Published by Rustin Mangum
This article was originally published in the Orange County Business Journal. Download PDF
You’ve got to check this out!” My friend was excited about his new invention and giving me the full sales pitch. With a product getting ready for market, he had new hope that his hard work and investment over the previous years might actually pay off. He explained his decision to delay patent filing while testing the market to see if the product would take off.
This thorny decision faces every start-up company and work-from-home inventor: file for patent protection early, or put off the hard work and legal expenses of seeking patent protection? Yes, there is a risk that the investment will not pay off, but what are the risks of not filing early in the creative process? Those risks can be devastating because a start-up is often most vulnerable when on the cusp of success. A foreign competitor sweeps in and starts churning out cheaper copies. A large conglomerate incorporates the new feature into software with an existing market base. Without patent protection, the start-up can lose everything.
The United States patent system is based on a quid pro quo between inventors and society. An inventor discloses the discovery to society which increases public knowledge and allows others to build upon that knowledge. In exchange, society grants the inventor a monopoly right to that invention for a period of time. The sooner a dis- closure is made, the sooner society benefits. Therefore, the patent laws include incentives for early disclosure and penalties for those that delay. Waiting more than a year after public disclosure – even for market testing – can allow the patent office to deny a patent based on the inventor’s own disclosures. Recent changes in the law will make early filing even more critical.
The America Invents Act, signed into law on September 16, 2011, makes fundamental changes to patent law in the United States. When fully implemented, the patent system will change from the current “first to invent” system, where inventors secure rights by showing they are the first inventor, to what is being called a “first to file” system, where the first inventor to file an application, or otherwise disclose an invention, has the right to the patent.
One way to defer costs is to file a provisional application. This initial step will not guarantee patent protection, but it keeps the door open by giving inventors one year to decide whether to pursue patent protection without sacrificing potential patent rights.
The bottom line is this: file for patent protection as early as possible. Assume competitors are hot on your tail because if they are not now, after seeing your success they will be. The protections available under patent law are far more effective if you opt in early.