How To Go About Getting An Insurance Patent
Part Four of a Series
Ask a New York City cabby with a sense of humor how to get to Carnegie Hall and hes likely to tell you “practice, practice, practice!” The same is true for patents. The process is straightforward, but getting a valuable insurance patent takes practice and maybe a little help.
The first step in getting a patent, of course, is to invent something. From the point of view of the U.S. Patent and Trademark Office (USPTO), an invention is made when the inventor(s) first describes both the invention and its “utility” (i.e., what its good for). There must be evidence of the date and contents of the description. A signed, dated and witnessed document is adequate evidence. The description must be complete enough so that another person skilled in the area can read it and make the invention work.
For insurance patents, a working model is unlikely to be required. The USPTO is only likely to demand a working model if “incredible utility” is alleged (e.g. cold fusion, perpetual motion, etc.)
Having made the invention, you ought to evaluate its market value and potential. If it passes your economic test, the next step is to prepare and file a patent application. The inventor can do this himself, but a patent application is required to follow a certain form and the language used has developed its own formal meaning. The experience of a patent agent or attorney can be very helpful in getting it right. You describe your invention to the agent/attorney, and they prepare a draft application for your review.
Patent agents and patent attorneys perform the same service in terms of helping clients get patents. They both have the same license to represent clients in front of the USPTO. Patent attorneys also have a license to represent clients in a court and can help, for example, in the enforcement of a patent if a lawsuit is required.
Before submitting a patent application, it is strongly recommended that the inventor search the “prior art” for similar inventions that have been made in the past. Prior art that teaches or suggests any aspect of the invention can cause some or all of the application to be rejected.
Only the first person to conceive of an invention (U.S.) or file an application (rest of the world) is entitled to a patent on it. If your invention has been publicly described by someone else or even yourself before your patent application is filed, then you are not entitled to a patent.
In the U.S., there is a one-year grace period for filing a patent application after it is publicly disclosed. In the rest of the world, there is no grace period.
A prior art search will help you and your patent agent determine what is new and what can be “claimed” in the patent application. A “claim” is a formal one-sentence description of what the invention is. Typically, there are many claims in a patent (sometimes 20 or more) each covering a different aspect of the invention. They are found in the Claims section at the end of the patent application.
An inventor who discovers a new and better way of underwriting, for example, might claim the method for underwriting itself, the types of insurance products that are enabled by the improved method of underwriting, the computer system that performs the underwriting calculations and even the database that is used to store the underwriting information.
The goal of the patent agent is to draft claims that are broad enough to cover all alternatives to the invention, diverse enough to capture all permutations of the invention and specific enough to withstand challenges to the patent that a competitor might bring.
Once the patent application is drafted, it is submitted with the appropriate fee to the USPTO for examination. If international coverage is desired, then a corresponding “PCT” application is also filed. PCT stands for the “patent cooperation treaty.”
A PCT application provides a relatively low-cost way to submit the same patent application to multiple countries. A patent application is required in each country in which you wish to protect your intellectual property.
In the United States, a patent application is assigned to a patent examiner after it is filed. The patent examiner reads the application and determines whether or not it satisfies the regulatory requirements to receive a patent. That is whether it is new, useful and not obvious.
To determine if the invention is new and not obvious, the examiner does his or her own prior art search.
Since it is common practice to draft initial claims that are as broad as possible, it is equally common for the patent examiner to find prior art that is close enough to your initial broad claims to make them “obvious.” The examiner then rejects the claims in an “office action.”
There are two ways to get around a finding of obviousness in an office action: You can amend the claims or argue that the examiner is mistaken.
Claims can be amended to more narrowly define the invention and thus get around the prior art issue. Justification for the narrower claims must be found in the “specification.” The specification is the everyday-language description of the invention that makes up the bulk of the patent application.
Several different examples or “embodiments” of an invention are often included in the specification. This provides enough material to support narrower claims.
If claims cannot be narrowed without sacrificing the value of the patent then flaws must be found in the examiners finding of obviousness. The most common flaw is that the examiner feels that the prior art “teaches or suggests” an element of a claim that, in fact, it does not.
Once the mistaken presumption is pointed out to the examiner, the claims often are allowed. Occasionally, the examiner is unconvinced by your arguments. In that case, the examiners decision can be appealed.
An even better argument against obviousness is to find prior art that “teaches away” from the claimed invention. Suppose, for example, you file a patent application on a method for providing a super preferred discount based on a new quality control procedure in your underwriting process. If you can cite prior art that suggests that your method is not likely to work, then you have a much better chance of getting your claims allowed.
Once the claims are allowed, the next step in getting a patent is to pay the issue fee. A patent issues on its publication date. Once it is published in the Official Gazette, it is an enforceable patent. Maintenance fees, due every four years, must also be paid to keep a patent in force. If they are not paid, the patent expires and anyone can make, use or sell the claimed invention.
A U.S. patent expires 20 years from the date the application is first filed. The entire process from filing to issuing typically takes two to four years so the period of enforceability is usually 16 to 18 years.
A typical U.S. patent will cost $10,000 to $20,000 in preparation and filing fees. An additional cost of $5,000 to $10,000 must be budgeted for each additional country in which the patent is filed. A good rule of thumb for the cost of protecting an important invention with broad international coverage is $100,000 spent over five years.
A patent is an investment. The skill and experience of both the inventor and his or her agent or attorney will help ensure that the investment is a valuable one.
Tom Bakos, FSA, MAAA, is a consulting actuary with Tom Bakos Consulting Inc., Ridgway, Colo. He can be reached via e-mail at [email protected]. com.
Mark Nowotarski is with Markets, Patents & Alliances, Stamford, Conn. He can be reached at [email protected] marketsandpatents.com.
Reproduced from National Underwriter Life & Health/Financial Services Edition, June 2, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.