iNSIDER - Volpe and Koenig, PC

i nsider
The Intellectual Property
Fall 2013
A Publication of Volpe and Koenig, P.C.
Inside this
Issue
Can You Still Lose Your
Patent Rights Over a
“Secret” Sale?..........................1
Don’t Forget About
Design Patents......................4
Patent Protection - When
Timing is Everything................5
Avoid “Dividing”
Trademarks............................6
Firm News...................................7
Can You Still Lose Your Patent
Rights Over a “Secret” Sale?
By Michael F. Snyder and Laura G. Remus
The “Old” Patent Law - What Almost No One
Knew Could Still “Kill” Your Patent
Section 102 of the United States Patent Act outlines the scope of
commercial sales activity that can invalidate a patent. The law of Section
102 reflects an overarching policy that if a patent is to be sought, a patent
application must be filed within a reasonable time after a completed
invention has been “sold” or “offered for sale” as those terms are
interpreted under the Patent Act.
Prior to March 16, 2013, the United States patent laws provided an
inventor the opportunity to offer its invention for sale for a limited time
period before filing a patent application in the United States. Known as
the “one year grace period,” under former 35 USC 102(b) (referred to
continued on page 2
continued from cover
in this article as “old” Section 102), commercial activity could
take place for up to a year before a patent was filed, without
losing patent rights, at least in the United States. (Many foreign
countries have what is known as an “absolute novelty” requirement,
where any public use, disclosure, or sale, prior to filing a patent, will
defeat all rights.)
An “on-sale bar” applies when two conditions are satisfied:
(1) the claimed invention must be the subject of a sale or
commercial “offer for sale”; and (2) the invention must be “ready
for patenting.” The “on-sale bar” is a question of law based on
underlying factual findings.
Commercial Sales Activity
The “sale” or “offer for sale” referenced in both old and new
Section 102 follows general contract principles. A “sale” or “offer
for sale” must take place between separate parties. A “sale” is a
contract between parties wherein the seller agrees to give rights
in property (the invention) in return for the buyer’s payment or
promise to pay the seller for that property. A contract for the
sale of goods requires a concrete offer by the purchasing party,
and acceptance of that offer by the selling party. A single sale,
a conditional sale, and a sale without any profit, have all been
found by courts to be acts constituting a “sale” under Section
102. Such acts could operate as “on-sale bars.” On the other
hand, an assignment or sale of rights to a patent is not a sale of
the invention.
An “offer for sale” must rise to the level of a commercial offer
for sale; that is, one which another party could make into a
binding contract by acceptance (assuming consideration).
There is no requirement that the sale actually take place, or that the
goods change hands. Even an offer that is rejected, or never even
received, can be enough to potentially bar a patent depending
on when those acts occur.
However, a communication that fails to constitute a definite
offer to sell a product and to include material terms is not an
“offer for sale” under the patent laws. For example, an offer to
enter into a license under a patent for future sale of the invention
covered by the patent when and if it has been developed was not
considered to be an offer to sell the patented invention. Material
terms of a commercial offer such as pricing for the product,
quantities, time and place of delivery, and product specifications,
are evidence of an “offer for sale.”
“Ready for Patenting”
In order for the on-sale bar to apply, an invention needs only to
be “ready for patenting.” An invention is “ready for patenting”
when: (1) the invention is reduced to practice; or (2) the
invention is depicted in drawings or described in writings of
sufficient nature to enable a person of ordinary skill in the art to
practice the invention. As can be imagined, whether an invention
is “ready for patenting” is generally a factual inquiry.
Critical “On-Sale Bar” Issues Under
Section 102
Under the law developed under old Section 102, there are several
particularly crucial issues for companies engaging outside
manufacturers to make a product that might be the subject of
patent protection. First, an invalidating sale or offer for sale did
not have to be public under old Section 102. The critical language
reads as follows: “…(b) the invention was… 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,…” The word “public”
as used in old Section 102(b) modified “use” only. “Public” did
not modify “sale.” Therefore, a completely secret form of prior art
could invalidate a patent.
continued on page 3
2
Fall 2013 Insider Volpe and Koenig, P.C.
continued from page 2
Second, there is no “joint development” exception to the onsale bar rule. That is, even if two corporate entities are working
together to develop an invention, if one entity sells or offers to sell
the invention to a third party or the other entity, the on-sale bar
is implicated. Finally, there is no “supplier” exception to the onsale bar. That is, the act of an outside supplier selling, or offering
to sell, a product to the inventor of that product can trigger the onsale bar. Accordingly, consider the following scenario: Company
A invents a product that may be the subject of a patent. Company
A does not have the manufacturing capabilities to make the
product. Company A enlists an overseas manufacturing facility,
Company B (a separate company), to manufacture the product,
and outlines the terms of the commercial transaction. Company
B advises Company A that it is ready to fulfill orders for the
product and ship them to Company A when Company A gives
the go-ahead.
The act of Company B offering to sell Company A its own product
triggers the on-sale bar, assuming that the invention is “ready for
patenting.” A “commercial offer for sale” has been made, even if
it was by Company A’s own supplier and was made to Company
A itself. In addition, even if Company A never consummates
the contemplated purchase from Company B, the on-sale bar
has still been triggered, since a commercial offer for sale under
old or new Section 102(b) is one which the other party could
make into a binding contract by simple acceptance. Moreover,
as discussed above, the on-sale bar may have been triggered
even if Company A and Company B were operating under a
confidentiality agreement, and the entire transaction was secret.
New Section 102, and the Issue of a
“Secret” Sale
The Leahy-Smith America Invents Act (“AIA”) was signed into
law on September 16, 2011. The provisions relating to “new”
Section 102 went into effect on March 16, 2013, and reflect the
United States moving from a “first to invent” system of patent
laws, to a “first to file” system. Old Section 102 still applies to all
issued US patents and all US patent applications that have an
effective filing date prior to March 16, 2013.
The language of new Section 102(b) states that a person shall
be entitled to a patent unless “… the claimed invention was
patented, described in a printed publication, or in public use,
on sale, or otherwise available to the public before the effective
filing date of the claimed invention.” As a threshold matter,
the one-year grace period for commercialization has now been
eliminated entirely, so caution must be taken in commercializing
an invention prior to filing a patent application in the United
States.
Aside from the timing of a commercial event in relation to the
date a patent application is filed, the law relating to the “onsale bar” should largely remain the same insofar as what acts
constitute a “sale” or “offer for sale.” However, new Section 102
does raise the critical issue of whether a secret sale or secret
“offer to sell” still triggers the “on-sale bar.” Put another way,
does the phrase “or otherwise available to the public” modify the
phrase “on sale?” If so, commercial activity necessary to invoke
the “on-sale bar” may now have to be available to the public.”
Due to the change in the language of new Section 102, it may be
that secret sales or secret offers to sell no longer trigger the “onsale bar” under new Section 102. During the drafting and after
passage of the AIA, there was some indication that Congress
intended that sales must be publicly known sales. The United
States Patent and Trademark Office (USPTO) has issued a set
of proposed examination guidelines indicating that secret sales
or secret offers for sale do not qualify as prior art under new
Section 102. [Examination Guidelines for Implementing the First
Inventor To File Provisions of the Leahy-Smith America Invents Act,
78 Fed. Reg. 11059 (Feb. 14, 2013)]. The USPTO stated in these
guidelines: “The legislative history of the AIA indicates that the
inclusion of this clause in AIA 35 U.S.C. 102(a)(1) should be
viewed as indicating that AIA 35 U.S.C. 102(a)(1) does not cover
non-public uses or nonpublic offers for sale.”
Still, it is not clear whether the law relating to secret sales has
changed, and comments in the congressional record or USPTO
guidelines are not the law. Until the Court of Appeals for the
Federal Circuit hears a case relating to this issue and hands down
a ruling, the best practice will be to file for patent protection in
the United States before any commercial sales activity takes
place, whether it is secret (confidential) or public. This is the
only way to avoid the risk of losing all patent rights in the United
States due to commercial activity considered to be a “sale” or
“offer for sale” under new Section 102.
Volpe and Koenig, P.C. 215-568-6400 vklaw.com
3
Don’t Forget About
Design Patents
By Michael F. Snyder and Laura G. Remus
The Fall 2012 Issue of the Intellectual Property
Insider highlighted a number of recent billion
dollar patent verdicts. One of the cases, Apple
v. Samsung, has continued to make headlines,
as the two companies have litigated more than
50 lawsuits around the world. The Apple v.
Samsung case is not just interesting because of
the $1.049 billion in damages awarded to Apple,
or because the two companies manufacture the
majority of the cell phones used in the United
States.1 From an IP perspective, the case is
noteworthy because it relies on a design patent,
and not a utility patent. If Apple, with its army
of IP professionals brandishing utility patents,
can benefit from a well-drafted design patent,
perhaps you can, too.
Before we consider a few of the recent pivotal design patent
cases, let us start with the basics. What is a design patent?
As stated by the United States Patent Office, a design
“consists of visual ornamental characteristics embodied in,
or applied to, an article of manufacture.” A design patent
describes and provides protection for the design. Design
patent applications are short, with only a front page and
one or multiple drawings. A brief description of each view is
given, followed by a single claim referencing the drawings,
stating that protection is sought for what is shown, or shown
and described. Design patents can be issued within 12-14
months of filing, and give protection for 14 years from the
date the design patent issues. Filing fees for design patents
are cheaper than for utility patents, and no maintenance
fees are required during the life of the patent.
Significantly, an infringing product does not have to
precisely match the patented design. Instead, the relevant
question is whether an “ordinary observer” would mistake
the infringing product for the patented one. This concept is
highlighted by a few recent court cases.
1
4
Prior to 2008, the plaintiff in a design patent case had to
satisfy two requirements. The “ordinary observer” test asks
whether the accused design is substantially similar to the
patented design. The “point of novelty” test considered
whether the accused design appropriated the patented
design’s novel features, as compared to the prior art. On
September 22, 2008, the en banc U.S. Court of Appeals
for the Federal Circuit, in Egyptian Goddess, Inc. v. Swisa, did
away with the “point of novelty” test, leaving the “ordinary
observer” test as the sole test for infringement.
In 2010, in Crocs, Inc. v. US International Trade Commission,
the Federal Circuit reiterated that a design patent’s scope
should be based on its drawings, and not the wording of the
claim. A design patents’ drawings typically need very little
textual description, and thus the claim construction should
not be used to limit the scope of the patent. The court also
fleshed out the “ordinary observer test,” stating that the
test applied to the patented design in its entirety, i.e., minor
differences between a patented design and an accused
product’s design do not prevent a finding of infringement.
In 2012 a U.S. jury ruled that Samsung had willfully infringed
a number of Apple’s design patents. The Apple patents
included multiple embodiments with various elements
depicted in solid and phantom (dashed or “broken”) lines.
The strategically varied images allowed Apple to argue
infringement by Samsung products that looked similar to
a given Apple product without mimicking every element of
the Apple product’s design. The case again drew attention
to the “ordinary observer test,” with the verdict affirming
the importance of considering the design as a whole. While
the final outcome of the Apple-Samsung case remains to
be seen after all appeals have been exhausted, the power of
a design patent is evident. This form of protection may be
very potent, indeed, where the ornamental appearance of a
product has commercial value. 
http://www.comscore.com/Insights/Press_Releases/2013/9/comScore_Reports_July_2013_U.S._Smartphone_Subscriber_Market_Sharepatent/application.
Fall 2013 Insider Volpe and Koenig, P.C.
Patent Protection - When Timing is Everything
By Michael F. Snyder and Laura G. Remus
Mrs. Inventor has a great invention. She thinks about it,
researches it, works on it, gives a presentation at a trade
show, applies for a United States patent, publishes a
paper, seeks investors, and begins selling the invention.
She finds out that her invention is incredibly popular,
especially outside of the United States. Can Mrs. Inventor
protect her invention in foreign jurisdictions, based on
the previously discussed timeline of events?
While the United States still has a limited one-year
grace period for some types of disclosures made
by an inventor, many countries require that an
application for a patent must be filed prior
to any public disclosure of the claimed
invention. If Mrs. Inventor applies for
a patent in another country, her own
publication could forever block her
from obtaining a patent outside of
the United States.
The term “Absolute Novelty”
describes the requirement, followed by
many foreign countries, that an application
for a patent must be filed before the
invention is publicly disclosed. The
rules for Absolute Novelty vary from
country to country. For example, while certain
jurisdictions allow for scholarly presentations of the
invention for a limited period before a patent application
is filed, many do not. In some countries, disclosures under
a Confidential Non-Disclosure Agreement might not be
considered to be “public.”
So what is the best strategy for protecting against the
pitfalls of a public disclosure destroying potential patent
rights, both in the U.S. and abroad? One option is to
file at least a U.S. provisional patent application before
disclosing the invention, and within 12 months of filling the
provisional application, file an international application
and/or a U.S. non-provisional application. While most
foreign countries require a patent application to be
filed prior to public disclosure of an invention, they will
recognize a U.S. provisional application as a placeholder
for the foreign application.
Mrs. Inventor, our brilliant and now savvier
innovator, develops another invention.
Learning from her prior experience,
she carefully considers the scope
of protection that she would like
to obtain. Recognizing that her
invention has global applications,
she decides to file a U.S.
provisional application before
making any public disclosure
whatsoever of her invention.
She then begins to advertise
her invention, and receives
an order for a large quantity.
Within twelve months of
filing her provisional application,
Mrs. Inventor files a U.S. nonprovisional application, as well
as a Patent Cooperation Treaty
(“PCT”) patent application designating many foreign
countries. Both applications claim priority to the U.S.
provisional application. About a year and a half after filing
the non-provisional application, Mrs. Inventor receives
her first U.S. office action. She has also received a Written
Opinion and has the opportunity to choose countries in
which to pursue protection. Although almost two years
have passed since Mrs. Inventor advertised her invention,
the provisional application that she filed before her initial
public disclosure maintains her rights to patent the
invention around the globe. Well done, Mrs. Inventor! 
Volpe and Koenig, P.C. 215-568-6400 vklaw.com
5
©
®
$
™
™
Avoid “Dividing” Trademarks
By Michael F. Snyder and Laura G. Remus
Some forms of intellectual property can be treated, in certain
ways, like real property. Patents or copyrights, for example, can
be assigned (sold) or licensed, just as you would sell or license
a building or office equipment. There is no need for a patent
owner to sell the business related to the invention shown in the
patent when they sell the patent.
The foregoing is just one example of why it is always a best
practice to ensure that trademarks are owned by companies or
corporations, and not by individuals. Businesses can allocate
ownership and rights to ensure that the use of the business
trademarks are accounted for if the owners part ways, or if a
new venture is started.
This is not true of a trademark. In trademark law, it has often been
stated that the right of a trademark is not a “right in gross,” or a
right independent in itself. Trademark rights exist only as part of
an established business, and for the protection of the goodwill
of the business symbolized by the trademark. The fact that
trademarks are always attached to the goodwill of a business
raises important issues regarding trademark ownership, and
transferring trademark rights.
As stated above, it is not possible to sell a trademark apart from
its related business. Such an assignment will be considered
invalid. Accordingly, a company cannot sell-off a popular
trademark without selling the underlying business attached to
the trademark. If the trademark is sold by itself, and the company
continues making the same product but simply changes the
trademark for the product, it could not be said that the goodwill
of the business symbolized by the trademark went with the
trademark to the new owner.
Assume two friends begin a business selling a product, without
forming a company or corporation, and come up with a great
trademark for the product. Both friends put equal work into
the business. The product becomes very popular, and gains
recognition. The question is: who owns the trademark?
Since a trademark is always tied to the goodwill of a business,
both friends would, in the above situation, own the trademark
equally - not a particularly good situation from the perspective of
trademark law. Issues could arise if one friend sought to use the
trademark to start a new venture, without the other friend. The
trademark is not a type of intellectual property than can easily
be divided. To paraphrase one court’s decision, “a trademark
should not have two masters.”
6
Fall 2013 Insider Volpe and Koenig, P.C.
These are just a few of the potential pitfalls that trademark
owners should be aware of when starting a business, selling
an established business, or starting a new venture with the
trademark used by a prior business. Since goodwill is difficult
to build, it is important that the goodwill symbolized by a
trademark be protected, starting at the creation of the trademark.
Determining trademark ownership when starting to use a
trademark can help protect against fracturing the trademark
rights in the future. 
firm news
Volpe and Koenig Shareholders Named 2013 Top Rated Lawyers in
Intellectual Property Law
Shareholders C. Frederick Koenig, III and Anthony S. Volpe
were recently selected by LexisNexis Martindale-Hubbell
and American Lawyer Media as Top Rated Lawyers in
Intellectual Property for 2013, which will be published in
The American Lawyer magazine and other publications.
To identify top-rated lawyers for 2013, the database of
Martindale-Hubbell Peer Review Ratings is tapped to
discover lawyers rated by their peers as “AV Preeminent”
– the highest Peer Review Rating available, measuring
performance in the following key areas: legal knowledge,
analytical capabilities, judgment, communication ability
and legal experience.
C. Frederick Koenig, III
Anthony S. Volpe
Former Volpe and Koenig, P.C. Technical Advisor
Becomes Patent Agent
Former Volpe and Koenig technical advisor, Keiko Kimura Middleton, is now a patent agent with
the firm. Middleton’s technical background covers chemistry, material science, pharmaceutical,
semiconductor, and medical devices. A native speaker of Japanese fluent in English, she
assists clients, especially from Japan, in preparing U.S. patent applications, U.S. national phase
applications via the Patent Cooperation Treaty (PCT), foreign filings, PCT international filings, and
providing assistance along with attorneys in matters ranging from patent prosecution and portfolio
development, to technology transfer, licensing and monetization for Japanese clients.
Volpe and Koenig Welcomes Jonathan M. Dunsay
as an Associate
Jonathan M. Dunsay recently joined the firm as an associate in Volpe and Koenig’s Electrical Group
and focuses his practice on electrical and mechanical patent matters. Jon earned his J.D. from the
Georgetown University Law Center and his B.A. and B.S. from the University of Pennsylvania. He
is admitted to practice in Pennsylvania and New Jersey, as well as before the United States Patent
and Trademark Office.
Volpe and Koenig, P.C. 215-568-6400 vklaw.com
7
Firm news continued.
THE
T
BaEwSyers
L
The Intellectual Property Insider is a quarterly publication from Volpe and Koenig, P.C. For a
complimentary subscription, please email your contact information to [email protected] or visit
our Web site at vklaw.com. To opt-out of an email subscription, please send your name and email
address, with “unsubscribe” in the subject line, to [email protected]. This publication is intended for
informational purposes only and should not be considered legal advice. Please consult an attorney
regarding your specific situation. Receipt of this newsletter does not constitute an attorney-client
relationship. © 2013 Volpe and Koenig, P.C.
8
Fall 2013 Insider Volpe and Koenig, P.C.
Volpe and Koenig Attorneys
Named as The Best Lawyers
in America© 2014
Shareholders Gerald B. Halt, Jr., Randolph J. Huis, C.
Frederick Koenig, III, John J. O’Malley, John C. Donch, Jr.,
Michael F. Snyder and Anthony S. Volpe were recently
selected by their peers for inclusion in The Best Lawyers
in America® 2014 (Copyright 2013 by Woodward/
White, Inc. of Aiken, SC). Since it was first published
in 1983, Best Lawyers has become universally regarded
as the definitive guide to legal excellence. Because Best
Lawyers is based on an exhaustive peer-review survey
in which almost 50,000 leading attorneys cast nearly
five million votes on the legal abilities of other lawyers
in their practice areas, and because lawyers are not
required or allowed to pay a fee to be listed, inclusion
in Best Lawyers is considered a singular honor.
News Credits
Editor . . . . . . . . . . . . . . . . . . . Michael F. Snyder
Contributing Authors . . . . . Michael F. Snyder
Laura G. Remus