7 Things American Companies Need to Know About the America Invents Act

patent-reformIt’s amazing how fast 18 months flies by.  It seems like just yesterday I was lamenting the passing of the America Invents Act, and now here we are mere days away from its final implementation.

If you haven’t heard, the United States will officially follow the herd and become a First-Inventor-to-File nation on Saturday, March 16.  In light of this new beginning, here are 5 things you should know about the AIA to ensure that your inventions are protected.

1.  First-Inventor-to-File Wins

Here’s the scenario.

Two competing companies are working to solve the same problem.  Both companies invent the same solution.  Each company files a patent application with the US Patent Office.  Who does the Patent Office award the patent to?

Under the First-to-Invent system, the patent would be awarded to the inventors who could show that they invented the invention first.

Under the First-to-File system, the patent would be awarded to the inventor who filed their application first.

To quote Tom Hanks’ character in Cast Away, “We live and die by the clock.”  You don’t have time to make everything perfect before you file a patent application.  Good enough will have to do.  (You might even have to settle for just OK.)

2.  You Will Spend More Money Earlier in the Process

Under the First-to-Invent rules, an inventor could tinker around with his invention, tweaking it until he turned his concept into a finished product.  At that point, he could file one patent application to cover the end result without fear that someone would step in and file their application before he was ready.

Those days are gone.

You no longer have the luxury of waiting.  An inventor will have to be on top of his patent game from the very beginning.  The new corporate patent process might look something like this: file at conception, file again, maybe multiple times, as the inventor works the concept into something that resembles a more complete product, and at the end when the final product finally reveals itself.

That’s a lot of money earlier in the process to ensure that you have won the race to the patent office.

3.  You Need a New Attitude

In order to make this adjustment successfully, your organization MUST adjust your thinking when it comes to patents.  You can’t file a patent as an afterthought in your New Product Development process.   You need a procedure to identify any and all patent issues as early in the process as possible.  If you don’t, you run the risk of losing your valuable business assets.

4.  The Strategic Use of Provisional Patent Applications

Make sure you and your patent attorney understand how to use provisional patent applications.  When money is tight and time is of the essence, these informal, non-examined patent applications may just be the answer.

5.  Amending Claims Can Change the Rules

It all seemed so simple.

Applications filed before March 16, 2013 will continue to be subject to the old First-to-Invent rules.  Applications filed on or after March 16, 2013 will be governed under the new First-to-File rules.

But nothing is ever as simple as it seems under the AIA.

What if you amend or add claims in your first-to-invent patent application after the March 16, 2013 date?

Even though you had filed your patent application prior to March 16, 2013, certain changes you make to the claims may pull your application into the First-to-File rules, and you may not get the full protection of the First-to-Invent rules you thought you had.

6.  Change to the Grace Period Rules

Like the First-to-Invent system itself, America had another somewhat unique feature in its patent system.  The United States offers what is known as a Grace Period.

In the United States, inventors were given 12 months to file a patent application after the date the invention was first disclosed to the public no matter who disclosed the invention.  That was a benefit of the first-to-invent system.

Now, the grace period only applies to disclosures made by the inventor.  Public disclosure by anyone else anywhere in the world prior to you having a patent application on file means you lose your patent rights.

(Think about how this could impact heavily competitive industries with multiple companies working to solve the same problems.)

7.  Prepare for the Unexpected

Just when you think you understand the AIA things are bound to change.  Like any new law, what the various provisions and terms of the AIA really mean will be decided by the Courts.  Over the next decade (or longer) IP practitioners will closely watch as cases wind their way through the Federal court system.  There is already talk that a Constitutional challenge will be waged against the America Invents Act itself.

Don’t be fooled.  The America Invents Act brings significant change to American business.  In 10 days, we enter into a brave new world, America.  Good luck and God speed.

Don’t Get Your Legal Advice on Twitter

What do you believe to be true about intellectual property?

Are your beliefs based on truth, myth or falsehoods?

You might be surprised to find out that a lot of the ‘truths’ about IP that you believe are actually falsehoods perpetuated by the ignorance and half-truths of the media, the internet, other well-meaning entrepreneurs, and even IP practitioners themselves.

In fact, the information you have learned somewhere along your journey could be hurting the quality, quantity, and value of your intellectual property.

How do I know this?

Let’s look at a twitter exchange that I had last weekend.

Tweet from a successful entrepreneur:

“Founders: when starting out, in most cases, don’t worry about getting patents because you probably don’t have the money to enforce them.”

To which I replied:

“Naive advice. It takes 3+ years to get patent, so can’t enforce for years. You may have $$ and need to enforce in 5 years.”

Our exchange was seen by an entrepreneur from Canada who inquired:

“I’ve also been thinking this way too.. It’s a toughy. Is it worth $3,000 to apply provisional with fee to start?”

To which I responded (because originator of the conversation surely did not know how to answer the question):

“My first question would be why are you spending $3000. The fee is only $125.”

(EXPLANATION: The filing fee for a provisional patent Application in the United States is $125.  With a little bit of information, and following the instructions on the form, you don’t need a lawyer to file a provisional application.)

The Canadian entrepreneur replied:

“Ah, I found it. But typical utility, sm entity + lawyer fee is usually $1500+ no?” (with a link the USPTO website.)

At this point, I had to wonder, where was he getting these numbers?   Utility patents typically cost about $6000 on the low end, and up to $15,000+ on the higher end.  Depending on the technology involved that price could be a lot higher.

This is what I mean by truths, myths, and falsehoods.  Obviously, what this entrepreneur believes to be true about the costs of patents is actually false, and his misinformation will influence the decisions that he will make about whether or not to file for patent protection.

What else when it comes to patents does he believe to be true?

As an IP practitioner, I know this whole twitter exchange is a microcosm of a larger problem.  I know entrepreneurs everywhere don’t understand all of the intricacies of intellectual property law, but it doesn’t prevent them from making blanket statements that circulate as truth.

I know that when cash-strapped entrepreneurs see what looks like free, credible advice, they take it.  In fact, they seek out advice like this.  First, it’s free.  Second, it comes from a successful entrepreneur.   When they see a successful entrepreneur who seems to have some experience in this area say that they can ignore something, they tend to listen.  Why?  They are looking for an excuse NOT to spend their scarce money, time, or effort on it.

So, here is what you can take away from this exchange.

1.  Be careful who you take legal advice from.  If you get your legal advice in 140 character sound bites to save a few bucks, please don’t.  You know better than that, so please, before you act on someone’s free advice (a.k.a. his opinion), think twice.

2.  Be careful who you take legal advice from (Part 2.)  Even tweets from attorneys should be taken with caution.  The successful entrepreneur was not entirely wrong in his original tweet.  Not everyone needs expensive patents for their business.  However, some companies do.  So my tweet was not necessarily meant to cover every situation either.  It was merely to point out that the advice is limited, and for some people, it is absolutely the wrong advice.

3.  Get an informed opinion.  When you have a question about intellectual property (or business formation or partnerships or licensing or any of the 100s of other issues that you are facing), call an attorney and get a couple of hours of his/her time.  It’s worth the money to get the right advice for your unique situation.  Short money up front could save your business.

4.  There is a lot more to protecting your innovation than just getting patents.  Many start-ups and entrepreneurs believe that getting the patent is their only IP concern.  So if they don’t have to get patents, they falsely believe there is nothing else for them to worry about.

Oh, contraire.

The real patent issue may not be what you need to get, but what others have received.  Competitive intelligence, prior art searches, freedom-to-operate opinions, etc. may be even more important to your business than getting patents.

JUST BE CAREFUL WHOSE ADVICE YOU DECIDE TO FOLLOW.  IT COULD MAKE OR BREAK YOUR BUSINESS IN WAYS THAT YOU WON’T KNOW ABOUT UNTIL IT IS TOO LATE.

If you believe that you might be under the spell of some IP myths or falsehoods that you’ve learned over the years, I can help you identify fact from fiction.  Call me at 508-878-3590 or email me at kelli@ipinfocus.com to set-up an appointment to discuss your intellectual property issues and how I can help you solve them.

How a Provisional Patent Application Could Save your Business

You invent something on May 1, 2012.

You are still in the conceptual stages, so you put off filing for patent protection.

On October 15, 2012, you are given the opportunity to give a presentation on your invention at a local conference.  You jump at the chance, and present your invention to the assembly of attendees.

You have now disclosed your invention to the public without the benefit of having a patent application on file.  Fortunately, you know about the 12 month grace period in the United States.  You know that if you file a patent application on or prior to October 15, 2013, you won’t lose your patent rights.

Time flies when you are busy working on your invention, your business plan, and your Kickstarter campaign.  You finally file your patent application on August 1, 2013, but that’s OK.  You filed well before your October 15, 2013 deadline.

What you don’t know is that one of the conference attendees really liked your idea.  In fact, he liked it so much that he decided to file a US patent application on it on April 1, 2013.

Two patent applications and the same invention…who gets the patent?

What you will painfully discover is that you don’t have the patent rights you think you do.

The final implementation of the America Invents Act goes into effect on March 16, 2013, and as of that date, the old rules no longer apply.

When you disclosed your invention at the October, 2012 conference, the United States was under a First-to-Invent system.  If there were two inventors claiming to have invented the same invention, the court would award the patent to the inventor who invented the invention first.  In our scenario, you would be awarded the patent.

This system gave the original inventors time to tinker with their inventions without having to file for patent protection.  This removed any fear that he would lose his patent rights if someone filed a patent application on the same invention before them, as is the case in the above scenario.

Unfortunately for you, the First-to-Invent rules end in March, 2013.  Patent applications filed on or after March 16, 2013 will be subject to a different set of rules.  As part of the America Invents Act, the United States will implement a First-to-File system.

Under the new system, if there are two inventors claiming to have invented the same invention, the court will award the patent to the inventor who filed the patent application first.

In the example above, the patent would be awarded to the conference attendee because he filed first on April 1, 2013 under the new rules.  And the kicker in all of this is…if you continue with your plans to make, use or sell that invention, you probably infringe his patent.

In order to get the benefit of a grace period and the old rules, you should have filed your patent application before March 16, 2013.  By waiting until after this date, you run the risk of someone filing a patent application on your invention before you.

The lesson in this story is the quicker you get your application on file, the better.  There will no longer be safety in delaying your patent application filing.

Filing a simple, inexpensive provisional patent application would have saved you a lot of heartache.  Having a provisional patent application on file prior to your disclosure would have ensured that you had the benefit of a full 12 month period before you had to file your non-provisional application.  The early filing date of your provisional application would have trumped the conference attendee’s later filing.

Don’t fall into this trap.  The rules are changing.  You need to understand those changes and how they impact your business.

If you must publicly disclose your invention, think seriously about filing a provisional patent application.  It could save your business.