How To
Go About Getting An Insurance Patent
By Tom Bakos and Mark Nowotarski, National Underwriter,
June 2, 2003
Part
Four of a Series
Ask a New York City cabby with a sense of humor how to get to Carnegie Hall and he’s likely to tell you "practice, practice, practice!" The same is true for patents. The process is straightforward, but getting a valuable insurance patent takes practice and maybe a little help.
The first step in getting a patent, of course, is to invent something. From the point of view of the U.S. Patent and Trademark Office (USPTO), an invention is made when the inventor(s) first describes both the invention and its "utility" (i.e., what it’s good for). There must be evidence of the date and contents of the description. A signed, dated and witnessed document is adequate evidence. The description must be complete enough so that another person skilled in the area can read it and make the invention work.
For insurance patents, a working model is unlikely to be required. The USPTO
is only likely to demand a working model if "incredible utility" is
alleged (e.g. cold fusion, perpetual motion, etc.)
Having made the invention, you ought to evaluate its market value and potential.
If it passes your economic test, the next step is to prepare and file a patent
application. The inventor can do this himself, but a patent application is
required to follow a certain form and the language used has developed its
own formal meaning. The experience of a patent agent or attorney can be very
helpful in getting it right. You describe your invention to the agent/attorney,
and they prepare a draft application for your review.
Patent agents and patent attorneys perform the same service in terms of helping
clients get patents. They both have the same license to represent clients
in front of the USPTO. Patent attorneys also have a license to represent clients
in a court and can help, for example, in the enforcement of a patent if a
lawsuit is required.
Before submitting a patent application, it is strongly recommended that the
inventor search the "prior art" for similar inventions that have
been made in the past. Prior art that teaches or suggests any aspect of the
invention can cause some or all of the application to be rejected.
Only the first person to conceive of an invention (U.S.) or file an application
(rest of the world) is entitled to a patent on it. If your invention has been
publicly described by someone else or even yourself before your patent application
is filed, then you are not entitled to a patent.
In the U.S., there is a one-year grace period for filing a patent application
after it is publicly disclosed. In the rest of the world, there is no grace
period.
A prior art search will help you and your patent agent determine what is
new and what can be "claimed" in the patent application. A "claim" is
a formal one-sentence description of what the invention is. Typically, there
are many claims in a patent (sometimes 20 or more) each covering a different
aspect of the invention. They are found in the Claims section at the end of
the patent application.
An inventor who discovers a new and better way of underwriting, for example,
might claim the method for underwriting itself, the types of insurance products
that are enabled by the improved method of underwriting, the computer system
that performs the underwriting calculations and even the database that is
used to store the underwriting information.
The goal of the patent agent is to draft claims that are broad enough to
cover all alternatives to the invention, diverse enough to capture all permutations
of the invention and specific enough to withstand challenges to the patent
that a competitor might bring.
Once the patent application is drafted, it is submitted with the appropriate
fee to the USPTO for examination. If international coverage is desired, then
a corresponding "PCT" application is also filed. PCT stands for
the "patent cooperation treaty."
A PCT application provides a relatively low-cost way to submit the same patent
application to multiple countries. A patent application is required in each
country in which you wish to protect your intellectual property.
In the United States, a patent application is assigned to a patent examiner
after it is filed. The patent examiner reads the application and determines
whether or not it satisfies the regulatory requirements to receive a patent.
That is whether it is new, useful and not obvious.
To determine if the invention is new and not obvious, the examiner does his
or her own prior art search.
Since it is common practice to draft initial claims that are as broad as
possible, it is equally common for the patent examiner to find prior art that
is close enough to your initial broad claims to make them "obvious." The
examiner then rejects the claims in an "office action."
There are two ways to get around a finding of obviousness in an office action:
You can amend the claims or argue that the examiner is mistaken.
Claims can be amended to more narrowly define the invention and thus get
around the prior art issue. Justification for the narrower claims must be
found in the "specification." The specification is the everyday-language
description of the invention that makes up the bulk of the patent application.
Several different examples or "embodiments" of an invention are
often included in the specification. This provides enough material to support
narrower claims.
If claims cannot be narrowed without sacrificing the value of the patent
then flaws must be found in the examiner’s finding of obviousness. The
most common flaw is that the examiner feels that the prior art "teaches
or suggests" an element of a claim that, in fact, it does not.
Once the mistaken presumption is pointed out to the examiner, the claims
often are allowed. Occasionally, the examiner is unconvinced by your arguments.
In that case, the examiner’s decision can be appealed.
An even better argument against obviousness is to find prior art that "teaches
away" from the claimed invention. Suppose, for example, you file a patent
application on a method for providing a super preferred discount based on
a new quality control procedure in your underwriting process. If you can cite
prior art that suggests that your method is not likely to work, then you have
a much better chance of getting your claims allowed.
Once the claims are allowed, the next step in getting a patent is to pay
the issue fee. A patent issues on its publication date. Once it is published
in the Official Gazette, it is an enforceable patent. Maintenance fees, due
every four years, must also be paid to keep a patent in force. If they are
not paid, the patent expires and anyone can make, use or sell the claimed
invention.
A U.S. patent expires 20 years from the date the application is first filed.
The entire process from filing to issuing typically takes two to four years
so the period of enforceability is usually 16 to 18 years.
A typical U.S. patent will cost $10,000 to $20,000 in preparation and filing
fees. An additional cost of $5,000 to $10,000 must be budgeted for each additional
country in which the patent is filed. A good rule of thumb for the cost of
protecting an important invention with broad international coverage is $100,000
spent over five years.
A patent is an investment. The skill and experience of both the inventor
and his or her agent or attorney will help ensure that the investment is a
valuable one.
Reproduced
from National Underwriter Life & Health/Financial Services Edition,
June 2, 2003. Copyright © 2003 by The National Underwriter Company
in the serial publication. All rights reserved. Copyright in this article
as an independent work may be held by the author.
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