Telling the Story: Impact of KSR on Background Sections in Patents

With the Supreme Court's KSR decision last April, there is an increasing need for patent drafters to consider the potential impact of obviousness. Some have suggested that the background section should be strengthened to help frame the nature of the patent as a surprising discovery, not merely applying known problem solving tools to crunch through a widely recognized problem with seemingly predictable results. I'm in that camp, in appropriate cases, sensing that the background section can help the Examiner understand that the inventor was not simply doing something that is obvious based on common sense. In some cases, a key part of the invention may be rooted in the discovery of the previously unappreciated problem that is now solved. The key to the beauty and non-obviousness of the invention may lie in finding the actual problem that needed to be solved rather than in solving it, but if a patent is drafted to simply state the problem and it's solution, it may seem obvious under KSR.

But there is also a case to be made for backing down on the background section and putting much less information there to avoid handing an Examiner or opponent information to use against your patent. The Patent Prospector reviews an article that calls, among other things, for eliminating much of the background section. The paper is "KSR-Induced PTO Obviousness Practice Changes" by Harold C. Wegner:

VI. THE "PROBLEM” SOLVED BY THE INVENTION
All too often, patent applicants needlessly include detailed "Background" sections, create "objects" and, particularly, set up "problems" in the prior art to be solved. None of this verbiage is necessary to meet statutory requirements of patentability.
A. The "Known Problem" as Fatal to Patent Validity
Setting up a strawman, a "problem", in the "Background" may now prove fatal to patentability; it is irrelevant what purpose the applicant intends to solve:

"In determining whether the subject matter of a patent claim is obvious, neither the particular motivation nor the avowed purpose of the patentee controls. What matters is the objective reach of the claim. If the claim extends to what is obvious, it is invalid under § 103. One of the ways in which a patent's subject matter can be proved obvious is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent's claims."

I would suggest problems or limitations can be presented, especially if it is made clear that these problems were not previously appreciated and part of the discovery process for this invention was finding that these problems were at hand - problems which are somehow unique and not analogous to problems in other art areas. But don't present the specific problem solved as if it's one everyone recognizes and would be motivated to pursue with elements such as those used in the invention. Some story telling, when appropriate, might help. Otherwise a minimalist approach may be wise for the background section.

Term Life Extensions: Maximizing the Life of Your Patent

The value of many pharmaceutical and biotech patents is greatest near the end of the life of the patent, when regulatory hurdles have been cleared and strong markets have been developed. A few months of additional life in the patent could be worth millions. If you are pursuing a patent and think that the greatest value may be near the end of the patent's life, don't overlook the possibility of realizing extensions to the life of your patent. Patent term extension may be available when excessive delays in processing by the PTO have occurred, in when other factors occur. For a review of the details and some excellent tips, see "Maximizing the Value of Biotech Patents" by Courtenay C. Brinckerhoff, senior counsel in the intellectual property department of Foley and Lardner.

Stephanie Keller-Bottom of Nokia's Innovent Speaks at Stanford

Stephanie Keller-Bottom, an entrepreneurial thought leader and director of the Innovent Team at Nokia, gave a valuable presentation on commercializing innovations at a 2006 event at Stanford University. Listen to the mp3 file below:


If you have trouble with the flash mp3 player, you can listed to it from the Stanford site or access the mp3 file directly at http://www.stanford.edu/group/edcorner/uploads/podcast/keller-bottom060426.mp3.

Some video clips from her presentation are also available from the Stanford Educator's Corner.

Biodiesel from Algae

Biodiesel got a little more interesting with the news release from Solazyme about their new biodiesel process that converts algae to fuel. Is it a real green energy solution or more hype? The answer lies in the economics. There is a long ways to go still in commercializing this technology, but Chevron is getting on board. If these advances can substantially lower the cost of creating biodiesel, then we could see this go commercial. I welcome approaches that use algae, cellulose, or other biomass besides food crops. Turning food into fuel just doesn't make sense, in my opinion, and the trend of turning corn to ethanol has helped drive up the price of basic grains for millions. Let's find solutions that are earth friendly and people friendly.

Venture Capital: Basic Information for Entrepreneurs

Many new entrepreneurs are interested in understanding venture capital funding for the growth of their business. Some state governments provide information and resources for entrepreneurs seeking help on funding. An outstanding example is the Wisconsin Angel Network. Look at their resource page and listen to presentations on stages of investing and finance marketing. Many other resources are there.

Another resource is N. Humphrey's Venture Capital Guide, published by Gilbert and Tobin (2000). The following information from OzNetLaw is based on Humphrey:

1. What is venture capital?

Venture capital involves funding high growth private start-up companies, particularly in the information technology and e-business industries. Venture capital offers medium term equity finance and does not require regular interest payments. Venture capital can provide a number of value added services include mentoring and the introduction of strategic alliances.

Venture capitalists (high net worth individuals or companies who provide the capital) generally take a minority share in the company and usually do not seek day to day control of a business. They generally appoint a representative to the board of directors and require input and in many cases retain veto rights over key strategic decisions.

2. Stages Of Growth

Venture capitalists categorise companies into four stages of growth:

(a) Stage one—Seed: the business is little more than a concept, the product is in development and the company is concentrating on research and producing a working model or prototype. The founders will fund the business from personal funds, typically requiring between $50,000 to $500,000.

(b) Stage two—Start-up: known as the "Angel round", the concept or products have been developed but the company has no track record and often has not made a profit, thereby making more traditional funding difficult to obtain. This is the riskiest stage for investors. The company needs a large amount of capital (typically between $500,000 to $2 million) but has no reliable indicators of its future success. Many businesses fail during this phase.

(c) Stage three—Expansion: known as the "second round" and may comprise multiple rounds before stage four. The company is fully set up, has usually received some funding and is building a financial track record. The company however, needs further funding (typically between $2 million to $10 million plus) to expand existing operational and marketing capacity. Some companies choose to meet financing needs with traditional bank finance (note that a bank will usually require personal guarantees from directors together with collateral).

(d) Stage four—Mezzanine: known as pre-Initial Public Offering (IPO) funding (typically between $10 million and $50 million and up). Funds are used to prepare for IPO including strategic acquisitions. Mezzanine investors may provide experience in the IPO process; for example, the company is "dressed up" for listing by introducing recognised business people to the board.

Resources for Defensive Publication

Strategies for defensive publication are one of the services we provide our clients. Those interested in defensive publications can learn some of the basics from a useful new blog, Securing Innovation. Take a look at their Short Guide to Defensive Publication. (Hat tip to InventBlog.)

Tips for Presentations to Venture Capital Firms

Over a FoundRead, there's a good post on pitching your technology to VCs. Valuable guidance. In addition, remember that the real key is preparing. How powerful is your business proposition? What's your reason to believe? How can you protect your business in light of emerging competition? Do you have an intellectual asset story? And that's right - intellectual assets, not just intellectual property. If you don't know the difference and don't have a compelling IA story to tell, get some help (why not Innovationedge?) and become prepared before you waste what may be a one-time opportunity to tell your story.