2 Nearly Identical Patents

[bs750]

What is the name of your state? Virginia

I have researched a product I would like to manufacture. As it turns out, there are 2 nearly identical patents for it, awarded the same day and with the patent numbers about 5 from each each other. The inspectors were different people. Otherwise, I don't know how this happened.

The earlier patent, both for application and the patent number, is for my product and is very generally written (it mentions any type of ceramic coating, and lists many).

The second patent is more specific. It mentions the exact ceramic coating I would like to use.

Here's where it gets interesting. I offered to pay a royalty to the first patent-holder. He said no. The second patent holder somehow found me and offered me a royalty program. I said I'd look into it.

Quite by accident, I found on Google that the first patent had lapsed, due to not paying the USPO fees every 7 years. Its definitely in the public domain now.

I'm ready to proceed with manufacturing, but I'm still concerned with the 2nd patent. Any chance that the rights for this revert to the second patent, or am I correct that its in the public domain?

Thanks in advance.What is the name of your state?

 

[divgradcurl]

What is the name of your state? Virginia

I have researched a product I would like to manufacture. As it turns out, there are 2 nearly identical patents for it, awarded the same day and with the patent numbers about 5 from each each other. The inspectors were different people. Otherwise, I don't know how this happened.

The earlier patent, both for application and the patent number, is for my product and is very generally written (it mentions any type of ceramic coating, and lists many).

The second patent is more specific. It mentions the exact ceramic coating I would like to use.

Here's where it gets interesting. I offered to pay a royalty to the first patent-holder. He said no. The second patent holder somehow found me and offered me a royalty program. I said I'd look into it.

Quite by accident, I found on Google that the first patent had lapsed, due to not paying the USPO fees every 7 years. Its definitely in the public domain now.

I'm ready to proceed with manufacturing, but I'm still concerned with the 2nd patent. Any chance that the rights for this revert to the second patent, or am I correct that its in the public domain?

Thanks in advance.What is the name of your state?

I am not sure what you are asking for here. If the second patent is still valid (up to date maintenance fees, hasn't expired, etc.), then it is not in the public domain.

If both patents really covered the same ground, then in principle, yeah, expiration of the first patent should put that stuff into the public domain. However, in such a case, it wouldn't be automatic -- rather, this public domain idea would be a defense to a charge of infringemen of the second patent -- a type of invalidity defense.

If you refuse to take a license, make your product, and then get sued by the second patent holder, then it is possible that the existance of the first patent could potentially be used as a grounds for an invalidity defense -- but it's not a sure thing, and would require a competant analysis by a patent attorney to determine if such a defense exists in your case or not.

Your best bet would be to sit down with a local patent attorney, who can review all of the facts of your situation and advise you accordingly. Or just take a license for the second patent holder.

Also, how long has the first patent been lapsed for? It is possible to "revive" patents tat have lapsed for failure to pay maintenance fees in certain circumstances.

 

[bs750]

The first patent lapsed in 2002. The original company that patented it was forced to sell (due to bancruptcy), and during the yearlong negotiations they didn't pay any bills. The Patent Office gave them a bunch of chances to pay late.
The new owner of the patent probably didn't realize the patent had expired till the deal was finalized. On the Patent Office website for this patent, its current status is listed as expired.

The second company's royalty fee was outragiously high, and would negate our making the product. That company has also been bought out, and the product I want to manufacture is not in the new companies product lines. They still want the huge royalty.

My gut reaction is to build the product with no royalties for these reasons:

1. In case patent holder #2 sues, he is not making the product, so he can't sue for lost revenue. He can only sue for back royalty payments.

2. As you say, if he sues then patent #1 being in the public domain will be my defense.

Thanks for all your thoughts. I will take it to an attorney for a written opinion. I just wanted to get some advice first.

 

[divgradcurl]

1. In case patent holder #2 sues, he is not making the product, so he can't sue for lost revenue. He can only sue for back royalty payments.

You are right, there would be no lost profits -- but a "reasonable royalty rate" could be as high as the rate they are quoting you for a license. There are also other models for damages in patent infringement cases that are more complicated, and may ber relevant in your case based on the specific facts of your case. Plus, you'll need to pay your attorneys as well, which could easily spiral up into the million-dollar range by the time summary judgment rolls around.

In addition, they could sue for a preliminary (and later permanent) injunction -- if an injunction is granted, you won't be able to keep selling your products, so that will cut off your revenue stream. Preliminary injuctions are relatively straightforward to obtain; permanent injunctions are now (in the wake of the eBay case) somewhat more difficult to obtain, but they are still out there, and can't be ignored.

2. As you say, if he sues then patent #1 being in the public domain will be my defense.

I reread what I wrote, and maybe I didn't put enough caveats in. The earlier-filed patent MAY be invalidating art -- but you would need an attorney to review both patents and determine whether or not the earlier patent potentially invalidates, in part or in whole, the second patent. Remember -- and this is important -- an issued patent is presumed valid, and in order to overcome that presumption of validity, you need to prove invalidity by "clear and convincing" evidence -- that's a significatly higher standard of proof that the usual civil "preponderance of the evidence" (although it falls short of "beyond a reasonable doubt" -- it's somewhere in between the usual civil and criminal standards of proof).

Further, a patent can be invalidated in part, or in whole -- even if a big chunk of the patent gets invalidated, if enough "new stuff is left over to ensnare you, well, you can still be caught.

Plus, invalidity is NOT something that is commonly resolved at summary judgment -- it is usually a factual issue tried before the jury, which means the costs for you to defend the case skyrocket (unless you can work out a settlement before then).

Definitely talk with an attorney. Along with advice on infringemet and invalidity, ask for an estimate on what it would cost to defend yourself if you ended up getting sued -- that cost might be a lot higher than you expect, and may make you rethink the cost-benefit analysis.

Good luck.