Patent vs Patent Pending: Legal Meaning, Risks & Best Practices

Introduction

"Patent" and "patent pending" are terms that may sound alike, but in actuality, there is a significant difference between them when one talks about business and legal matters. "Patent" means the right to exclude others from producing, manufacturing, selling, or importing the invention for a certain period. "Patent pending," on the other hand, simply means that the patent application has already been submitted and it is currently being reviewed. It makes sense to make a clear difference between these two terms since a patent gives the holder the right to sue others in a court, while "patent pending" does not.

Words such as "patent" and "patent pending" can also influence consumers’ behavior towards products bearing these marks. "Patent pending" may prevent others from copying, attract investors, and indicate innovation, but at the same time, this term should be used cautiously.

Why do companies put 'patent pending' on products?

Companies have many reasons for using the term "patent pending" aside from it being a simple notification that their invention is under application for patents. This is because such a notification can influence how competitors, investors, and consumers react to a product from the moment it is marked "patent pending". For example, once an invention is applied for a patent, the inventor or the company can notify the public by indicating the invention as one seeking protection, since competitors will think twice before replicating or imitating the product, and buyers will realize the product's uniqueness and economic value.

In addition, the term "patent pending" serves a purpose for promoting and developing the product. It enables startups to use the term during presentations of their inventions to show investors that they are not developing products alone but inventing something novel and unique. In effect, the term can give startups an edge over others in terms of developing their business before obtaining patents for their inventions. However, the term should not be misused. First, companies must make sure that their invention is truly applied for patents. Second, they should not overemphasize their products being patented, when they are still pending. In this way, “patent pending” can be considered to be a combination of deterrence, credibility, and commercial positioning rather than a replacement for an actual patent.

Legal implications of the “patent pending”

The “patent pending” designation holds great commercial weight but is not legally binding. This simply indicates that the applicant’s patent has been filed with the relevant authority and is undergoing examination procedures. Therefore, the inventor is legally allowed to notify the general public that he seeks protection for his invention. There is no legal enforceable right at this point since the patent holder does not have grounds to file suit against an infringer.

The primary disadvantage associated with this legal terminology is the fact that it will not prevent anyone from manufacturing and distributing similar inventions. As long as there is no patent awarded, competitors can manufacture and distribute similar products without having to worry about any legal problems. The applicant cannot even be sure that the scope of his patent will not change in the course of the process.

The last and very important disadvantage of using this terminology is false marking. Any company is permitted to use “patent pending” only when a patent application has been filed. Otherwise, it may face certain legal consequences. In America, the USPTO warns that using “patent pending” is simply informational.

Jurisdictional differences - reasons for territoriality

Territory is important because patents are territorially based and not universal: a patent issued in one jurisdiction can be enforceable only in that country, and “patent pending” applies only in jurisdictions where a formal application for a patent is made. Thus, “patent pending” in India will not mean the same thing in the United States or any other jurisdiction unless an application for patent is pending in such jurisdictions.

It is because of this reason that companies have to modify their labeling to suit individual jurisdictions. If done without taking into consideration the peculiarities of the individual jurisdiction, a company might mislead consumers about the extent of protection offered by the patent system in all jurisdictions. The implication of this for strategy is that inventions are applied for independently or under the Patent Cooperation Treaty framework in different jurisdictions.

India specific marking regulations and penalties

For patent marking in India, the marking does not serve as an advertisement only but it has certain legal obligations associated with it which are also subject to financial penalties. Section 120 of the Patents Act, 1970 states that if any individual gives a false suggestion that the product is patented in India or that an application for patent in India is being made while this is not true, then the concerned individual is liable to a fine of one lakh rupees. Product labeling in particular becomes quite important since the terms like ‘patent’, ‘patented’, ‘patent applied for’ and ‘patent pending’ are assumed to relate to an Indian patent application and Indian patent unless otherwise mentioned.

The US also adopts this strategy, though in a somewhat dissimilar way. False marking in the US, according to 35 U.S.C. § 292, is a violation in the event that a certain article is falsely marked with patented or "patent pending" if the purpose was to mislead people. It is illegal to commit a violation in that regard, and there is an associated punishment that could amount to a fine of no more than $500 for each offense, and there are also instances under which such violations could occur via civil actions, especially when a person is subjected to competitive harm. The practice of private actions has been significantly restricted over time, but the threat of liability remains.

From the above explanation, it becomes clear why patents should be applied with caution. Whether you are operating within the Indian or US territory, it would be best for you to ensure that the labeling is correct with regard to your application.

Patent marking best practices

A well-thought-out patent marking procedure should not simply be considered compliance with the law, but rather an integral part of intellectual property strategy. The primary principle: "Patent pending" cannot be used until the relevant application is actually made in a certain territory. After that, the notice can be utilized in good faith indicating that the owner seeks protection of his invention, but must always correspond to the real status of the product.

Terrestrial issues come into play here as well. In case of filing only in India, it will be safer to use such notices like "Indian patent pending" or "Patent pending in India: application no.," since the phrase "patent pending" may suggest some kind of wider protection that does not exist yet. It is also recommended to make notes about the filing date by saving receipts of application, application number, and dated packaging, advertisement, product page.

Moreover, patent markings should be updated timely: if an application is refused, withdrawn or abandoned, labeling needs to be stopped promptly. Once the patent is issued, it would be wise to re-label the product with the patent number along with the country name, or a virtual marking site can be used if the country permits such an option.

Lastly, obtaining a legal review is absolutely necessary, particularly if the company sells its products in different territories or on the Internet. Just a few words could cause misconceptions and even raise a risk of being involved in false marking. Legal counsel will make sure that all is in order according to the jurisdiction laws.

Practical Examples or Scenarios

• Startup with Indian provisional filing: A company applies for a patent for its invention through a provisional application filed in India, and puts the stamp of “Patent Pending (India Application No.)” on the packaging of the product as well as the website. The above process is allowed in India, as long as the marking is changed after the patent application is withdrawn or the patent is granted.
• Risk involved in cross-border e-commerce: The same product that sells in all the jurisdictions should have an appropriate marking on the products and websites. Otherwise, if the company uses the marking of “Patent Pending” while selling the product in the EU jurisdiction even though there is only one patent in India, it may be construed as misleading in the EU.
• Vulnerability for False Patenting: False patenting or marking refers to the scenario wherein the manufacturer marks their goods as “Patented,” though there is no patent for the said goods.¹

Footnotes

1. United States Patent and Trademark Office (USPTO), General Information Concerning Patents, available at: https://www.uspto.gov/patents/basics

2. Merges, R. P., Menell, P. S., & Lemley, M. A., Intellectual Property in the New Technological Age, Wolters Kluwer, 2020.

3. USPTO, Patent Pending Status, available at: https://www.uspto.gov/patents/basics/patent-pending

4. Patents Act, 1970 (India), Section 120.

5. 35 U.S.C. § 292 (United States).

6. Patent Cooperation Treaty (PCT), World Intellectual Property Organization (WIPO).

7. Indian Patent Office, Patent Marking Guidelines, available at: https://ipindia.gov.in

8. Lemley, M. A., “The False Marking Statute,” Stanford Law Review, Vol. 64, 2012.

Saloni Menro
3 Year LL.B. (5^th Sem)
Parul University

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.