Is it worth getting a patent?

Question: Is getting a patent really worth anything?  That is, are the individuals or companies that have patent rights in the insurance industry actually enforcing them through patent infringement lawsuits?

Answer: In general, insurance business method patents are too new yet to have generated a lot of infringement lawsuits and the licensing and legal activity that surrounds enforcing patents.  One notable exception is the patent infringement and theft of trade secret lawsuit that Bancorp Services brought against Hartford Life Insurance Company.  The patent owner, Bancorp Services, was paid $80 million dollars by Hartford to settle the case. Strictly speaking, this was not a pure patent infringement case since another IP issue, violation of a secrecy agreement, was involved.  However, the validity of the patent was upheld on appeal so insurance business method patents are clearly enforceable.

Patent Tech

What do the computers do?

Corporate attorneys who attend will be better prepared to face the new risks posed by the proliferation of patents in the financial services industry.  15 CLE or CPE credits will be available to participants.

 For information and registration go to http://www.iirusa.com/iprights/ or call the IIR at (888) 670-8200. 

IIR Meeting on Retirement Income Products to Offer Session on Patents June 22 – 24, Boston MA

The Institute for International Research will be presenting the inaugural Symposium on Managing Retirement Income on June 22 -24, 2005 at the Hyatt Regency, Boston MA.

Product developers who attend will be better prepared to increase the value of their innovative offerings by protecting them with patents.  For information and registration go to http://www.iirusa.com/retirementincome/ or call the IIR at (888) 670-8200. 

By: Matt Schoen, President MB Schoen & Associates, Inc., mbschoen@coliaudit.com

There are a number of challenges any inventor faces when pursuing a patent application, especially with one’s first application.  The hurdles appear more daunting still when you are a small firm.  In obtaining our first patent, however, we have learned several important lessons which we hope will make your experience more productive.  These lessons are:

 ·         Take time up front to learn a few underlying concepts, principles and terms of patent law.
 ·         Engage an experienced patent lawyer or agent with expertise in your area – irrespective of the higher cost.
 ·         Read a good overview book on intellectual property

 Take time up front to learn a few underlying concepts, principles and terms of patent law

One of the first things my co-inventor and I confronted after engaging our exceptionally experienced patent attorney, was the culture shock accompanying any sudden immersion in a foreign language.  Not only did we struggle to understand the arcane patent terminology flowing endlessly from him, but he, in turn, had to become familiar with the equally unfathomable jargon of our world – i.e. insurance products and qualified pensions.  There were multiple occasions when either my co-inventor or I failed to understand our attorney’s detailed instruction, not once, not twice, but several times.  This involved hours or even days of misguided work on our part that ultimately missed the mark.  This was a mutually frustrating experience to say the least.  And things could have been worse had our attorney not shared a deep understanding of the computer science fundamental to our invention and had he not had prior experience with insurance related patents. 

A lot of this miscommunication could have been avoided if we as inventors had taken time up front to learn a few of the underlying concepts, principles and terms of patent law.  These concepts and terms include:

·         What constitutes patentable subject matter

·         What is the difference between an exclusionary right and an affirmative right

·         How do you tell whether or not a provisional patent application will suffice in our particular situation

·         What must be filed in a provisional to properly support the subsequent nonprovisional patent application.

·         What is meant by “best mode”

·         What are “statutory bars” and what are their implications to your patent application. 

·         What are patent “claims” and how should they be drafted to provide the broadest possible protection, irrespective of what your preferred embodiment may otherwise appear to suggest. 

These are but a few of the concepts and terms it is advisable to comprehend in advance.

 Engage an experienced patent lawyer or agent with expertise handling like-subject matter -- irrespective of the higher cost

 Would you shop for a bargain surgeon if you needed surgery to repair a heart valve?  That’s how important a good patent attorney/agent can be to a small company.  We looked hard to find a patent attorney/agent who had expertise in our field.  Our investment of time and money to get our first patent, while considerably greater than anticipated, has in our experience been well worth it. 

 We are happy to report that we have successfully licensed our invention to a third party (Corporate Compensation Plans, Inc.- ed.) who is now bringing it to market.  They, in turn, have further invested their own time and effort to develop a commercially viable product which has recently been licensed to several major corporations.

 While it is impossible to know whether our deep pocket licensees would have run with our intellectual property in the absence of our patent and patent pending, it is reassuring to know that when their IP counsel reviewed our patent, they advised their clients to obtain a license if they wish to tread in our covered markets.  This is the fruit of finding the best attorney/agent to meet our needs.

 Read a good overview book on intellectual property

 Years after toiling through our first patent application, I found an excellent primer on intellectual property law, Essentials of Intellectual Property.  While reading through it I realized what a huge difference a little advance knowledge could have made.  Many of the important messages and concepts our attorney so patiently imparted to us would have been grasped much more readily had we taken the time to read such a book up front.

 Obtaining a first patent can be expensive and time consuming, particularly for a small company.  To make it go smoother, however, it is important to:  

·         Take time up front to learn a few underlying concepts, principles and terms of patent law;

·         Engage an experienced patent lawyer or agent with expertise in your area – irrespective of the higher cost; and

·         Read a good overview book on intellectual property.