March 6, 2014

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Article

The Inventor’s Dilemma

New Patent Laws a Trap for the Unwary

By Randall B. Bateman

March 6, 2014


On Sept. 16, 2011, President Barack Obama signed into law the America Invents Act (AIA), one of the most significant changes to patent law in more than a century. The last provisions of the AIA went into effect earlier this year. While the AIA does present some new opportunities for protecting inventions, it can also be a trap for the unwary.

Historically, U.S. patent law has been relatively unique because it granted a patent to the first person to make an invention. There was no need to rush to the patent office. Even if someone else filed a patent application first, the first inventor was able to obtain a patent by proving that he or she was the first inventor.

Another feature of U.S. patent law is the one-year grace period for filing a patent application after public disclosure. In contrast, many foreign countries require a patent application to be filed before any public disclosure. This one-year grace period is often used by U.S. inventors and small businesses to test market demand for the invention prior to spending the money to pursue a patent.

Now that AIA has been implemented, inventors and companies should be very wary of relying on the grace period. Under the new rules, a patent will generally be granted to the first party to file a patent application, not to the first to invent. Disclosure of an invention will start the grace period running and will become prior art against third parties seeking to patent a similar invention. However, the grace period provides no protection for aspects of an invention that were not disclosed. This could result in a company losing substantial patent rights if, for example, a third party files a patent application first on the aspect of the invention not disclosed.

Potential Pitfalls

While it will be several years before the courts have formally interpreted the new law, the initial analysis suggests that it will contain many pitfalls for the unwary.

For example, John Doe invents a new laundry detergent having ingredients A, B and C and it cleans better than any known detergent. Doe knows that chemical C can be substituted with a number of similar compounds that are also effective. Because Doe is an individual inventor, he wants to see if his product will sell before pursuing patent rights.

A month later, Acme Chemical Company develops and starts selling a competing detergent, which has ingredients A, B and D. Chemical D belongs to the same family of compounds and works about as well as C. When Doe goes to patent his detergent, he probably will be able to patent the combination of A, B and C, but will probably not be able to get claims broad enough to cover Acme’s product having compounds A, B and D. Rather, Acme’s disclosure will be prior art against a patent claim that tries to claim A, B and D or A, B and the entire family of compounds to which C and D belong.

Thus, while Doe may get a patent, it will be of little worth if Acme and others can easily make a competing product that does not infringe. Under the law prior to March 16, 2013, Doe would have been able to obtain a patent that would cover Acme’s product.

Likewise, if Doe takes a long time trying to refine his invention, he may lose his patent rights. As a small inventor, it may take Doe months to test his new cleaning product. Acme, however, may be able test its product faster and file an application prior to Doe’s disclosure. In such a case, Acme will get the patent even though Doe may have invented months before.

Paper Trail

While some have suggested that the new rules eliminate the need to keep records regarding inventorship, the opposite is true. Under the new rules, companies should keep additional records regarding inventorship and any disclosures. First, it may need to rely on the disclosure documentation to show a disclosure prior to the filing by a competing application. Second, it may be able to remove a prior-filed application as prior art if it can show that the prior filing was derived from its invention. Thus, for example, if Acme had learned of Doe’s invention and filed based on what it learned, Doe may be able to remove Acme’s patent application as prior art against his own.

Another important reason for good documentation is the rogue former employee. If a company does not keep good records, a former employee could file a patent application on material he or she worked on while employed. To overcome the ex-employee’s first filing, the company will need to show that the employee derived his or her invention from work done at the company. Therefore, the new law makes record keeping even more important.

File Early and Often

Companies should consider filing provisional applications as early as possible and filing a follow-on provisional with each improvement to the invention. While filing prior to disclosure is essential to preserve foreign rights, delaying disclosure or filing after a prolonged period of time risks losing patent rights altogether. The one thing worse than not getting a patent is your competitor getting a patent that covers your invention.


Randall B. Bateman is a patent attorney at Bateman IP, an intellectual property law firm with offices in Salt Lake City and Orem.

 

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