Wireless Worries: FCC and the USPTO
September 20, 2004

By Mark Punzalan and Dennis Fernandez

Excerpted from Larta Institute's new white paper, Intellectual Property Strategies for Wireless Technologies

As they build their business, improve their technologies, and bring their products to market, startup wireless companies need to be aware of important issues as they apply for patents, government approvals, and broadcast spectrum.

While FCC approval for a product generally takes from one month to one year, the average time for patent approval by the USPTO is generally three years. Moreover, obtaining patents will prove to be more profitable when accomplished early on in the game. Thus, before any efforts are made toward obtaining FCC approval, a company that seeks to market any wireless technology should seek to patent the technology as soon as possible. Filing patents and receiving approved patents will generally lead to more investors and capital in the long run. For a startup company, this capital could be invaluable to cover costs associated with marketing the wireless application after it obtains FCC approval.

Filing with the USPTO

Once a company has conceptualized the wireless application, the company should file a patent application. The company may consider filing a provisional patent application, which, unlike a regular utility patent application, acts as a placeholder to file a regular utility patent application within a year, and does not need to contain actual claims. The later-filed patent application can then claim priority back to the filing date of the provision application, as long as the invention is supported by the details in the provisional. However, a provisional application may hurt rather than help the company, especially if the provisional application is rushed. Instead, it is generally in the best interest of a company to spend all efforts on completing the regular utility patent application, rather than risking having to clean up problems from a rushed provisional application.

It is extremely important for companies not to disclose ideas about the invention or offer it for sale before a patent application is filed. The USPTO currently has a one-year grace period to file a patent once it is disclosed, and if an application is not filed within this time, the invention becomes part of the public domain. This is yet another reason why the patent approval process should be undertaken before any efforts are made to obtain FCC approval, since conducting the tests required by the FCC could inadvertently result in disclosure of the invention.

When crafting patents, startup companies must work with an experienced patent prosecution team to ensure that the submitted claims are not too narrow in scope. Patent claim language should be constructed to broadly define novel concepts so as to create a legal strategy that blocks competitors.

Filing with the FCC

As stated earlier, companies creating software for wireless technologies need not concern themselves with obtaining FCC approval. Instead, software manufacturers can focus the brunt of their efforts on the patent approval process.

On the other hand, manufacturers of hardware, components, or other devices necessary for wireless communication should concentrate on obtaining FCC approval (via one of the above-outlined methods) only after they have filed the regular patent application. In an ideal situation, filing a patent (or more than one patent) will have attracted investors and capital to the company. This capital may be critical to finance the costs stemming from obtaining FCC approval (e.g., lab tests), an approval period that could last anywhere from one month to one year.

Once the FCC has approved the device, the company is then allowed to market the product. However, it may be a good idea to hold off on marketing until a patent is obtained from the USPTO. This protects the company against potential infringement claims from makers of other devices.

Obtaining Spectrum Licenses

If a company's burgeoning technology requires the use of radio spectrum (e.g., WiMax or 3G), a company should apply for a license with the FCC to purchase radio spectrum. Ideally, this should be done fairly early in the game, perhaps even before the patent application is filed. This guarantees the company a designated amount of spectrum for them to employ their new technology for at least ten years, and it is renewable thereafter.

Applications for licenses can be made online, and the elapsed time between application and approval is typically less than fifteen days. Moreover, the application is fairly inexpensive.

A company should also take note of when the FCC offers sales of spectrum. Spectrum may be freed up when the prior owners of the spectrum become bankrupt, and FCC will often hold auctions for this spectrum. In June of 2004, the FCC added an additional five megahertz of spectrum below 2500 MHz, increasing the total size of the band to 194 MHz. Further, the FCC also established simpler and more flexible rules for licensees, including geographic area licensing and the ability to employ the technology of their choice.

In early 2005, the FCC expects to auction large amounts of spectrum. While larger telecommunications companies will swallow a great amount of this freed spectrum, the FCC has reserved a significant portion specifically for small businesses, and startup companies should fully exploit the availability of this spectrum.

Dennis Fernandez is the managing partner of Fernandez & Associates LLP in Menlo Park, CA. Fernandez & Associates LLP specializes in High-Technology and Intellectual Property Rights, focusing on patent protection of advanced electronic circuits, semiconductor chip designs, network communication systems. The firm counsels early-stage electronics, communications, and biotechnology companies and venture investors. Fernandez & Associates LLP specializes in developing and enforcing defensive and offensive US and international patent strategies for early-stage biotechnology, software and semiconductor technologies.

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