The patent industry, like any specialized community, is subject to rumors and speculation. There has been one particular rumor going around that has prompted the same question to be asked at least a dozen times in my office over the last couple years: “Do I have to pay royalties to patents that are cited in my patent?”
The belief seems to be that because you are referring to or quoting a patent, you are invoking their intellectual property in a manner that requires compensation. There are contexts in which this makes some sense. If a musician uses a sample from another song, or an author uses an extract from another published work, they may have to pay a licensing fee to a copyright holder.
But when it comes to citing patents in a patent application, you do not have to pay a royalty or licensing fee.
When do you have to pay a patent royalty?
So, there are certain circumstances in which you must pay royalties to patent holders. First of all, the need to license a patent can arise if it turns out that you are making and selling a product that infringes on someone’s patent. Infringement generally involves making and selling a product in the United States that utilizes someone’s patent. Also, building devices overseas with patented elements, or using patented methods, and then selling them in the United States is also infringement. In either of these cases, it’s wise to negotiate a license fee, if possible. Because otherwise, you’re going to get sued for a lot of money.
The other instance in which royalties are commonly paid is when a manufacturer pays a licensing fee to a patent pool that more or less has a monopoly on a technological standard. For instance, if you sold a product using the MPEG-2 video codec (commonly used in DVDs and digital videos until a few years ago), you would have to pay a licensing fee to MPEG LA, the MPEG-2 technology pool.
But if you aren’t manufacturing, selling, or using something that infringes on a patent, then you aren’t committing infringement.
The information contained in a patent is meant for public consumption. And many other forms of information are freely cited in patent applications.
In addition to issued patents, patent applications commonly cite a variety of other materials, such as pre-grant publications, information on unpatented devices, marketing materials, and more. It is quite common to cite a variety of patents and other materials to demonstrate how patentable elements of your invention do not utilize preexisting patented designs or methods.
For the patent system to function, inventors must be freely able to understand what is patented (or otherwise exists already), and what is not. Charging a citation fee would undermine inventors’ ability to respect the bounds of others’ patents.
Rest assured, you do not owe a royalty if you cite another person’s patent in your own application, no more than a scientific researcher has to pay royalties to cite publications when assembling a research paper.
However, patent applicants quite often make critical mistakes. If you would like the assistance of a patent attorney to ensure you get through the patent process smoothly, the Law Office of Michael O’Brien can help. To learn more, give us a call at (916) 760-8265, or send us a message using our contact form.