March 10, 2003
Patent Law 101
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Peggy Aycinena - Contributing Editor


by Peggy Aycinena - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by EDACafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!

Steve Beyer has been mountain climbing in Nepal, backpacking in New Zealand, and has lived and worked in Japan. He's an avid cyclist and has never been known to shy away from a pick-up game of basketball, no matter how tough the opponent. But all of this pales in comparison to his principle adventure in life - Patent Law.


Beyer was half-way through graduate school at Stanford, when it occurred to him that one way he could leverage his engineering and his interest in writing was to go to law school. He set his sights on doing just that, after completing his MSME, and promised himself that, no matter what, he'd never go into patent law.


Predictably, the first job he landed out of graduate school - the one that was to support him through law school - was a job at the U.S. Patent Office. There he learned the ropes (and tedium) of poring over patent applications and working with those who come hoping to certify that their idea is a patentable one.


Beyer's work in the Patent Office was educational, but hardly inspirational, so when he had an opportunity to go work at a law firm, while still working his way through law school, he jumped at the chance. It was a patent law firm and the rest is history.


Today, despite all of his initial intentions to the contrary, Steve Beyer is a patent attorney and partner in Beyer Weaver & Thomas, LLP - an intellectual property law firm with several offices in Northern California. More importantly, for the legal novice with an interest in the subject, Beyer is a patient and willing instructor. He really likes this stuff.




It starts with an idea


Beyer says the patent process always starts with an idea, and he says you can try to patent just about anything. However, in order to successfully defend a patent to the U.S. Patent Office you need to prove that:


- The idea is a novel one.

- It's different from anything else that existed before.

- It's not obvious to a person with "ordinary skills in the area."


That all certainly seem straightforward enough, but according to Beyer it's a devilishly difficult task to actually prove that an idea meets these requirements. He says that whether you're trying to get a patent on a user interface, an operating system, a driver, or an optimization algorithm, to prove that your concept warrants a patent is very, very challenging - and can take anywhere from 10 months to 4 or 5 years from the initial filing of an application to the final awarding of the patent itself.


Anybody can work through the patent process on his or her own, Beyer says: "It's not rocket science." He says many inventors and innovators have successfully written and defended their own patent applications. Beyer doesn't discourage that type of thinking, but says that if someone does decide to spend the $12,000 to $18,000 required to hire a patent attorney to file a patent application (that includes several thousand dollars in application fees to the Patent Office), they'll get a lot of help for the money.


Such help includes assistance in researching the uniqueness of the idea - its "patentability" - and experience in documenting an idea to the level of detail required by the Patent Office - flow charts and block diagrams for software, or schematics for hardware, plus extensive descriptive narrative. Many patent attorneys, he says, have had experience themselves working in the Patent Office and understand the bureaucracy and mind-set of the people who work there.


Patent examiners who work in the Patent Office, Beyer says, usually have a technical degree relevant to the technology of the patents they're examining. However, he adds, frequently these individuals - though very dedicated to their craft - have never actually worked in the industry that's generating the patent applications that they handle. This isn't necessarily a problem, he says, just an important factor to keep in mind when working closely with the examiner who's been assigned to your application.


On the legal side, Beyer says that patent attorneys, particularly those in high-tech, have passed not just one, but two different types of Bar Exams - the well-known exam administered by each state which licenses an individual to practice "before the Bar," and the lesser know exam administered by the U.S. Patent Office which licenses an individual to "prosecute a patent" before the U.S. Patent Office. Additionally, you need a technical degree of some sort to be permitted to sit for the "Patent Bar" if you want to be licensed to prosecute patents in a technical area.


The term "prosecution" is a difficult one for the layman to get past in any discussion of patent law. In movies and TV, prosecutors are doggedly determined champions of law and order, trying to pin the "goods" on a miscreant of some sort or another. However, in the semantics of patent law, "prosecution" is the process by which a patent application is "defended" before the Patent Office.


Beyer says that 95-to-99 percent of all patent applications are turned down the first time around. That rejection then triggers several iterative rounds of additional documentation and communication between the applicant and the Patent Office - the process that can last upwards of 5 years - and this is termed "Patent Prosecution."


Beyer does not do "litigation" - the process whereby the party of the first part sues the party of the second part for "patent infringement." (Although he does serve occasionally as a consultant in patent litigation.) Anybody who lives and works in EDA probably knows more than they ever wanted to know about "litigation" - but, in any case, don't confuse "prosecution" and "litigation" when you're talking about patent law.




Is it a (venture) capital idea?


The legal fees associated with the prosecution phase of the patent process can run, again, from $10,000 to $20,000, according to Beyer. In other words, if you've hired a patent attorney to assist in the process, by the time your patent is actually granted you may have spent upwards of $30,000 to $50,000 on legal fees over all - only a small part of which are the actual fees required by the U.S. Patent Office.


Beyer says that if you're a small start-up, with perhaps only $500,000 in seed money, you're unlikely to see why you should shell out such a large percentage of that money for pricey legal fees just to pursue protection of your idea. In fact, you may even be ornery enough to think you don't need to file for patent protection at all for your idea or product. However, he says, there's more than just legal fees or a sense of empowerment hanging in the balance.


Beyer says, if you plan to seek out venture capitalists and angels to fund your technology start-up, you may find that though they are fascinated by your proposal, the very first thing they're going to ask is, "What have you done to protect your idea? Have you filed a patent application?" VCs are not usually willing to move forward, he says, and back your business plan if you have not laid down the requisite groundwork, "marked" your technical territory, and prepared to defend it from attack from competitors. So, as philosophically appealing as it may seem to go it alone without patent protection or burdensome legal fees, your first visit to a VC's office may radically change your point of
view.


Meanwhile, say that you've filed the application, that you're enduring the prosecution phase, that your business is up and running based on your idea - what protection do you have from IP raiders while you're awaiting the final granting of your patent?


The answer is simple, Beyer says. "None. You have no protection. Until that patent is granted, you have no exclusive legal right to your idea or product." Which begs the question all over again - why go to all of this trouble if, during the early years, your start-up has no way to defend its technology. The answer is again simple. Just try to get initial funding, or subsequent rounds of funding, if you have not done due diligence in protecting your idea - and the investments of your backers.




A Ploy named Sue


Beyer says that when you finally receive your patent, you may be quite surprised about the wording in the document. He says a patent is never longer than a single sentence, but what a sentence it is! Beyer calls it "complete and utter gibberish" that thoroughly describes your intellectual property to an excruciating level of detail, and also describes exactly what nobody else can do with your IP.


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-- Peggy Aycinena, EDACafe.com Contributing Editor.




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