Beware of Invention Promotion Companies

The American Inventors Protection Act which was enacted November 29, 1999,
and amended by the Intellectual Property and High Technology Technical
Amendments Act of 2002; helps protect inventors against deceptive practices
of certain invention promotion companies. It requires invention promoters to disclose
in writing the number of positive and negative evaluations of inventions
they have given over a five-year period and their customers’ success in receiving net
financial profit and license agreements as a direct result of the invention
promotion services.

Invention promoters do not include government agencies, qualified nonprofit, charitable, scientific or educational organizations, or persons or entities involved in evaluating the commercial potential of or offering to license or sell, a utility patent or a previously filed nonprovisional utility patent application. It excludes any party participating in a transaction involving the sale of stock or assets of a business as well as any party who directly engages in the business of retail sales of products or the distribution of products.

Customers injured by failure to disclose the required information or by any material false or fraudulent representation by the invention promoter can bring a civil action to recover statutory damages or actual damages. Damages of up to three times the amount awarded are available for intentional or willful violations.

The Patent and Trademark Fee Fairness Act of 1999

This subtitle reduces certain patent fees. The original filing fee, the reissue fee, and the international application fees were each reduced. The initial maintenance fee was also reduced. The Director is authorized to adjust trademark fees and language is included that emphasizes that trademark fees can only be used for trademark-related activities.

The First Inventor Defense Act of 1999

This subtitle provides a defense against charges of patent infringement for a party who had, in good faith, actually reduced the subject matter to practice at least one year before the effective filing date of the patent and commercially used the subject matter before the effective filing date. The defense is limited to methods of “doing or conducting business.” Establishment of the defense does not invalidate the subject patent.

The defense is personal and cannot be assigned except as a transfer of the line of business to which the defense relates, and even then, is only assertable for sites using the method before the later of the date of assignment or the effective filing date of the patent. The defense can only be asserted as a defense against infringement of a commercially used method.

The Patent Term Guarantee Act of 1999

This subtitle extends the term of patents, in accordance with regulations prescribed by the Director, to compensate for certain United States Patent and Trademark Office (USPTO) processing delays and for delays in the prosecution of applications pending more than three years. Extensions are available for delays in issuance of a patent due to interference proceedings, secrecy orders, and appellate review. Diligent applicants are guaranteed a minimum 17-year patent term. This subtitle also requires the Director to prescribe regulations to provide for the continued examination of an application, at the request of the applicant.

The Domestic Publication of Foreign Filed Patent Applications Act of 1999

This subtitle provides for publication of patent applications 18 months after filing unless the applicant requests otherwise upon filing and certifies that the invention has not and will not be the subject of an application filed in a foreign country. Provisional rights are available to patentees to obtain reasonable royalties if others make, use, sell, or import the invention during the period between publication and grant. If the foreign-filed application is less extensive than that filed with the USPTO, the applicant may submit and request publication of a redacted version by the USPTO. There is a six year statute of limitations on the “provisional” right to collect the reasonable royalty.

The Optional Inter Partes Reexamination Procedure Act of 1999

This subtitle establishes a reexamination alternative that expands the participation of third-party requesters by permitting those parties to submit a written response each time the patent owner files a response to the USPTO. Those third-party requesters who choose to use the optional procedure, however, will not be able to appeal adverse decisions beyond the Board of Patent Appeals and Interferences. Also, they will not be able to challenge, in any later civil action, any fact determined during the process of the optional reexamination procedure.

The Patent and Trademark Office Efficiency Act

This subtitle establishes the USPTO as an agency within the Department of Commerce, subject to the policy direction of the Secretary of Commerce. The USPTO retains responsibility for decisions regarding the management and administration of its operations and exercises independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions. It also allows the USPTO to establish satellite offices in places in the United States as necessary and appropriate to conduct business and authorizes the entering into and performance of contracts.

Miscellaneous Patent Provisions

This subtitle makes a number of technical and clarifying changes to patent law and provides authority for the electronic filing, maintenance, and publication of documents.

A discharged employee who remains in a similar, if not identical, field of
business after termination may face potential liability under trade secret
law.  For example, a former employee might benefit from soliciting
the customers from former employment. Whether or not such solicitation
constitutes a trade secret violation, when the customer list of a former
employer was stored in a confidential file, depends on the accessibility
of customer names elsewhere.

The solicitation of customers will probably not constitute a violation of
trade secret law if:

  • A former employee did not copy or memorize the confidential customer files

  • Employers' customers were known users of employers' merchandise

  • Customers engaged in business at advertised locations

  • Customer names were readily ascertainable in the trade as likely users
    of employers' services

Criminal Penalty for Government Employees

A federal statute imposes a criminal penalty for any United States government
employee who discloses trade secret information that is revealed to him during
the course of his employment. This means that government employees are obligated
to keep the trade secret information confidential. Imposing a penalty for
the violation of a trade secret fosters business and, subsequently, the economy,

  • Discouraging government employees from capitalizing on confidential information
    they become privy to during the course of employment

  • Arming owners of a trade secret with a sufficient remedy in the case of

Leave a Reply