Patent Application Fees Can Qualify for the Research and Development Tax Credit.

The federal research and experimentation tax credit (referred to as both an “R&D credit” or “R&E credit”) can be a valuable tool for individuals and businesses that conduct research and development, including the invention of patented products and processes. It provides a 20 percent credit on selected research expenditures.

In order to qualify for the R&D credit, research activities must satisfy a four-part test established by Congress:

  • Permitted Purpose: The goal of the activity must be to create a new or improve an existing business component in terms of functionality, performance, reliability, or quality. A business component is defined as any product, process, technique, invention, formula, or computer software that the taxpayer intends to hold for sale, lease, license, or actual use in the taxpayer’s trade or business.
  • Elimination of Uncertainty: A degree of uncertainty must exist concerning the development or improvement of the business component. Uncertainty exists if the information available to the taxpayer does not establish the capability of development or improvement, method of development or improvement, or the appropriateness of the business component’s design.
  • Process of Experimentation: The taxpayer must undertake a process of experimentation designed to evaluate one or more alternatives to achieve a result.
  • Technological in Nature: The experimental process must fundamentally rely on principles of the “hard sciences, including physical, biological sciences, engineering, or computer sciences.

As detailed by the Journal of Accountancy, a number of expenses can qualify for the R&D tax credit, including wages, supplies and contract research expenses. For instance, in-house wages attributable to qualified research and 65 percent of vendor expenses related to design and testing services are includable.

In addition, the tax credit has been interpreted to include not only developing prototypes or models, but also applying for patents. Accordingly, inventors may be able to use the tax credit to offset the increased application fees now required by the U.S. Patent and Trademark Office.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Guidance After The Myriad Decision.

USPTO Provides Guidance in Response to Myriad Decision

The U.S. Supreme Court recently issued its decision in Association for Molecular Pathology v. Myriad Genetics, Inc., which clarifies what types of DNA claims are patent eligible. Only a few days later, the U.S. Patent and Trademark Office (USPTO) issued preliminary guidance to its patent examining corps.

Earlier this year, tThe Supreme Court held that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring.

As noted by the USPTO, “Myriad significantly changes the Office’s examination policy regarding nucleic acid-related technology.”In accordance with the Myriad decision, the USPTO advises it examiners:

As of today, naturally occurring nucleic acids are not patent eligible merely because they have been isolated. Examiners should now reject product claims drawn solely to naturally occurring nucleic acids or fragments thereof, whether isolated or not, as being ineligible subject matter under 35 U.S.C. § 101. Claims clearly limited to non-naturally-occurring nucleic acids, such as a cDNA or a nucleic acid in which the order of the naturally­occurring nucleotides has been altered (e.g., a man-made variant sequence), remain eligible.

The USPTO further added that it is closely reviewing the decision in Myriad and will issue more comprehensive guidance on patent subject matter eligibility determinations, including the role isolation plays in those determinations.

I will keep you informed of any new examination process and rule changes from the USPTO as they become relevant to you business.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

USPTO and Korean Intellectual Property Office Announce New Pilot

The U.S Patent and Trademark Office (USPTO) and the Korean Intellectual Property Office (KIPO) recently announced the launch of a new patent pilot.

KIPO will classify some of its patent documents using the Cooperative Patent Classification system (CPC). It is the first foreign patent office to engage with the USPTO and EPO in this new system.

The CPC is a new classification system jointly managed by the USPTO and the European Patent Office (EPO). It includes approximately 250,000 classification symbols based on the International Patent Classification (IPC) system, and will allow examiners and patent users worldwide to conduct searches by accessing the same classified patent document collections. The goal is to enable more efficient prior art searches and enhance efficiency through work-sharing initiatives designed to reduce unnecessary duplication of work.

CPC definitions containing a thorough description of the technical subject matter covered will be provided for every CPC subclass and regularly updated. Downloadable CPC schemes, CPC definitions and concordances (e.g. ECLA to CPC and CPC to IPC) are now available on the official CPC website.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Samsung Facing Patent Infringement Suit From Taiwan University

Samsung Electronics Co.’s latest smartphone, the Galaxy S4, offers an innovative feature — users can erase people from photos taken with the device. A commercial for the phone shows a mother fixing a photo of her son receiving his diploma after another graduate jumps in the frame.  While the technology is a strong selling point, Samsung may have to fight to keep it.

The company is facing a patent infringement lawsuit from National Cheng Kung University. The school, based in Taiwan, alleges that the devices infringe its patent for “Image-Capturing Device and Method For Removing Strangers From An Image.” The U.S. Patent and Trademark Office issued the patent in 2008.

National Cheng Kung University filed the patent lawsuit in Texas Eastern District Court. It seeks a permanent injunction to stop Samsung from infringing on the patent, as well as unspecified monetary damages.

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Both parties have been active participants in the so-called “Smartphone Wars.” National Cheng Kung University has filed several lawsuits against Apple Inc. in the same Texas court. In a suit filed last year, the school alleged that Apple’s “voice activated assistant capabilities otherwise known as Siri” infringed upon patents held by a university research team. Last month, it filed another infringement suit involving Apple’s Face Time product.

Samsung, of course, is also no stranger to patent litigation with Apple. The two companies have been battling across the globe for the past several years, with each claiming a measure of success. Samsung recently won a victory before the U.S. International Trade Commission, which ruled that several older Apple devices infringe Samsung patents. 

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Lawmaker Seeks to Expand Post-Grant Reviews

Senator Charles Schumer recently introduced legislation that would expand the scope of covered business methods eligible for post-grant review.  The “Patent Quality Improvement Act of 2013” would also remove the sunset provision and make the program permanent.

Post-grant review procedures allow a third party to challenge a patent’s invalidity on a number of grounds, including prior art, lack of enablement, lack of novelty, or inadequate written description. Thus, post-grant review allows parties to raise a number of new challenges that were previously reserved for litigation.

Schumer’s bill would expand the availability of post-grant review by amending the definition of “covered business methods” to remove the phrase “financial product or service.” The new definition would read as follows:

IN GENERAL- For purposes of this section, the term ‘covered business method patent’ means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of an enterprise, product, or service, except that the term does not include patents for technological inventions. (Emphasis added)

If the bill passes, it would then be up to the USPTO to provide precise definitions for the new terms.  While Senator Schumer has stated that the bill would “crackdown on ‘patent trolls’” by providing “small technology start-ups with the opportunity to efficiently address [infringement suits] outside of the legal system,” it has the potential to benefit a wide variety of patent holders.

In addition to this bill there are several others that are pending votes as well:

Manufacturing Innovation in America Act of 2013 (H.R. 2605)

Patent Abuse Reduction Act of 2013 (S. 1013)

End Anonymous Patents Act (H.R. 2024)

Patent Litigation and Innovation Act of 2013 (H.R. 2639)

MODDERN Cures Act of 2013 (H.R. 3091)

PATENT Jobs Act (H.R. 2582)

STOP Act (H.R. 2766)

PACES Act (S. 1478)

PARTS Act (S.780)

Medical Innovation Prize Fund Act (S. 627)

I will keep you updated as the bills are passed or defeated.

How Can I Help?

For detailed advice about post-grant proceedings, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Vermont Takes Unprecedented Approach to “Patent Trolls”

The state of Vermont is fighting back against what it calls “unfair business practices” by non-practicing entities. The state passed a law against asserting false patent claims and filed a lawsuit against one so-called patent troll.

 

The new state law, entitled “Bad Faith Assertions of Patent Infringements,” is intended to distinguish between abusive and valid patent infringement claims. The statute includes a private right of action and also allows the state attorney general to enforce violations.

 

Factors that indicate a bad faith patent assertion include failing to identify the patent(s)-at-issue, the patent owner, and exactly how the recipient’s behavior violates the patent; demanding too quick a response or too costly licensing fees; and asserting deceptive or meritless allegations. Meanwhile, factors that suggest a valid patent infringement claim include commercializing the patented invention; being either the original inventor or an educational institution; and successfully enforcing the patent in court.

 

Vermont is also now the first state to file a lawsuit against a non-practicing entity (an NPE). The attorney general’s lawsuit alleges that MPHJ Technology Investments violated state consumer protection laws (not the newly passed law) by threatening to initiate patent infringement lawsuits against small Vermont businesses that did not pay licensing fees.

 

The lawsuit specifically claims that the NPE failed to conduct due diligence to confirm the businesses were infringing prior to sending the demand letters.

 

According to the complaint, the letters were also deceptive because the licensing fees suggested by the NPE of $900-$1200 per employee are higher than those normally charged. The lawsuit seeks an injunction and up to $10,000 in penalties per violation.

 

Given the novel nature of Vermont’s law and the suit, the patent community will be closely monitoring the legal developments surrounding both. It is unclear if the state’s foray into patent law, which is traditionally the jurisdiction of the federal government, will survive judicial scrutiny.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman