Followers of U.S. patent practice will understand that patent law and its application in the U.S. courts and the United States Patent and Trademark Office (USPTO) has an ebb and flow from patent friendly to patent hostile. Historically this trend moves like a pendulum peaking in one direction and then pulling back to repeat the flow from overly liberal in the allowance and enforcement of patents to overly conservative and restrictive of allowable patent scope.
 
So where are we today on the patent spectrum? Arguably we are very high on the patent hostile side. Two major factors weighing on anti-patent sentiment in the U.S. are patent eligibility requirement under 35 U.S.C. §101, and post grant procedures enacted by the American Invents Act (AIA).
 
First let’s address patent eligibility. 35 U.S.C. §101 requires inventions to fall within certain categories of statutorily patent eligible subject matter. There categories include “any new and useful process, machine, manufacture, or composition of matter.” Conversely, courts have defined three areas of patent ineligibility, namely, laws of nature, natural phenomenon, and abstract ideas. Historically there was very little (at least compared to the last ten years) discussion of what patent eligible subject matter meant and how to apply it. However, two areas of modern technology have drastically ratcheted up the discussion of patent eligibility. These areas are computer assisted technology/software and biotechnology, and the relevant court cases are Alice Corp. v. CLS Bank (“Alice”) and Mayo Collaborative Services v. Prometheus Labs. Inc. (“Mayo”). Without getting into a dissertation on how to apply the rules of patent eligibility and/or the holding in Alice/Mayo and their progeny, a short explanation is that computer software patent claims that solely recite abstract ideas (e.g., a method for hedging financial risk) and biotechnology patent claims that recite naturally occurring compositions of matter (e.g., a DNA marker for breast cancer) are patent ineligible. This a massively truncated explanation of how these classes of inventions have been limited, but the fact is that they have been limited. It has become much more difficult to obtain and subsequently enforce patents in these technological areas.    
 
There are reasons why these limitations exist. The patent system was designed to promote innovation and not just discovery. Inventions should provide novel applications of inventive ideas, not just the abstract idea itself or the identification of the compound found in nature. At the extreme ends of patent eligibility these concepts seem relatively simple, but in practice a mix of abstract ideas and natural compositions with inventive methods, processes, compositions and article of manufacture have led to invalidity and unpatentability of thousands of patent applications in the last decade. Subsequently, this preference for reduced allowability to avoid potentially patent ineligible inventions has results in fewer patents and very likely a reduction of investment in U.S. biotechnology.
 
The second recent development (recent being the last 10 to 15 years) was the passage of the America Invents Act (AIA) in 2011, and subsequent enactment of its provision over the following years. The AIA, also referred to as the Patent Reform Act, created multiple changes in U.S. patent law that generally brought the U.S. in line with most of the world’s industrialized nations. These features include changing the U.S. to a first-to-file country (from a first-to-invent), updating applicant eligibility (allowing corporations, and not just inventors to be the applicant for patents), and adding additional post-grant procedures to challenge patents at the USPTO (as opposed to litigating in federal courts). Two of the new post-grant procedures of particular importance to this discussion are IPRs (Inter Partes Reviews) and PGRs (Post Grant Reviews). As a summary explanation, IPRs allow challenges to any pending patent (all first-to-invent, and first-to-file patents 9 months after grant), but with limited challenges (obviousness and anticipation); and PGRs allow challenges to any patent filed after March 2013 (but within 9 months of the patent grant or reissue) with expanded challenges compared to IPRs. These procedures are similar to many post grant procedures that exist in other countries or regions, particularly oppositions in the European Patent Office (EPO). Arguably these procedures have made it more cost effective for entities to challenge patents. The USPTO procedures are intended to reduce litigation discovery costs and the duration of litigation. As an example, IPR/PRG’s are designed to reach a final decision in 18 months and can cost around $100,000. In contrast, federal district court litigations can take multiple years and cost millions of dollars.
 
What is undisputable is that these new procedures have made it easier to challenge and invalidate patents. While this may lead to a better crop of patents with poorer patents being weeded out before they can be asserted and litigated in courts, it also increases the chances for all patents to be invalidated by decreasing the hurdles for patent challenges.
 
Should the U.S. be more patent friendly or continue in this anti-patent trend? The answer often depends on your view of patents. Patents are governments grants of a limited monopoly in exchange for the public disclosure of novel and non-obvious invention (including the know how to practice these inventions). The tradeoff is designed to advance technology through the disclosure and simultaneously support research and development with the promise of limited future exclusivity. The public disclosure of the innovation (in contrast to trade secret protection) enables others to understand and build on the technology, hopefully leading to greater technological advancements. A counter argument to increasing the strength and value of patents is the view that patents are anti-competitive and reduce incentives to innovate and commercialize new products and technologies for fear of infringing existing patents. The challenge is to balance the competing interests of increased incentives to innovate while simultaneously providing competitive and fair marketplaces. These countervailing interests create the ying and yang that pull patent law in different directions over time.  
 
Recently the pendulum has swung significantly into anti-patent territory, but history suggests it will likely swing back. While it is unlikely we will see wholesale elimination of IPR and PRG’s, their scope and enforcement will probably be tamed. Further, Federal Circuit and Supreme Court decisions (followed by USPTO allowability guidelines) will likely temper the patent eligibility requirements currently in force. It will take time, but eventually the U.S. will be back in a patent friendly mindset. In the future the pendulum will likely move towards overly patent friendly, and then oscillate back toward anti-patent sentiment, but hopefully by then I will be long, long retired.
 
If you have any questions about patents, trademarks or copyrights, and would like to discuss protection and registration please contact me at [email protected] or visit my website at www.chiaraiplaw.com
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When asked by prospective clients what a trademark clearance search is my first response is usually to explain that it is akin to insurance for your trademark filing and eventual trademark use.
 
For those new to the IP world, there are a few points to start with about trademarks that will help explain the following discussion on clearance searches (and opinions, more below). First, trademarks (or marks) are used to identify your goods or services and distinguish your goods and services from competitors in the marketplace. A second point is that while using the exact same name on the exact same goods or services as another person will clearly causes problems (potential registration rejections and infringement), so to can using similar marks on similar goods and services. So, while most people will recognize the problematic nature of a duplicate mark on the same goods and service, it is more difficult to understand the relevance of similar marks on similar goods and services. The importance of the level of similarity becomes the focus of the trademark clearance opinion letter discussed further below. A third point that is often not intuitive to first time trademark filers is that the USPTO employs classes to distinguish the types of goods and services upon which the mark will be employed. Similar goods and services are grouped together to facilitate the searching. For example, spoons, forks and sponges, are grouped together in class 21 (household goods), and T-shirts, sweaters and pants are grouped in class 25 (clothing). You can file, and have your mark searched, in multiple classes if you are employing the mark on different goods and services, however, this will increase the filing and searching fees, as well as the possibility of conflicts with similar marks. One significance of the classes is that if a third party mark that is similar to your mark is also listed on a good or service in the same class as your mark it will increase the relevance of what is referred to as “the likelihood of confusion” and ultimately may lead to a potential filing rejection or finding of infringement.             
 
So, what is the clearance search and how is it done? The clearance search can be done completely in-house by an attorney (with or without help from staff/paralegals/assistants) or, and this is by far the more prevalent current method, the search can be conducted by a third-party software-based search firm. The search will generally cover United States Patent and Trademark Office (USPTO) registered trademarks and pending applications, U.S. state trademarks, domain names, social media pages/usernames, websites, and general internet searches. These searches can be expanded (at additional cost) to foreign trademark databases. Typically, these searches cost about $150-$500 depending on whether the mark is a word mark, logo mark, combination word/logo mark, the number of classes of goods or services being searched, and whether the search will cover foreign registrations (this is the estimated search firm fee, not the cost for the attorney to review and opine on the search results).
 
The reason third-party searching firms are used for most clearance searches is that they employ well tested software that runs algorithms that can generate detailed reports in minutes that would take human researches hours if not days. Additionally, the software not only searches for the exact word or logo (think direct hits), but also similar sounding words including spelling variations, e.g., “Quick” and “Kwik” for word marks, and variations on images for logos. Similar sounding word marks and similar looking logos being employed on the same class of goods or services are highly relevant when it comes down to interpreting the trademark clearance search.
The clearance search will generally be divided by the different databases searched (e.g., U.S. registered trademarks, state trademarks, domain names, etc.…). Then within each category the results will be ranked in level of relevance from: (i) direct hits (same word/image); (ii) words or phrases that contain one or more of the base words/images from the searched mark; and (iii) similar sounding/looking marks. Further, because the search will have been based on the class (or classes) of goods and services upon which the mark will be employed the closer the goods and services of the similar mark are to the goods and services of the searched mark the greater the relevance of the results.
     
If there are exact hits on exact goods and services often the best course of action will be to pick a new trademark and start over. However, if there are no directly conflicting marks in the same class of goods and services you will still need to weigh the results of the search. This is where the trademark clearance opinion letter enters our discussion.
 
A trademark attorney will review and analyze the results of the clearance search and prepare a trademark clearance opinion letter. The letter will weigh the significance of the search results and provide a legal opinion, not a guarantee, but a reasoned understanding based on the facts and the law. The opinion letter may be primarily directed towards success in obtaining registration of the mark before the USPTO, towards non-infringement of competing marks (a/k/a “freedom-to-operate”), or combinations of both. While there is much overlap between the two analyses, a complete freedom-to-operate opinion will usually be more involved (and costly) than a likelihood of registration opinion.  
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Now back to our original discussion about “insurance”. A positive clearance opinion letter should give confidence to the trademark filer/user that they will have a good chance of obtaining registration and hopefully not infringe any existing trademarks when they market their goods and services. A negative clearance opinion letter will suggest that the trademark filer/user may want to think about choosing a different mark. Of course, there will be degrees of clearance opinions from highly positive to highly negative based on the facts of the search results. While there are costs associated with the clearance search and the opinion letter, these can be drastically outweighed by lost funds spent on rejected trademark applications, the costs of having to rebrand, and/or the costs of potential trademark infringement. So, think of the clearance search and opinion as insurance on your trademark. If you feel the costs of the insurance outweigh the value of the mark it may not be worth it for you, but if you think the mark is going to be highly valuable to your business it may be worth paying something up front to insure your branding costs and assist in avoiding infringement down the road.
 
If you are interested in filing a trademark or if you need advice on a trademark already in use it is highly advisable to consult an experienced IP attorney to discuss your individual needs and goals. If you have any questions about trademarks, clearance searches, or opinion letters, and would like to discuss protection and registration please contact me at [email protected] or visit my website at www.chiaraiplaw.com