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IBA: Startup Launches as a Result of America Invents Act

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For most patent attorneys, the American Invents Act has created an opportunity to engage clients on a variety of legal matters. For one Indianapolis-based entrepreneur, James Burnes of Project Brilliant, it sparked an opportunity to launch a new software venture.

Among many changes, the AIA added a new method for marking in U.S. 35, Section 287(a). Virtual marking, the use of a web address in addition to “pat.” or “patent” (e.g. patent.companyurl.com). This new method offers significantly lower costs and efficiencies for companies to implement a marking strategy than the centuries old method of traditional marking. “The AIA’s treatment of product marking is one of the few changes made to patent law by the AIA that truly makes the business of patenting more efficient,” said John Daniluck, patent attorney and partner at Bingham Greenebaum Doll.

Burnes recognized that the cost and resources necessary for a company to effectively design, build and maintain its own virtual marketing database and publishing platform would be a time consuming, expensive endeavor; perfect for a software-as-a-service business. His company, PatentStatus (www.patstatus.com), is the first virtual patent marking software solution to enable corporate counsel to quickly build and launch a virtual marking database on their website without resources from IT, marketing or web staff.

“We worked with a variety of intellectual property attorneys to determine what functionality made sense,” said Burnes. “PatentStatus enables corporate counsel to create, build and maintain a registry on their company’s website without requiring lots of resources from their company’s IT department. It’s literally as easy to use as email.” According to Burnes, the only task a client’s IT staff has takes five minutes to update the company’s domain name servers to point their unique virtual marking URL (e.g. pat.companyurl.com) to PatentStatus’ secure servers.

Marking = revenue

Proper patent marking provides constructive notice to infringers and maximizes potential infringement damages for patent owners. “Virtual marking allows a patent owner to use technology to greatly reduce the cost of marking and at the same time increase the certainty of marking all the right products,” said Daniluck. That can mean additional revenue in successful infringement litigation.

Virtual marking offers the fastest and most cost effective method to providing constructive notice to their competitors while also mitigating the risk of improper marking that can occur due to employee error or negligence. Prior to virtual marking, traditional marking was time consuming and expensive and prone to employee error. “PatentStatus software allows our clients to use a single marking across every product, part and article they make and then publish the related patent information on their web site to provide constructive notice,” said Burnes. “As patent claims or associated patents change in the future, our clients can simply update their database and immediately make live changes.”

Understanding utilization creates opportunity

“Companies need to understand which patents in its portfolio they are using,” said Rick Rezek, patent attorney and partner at Barnes & Thornburg. “Having a complete, up-to-date database that links products and parts with the related patents is the first step in maximizing the use of the patent portfolio.”

The challenge for most companies implementing a virtual patent marking strategy will be getting that data together. Burnes says PatentStatus makes it easy to upload data in bulk or to add information individually as those patent-to-product or patent-to-part relationships are identified. “If you have a spreadsheet or existing patent management software, you can also bulk import your data into PatentStatus in seconds,” he said. What about publishing the wrong data? While not foolproof, PatentStatus includes a variety of fail-safes as well, to avoid publishing data that is inaccurate.

Build it or outsource it?

Burnes makes his case why outsourcing to a service like PatentStatus makes more sense than building it in-house. “You need software that is secure, scalable and has all the data tracking and historical logs to stand up in court, “said Burnes. “If our clients sue an infringer, we can be a trusted, independent third-party authority to the courts providing testimony on what was in our system and when,” he said.

This last point is key—and a big consideration when thinking about building a system in house Burnes said. “We’ve worked with multiple IP firms to identify how to create the strongest-legal-standing product that can be built. Our software not only holds the data securely, but has multiple methods of tracking, storing, archiving and logging the data.”

The other consideration is ongoing maintenance costs. As case law changes or USPTO guidelines emerge, corporations will have to update their systems with each new change. Those costs can add up over time versus a consistent budgeted expense using a third party service like PatentStatus.

“Case-law compliancy is our number-one focus. We’re taking on the burden of being a compliant platform for our clients,” said Burnes. “Because this is our specialty, we’re able to deliver a solution at a fraction of the annual costs to what companies can do on their own—and we can deliver it instantly while companies who in-source it may wait weeks or months for their IT departments to prioritize the project.”•

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