I received a telephone call from a potential client, a start-up business.  The owner said that he had a new and original process for making a food product.  He wanted to patent that immediately.  He had spoken with a patent lawyer and was concerned about the cost of preparing the patent application.  He wanted a second estimate and was referred to me.

            My initial reaction was one of skepticism.  There is an inherent problem with process patents:  how do you know that the patent is being infringed?  Think about it:  almost by definition a “process” is something that is done inside someone’s manufacturing facility, so unless the product is a unique result of that process (which this was not) it may be very difficult to know what “process” was used to make the product simply by looking at it.  And if you cannot determine whether the process was used to make the product, what good is the patent?  So while there are some things a potential plaintiff may be able to do to clear that hurdle, the fact is that process patents can be challenging to enforce.

            As we discussed his unique process, my skepticism was increased because it started to sound like his “process” was more like a recipe or formula, neither of which can be patented.

             His determination was seemingly unshakable. As we chatted, however, it dawned on me that his patent lawyer had not told him about the strategic business risk inherent in the patent process, namely, the risk of disclosure without ultimately getting patent protection.

            Under the patent laws, an applicant has a duty to disclose everything it knows about the claimed invention, including the best mode of practicing it.  All of that must be contained in the patent application.  The law requires that all patent applications be made public (“published”) 18 months after they are filed.  At that point, the claimed invention is disclosed to the world.  Unfortunately, it will be years before an Examining Attorney in the Patent Office actually picks up the file and reviews the application.  If the Examining Attorney concludes that the application does not satisfy the standards for patentability, it will be rejected.  While applicants have an opportunity to respond to and appeal the rejection, that can be an expensive process.  And if the application is ultimately refused, the applicant will have: (a) disclosed the process to the world, (b) have no way to stop competitors from using it, and (c) will have paid lawyers a lot of money for the privilege of having done something strategically dumb.

            The risk of rejection can be minimized by having a lawyer do a patent search and opinion prior to filing the application.  Because this can be very expensive, however, many small companies and start-ups do not want to invest in it.  And it is a rare occasion where a lawyer will say “don’t worry, be happy” about a claimed invention, so the business will still have to face the strategic dilemma.

            When I explained this conundrum to the potential client he immediately understood that disclosing the process was too high a risk for him to take.  He took the patent option off the table and we discussed ways to protect the process by treating it as a trade secret.  And, in fact, the potential client was already doing many of the things required to keep it confidential.

            A patent is a powerful tool to protect inventions because it gives the owner a lawful monopoly, but it is important to understand and consider the strategic risks inherent in the patent process.  Moreover, a patent is only useful if the patent owner can easily detect whether competitors are infringing it and – perhaps more importantly – is willing to pay lawyers to sue infringers.  While the successful plaintiff in a patent infringement action can recover its attorneys’ fees, most patent litigators require their bills to be paid on a monthly basis so it can be years before those fees are reimbursed by the unsuccessful defendant.  As a result, it is often strategically preferable better and less expensive simply to treat “inventions” as trade secrets.