References and Information Disclosure Statements
One easy way to spot an above-average patent is the References Cited on the front page. The references are specific pieces of prior art that the examiner considered when evaluating the patent, and they are a good look at how good the patent might be.
There are two types of references: ones with a little star and ones without. The starred references are those that the examiner found, and the unstarred references were provided by the applicant.
If a patent has three or four starred references and nothing else, the patent is bad. If it has lots of references, sometimes with another page of references, the patent may still be bad, but it shows the applicant put in the effort to get a good patent.
The References Cited section is a strategic way a patent applicant can make their patents better – and it does not cost anything.
Remember that when we send in prior art to the examiner, there is a chance that our patent will be rejected. The examiner will likely rub it in by citing the reference you gave them and calling it “Applicant’s Admitted Prior Art.” They use that term just to twist the knife when they are doing a rejection.
However, the References Cites section is sadly one of the most underused tools to make your patents strong.
Information Disclosure Statements
In the US, we have both the obligation and the opportunity to put references in front of the examiner for consideration. The obligation comes from the requirement that we must give the examiner everything we know. In fact, some patents have been challenged because the inventor intentionally withheld references that would have invalidated his claims – or at least the facts were twisted to show “inequitable conduct” on the part of the applicant.
References are sent to the examiner on a form called an Information Disclosure Statement.
If you know of a reference, be it a patent, blog post, scientific paper, dusty thesis on the shelf of some university, or anything else that may be relevant to the examiner, you have a legal obligation to send it to the examiner. If you do not, your patent can be wiped out.
Some inventors are terrified that their patent application will be rejected if they show the examiner their competitor’s product, an old website, or some patent they stumbled upon. I remember having invested in a large patent portfolio early in my career. I was worrying that the portfolio would be decimated by some prior art that was not found during examination.
When we do patent-backed financing, we try to stress test the patents by doing as thorough a search as possible. If the patent survives the stress test, it will be a great one. If it does not survive, well, we are lucky to get any money out of it.
A patent with three or four starred references – and nothing else – shows that the patent can be attacked in litigation by questioning the inventors about what they knew at the time of invention. Did they have anything – any written reference at all – that they should have shown to the examiner? If they failed in their obligation, the patent can be invalidated right then and there. It is pretty serious.
Keeping Track of Patents During a Search
The Information Disclosure Statement obligation means that you must disclose any reference that may be “close” to your invention. This means you must keep track of any patents you find during a patent search.
For people who do extensive patent searching, it may be very difficult to track every patent that pops up. Certainly, if you save a patent because it is close to your invention, you must send it to the USPTO. However, what if you saw a good prior art reference but did not save it? Will it invalidate your patent if you do not send it to the USPTO? Quite possibly, yes, your patent might be invalidated.
However, if you look at hundreds or thousands of patents, the examiner does not want to look at all of them. Some patent attorneys have abused the IDS privilege and have sent enormous numbers of patents – making the examiner’s lives miserable. Consequently, the USPTO has put a limit on the practice. It is not a hard and fast limit, but the examiner has discretion to enter your IDS into the record or not.
Mostly, they are worried about applicants playing “hide the ball,” where you send in a thousand pointless patents with one killer one hidden in the pile.
Managing IDSs is a tedious process, but some patent attorneys take it to an extreme – probably because they get to bill the client.
The sophisticated patent professional will also notice how many non-patent references are cited. These are known as Non Patent Literature (NPL), and the more, the better. Specifically, scientific journal references, blog posts, and other documentation of the state of the art are very good.
The references are also an opportunity for applicants to bolster their patents. Anytime a reference is considered by the examiner, it is very difficult for someone else to try to invalidate your patent by using that reference.
This is an opportunity to inoculate our patent against competitors’ patents – or any other reference out there.
Consider an example: when I file a patent application, I want the examiner to consider all of the patents of my competitors. This will make all of those patents useless if they tried to invalidate my patent using theirs.
Sending in references for the examiner to consider carries some risks. Examiners will get angry when you send them 50 or 100 references, especially if the references are only tangentially related to the invention.
There are many services that provide some kind of scoring system for patents, as an automated way of assessing patent value or quality. Virtually every one of the scoring systems uses the references as a key indicator of quality.
One type of reference is a backward reference. This is the reference cited by someone as prior art and is listed on the front of the patent.
The other type of reference is the forward reference. These are the patents that cite the reference as prior art.
A patent’s importance is implied by how many patents cite it. The bedrock patents that describe a new idea for the first time will be cited by all the other patents that come after it.
It should be noted that forward or backward citations are based on what is in the specification, not the claims, of the patent. Just because a patent discusses something in detail in the specification, it does not mean that the topic was claimed.
The specification is the part of the patent that is given away to the public, and the claims are the part that the patent owner can enforce.
I recently ran into an inventor who filed a 300+ page patent application that had been pending for a couple years. He gave me a listing of all the companies who had cited his patent application as prior art, and the listing was impressive. His patent application had been cited many, many times by an impressive list of competitors.
However, his patent claims were ridiculously narrow and focused on a relatively trivial part of the giant patent application. In other words, he created this giant roadblock to other people’s inventions, but he captured no real value that he could enforce. I could not give his patent any value as a roadblock to others.
This is a segue to one of the most eye opening parts of doing a patent search: seeing who owns patents related to a given technology.
I do lots of patent searches as part of due diligence on inventions. As I find related patents, I am also uncovering competitors who happen to be working in the same space. Sometimes, the search uncovers competitors we knew were in the space, sometimes new ones pop up we never heard of, and we are often surprised to see companies who we never considered to be competitors.
The interesting part of patents is that we get a glimpse into their research and development activities and see what they were thinking and how they were going about it. This insight can be very valuable competitive intelligence, and can inform the product and marketing strategy of a startup.
Patent searches are the low hanging fruit of the patent process. While you are making your patent stronger, you can also harvest very valuable competitive information.