Patents Tutorial

The concept of a patent is often traced back to mid 15th century England where a patent was granted by the King for stained glass manufacturing. Thus the notion of a state-granted monopoly was born. A century later the Crown routinely granted "letters patent" mostly for its own benefit and that of its friends. It is no wonder that some citizens in the rebellious colonies may have had a distaste for them. As mentioned in the Introduction, Thomas Jefferson needed some convincing before agreeing to include patent protection in the U.S. Constitution (see Article I Section 8).

Still others indicate that the first patent was granted in Florence in 1421 and likewise point to a Venetian Patent statute of 1474 as early patent law. One thing is clear, patents were well established as a concept by the time of the first American colonies and there is some record of the debate that preceded their inclusion in the U.S. Constitution. James Madison had the following to say on the topic (Federalist #43):

"The utility of the clause will scarcely be questioned. The copyright of authors has been solmnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of the individuals."

At least some of Madison's colleagues were less sanguine about the prospect of patent monopolies but their complaints are now mere historical footnotes, since it is obvious that Madison's view prevailed. Congress was also apparently persuaded and over the next fifty years passed the patents acts of 1790, 1793 and 1836. The current controlling federal statute is Title 35 of the U.S. Code located here.

Patent law has been, and remains, controversial, both nationally and internationally. It is also, of the big three (i.e. copyright, trademarks, and patents) the most arcane and arguably the least well understood by the public at large.

The controlling federal patent statute is Title 35 of the U.S. Code which is located here. However, lay persons and attorneys alike can quickly get lost in the weeds in Title 35 because it is large, complex and the statute itself provides very little guidance. For example, the entire definitions section is here and as you can see from the sparseness of this section, it provides very little help. Most of the substance, at least from an introductory perspective, is located in Chapter 10 -- Patentability of Inventions. That is where this tutorial will focus.

What can you patent?

Patentable subject matter is defined in section 101 and the entire section is made up of one sentence that reads as follows:

§ 101. Inventions patentable

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

Essentially this section leaves patentable subject matter almost entirely open to every kind of invention under the sun. Given its broad scope, millions of inventors have responded and patented almost everything imaginable (and some inventions that are hard to imagine). There are limits to what constitutes patentable subject matter (covered next), and the process itself is arduous and almost always very expensive, so obtaining a patent does have its "barriers to entry," but despite this fact, many have managed to cross this hurdle.

But a warning is in order here. Crossing the finish (i.e. running the patent marathon) does not imply that wealth will follow. Monetizing a patent is quite a different and more significant hurdle. Of the many that manage to cross the first hurdle, those that capitalize on their invention in a significant way are few and far between (usually, although not always, it is big name corporations, or at a minimum, the "well connected" that accomplish this feat). There is the rule and then there is the reality. This process is not for the faint of heart or for the uninitiated.

What are the requirements?

In order to obtain a patent an invention must be new, useful and non-obvious. This is a trite little phrase because all the keywords in it are terms of art, supported not only by statutory language but by a significant body of case law. Section 102 (duplicated below in its entirety to illustrate a point), deals with the "new" or "novelty" requirement. It is one of those code sections that encompasses entire treatises and that patent attorneys take years to master. It is deceptively byzantine with both national and international patent law implications.

§ 102. Conditions for patentability; novelty and loss of right to patent

A person shall be entitled to a patent unless—

(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or

(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or

(c) he has abandoned the invention, or

(d) the invention was first patented or caused to be patented, or was the subject of an inventor’s certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor’s certificate filed more than twelve months before the filing of the application in the United States, or

(e) the invention was described in
(1) an application for patent, published under section 122 (b), by another filed in the United States before the invention by the applicant for patent or
(2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351 (a) shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language; [1] or

(f) he did not himself invent the subject matter sought to be patented, or

(g)
(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or
(2) before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.

What does it mean? Exactly. A crude interpretation is that if a person (or legal entity) already invented the subject matter of your patent you are out of luck. Your invention is not new, and you can't patent it. This does not necessarily mean (in the U.S.) that someone already patented your invention. It simply means that your invention was "known to the public" before you "invented" it. It also means that if you (or someone else) published the invention more than one year before filing the application, then you cannot patent the invention (a U.S. grace period not supported by the rest of the world). The latter requirement is known as a "statutory bar" and is a hard rule, no exceptions. Furthermore, if your invention was used publicly, or offered for sale to the public more than one year prior to the filing date, you can't patent it. The exceptions here swallow the rule and then some. Almost every key phrase is a term of art that has been litigated.

Section 102 does highlight the importance of the patent search process. Before a client spends an inordinate amount of time walking down this road, they are well advised to first make an initial assessment (by searching the prior art) to determine if the novelty requirement is met. This also applies (even more so) as to whether the non-obvious requirement (discussed next) is also met. Patent search itself is a complex process, usually done by patent attorneys or other search specialists that they employ. The USPTO provides a publicly searchable database which is a good place to start. The FAQ from the USPTO on how to search for patents is located here. However, unless you are an expert in your field and knowledgeable about patents, this preliminary effort is likely to be of little use, other than the possibility of finding a direct hit on your invention, in which case your search is over and you can save yourself the time and money required to proceed. Should you decide to proceed, our recommendation is that you pay for an extensive and professionally done search.

What does it mean for an invention to be non-obvious?

The obviousness requirement, from a statutory perspective, is addressed in section 103. We will refrain from providing the entire section and only highlight the introductory paragraph.

§ 103. Conditions for patentability; non-obvious subject matter

(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.

In other words, despite the fact that the invention in question meets the "novelty" threshold (i.e. there is something "new" about it) it may still not be patentable because it is simply an "obvious" extension of what is contained in the prior art. Again, the same caveats apply to this section as apply to the others. Key phrases and words are all terms of art. For example, what does it mean for someone to have "ordinary skill in the art?" Courts generally weigh several factors but there are no "bright line" rules. The factors weighed often include the following: (1) educational requirements for those that work in the field; (2) types of "problems" faced by those that work in the field; and (3) the time interval between innovations in the field.

The section 103 inquiry (i.e. on the part of the court) usually proceeds as follows: (1) determine the scope and content of the prior art; (2) determine the difference between the prior art and the claims at issue; and (3) determine what is meant by ordinary skill in the art. The test then is stated in these terms. If a person of ordinary skill could have developed the invention in question, then it is not patentable; otherwise (if all other requirements are met) it is.

If patents were litigated all the time then the section 103 inquiry would be the equivalent of a full employment act for attorneys (mostly patent attorneys). The reality is that patents are not litigated that often, despite the impression provided vis-a-vis the popular press. Patent litigation is much to expensive to be high volume. This is one of the factors that contribute to the lack of monetization of patents by small inventors. Even if they manage to cross the patent prosecution hurdles (i.e. actually obtaining the patent via the USPTO) they lack the resources to enforce it in a court of law.

What does it mean for an invention to be useful?

The "useful" (see section 101 above) requirement is often not an issue (and often not litigated) because most inventions are useful for something. There is no high degree of usefulness that is required, as evidenced by the many sites on the web that contain lists of "crazy" inventions that have been patented. However, as in almost all concepts in the patent universe, this does not mean that "useful" is a non-existent requirement. It is often litigated with respect to chemical patents or in bio-genetic related patents. The inquiry into utility usually poses three distinct questions: (1) general utility (can the invention do anything?); (2) specific utility (does the invention solve the problem that it was intended to solve?); and (3) beneficial or moral utility (does the invention produce a social good?). An intermediate chemical or biological process that is not an end in itself may be subject to attack on the grounds of "usefulness." The fear is that granting a patent on such a process would have a "chilling effect" on further work in the field.

What is not patentable?

There are three distinct categories of patents that are protected by the statute: (1) utility patents; (2) design patents; and (3) plant patents. Each are reviewed below with their key attributes summarized.

Utility Patents

This category is what most people think of when they think of patents. Utility patents are mechanical, chemical, biological, software, process and other types of what we typically think of as "inventions." In order to obtain a utility patent an inventor must file an application with the USPTO and meet the following requirements: (1) describe the patent full enough to allow one skilled in the art to reproduce it; and (2) meet the statutory mandates of new, useful and non-obviousness. There is no common law protection and no state patent laws—it is all federal and statutory.

The disclosure requirement is a significant part of the quid pro quo required in order to be granted the patent monopoly. The introductory paragraph is presented below. The disclosure is how the public eventually gets its half (presumably more) of the benefit of the bargain.

§ 112. Specification

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.

Notice the requirement for setting forth the best mode. The inventor cannot hold back without the risk of being penalized (i.e. having the patent later invalidated). In other words, an inventor needs to present the most viable implementation. This is one of ways that the public's interest in the invention is protected. Section 112 goes on to detail the nature of the claims that an inventor must make, both their number and their form. The claims are what define the "metes and bounds" of the inventor's property rights. They must be drafted with utmost care. It is the claims that legally define the invention. In an infringement action the core issue will be whether the claims of the defendant "read on to the patentable invention."

For a utility patent an inventor is granted monopoly rights for a period of twenty years from the filing date of the application. After such time the invention enters the public domain and can be freely used by any interested party. Courts are often quick to reinforce the concept that the patent monopoly is not the “natural right” of an individual inventor but rather an inducement to bring forth new knowledge.

Design Patents

These patents are a bit of an "odd bird" in intellectual property law. They overlap with other doctrines such as copyright, trademark and unfair competition law in that they afford protection for non-functional characteristics of useful objects. They have been obtained for a wide assortment of products including shoes, automobile designs and computer graphics. The public policy rationale for design patents, going back to 1842, was to provide "encouragement for the decorative arts." Apparently the artsy folks were feeling a bit left out in the middle of the 19th century. The authors had copyright protection and the inventors had patent protection but the artsy folks had no safe haven in the law with which to protect their intellectual property rights. Obviously this is a bit tongue in cheek since the "decorative design" of a product might have a significant role to play in whether or not it is successful. We all love "beautiful things" and hence Apple's star is again on the rise with the iPod, iPhone and re-invigorated PC products. Look for more and more design patents going forward.

The core statutory provision for design patents is section 171 provided below.

§ 171. Patents for designs

Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title.

The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.

The duration of the monopoly is for fourteen years as opposed to twenty years for utlity patents. The patentability requirements are also somewhat different. Obviously the "useful" requirement has been omitted since that is not what is being protected. In place of "useful" we have the "ornamentality" requirement. Ornamental means (more or less) creating a pleasing appearance or as one court indicated: "must be the product of aesthetic and artistic conception." Whatever that means, it does not necessarily imply what we normally consider to be art, since the design of a cement mixer has met the requirement. In other cases the requirement has not been satisfied due to concealment during use. In other words, a design cannot be pleasing if it is not seen. In addition, the design cannot be dictated by its function in order to obtain the patent. There are various public policy reasons for the latter rule, including the fact that functionality is protected by utility patents, with all that they entail.

Both the novelty and the non-obvious requirements of utility patents continue to apply. Novelty is established if no other prior art has exactly the same design. A design is different if the "ordinary observer" would judge it to be so. To be "different" means that it has to be more than modification of a prior design. With respect to the non-obviousness standard, a variation of the standard set forth in Graham v. John Deere (USSC 1996) for utility patents is used. Here the standard is whether a "designer of ordinary capability" could have made the modification. If so, then the modification is "obvious" and no design patent issues.

If all of this sounds a bit vague and "mushy" you are in good company. However, the American courts are remarkable in their pragmatism. They are quite capable of dealing with this sort of complexity and producing decisions that, on the whole, serve the intended purpose. This despite the criticism from academics and other commentators. They deserve much more credit then they are often given. American jurisprudence is arguably one of the principal factors in why the American economic experiment has flourished, in spite of the many bumps along the way.

Plant Patents

Plants can be protected as utility patents if the general requirements for utility patents are met. However, there are also specific statutory provisions that cover plants. Historically plants were thought to be ineligible for patent protection but the Plant Patent Act and the Plant Variety Protection Act have put that argument to rest. However, not all plants are patentable, because obviously plants are part of nature and man did not invent nature. This section will cover the specific requirements that must be met. Section 161 is the core statutory provision.

§ 161. Patents for plants

Whoever invents or discovers and asexually reproduces 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, may obtain a patent therefor, subject to the conditions and requirements of this title.

The provisions of this title relating to patents for inventions shall apply to patents for plants, except as otherwise provided.

Similar to design patents, there are general provisions related to inventions that continue to apply. The first thing to notice is that it is only asexual reproduction of a plant that is the central concern. The ability to creatively isolate and breed "new" types of plants is rewarded. What does "new" mean? In general it means characteristics clearly distinguishable from those of existing varieties. Some of these characteristics include: habit, immunity from disease, soil or conditions, fruit or stems, flavor, productivity (including ever bearing qualities in the case of fruits), storage qualities, perfume, form, and ease of asexual reproduction. Distinctness (i.e. "newness") is usually defined as the aggregate of the plants distinguishing characteristics. With respect to the non-obviousness requirement, it will be met if the new variety: (1) maintains the desirable qualities of the parent; and (2) adds significant improvements; and (3) preserves the new specimen by asexually reproducing it.

Comments: All of our tutorials represent broad overviews. However, this is more true in the case of patents. The patent universe is so large that patent attorneys often practice patent law and not much else. We are not patent attorneys, but we do provide limited patent advice in a few specific areas that are prevalent in the online business environment. See our Practice Areas for more information. We help clients decide whether or not they have a viable patent and then refer them to specialists for patent prosecution and other patent specialty matters.

Before discussing infringement, we should first discuss what it is that the patent monopoly enables in the form of the inventor's intellectual property rights. The monopoly is exclusionary. A patent owner has the right to exclude others from using, making and selling the invention. The inventor is not required to proactively make, use or sell the invention in order to obtain these rights. Furthermore, a patent gives the inventor the right to sue not only those that “steal” his invention, but those who reverse engineer it and even those who develop the same invention independently. This protection is quite broad. But what is it that legally defines the invention and therefore defines that which is infringed upon? That has to do with what is claimed in the patent. It is the "claims" that define the "metes and bounds" of the property right. It is the claims where a court's inquiry focuses during an infringement action.

Claim Construction & Interpretation

One of the primary reasons that patents are expensive to obtain is that patent drafting (especially drafting claims) is complex, tedious and exacting work. All attorneys work with language on a daily basis, but the use of language in drafting patents is arguably an order of magnitude more challenging technically. Not only must patent attorneys have a solid working knowledge (if not in depth knowledge) of the various sciences that they draft patents in, but they must also have a technical command of the English language (or any other language they happen to draft in) that approaches mastery. Here minor variations in phrases and meaning often are the difference between winning and losing an infringement action. Words always matter with respect to legal drafting, here they tend matter even more. The challenge for the claims drafter is to claim as broadly as possible while still representing the specifics of the invention. That is, a inventor cannot claim all forms of communication if all they invented was the telegraph. It is simply too broad a claim.

Patent attorneys draft the claims but the courts are the ones that ultimately interpret them. Claim interpretation is a matter of law. This is not something that is turned over to the jury to decide. It is too technical an exercise for juries. In fact, many judges probably find it daunting. This has several implications, one of which is that the Federal Circuit (the special appeals court that hears appeals in patent litigation) will review a district court's findings de novo. De novo is simply legalese for "all over again."  You may win at the district court level but the Federal Circuit is going to take a second bite at the apple, always. This also means that where a substantial amount of money is at stake (a near certainty in patent litigation) there is a very high probability (again near certainty) that an appeal will follow, unless of course the parties settle. In short, patent litigation is (for many reasons appeals being one) an expensive proposition.

Infringement & Other Causes of Action

It should be clear, at least from a big picture perspective, that in an infringement action, the plaintiff will allege that the defendant's action (making, selling or using) intrudes upon the scope of what was claimed. If, through the analysis briefly described above, a court finds that this is true, then the plaintiff prevails (also see The Doctrine of Equivalents discussed below). The defendant will assert a number of standard defenses (see Defenses) in counter argument. Section 271 (excerpted below) provides the statutory grounds for an infringement action. Since there are no state or common law patent actions, this section defines how liability is triggered.

§ 271. Infringement of patent

(a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

(b) Whoever actively induces infringement of a patent shall be liable as an infringer.

(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

Section 271 covers both infringement and contributory infringement. The right to bring an infringement action runs from the date the patent is issued to the end of the patent term (i.e. twenty years). Anyone familiar with technology life cycles, which now certainly includes nearly everyone online, is aware of the power inherent in such a monopoly right. Twenty years in a technology life cycle is an eternity. The patent holder will essentially own, or otherwise be compensated for (e.g. through licensing), any market into which the invention is sold. That is, given that they possess the financial resources necessary to enforce it.

In addition to an infringement action, there are other actions that may be brought, depending on the specific facts of the case. These include: (1) an interference action, in which a party may assert that they in fact were the "first to invent" (a U.S. specific allegation because the rest of the world uses a "first to file" system). (2) an action for a declaratory judgment that the patent issued is not valid (usually a preemptive strike by a party in fear of suit); and (3) an action with the International Trade Commission to prevent infringing items from being imported. There are also some specialized procedures that may be brought with the USPTO (e.g. a reexamination procedure) that are not law suits per se, but may have legal consequences in subsequent litigation.

The Doctrine of Equivalents

To make things more complex "literal" infringement of the claims is not required in order for infringement liability to trigger. The judicially created doctrine of equivalents prevents inventors from making minor changes to a prior invention in order to avoid the literal language of the claims. A leading case here is Graver Tank & Mfg. v. Linde Air Prods (USSC 1950). The Court in Graver stated the issue as follows:

In determining whether an accused device or composition infringes a valid patent, resort must be had in the first instance to the words of the claim. If accused matter falls clearly within the claim, infringement is made out and that is the end of it.

But courts have also recognized that to permit imitation of a patented invention which does not copy every literal detail would be to convert the protection of the patent grant into a hollow and useless thing. Such a limitation would leave room for - indeed encourage - the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of law. One who seeks to pirate an invention, like one who seeks to pirate a copyrighted book or play, may be expected to introduce minor variations to conceal and shelter the piracy. Outright and forthright duplication is a dull and very rare type of infringement. To prohibit no other would place the inventor at the mercy of verbalism and would be subordinating substance to form. It would deprive him of the benefit of his invention and would foster concealment rather than disclosure of inventions, which is one of the primary purposes of the patent system

Like so much in patent law, this doctrine is complex to apply, and has led to much confusion and controversy. It exemplifies (yet again) why patent law, much more so than other areas of intellectual property, is the domain of legal specialists.

Comments: Reality check. Yes patents are expensive to obtain and to enforce, that much should be painfully clear. But it should also be clear that patents are economically powerful. Despite all the bad press, patents remain an intellectual property reality especially where innovation is rapidly occurring as is the case online. We help clients rationalize this maze with respect to software and business method patents. In most cases a patent strategy will not be recommended for all the aforementioned reasons, but that does not imply that they are strategically always out of the question either.

There are a number of more or less "standard" defenses that are asserted by an accused infringer as an attempt to avoid liability. The starting point is to argue that the patent in question is not valid because it does meet the requirements of patentability and therefore should have never been issued. Here the defendant will argue one or more of the following:

• The patent in question is not new; or
• The patent is obvious; or
• The patent is not useful (rarely).

The defendant may also argue that the patent has not been sufficiently disclosed, or that the best mode was not provided, or that it has been abandoned. In short, a defendant will attack the patent in any and every way possible, given the specific facts in play.

In addition to a "frontal" attack, there are some specialty defenses that might be asserted under a more narrow set of factual constraints as discussed below.

Experimental Use Defense

There is a limited exception if the reconstruction of the invention was merely for the purpose of scientific inquiry (and not for profit). The doctrine apparently has its origin in yet another famous opinion by Justice Story (see Whittemore v. Cutter (C.C.D. Mass. 1813)). Here Justice Story had the following to say: "it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects." But things are not often what they seem it patent land since in a more recent decision by the Federal Circuit (see In Re Roche Products v. Bolar Pharmaceuticals (1984)) the court stated as follows:

Bolar's intended "experimental" use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. Bolar's intended use of flurazepam hcl to derive FDA required test data is thus an infringement of the '053 patent. Bolar may intend to perform "experiments," but unlicensed experiments conducted with a view to the adaption of the patented invention to the experimentor's business is a violation of the rights of the patentee to exclude others from using his patented invention. It is obvious here that it is a misnomer to call the intended use de minimis. It is no trifle in its economic effect on the parties even if the quantity used is small. It is no dilettante affair such as Justice Story envisioned. We cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of "scientific inquiry," when that inquiry has definite, cognizable, and not insubstantial commercial purposes.

Caveat Inventor! Pose Roche the Federal Circuit provided a more narrow plaintiff friendly interpretation of that case. Here the plaintiff prevailed against a university not directly involved in activities that would lead to commercial gain (see Madley v. Duke University (Fed. Cir. 2002)). The experimental use defense remains viable, but predicting when a court may in fact allow it appears to be a risky proposition.

Bad Behavior Defense

There are harsh penalties if a court finds "inequitable conduct" on the part of the inventor during the patent prosecution process (i.e. the application process with the USPTO). If found the issued patent is completely unenforceable. But what is the standard for judging the behavior that falls into this category? The Federal Circuit in Kingsdown Medical Consultants v. Hollister (Fed. Cir. 1988) held that gross negligence, in and of itself, may not be enough. The key languages follows:

Some of our opionions have suggested that a finding of gross negligence compels a finding of intent to deceive. Others have indicated that gross negligence alone does not mandate a finding of intent to deceive.

"Gross negligence" has been used as a label for various patterns of conduct. It is definable, however, only in terms of a particular act or acts viewed in light of all the circumstances. We adopt the view that a finding that particular conduct amounts to "gross negligence" does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.

So this is a "totality of the circumstances" kind of test. Notice that from a practical perspective it will take a substantial amount of discovery to support such a finding. Discovery is expensive to produce. Patent litigation tends to favor, more so than in the general case, those with deep pockets. It would be highly unusual for a small or medium size company to mount such a defense. You might prevail and bankrupt the business at the same (i.e. win the battle and lose the war). There may be significant exposure for online entrepreneurs depending on the type of online business conducted and the technologies used to underpin it. A more in depth treatment of the topic can be found here.

Patent Misuse Defense

Patent misuse is a judge made doctrine that has its roots in the judiciary attempting to limit the patent monopoly to the "four corners of the statute" and not allow a holder to extend property rights beyond it in a way that was felt to be anti competitive. Many commentators believe that the doctrine is coextensive with antitrust laws, which have somewhat fallen out of favor. But what is in or out of favor is driven by "events on the ground" and American jurisprudence has always demonstrated a pragmatic bent, willing to address the pressing issues of the day, adapting to changing views in public policy. That said, as discussed below, Congress has acted to curb the doctrine's scope, but it remains "good law" in certain situations.

It would take a law review article to attempt to add clarity to the controversy surrounding this doctrine (and its extensions elsewhere) and readers would likely be none the better for it. However, given the current debate surrounding software patents, and the prevalence of software patents (felt but mostly unseen) to online businesses, a few words may be in order. While clarity may not be achieved, the far less ambitious goal of general awareness is within reach. If an online entrepreneur has an awareness of the contours of the doctrine, they may have a "hook" for a defense that prevents or mitigates the otherwise devastating consequences of patent infringement. This liability has the potential to have an impact in an insidious manner, catching an unsuspecting business unawares, perhaps through the use of software they had every reason to believe was legitimate.

The doctrine itself is not software specific. It has been around for well over a hundred years and applies to patents in general, software just provides a convenient digital law centric illustration. It is not even clear that there is an obvious fact pattern where it might apply to software patents, online or off, but that is the point (although copyright mis-use was developed under s software licensing fact pattern). If you are arguing patent misuse chances are you are looking for a life preserver, people that are drowning tend not to refuse help.

Patent misuse occurs when a patent holder attempts to mandate the purchase of a non-patented item with use of the patent. A landmark case is Motion Picture Patents Company v. Universal Film Manufacturing Company (USSC 1917). In this case the plaintiff sought to restrict the use of the patented machine (an invention used to display motion pictures) by providing, via a post sale notice attached to the machine (and importantly according to the Court not via contract), that the machine could only be used with specified (non-patented) supplies. Early in the opinion the Court states its apparent displeasure with this state of affairs as follows:

Plainly, this language of the statute and the established rules to which we have referred restrict the patent granted on a machine, such as we have in this case, to the mechanism described in the patent as necessary to produce the described results. It is not concerned with, and has nothing to do with, the materials with which or on which the machine operates. The grant is of the exclusive right to use the mechanism to produce the result with any appropriate material, and the materials with which the machine is operated are no part of the patented machine or of the combination which produces the patented result. The difference is clear and vital between the exclusive right to use the machine, which the law gives to the inventor, and the right to use it exclusively with prescribed materials to which such a license notice as we have here seeks to restrict it. The restrictions of the law relate to the useful and novel features of the machine which are described in the claims of the patent; they have nothing to do with the materials used in the operation of the machine, while the notice restrictions have nothing to do with the invention which is patented, but relate wholly to the materials to be used with it. Both in form and in substance, the notice attempts a restriction upon the use of the supplies only, and it cannot, with any regard to propriety in the use of language, be termed a restriction upon the use of the machine itself.

In other words, the Court is clearly saying that the attempted restriction has nothing at all to do with the patent monopoly and cannot be tied to it. Whatever legal force such notice may have, it is not to be derived from the patent, and cannot be. The Court goes on to comment on the anti competitiveness of allowing such control by stating:

The perfect instrument of favoritism and oppression which such a system of doing business, if valid, would put into the control of the owner of such a patent should make courts astute, if need be, to defeat its operation. If these restrictions were sustained, plainly the plaintiff might, for its own profit or that of its favorites, by the obviously simple expedient of varying its royalty charge, ruin anyone unfortunate enough to be dependent upon its confessedly important improvements for the doing of business.

It is plain as day that the Court here feels strongly about the potential stranglehold a patent holder might have on a market if such control were allowed. In concluding that the restriction on supplies was invalid the Court closes in summary with the paragraph below:

A restriction which would give to the plaintiff such a potential power for evil over an industry which must be recognized as an important element in the amusement life of the nation, under the conclusions we have stated in this opinion, is plainly void because wholly without the scope and purpose of our patent laws, and because, if sustained, it would be gravely injurious to that public interest, which we have seen is more a favorite of the law than is the promotion of private fortunes.

A fair amount of time has been devoted to this case to illustrate that patent controversy is nothing new. The patent debate is always about balancing the quid pro quo for the public with the need to promote and reward innovation. Justice Holmes dissented in this case and argued that such restrictions were well within the right of the patent holder, since a holder was free to refuse to provide the invention to the public altogether. Notice that this is a majority of the USSC stating that extending the patent monopoly would be "evil" under these facts. The doctrine, as held here by the majority, continued to expand until Congress amended the patent laws in 1952, adding section 271(1)-(3).

The following additions to section 271 were no doubt aimed at providing the patent holder more control of how the invention is used. This is indicative of the back and forth that goes. At different times various powerful players exert influence on either Congress, the courts or both. The constant "to and fro" of the patent, debate.

(d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following:

(1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent;
(2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent;
(3) sought to enforce his patent rights against infringement or contributory infringement;

Where are we now? Well to answer that question would require the aforementioned law review article. Others have probably written on the topic in a far more eloquent and rigorous way. The point here was to illustrate the process by which a doctrine evolves and then recedes. There is no end to the patent debate because the balancing act is complex and events on the ground take unexpected turns. It is, for our purposes here, enough to be aware. If a patent holder attempts to extend the reach of the patent with what feels like "strong arm" tactics, unrelated directed to what was claimed, then the misuse doctrine may trigger.

Patent holders can bring civil actions in federal court both in equity (injunctions) and at law (money damages). Often a holder will do both; seek an injunction to prevent future harm and money damages for past wrongs. In order to prove infringement the holder will have to prove that the defendant's making, using or selling of a process, machine, manufacture, or composition of matter "steps on" one or more of the patent holder's claims as described in the patent in question (see Infringement). The defendant will likely respond (i.e. assuming no settlement and plausible arguments) with one or more affirmative defenses (see Defenses).

Injunctions

Section 283 explicitly provides for equitable relief as follows:

§ 283. Injunction

The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.

In general, in order for the patent holder plaintiff to get a permanent injunction they will need to show: (1) that there is no adequate remedy at law or that they will suffer irreparable harm unless the injunction is granted; (2) that the "balancing of the equities" favors them; and (3) that granting the injunction is in the public interest. A preliminary injunction may also be available to the patent holder but here the burden is greater. In addition to a showing with respect to the factors above the patent holder will need to show that there is a strong likelihood that they will prevail on the merits.

In a fairly recent case, eBay v. MercExchange (USSC 2006), the Court may have signaled that it is less inclined to grant injunctions in certain situations. In eBay, a jury found that MercExchange had a valid patent and that eBay and Half.com had infringed upon it. Nonetheless the district court refused to grant a permanent injunction (which may have shut down eBay), but the appeals court reversed citing that general rule that “courts will issue a permanent injunction against patent infringement barring exceptional circumstances.” The USSC reversed indicating that both lower courts had gotten it wrong. The district court because its reasoning would deny injunctions too broadly and the appeals court because it did not apply the "four" (the Court apparently split factor 1 into two factors (1)(a) no remedy at law; or (1)(b) irreparable harm) factor analysis as described above. The Court apparently felt that there was a remedy at law going forward. Justice Kennedy gets to the heart of the matter in his concurrence:

When the patented invention is but a small component of the product the companies seek to produce (e.g. eBay) and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest.

What is to be made of the eBay decision? It is too early to tell. But it does reinforce the view that American jurisprudence is first and foremost concerned with practical outcomes. The Court stepped in to prevent the "tail from wagging the dog" while leaving the door open for a decision that goes the other way under a different set of facts.

Money Damages

The statute provides for damages in section 284 as follows:

§ 284. Damages

Upon finding for the claimant the court shall award the claimant 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, together with interest and costs as fixed by the court. When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154 (d) of this title. The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.

Notice that a court has discretion to grant treble damages. Treble damages are available when a court finds intentional wrongdoing on the part of the defendant. It may also grant, in exceptional cases, attorney fees to the prevailing party. The statute of limitations for a patent infringement claim is six years.

There are also special damages available for the infringement of a design patent as follows:

§ 289. Additional remedy for infringement of design patent

Whoever during the term of a patent for a design, without license of the owner,

(1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or
(2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.

Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.

This section imposes a severe penalty for infringement of a design patent in that there are no qualifications on the profit. The infringer will be disgorged of the "total profit" and not just the profit directly attributed to the patent infringed upon.

Comments: Many patent disputes, especially in the software space, are not settled via litigation but rather are resolved via licensing and cross licensing agreements. While this may appear to be "progress" (depending on your point of view) it tends to favor businesses that have large patent portfolios and therefore leverage during the negotiations process. Often licensing is a convenient insurance policy against litigation risk and may be a viable option for high growth online businesses that have some exposure.

The patent application process is complex and time consuming even for practitioners that routinely "prosecute" applications on a daily basis. Attorneys and patent agents require special licenses to practice before the USPTO. They must pass a rigorous examination in order to obtain the license. They must also meet educational requirements that emphasize either degrees in science (engineering, chemistry, computer science, etc.) or enough coursework in the "hard sciences" as substitute credentials. The educational requirements must be satisfied before they are allowed to sit for the exam.

As an illustration of the complexity of the application process the entirety of Chapter 11 of the statute is dedicated to it. There are 12 sections in this chapter alone and that number does not exhaust all the sections in other chapters that touch upon the application process. In addition, a practitioner must be intimate with the Manual of Patent Examining Procedure (MPEP), a document that makes the statute sections appear to be a walk in the park. In short, while there is no requirement that an inventor hire an attorney or patent agent to prosecute a patent, it is highly recommended. The exceptions to this rule are few and far between. Yes there are more and more resources available that guide the lay person through the process, but there are no short cuts to mastery. It should not be attempted unless an individual possesses deep knowledge within the industry in which the patent lies and a significant amount of time to invest.

The page provides a brief introduction to the requirements of the application process as enumerated in Chapter 11. Section 111(a) contains the basics at the highest level:

§ 111. Application

(a)  In General.—

(1) Written application.— An application for patent shall be made, or authorized to be made, by the inventor, except as otherwise provided in this title, in writing to the Director.
(2) Contents.— Such application shall include— (A) a specification as prescribed by section 112 of this title; (B) a drawing as prescribed by section 113 of this title; and (C) an oath by the applicant as prescribed by section 115 of this title.
(3) Fee and oath.— The application must be accompanied by the fee required by law. The fee and oath may be submitted after the specification and any required drawing are submitted, within such period and under such conditions, including the payment of a surcharge, as may be prescribed by the Director.
(4) Failure to submit.— Upon failure to submit the fee and oath within such prescribed period, the application shall be regarded as abandoned, unless it is shown to the satisfaction of the Director that the delay in submitting the fee and oath was unavoidable or unintentional. The filing date of an application shall be the date on which the specification and any required drawing are received in the Patent and Trademark Office.

This brief code section begins to illustrate the complexity in that it refers to several other sections just to introduce the general concept. But section 111(b) continues the fun with its discussion of provisional applications. Suffice it to say that provisional (i.e. temporary) applications are an important part of the process and afford the inventor certain protections. They also have some international implications that inventors should be aware of.

Section 112 deals with the requirements of the specification. It discusses dependent and independent claims, best mode, and many other terms of art that define the inventor's disclosure requirement. Remember that in order to be granted a patent monopoly the inventor must disclose the invention in a manner that would allow it to be duplicated by "one skilled in the art." The disclosure is required to ensure that the public will ultimately benefit from the invention, once the patent term has expired. Any credible patent treatise will likely devote hundreds of pages to the specification section; both in terms of "how to" and to the case law that underpins it.

Sections 113 and 114 deal with drawings, models and specimens and are relatively self explanatory. Section 115 specifies the oath that an inventor must make in conjunction with the application. The oath must state that the inventor is the "original or first inventor" of the process, machine, manufacture, or composition of matter, or improvement thereof, for which he solicits a patent. This comports with the U.S. "first to invent" standard (as opposed to the international standard of "first to file"). Section 116 deals with the concept of joint inventors. The concept is defined rather broadly as the following "snippet" from section 116 suggests:

§ 116. Inventors

When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though
(1) they did not physically work together or at the same time,
(2) each did not make the same type or amount of contribution, or
(3) each did not make a contribution to the subject matter of every claim of the patent.

Care must be taken on the part of employers to ensure that patent rights are assigned to the business as part of the employment contract. Otherwise there may be subsequent litigation with respect to who owns the property right. While this is standard practice for businesses that employ engineers, scientists and other technical talent it has not been routine practice for online businesses in general (i.e. outside of the technology industry). In addition, business method patents open up an entire distinct route to the patentability of processes and methods that may have implications vis-a-vis other organizational talent not heretofore considered "technical" (e.g. business development and marketing personnel). To learn more about business method patents see our article Internet Business Method Patents.

Section 117 deals with the filing of an application if the inventor is deceased and section 118 concerns itself with whom, other than the inventor, can file an application. The latter may be necessary in cases where the inventor refuses to file, or cannot be found, and other stakeholders have an interest in preserving the property right. Sections 119 and 120 both deal with the enormously complex issue of "priority" from a slightly different perspective. The priority issue is one that has far too many layers for a meaningful discussion in an introductory section. Part of the complexity (perhaps most) lies in the tension (i.e. differences) between the uniquely American "first to invent" system and the international "first to file" system. Since many online business have the potential for global reach, this is yet another reason for the necessity of competent representation should a client decide that obtaining a patent will further their business objectives.

Section 121 deals with the concept of Divisional Applications. Patent applications come in a variety of forms each with their own nuances. Finally, section 122 concerns itself with the confidential nature of patent applications.

Comments: There is a lot to "chew on" in the patent application process. We help clients triangulate their patent strategy and then refer them to patent specialists should they decide to proceed. We add value by providing an objective "second pair of eyes." More often than not, a client will be better served by investing in their online business as opposed to pursuing a patent strategy.  However, as mentioned elsewhere, there are always exceptions to the rule.

This is a representative list of patent law cases. Refer to Other Cyberlaw Resources for sites that provide additional coverage. While the practice of patent law is indeed a specialty, the interested reader can attain a sufficient understanding of the doctrine necessary to meet most business objectives. You need not become an expert in order to make more informed business decisions. Better business decisions is the goal of all our tutorials and it is well within reach in even the most complex of intellectual property topics, patents.

Requirements

Case: City of Elizabeth v. Pavement Company (USSC 1877)
Summary: If an invention is used under the surveillance of the inventor, for the purposes of testing the machine, it is experimental use and not public use.  [full text]

Case: The Incandescent Lamp Patent (USSC 1895)
Summary: If the description be so vague and uncertain that no one can tell, except by independent experiments, how to construct the patented device, the patent is void.  [full text]

Case: Parke-Davis v. H.K. Mulford (S.D.N.Y. 1911)
Summary: Patents on purified naturally occurring substances are valid.  []

Case: Rosaire v. National Lead Co.(5th Cir. 1955) 
Summary: With regard to public use, no affirmative act is required to bring the work to public attention where it is done in the open and public knowledge need not be shown.  [full text]

Case: Graham v. John Deere Co. (USSC 1966)
Summary: The test for obviousness is whether the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.  [full text]

Case: Brenner v. Manson (USSC 1966)
Summary: A patent is not a hunting license. Process (e.g. chemical) claims must be reduced to a useful product before the utility requirement is met.  [full text]

Case: Diamond v. Chakrabarty (USSC 1980)
Summary: Patents on man made microorganisms are valid. [full text]

Case: Diamond v. Diehr (USSC 1981)
Summary: Processes embedded within software that produce a useful result are patentable. [full text]

Case: In re Hall (Fed. Cir. 1986)
Summary: A “printed publication” is one to which the public has access. [ ]

Case: In re Vaeck (Fed. Cir. 1991)
Summary:A basic inquiry into non-obviousness is whether a inventor who is aware of the prior art would think to create the claimed invention and have a reasonable likelihood of success in doing so. [ ]

Case: The Gentry Gallery v. The Berkline Corp. (Fed. Cir. 1998)
Summary: A patent's claims can be no broader than the supporting disclosure. [full text]

Case: In re Dembiczak (Fed. Cir. 1999)
Summary: There must be some motivation in the prior art that would suggest a combination of references. [full text]

Case: In re Fisher (Fed. Cir. 2005)
Summary: The underlying function of a gene must be identified before the utility requirement is met. [full text PDF ]

Infringement

Case: Larami Corp. v. Amron (E.D. Pa. 1993) 
Summary: There is no literal infringement if one element of the claim is missing and no infringement by equivalents unless the defendant's invention includes every limitation or element of the patended claim. [ ]

Case: C.R.Bard v. Advanced Cardiovascular Systems (Fed. Cir. 1990) 
Summary: If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement action. [full text]

Case: Warner-Jenkinson Co. v. Hilton Davis Chemical Co. (USSC 1997) 
Summary: The doctrine of equivalents does not rest solely on a linguistic framework but rather the essential inquiry is whether the accused product contains elements identical or equivalent to each claimed element of the patented invention. [full text]

Case: Festo Corp. v. Shoketsu (USSC 2002) 
Summary: The amendment of a patent application by the inventor concedes that the patent does not extend as far as the original claim, therefore the holder bears the burden of showing that the amendment does not surrender the equivalent in question. [full text]

Case: Johnson & Johnston v. R.E. Service (Fed. Cir. 2002) 
Summary: Any subject matter that is disclosed but not claimed enters into public domain. [full text]

Case: Phillips v. AWH Corporation (Fed. Cir. 2005)
Summary:  The patent's specification and claims should be reviewed for meaning/context before looking to dictionaries. [full text]

Case: Eolas Technologies v. Microsoft (Fed. Cir. 2005)
Summary:  Software made in the U.S. and exported abroad is a "component of a patented invention." [full text PDF]

Defenses

Case: Whittemore v. Cutter (C.C.D. Mass. 1813)  
Summary:  Infringement does not lie where a machine is constructed merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects. []

Case: Motion Picture Patents Company v. Universal Film Manufacturing Company (USSC 1917)  
Summary: A patent holder cannot extend the patent monopoly by mandating the use of non-patented supplies with the patent. [full text]

Case: In Re Roche Products v. Bolar Pharmaceuticals (Fed. Cir.1984) 
Summary: The experimental use defense is not warranted where the ultimate objective is commercial gain. []

Case: Kingsdown Medical Consultants v. Hollister (Fed. Cir. 1988) 
Summary: Gross negligence, in and of itself, is not enough for a finding "intent to deceive" during the patent prosecution process. []

Case: Madley v. Duke University (Fed. Cir. 2002) 
Summary: Any furtherance of an institution's legitimate business, though not commercial in nature, may preclude the experimental use defense. []

The  World Trade Organization (WTO) is at the forefront in driving patent standardization globally. This concept is called harmonization of intellectual property law. However, there is no such thing as global patent law, but rather instead there is an agreement on some minimum patent protections that must be provided by each WTO signatory. The controlling law is the law of the jurisdiction, however each signatory has more or less agreed to "play nice" with respect to the minimums. In so doing, there has emerged a consensus on what a minimum standard means for the developing world. The minimum standards are enforced via the TRIPS agreement (discussed below), which each WTO signatory must agree to as a prerequisite to membership. TRIPS is quite broad and encompasses all relevant intellectual property law doctrines.

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

TRIPS is administered by the World Trade Organization (WTO). The WTO maintains a significant amount of relevant information regarding this agreement on its website and the "gateway" to additional TRIPS information can be found here. TRIPS contains content that is much broader than patents, including copyright, trademarks, industrial design and trade secrets. The following excerpt from the WTO TRIPS website is informative.

Ideas and knowledge are an increasingly important part of trade. Most of the value of new medicines and other high technology products lies in the amount of invention, innovation, research, design and testing involved. Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them. Many products that used to be traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value — for example brandnamed clothing or new varieties of plants.

Creators can be given the right to prevent others from using their inventions, designs or other creations — and to use that right to negotiate payment in return for others using them. These are “intellectual property rights”. They take a number of forms. For example books, paintings and films come under copyright; inventions can be patented; brandnames and product logos can be registered as trademarks; and so on. Governments and parliaments have given creators these rights as an incentive to produce ideas that will benefit society as a whole.

The extent of protection and enforcement of these rights varied widely around the world; and as intellectual property became more important in trade, these differences became a source of tension in international economic relations. New internationally-agreed trade rules for intellectual property rights were seen as a way to introduce more order and predictability, and for disputes to be settled more systematically.

A foundational part of the TRIPS agreement is the concept of National Treatment. Essentially this requires that foreign nationals be treated the same as "locals" once goods have entered the country (i.e. national laws apply to foreigners in a manner analogous to how a nation's laws applies to its own citizens). This does not mean that the same laws apply everywhere. That said, TRIPS does make an attempt to provide a minimal set of "common ground rules" by incorporating minimum standards from the Paris Convention and the Berne Convention. The full text of the agreement can be found here in outline format.

The patent related aspects of TRIPS are contained in Articles 27-34. These Articles can be found in their entirety starting here. The patentable subject matter that is protected is found in Article 27 and contains the following language:

Article 27 Patentable Subject Matter

1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. (5) Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

3. Members may also exclude from patentability:    
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

The TRIPS agreement is arguably the most important international agreement dealing with intellectual property (IP) law among the largest nations (and many smaller ones) and is a cornerstone agreement that underpins the global economy. It will likely continue to maintain its prominence as IP represents more and more of the GDP of both the developed and the developing world. Patent protection outside of the  holder's national borders will an remain an important issue on the world economic stage as the Internet increasingly drives the creation of global markets.