Guest article part 2: patent filing and escrow

This blog post and parts one and three of this post are guest posts by patent attorney Matthias Winter.


Part 2 Patent Rights

II. Patent Rights

A. Patent Application and Priority

Inventions can be submitted to the patent offices as patent applications. Depending on the filing office, a patent, if granted later, can develop its protection geographically. Patent applications at the German Patent and Trademark Office (DPMA) become German patents after they have been granted, patent applications at the European Patent Office (EPO) can either be broken down into national patents of the EPC member states or, in the near future, as a patent with unitary effect, so-called unitary patent, for a selection granted to member states of the European Union.

A subsequent application for the invention can be filed within one year of the application, the so-called priority year. The invention is then filed with other patent offices, particularly internationally. This subsequent application, when claiming priority, will be treated as if it had been filed on the same date as the original (priority) application.

The priority year is intended to allow the applicant to consider a patent strategy and still file the application as quickly as possible. The principle of novelty applies to patents: first come, first served. This means that the patent application with the earlier filing date precludes the granting of a later patent application with the same subject matter.

filing for patent

B. The Scope of a Patent
Patents protect inventions and allow the owner to take action against the use of the invention by unauthorized third parties. The scope of protection develops from the independent patent claims, of which each patent has at least one.
A patent claim describes the core of the protected invention as broadly as possible and as narrowly as necessary. The goal is to extend the scope of protection to as many applications as possible. However, any protected subject matter must meet the legal requirements for patentability, which the patent claim must reflect accordingly. Two of these requirements are novelty and inventive step.
A subject matter of the invention is new if it is not known from the prior art. This means it must not have been described in a single source before the filing date. The inventive step requirement is softer and therefore more complex. Because the subject matter of the invention is based on an inventive step if it cannot be derived from the prior art. It is permissible – albeit under certain conditions – to combine several sources with one another. As a result, the subject matter of the invention described in the patent claim must be adequately differentiated from the entire state of the art.
The desire for a broad patent claim and the need for a narrow patent claim result in language that is very characteristic of patents, if not necessarily understandable. On the one hand, this language must enable sufficient technical delimitation and, on the other hand, be able to be interpreted legally.
In addition to the claim, patents also have a description of the invention, which in most cases is supported by images, the so-called figures. In the description, the applicant can name everything that he considers necessary for an understanding of the invention. Very often, however, it is just that and nothing more. For example, for inventions in which software is used, so-called computer-implemented inventions, the function of the software is usually described. However, how these functions are then implemented as program code is usually not described.
Even if the description can be used to interpret the patent claims, the scope of protection of the patent is determined solely by the claims themselves. For example, a feature that can only be found in the description but not in the claims does not necessarily contribute to the scope of protection .

C. Software Escrow
The term escrow comes from the English and actually describes trust or deposit. In the economic sense, it describes an intermediate step in the conclusion of a trade between two parties.
The escrow service provider, also known as an escrow agent, keeps an object in safe custody until the condition for its release to the contracting party concerned has been met. An example may make this clear. Company A wants to transfer an item to Company B. However, the transfer is not easy, since A has to take certain steps for this, such as submitting applications, appointing a notary or similar. The transfer of the item is also subject to certain conditions for B. However, B cannot meet the conditions until A has started the transmission.
There is now the possibility that A initiates the transfer, B does not meet the conditions and the object is transferred from A to B in violation of the contract. To prevent this, A and B can agree that the item will first go to an escrow service provider C, who will hold the item until B fulfills the terms of the contract. If so, C can pass the item on to B. Should B fail to meet the conditions, C would return the item to A.
This concept can also be applied to software. Businesses that rely on the use of software must be able to rely on the software being delivered, even if the software vendor goes bankrupt or is otherwise prevented from delivering its product. Software escrow service providers store the software as such, in particular as source code, as the object. If, for whatever reason, the software provider is no longer able to offer the software, the licensee can contact the escrow service provider and request the release of the software in order to protect its own operations.


D. Requirements for (software) patents
As mentioned above, in order for the Offices to grant a patent for the invention, the invention must meet the patentability requirements. In addition to the described requirements of novelty and inventive step, the invention must also be technical and it must not be excluded from patentability in principle. The latter is particularly the case with software, which is where the myth “software is not patentable” comes from. However, this is not correct, because software can be accessible to the patent system in the form of a so-called computer-implemented invention.
Whether a software-based invention is patentable or not is always a case-by-case question and can only be predicted to a limited extent. In order to circumvent the ban on patentability, such an invention must have a technical effect. Classic examples of this are the anti-lock braking system (ABS) in a vehicle, in which software controls the brakes so that they brake more efficiently, or authentication processes that increase the security of digital communication.
Whether the requirements for patentability are met is checked in an examination procedure by the registration office. First, there is a formal check, which is followed by a substantive legal check. In the formal examination, the Office checks whether the documents submitted meet the formal requirements such as format, payment of fees, etc. and whether they are complete.
In the substantive examination, the examiners first conduct a search for the subject matter of the invention. The state of the art available worldwide is taken into account. This means that an invention that is known in China, for example, cannot be patented in Germany (principle of novelty). The examiners themselves are usually experts in the technical field assigned to them. In this way, the offices ensure a high level of specialist competence during the examination.
If the patent examiners assume that the invention does not meet the requirements for patentability, they inform the applicant of this in an examination report. The applicant then has a certain period of time to reply to this communication. In principle, the applicant has three options: limit the scope of protection of the independent claims in order to distinguish the invention from the prior art, defend the claims unchanged, or withdraw the application.
It is important that the application documents may not be extended after submission to the patent office and may only be changed to a limited extent. A limitation of the independent patent claims and thus the potential scope of protection is possible, but is subject to strict regulations.
If the applicant has filed a version of the patent claims, the Office will grant a patent for the invention. The maximum patent term is 20 years from the filing date. There are cases where the examination takes so long that the granted patent is only in force for a few years or even months before it loses its effect. However, these cases are rather rare.

Part 1 of the post

Part 3 of the post

Information on patent attorney Matthias Winter


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