors are used to reconstruct a hypothetical negotiation between the parties on the eve of infringement. Other factors to determine royalties can include established royalties for the patent based on prior licenses to other parties to use the patented invention, excess profits attributable to the infringement and the costs and availability of non-infringing alternatives. Royalties are typically tied to the patented features, but in some cases, damages may be based on a product's total revenues if the patented feature drives product demand.

Lost Profits: If the patent holder can demonstrate that they lost sales or profits directly as a result of the infringement, they may be entitled to recover those lost profits. This typically requires evidence showing a but for connection between the infringement and the patentee’s lost sales/profits. In order to claim lost profits, the patentee must prove that there was a reasonable probability that, but for the infringement, it would have made the infringer's sales. Typically, the patentee must prove four factors to prove lost profits damages: (1) demand for the patented product during the period of infringement; (2) absence of acceptable non-infringing alternatives available; (3) patentee had the manufacturing and marketing capability to meet the demand for the patented product during the infringement period; and (4) the amount of profit patentee would have earned had it made the sales taken by the infringing product.

Personal Liability: Generally, individuals may be held personally liable for patent infringement if they, alone or with others, commit the infringing acts (either directly or indirectly). Personal liability may also extend to officers and employees of corporations found to infringe under certain circumstances. Generally, to hold corporate officers or individuals liable for such infringement, plaintiffs must pierce the corporate veil to show alter ego liability. However, the Court of Appeals for the Federal Circuit recently held that corporate officers and employees who actively assist with their employer’s infringement may be personally liable for inducing infringement in certain circumstances without piercing of the corporate veil.

A patentee may bring a suit at any time after the patent grants and may even bring suit for a period of time after the patent has expired. Important to the timing consideration is that the Patent Act limits the period for collecting past damages for acts of infringement to six years before the filing of the complaint or counterclaim for patent infringement.

Legal fees associated with patent infringement actions in the United States can be very high, typically running into the millions of dollars to litigate a case through trial. The costs can vary dramatically depending on a number of factors, including for example, the number of patents in the case, the technology involved, the behavior of the parties, and where the case is pending, among others.

Awards of costs and fees to the prevailing party in patent cases is not automatic or a matter of right. In exceptional cases, a court may award reasonable costs and fees to the prevailing party. Determination of whether a case is exceptional is within the discretion of the District Court. Factors that are considered include closeness of the case, and parties' conduct, including trial tactics and any evidence of bad faith or inequitable conduct. There is another cost-shifting mechanism referred to as an offer of judgment. If a defendant makes an offer of judgment before trial (FRCP 68), the offer is rejected and the ultimate judgment less favorable than the offer, the plaintiff must pay the defendant's costs incurred after it made the offer.

The duration of a patent case can vary significantly depending on several factors, including the complexity and type of case, the jurisdiction in which the case is filed, the backlog of cases in the court system, whether the case is terminated early based on motion practice, and whether the case settles or goes to trial. A stay of the case (for example, while the patent is challenged at the patent office in a parallel proceeding) can also extend the duration of the patent case. Patent cases typically take approximately 18 months to several years from filing of a complaint through trial. However, every case is unique, and the timeline can vary significantly based on the facts and circumstances of the case.

Yes. An investigation conducted by the United States International Trade Commission (USITC) under Section 337 of the Tariff Act of 1930 can result in an order affecting the importation of goods. These orders may include exclusion orders to halt the importation of infringing products into the United States.

The United States Supreme Court in Amgen v. Sanofi determined that claims to a broad genus are unlikely to be enabled by a specification that merely describes methods by which species of that genus can be identified. In Amgen, the Supreme Court explained: “If a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class. In other words, the specification must enable the full scope of the invention as defined by its claims. The more one claims, the more one must enable.” On January 10, 2024, the United States Patent and Trademark Office (USPTO) issued "Guidelines for Assessing Enablement in Utility Applications and Patents in View of the U.S. Supreme Court Decision in Amgen Inc. et al. v. Sanofi et al." In February 2024, the U.S. Patent Office published guidance stating that an AI-assisted invention may be patentable if a natural person “significantly contributed to the claimed invention”. The guidance is not legally binding but provides some insight on how the U.S. Patent Office will evaluate patent applications covering AI-assisted applications.

Patent eligibility under 35 U.S.C. § 101, particularly for software-implemented and AI-related inventions, is likely to remain one of the most important and closely watched areas of U.S. patent law. Ongoing judicial decisions, USPTO guidance, and potential legislative activity may further shape the standards for patenting computer-implemented and AI-assisted inventions.