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What is a "submarine patent"?

3/27/2017

 
Absent less common circumstances such as a terminal disclaimer or patent term adjustment, the patent term currently lasts 20 years from the date that a patent application is filed. This wasn't always the case, however. Not so long ago (i.e., prior to June 8, 1995), the patent term lasted 17 years from the date of issuance, rather than 20 years from its date of filing  Why the change?

The change was made because certain interests had figured out ways to exploit various rules of the U.S. patent system of yesteryear. Remember, prior to the year 2000, patent applications were not automatically published 18 months after they were filed.  Patent prosecution was largely a private endeavor -- the only communications were between the patentee and the representatives of the United States Patent and Trademark Office (USPTO).

The exploit that was discovered was this: someone could file a chain of successive patent applications, each subsequent application claiming priority to the previous applications all the way back until the earliest application in the chain.  As long as at least one application remained pending at the Patent Office, the earlier applications could go abandoned prior to issuance.  Since there was no publication of patent applications, no one in the world would know that this party was attempting to pursue a patent application on the pursued technology.

But why would someone ever want to, for example, file eight patent applications letting the first seven go abandoned? Wouldn't that be a waste of money?

While this was happening, entire industries were being created and developed.  Take the computer industry, for example.  Almost all computers use microchips to function.  In its infancy, the computer industry may have just been a few guys tinkering around in their garages. Decades later, the industry is a multi-trillion dollar industry.
 
So once it is finally a ripe time to make a play, the patentee finally pushes his latest patent application through issuance.  They call it a "submarine patent" because is had been submerged from public view for many years (in one case, 40 years!).  The patent is usually some key patent in an industry that everyone uses -- a patent on a microchip, for example. Once the patent has issued, demands for licenses are made.  The entire industry must pay a royalty to the patentee or risk being sued/enjoined for patent infringement. 

More information on "submarine patents" can be found on Wikipedia:

https://en.wikipedia.org/wiki/Submarine_patent

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