[vc_row][vc_column][vc_single_image image=”1449″ img_size=”600×300″ onclick=”custom_link” link=”http://ipeducation.patenteducation.org/courses/patents-340-invention-rating-checklist/”][vc_column_text]This is a transcript from a section of the course “Patents 340 – Invention Rating Checklist,” which is available here at IP.Education.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_text_separator title=”Download the Checklist”][vc_single_image image=”997″ img_size=”medium” alignment=”center” onclick=”custom_link” link=”https://ipeducation.patenteducation.org/wp-content/uploads/sites/8/2016/06/Invention-Rating-Checklist-IP.Education.pdf”][/vc_column][vc_column width=”1/2″][vc_text_separator title=”Get the Book”][vc_single_image image=”20″ img_size=”medium” alignment=”center” onclick=”custom_link” link=”http://investinginpatents.com”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Actor Analysis

Actor analysis is a concept that sometimes gets lost in the thought process.

The concept of the actor analysis is simple: who are you going to sue with your patent?

The answer is not always straightforward.

One of the companies near us in Colorado makes a heat-moldable earphone.

They are really cool, and you use them by heating up a plastic piece in boiling water, which softens the plastic.

You them put the part in your ear and form it to your ear as it sets.

Once that is in place, you pop in the speaker part and you have custom fitted earphones.

I have a pair and they work really well.

When the inventor described this to his patent attorney, the patent attorney wrote claims that basically said:

heat up the plastic

form it to the ear

pop in the speaker

 

So what is the deal?

Well, who actually infringes these claims?

Who is the person who heats up the plastic, forms it to their ear, and pops in the speaker?

It is the customer.

Can I sue the customer?  No.

Let’s say that a competitor had product out in the field and someone bought a competitor’s moldable earphone.

The person who actually infringes these claims is the customer who I want to buy my product.

Can I sue them and say “You are infringing, so buy my product”?

Not in my book.

Another problem with these claims:  what could I recover if I sued this infringer?

I would probably sue for a reasonable royalty, which may be 2 to 5 percent of the wholesale price (not retail price).

On a $50 retail item, the wholesale price should be maybe $10.

That means I would be suing for 20 to 50 cents.

Does it make any sense to sue someone for a quarter?

No.  I also have to sue each customer, which could be thousands or millions of infringers.

This doesn’t make any sense at all.

These are infringers who are immune to a lawsuit.

The cost of suing them far outweighs what you might recover.

Another problem is: when does the infringement occur?

Infringement does not occur until all of the steps in a process are complete.

Infringement does not actually occur until the customer actually heats up the product and puts it in their ear.

In this case, infringement has not occurred when the competitor’s products are sitting on the store shelves.

I cannot sue when there is no infringement, so I am powerless to do anything until the customer goes home and uses the product.

To be fair, the competing manufacturer could be liable under something called contributory infringement or inducement.

This says that we could sue the manufacturer because they caused or induced the infringement of the customer.

But contributory infringement or inducement is much harder to prove in court, and almost impossible to stop a competitor from importing infringing goods through the International Trade Commission.

Looking at this invention, how could this problem be solved?

The answer is actually quite simple: we need to rethink the invention in terms of who we want to be the infringer.

We do not want the customer to be the infringer, we want the manufacturer to be the infringer.

How would we rethink the invention?

Rather than having the claims describe the process that the customer does, have the claims describe something that the manufacturer does.

Another factor is that the manufacturer is our direct competitor and the manufacturer has deep pockets.

Instead of collecting 25 cents from a single customer who infringes, we can collect millions of dollars from the manufacturer.  This is much better.

What if we rewrote the claims to describe the manufacturing process?

For example, we could have:

make a pair moldable plastic parts

get a set of headphones

put the plastic pars and headphones in packaging.

Now we have a set of claims that are directed to the right infringer: the manufacturer.

But are there any problems here?

Actually, there are.

Where does the infringement occur?  What is the physical location of infringement?

These steps are performed at the location of the factory.

Patents are jurisdictional, meaning that a US patent only protects against activities in the US.

What could an infringer do if they got caught violating these claims in the US?

They can move to Mexico, or China, or Indonesia, or Malaysia, or wherever.

Can we rethink the claims again?

How about these claims:

a pair of moldable plastic parts that have a receiver for an earphone and

a set of earphones.

These claims are much better.

They are the product, not the process.

Product claims can be enforced at the International Trade Commission.

This is the part of the US government that can stop an incoming container fresh off the ship loaded with infringing product.

The product can be held up right away and your patent can be enforced.

You can’t do this with process claims.

One of the reasons why the patent attorney in this case may have wanted to get the very first claims is that process claims are much easier to get.

Before this invention, nobody was boiling plastic in water to get it soft and putting the plastic in their ear – at least for headphones.

From the patent attorney’s standpoint, this was the best way to go because it was easy.

From the client’s perspective, it would have been a complete waste of money.

This example really brings home the reason why you need to use this checklist.[/vc_column_text][/vc_column][/vc_row]