Patent Submission Policies: Is it time to reconsider commercialization communications?

By Ryan Holte
November 14, 2016

Patent definitionDespite much recent patent law academic research concerning alleged breakdowns in modern patent commercialization through demand letters, increased litigation, and infringement remedies, few articles focus on the pre-breakdown commercialization process and the methods or communications leading to commercialization of new inventions.[1] While some have analyzed third party patent licensing intermediaries (which this article refers to as “side doors” into companies),[2] thus far, no recent research focuses on direct inventor-to-commercializer communications, or “front doors” into companies. My recent article titled Patent Submission Policies, which is forthcoming in the Akron Law Review, fills that gap.

The subject of my article is on the early stage of commercialization communication, when a manufacturer has not infringed the patent rights of a third party inventor—as the manufacturer does not have knowledge of the invention—but a third party inventor owns an invention protected by a published patent[3] that the manufacturer may profit from producing or incorporating into an existing product. These “front door” submission-review communications, pre-production and pre-commercialization, from third parties to manufacturers/commercializers, are covered by corporate policies known as “patent submission policies.”[4] They are also sometimes encompassed as part of broad “idea submission policies.”[5] As they relate to patent submissions directly between patent owners and commercializing firms, this paper refers to them synonymously as “patent submission policies.”

Among other things, patent submission policies invite, or block, third party submission of invention ideas, patent applications, or patents. They are the figurative “front doors” into a company for any third party inventor, which are crucial to the commercialization of inventions generally. Indeed, a 2014 National Bureau of Economic Research paper found that 49% of American manufacturing firms report their most important new products originate from outside sources, notably customers, suppliers, and technology specialists.[6]

My article collects and analyzes the variations of patent submission policies adopted by the largest companies within four technical industries: automotive; computer hardware; computer services; and pharmaceutical. When reviewing the policies, focus and analysis is only on the potential submission of patent-protected, or patent-pending, inventions originated by a third party with no affiliation to the commercializing firm. The policies are broken into one of three categories in the results tables: (1) “open patent submission” policies—allowing patent submissions; (2) “no patent submissions” policies—blocking all patent submissions; and (3) “no policy”—no stated policy found regarding patent submissions. In addition to researching individual policies, each industry is further reviewed to extract general and industry patterns. These patterns are then compared to other industry and patent data as well as other IP-submission standards, specifically book manuscript submissions and movie/TV screenplay submissions.

The review of current corporate patent submission policies reveals clear inconsistencies. While some technology firms have standards that result in clear paths for third party inventors to knock on corporate front doors with patent submissions,[7] others have standards to effectively block submissions of patents, block third party communications, and slam corporate doors in the face of outside inventors.[8] The lack of submission standards are somewhat unique as compared to other types of IP submissions, and often unique and inconsistent within specific technology industries themselves.[9] This lack of standardization across similar firms adds to the notion that patent submission policies have thus far been insufficiently analyzed and have perhaps evolved inefficiently.[10] They are also in stark contrast to the strong open patent submission policies technology-driven 19th century firms utilized.[11]

While some policies may be grounded in sound legal risk management reasoning, it is unclear why similarly situated firms operate with such extreme policy differences—for example, why Google promotes and invites patent submissions and Apple actively discourages and legally blocks patent submissions. It is further unclear why submission policy standards have not evolved equally—and perhaps efficiently—in the process of patent submissions, especially for firms similarly situated within unique technology industries. With this research, many questions arise—perhaps if early-innovator patent submissions were not shut-out, then later manufacturer infringement would be less likely, and future patent litigation could be reduced? In short, is the litigation and patent “trolling” certain industries complain about something they may be directly contributing to years before any litigation?

Given the importance of outside innovation to technology input, and the strong affront independent inventors receive when blocked from “front door” patent communications with large firms, perhaps firms should reevaluate their decisions to shut the doors on direct communications with third party patent owners.

To read my entire article please see Patent Submission Policies, available on SSRN.

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[1] E.g. Michael Risch, Patent Troll Myths, 42 Seton Hall L. Rev. 457, 461 (2011) (regarding background information on NPEs and the general “patent troll” debate); Kristen Osenga, Formerly Manufacturing Entities: Piercing the Patent Troll Rhetoric, 47 Conn. L. Rev. 435, 442 (2014) (discussing the birth and expansion of patent trolls); Ryan T. Holte, Trolls or Great Inventors: Case Studies of Patent Assertion Entities, 59 SLU L.J. 1, 5-10 (2013) (summarizing the academic discussion for and against non-practicing entities); Colleen V. Chien, Of Trolls, Davids, Goliaths, and Kings: Narratives and Evidence in the Litigation of High-Tech Patents, 87 N.C. L. Rev. 1571, 1577, 1587 (2009) (explaining that “the strategic use of patent litigation by well-established large companies . . . has been called patent predation.”) (citing Michael J. Meurer, Controlling Opportunistic and Anti-Competitive Intellectual Property Litigation, 44 B.C. L. Rev. 509, 521 (2003)); Caroline Coker Coursey, Battling the Patent Troll: Tips for Defending Patent Infringement Claims by Non-Manufacturing Patentees, 33 Am. J. Trial Advoc. 239, 241 (2009).

[2] E.g. Ted Sichelman, Commercializing Patents, 62 Stan. L. Rev. 341, 366 (2010); Nathan Myhrvold, Funding Eureka!, 88 Harv. Bus. Rev. 40, 47 (2010) (discussing the need for growth in the “invention capital market and industry”); Allen W. Wang, Rise of the Patent Intermediaries, 25 Berkeley Tech. L. J. 159, 165 (2010) (explaining that “[t]he majority of [patent] intermediaries focus on connecting parties that wish to monetize existing patent rights . . .”); B. Zorina Khan. Trolls and Other Patent Inventions: Economic History and the Patent Controversy in the Twenty-First Century, 21 George Mason L. Rev. 825, 832 (2014) (“[I]ntermediaries have the ability to reduce the costs of search and exchange, enhance liquidity, improve market depth and breadth, and increase overall efficiency.”); Stephen H. Haber & Seth H. Werfel, Why Do Inventors Sell to Patent Trolls? Experimental Evidence for the Asymmetry Hypothesis 1-2 (Stan. U., Working Paper Dated Jul. 8, 2016) (discussing how patent assertion entities “act as intermediaries in patent markets” and “improve the efficiency of markets by reducing transactions costs, resulting asymmetric information, and providing liquidity.”), http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2552734; Andrei Hagiu & David B. Yoffie, The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators, 27 J. Econ. Perspectives 45, 46 (2013) (discussing how patent intermediaries are now providing unique “platforms . . . [and] services for buying and selling patents.”). See also FN 26 discussing the role of “side door” patent intermediaries.

[3] The emphasis for legal protection is that the patent (or pending patent application) defines the IP boundaries claimed and the invention detail is public so not capable of being protected by trade secret rights. See infra Part I.A.

[4] See, e.g., Submit a Patented Product Idea, Legal Requirements Before Submission, 3M, http://solutions.3m.com/wps/portal/3M/en_US/Submit/YourIdea/Patented/ProductIdea/ (“3M has a two step process for you to submit a Patented Idea to us for evaluation. You must use this process to submit a Patented Idea, and any other communications by telephone, e-mail, postal service, overnight mail or personal contact will be redirected to this process . . .”) (last visited Aug. 12, 2016).

[5] See, e.g., Policy on Ideas Submitted by Persons Outside the Company, Pelican, http://img.pelican.com/docs/terms-and-conditions/Pelican_idea_submission_policy.pdf (“After you have read this policy, read the enclosed Idea Submission Agreement. If this Agreement is acceptable to you, please fill in the blanks, sign it, and return to us.”) (last visited Aug. 12, 2016). Given the lack in similarities between formally protected IP (such as patents and copyrights), and more-amorphous ideas, one would expect corporate intake and review procedures to be significantly different, however, this is often not the case. Policy considerations for generally unprotected ideas should be different. See Arthur R. Miller, Common Law Protection for Products of the Mind: An “Idea” Whose Time Has Come, 119 Harv. L. Rev. 703, 731 (2006) (The law protecting ideas shares certain qualities with the federal protection of copyrights and patents, but some of these similarities, such as concreteness and novelty, “simply are too far removed from and do not focus attention on the competing policies and basic issues that should be the centerpiece of idea cases.”).

[6] Ashish Arora, Wesley M. Cohen, & John P. Walsh, The Acquisition and Commercialization of Invention in American Manufacturing: Incidence and Impact (June 2014) (Nat’l Bureau of Econ. Research, Working Paper No. 20264), http://www.nber.org/papers/w20264. This 49% “new product” number includes 24% of acquired inventions that were patented by the source before becoming new products, with over half of those patented by independent inventors. See Part I.B.1.

[7] E.g. Contact Us/Email, Pfizer, https://www.pfizer.com/partnering/partnering_with_pfizer_contact_us (last visited July 20, 2015) (“To protect the interests of both yourself and Pfizer, it is preferred that you consult with an attorney regarding the legal avenues available to protect your idea prior to submission. There may be several options of protection available for your idea prior to submission. Although not recommended, you of course, have the option of submitting an idea without the advice of an attorney. Any submission that you may make to Pfizer is made voluntarily and does not contain any confidential information. . . . Your submission does not obligate Pfizer to adopt your ideas or pay any monies for any use thereof unless and until such obligation is expressed in a formal written contract with Pfizer.”).

[8] E.g. Privacy, Cookies and Legal Disclaimer, Novo Nordisk, http://www.novonordisk.com/utils/disclaimer.html (last visited July 20, 2015) (“Any questions, comments, suggestions or any other communications, including any ideas, inventions, concepts, techniques or know how you may forward to this site or otherwise to Novo Nordisk, electronically or by any other means, are on a non-confidential basis and will become the property of Novo Nordisk, which Novo Nordisk without restriction may use in any fashion and for any purposes whatsoever including developing, manufacturing and/or marketing goods or services.”).

[9] See infra Part IV. The exception to this is that the laws protecting general “idea submissions” is similarly varied and likely a hurdle to innovation commercialization in the non-patent marketplace. Arthur R. Miller, Common Law Protection for Products of the Mind: An “Idea” Whose Time Has Come, 119 Harv. L. Rev. 703, 714 & 778 (2006) (Reviewing the marketplace for idea submissions and noting that “the market for ideas is more lucrative, populated, demanding, and varied than ever before” but that “few legal theories available to offer protection, however, are confused and complicated.”)

[10] See infra Part V.

[11] See infra Part III.

The Author

Ryan Holte

Ryan Holte is a law professor at Southern Illinois University School of Law. Professor Holte's teaching expertise and scholarship interests include intellectual property (IP) law and property law, and he is a widely published author in IP subjects. His most recent articles focus on patent-related topics with particular focus on patent assertion entities (or "patent trolls"), equitable remedies in patent litigation, and empirical legal studies. Professor Holte is the recipient of two non-resident Thomas Edison Innovation Fellowships from the George Mason University School of Law to support research and writing on IP topics. His current works-in-progress include three empirical studies of patent litigation subjects. For more information, or to contact Professor Holte, please visit is profile page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 10 Comments comments.

  1. Paul F. Morgan November 15, 2016 8:44 am

    This is indeed an important topic. Getting more existing companies to take patent licenses to develop, produce and sell new technologies* should clearly be highly encouraged. To the extent overcautious attorneys preclude that with overly restrictive corporate policies and agreements it is contrary to public and national interests. The concern over getting sued for trade secret violations by outside inventor submissions should not apply if a thorough patent application is already on file, and the accepted outside disclosure is clearly limited to that application.
    Now under the AIA 102 a company cannot any longer claim they previously invented the invention of the submitted application unless they had also publicly disclosed it prior to the application filing date. This “first inventor to file” feature of the AIA is of considerable protective benefit to small inventors submitting ideas to corporations, and is not adequately appreciated. But the outside inventors have to file adequate patent applications first.

    *versus patent suits against companies that independently invent develop, produce and sell new technologies with no prior knowledge of the patent or its contents.

  2. Anon November 16, 2016 9:06 pm

    Mr. Morgan,

    Have you considered the opposite effects of the expanded Prior User Rights? I am sure that there are plenty of corporations willing to do a little “backdating” if the dollar signs become large enough (and “large enough” is a relative term – relative to how much it would take to bury the independent inventor (in other words – not much)…?

    Unsavory?

    Absolutely.

    But let’s not be Polly Anna here.

  3. Paul F. Morgan November 17, 2016 1:34 pm

    Anon, there is enough baseless internet-spawned paranoia in our society without your encouraging more of it by attacking the ethics of your own profession. If anyone actually reads the unusually strict proof burdens and date limitations requirements of the AIA prior commercial user statute they will appreciate why it has not even been successfully used.

  4. Anon November 17, 2016 4:03 pm

    and yet it exists, Mr. Morgan.

  5. Anon November 17, 2016 4:06 pm

    …as for “rigorous proof standards,” see my comment re: if the dollar signs are large enough and not being Polly Anna

  6. Anon November 17, 2016 6:24 pm

    It was not the ethics of our profession I was attacking, Mr. Morgan, but merely recognizing the nature of business (it would be business leaders pursuing PUR as such require NO inputs from our profession).

  7. Paul F. Morgan November 17, 2016 7:19 pm

    Again I suggest you actually read the statute – 35 USC 273. Any commercial prior user defense [if one is ever asserted] is a special personal and limited patent infringement litigation defense that is much harder to prove. It would, of course, have to be presented with supporting evidence by, and argued by, defense counsel as officers of the Court. Any such defense that does not succeed is sanctioned by an award of attorney fees. It also specifically requires clear and convincing evidence, from more than a year before the application filing date of the patent. I cannot speak for you, but real attorneys who regularly do trial work for a living not risk their practice and their licenses by manufacturing an entire difficult litigation defense with false testimony and documents.

  8. Anon November 18, 2016 7:19 am

    I have read it. I would suggest that you read it AND my comments here.

    This is NOT “run” by the attorney, but by the client. Internal counsel will do as they are told to do.

    Please stop being so Polly Anna.

  9. Paul F. Morgan November 18, 2016 9:07 am

    Anon, even the lay readers of this blog know that patent litigation is not conducted by “internal counsel.” Nor is 35 USC 273 even a prior art or prior invention defense. Nor would any client even be aware of it. Nor is there any basis for your illogical if not paranoid professional insults that patent attorneys would all jeopardize their entire lifetime employment anywhere by committing fraud on a court just by a current employer telling him or her to do so. A fraud easily exposed by opposing counsel in patent litigation discovery and cross-examination. If it were not for the fact that such nonsense might misslead some lay readers of this blog I would not waste time responding further.

  10. Anon November 18, 2016 2:56 pm

    Mr. Morgan, as you yourself point out, the actions necessary for PUR must be done prior to litigation.

    Methinks your skin be too thin, and you take offense personally for what a general counsel outside of litigation may do.

    Also, you think such fraud to be easily uncovered – which is itself a rather Polly Anna view.