October 27, 2011

Inventors, lace up your running shoes quietly

On Sept. 16, President Obama signed the America Invents Act. As a preliminary matter, no one knows what actual effect this Act will have. So, if you hear people squealing that the sky is falling or this is the end of life as we know it, take my aunt’s advice: “Wait to worry.”

Everyone in the intellectual property world has been talking about “First To File.” The United States, unlike most of the world, has always used a “First to Invent” system of patents. That means, no matter who goes to the U.S. Patent Office (USPTO) first and files, the patent belongs to the person who can prove that he or she was the first inventor.

The America Invents Act changes the U.S. patent system to a First to File system. Under First to File, it does not matter who invented something first. Whoever wins the race to the USPTO owns the patent.

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So if Tom has an invention and shows it to Sally, then Sally races to the USPTO and files a patent application, Sally may be the rightful owner of the patent and Tom, for his work, gets nothing.

It’s not all that simple, really. The person filing the application must take an oath that he or she is the original inventor. Making a false oath is a federal crime punishable by up to five years in prison and a fine.

To access that remedy, however, the true inventor would need to convince the federal prosecutor to bring criminal charges against the filer. Federal prosecutors are very busy; it’s hard to say what would make them charge a patent holder with a crime.

On the other hand, if Tom, the original inventor, had used the invention commercially more than one year before Sally filed for a patent, Tom may continue to use it. If Sally tries to make him stop, Tom will not be forced to stop, but Sally’s patent will not be invalidated. Tom, the original inventor, may not transfer his right to use it (without selling his entire business).

To invalidate the patent, the original inventor needs to show, in a very short time period, that a document published or a patent issued before Sally’s patent application essentially describes the invention.

Prior U.S. law has granted a grace period to people seeking patents — one year from the time of first disclosure, or similar event, to ask the USPTO to issue a patent. Generally, if the inventor does not ask within that time, the invention cannot be patented.

Under the Act, the grace period continues, but the disclosure, or other act, must have been made by the person seeking the patent or someone who got the information from the person seeking the patent.

Publish or perish

An example may help. On Oct. 1, Tom invents something and publishes enough information about it to satisfy the law. Sally swipes the invention, races to the USPTO and asks for a patent, filing her request on Nov. 1.

Tom can run to the USPTO before the patent is issued and show his publication. Or, soon after the patent issues, Tom may ask the USPTO to invalidate Sally’s patent. Sally cannot rely upon the grace period, because Tom published the information.

However, under this example, it seems neither Tom nor Sally will get a patent. If he waits, his one-year grace period will have expired. If Tom files for a patent after Sally yet before Sally’s patent is issued, he will not get the patent — even though he invented it — because Sally filed first.

If an inventor promotes an invention to potential investors for financing, the investors may file first without recourse. Maybe some website promising patents for $100 will take inventions as soon as disclosed, filing for themselves.

But, what about a confidentiality agreement or non-circumvention agreement! Good idea — but the only remedy is to go to court on breach of contract and, if the filer sits on the invention long enough (three years in Colorado) the real inventor has no damages or can no longer go to court — assuming the inventor can afford a lawyer and the lawsuit.

A sign in my office says: “Trust Everyone But Brand Your Cattle.” The safest course is to tell no one except your lawyer about possible inventions until filing with the USPTO and maybe follow the old advice, “File early and often.”

But, as I said at the beginning, no one knows how this will shake out, so don’t rely on my general analysis. Talk to your lawyer right away.

Alan F. Blakley is a lawyer with CR MILES PC in Fort Collins. He may be reached at afblakley@crmiles.com. The information included in this column is general information. You should contact your own lawyer before making any legal decisions.

On Sept. 16, President Obama signed the America Invents Act. As a preliminary matter, no one knows what actual effect this Act will have. So, if you hear people squealing that the sky is falling or this is the end of life as we know it, take my aunt’s advice: “Wait to worry.”

Everyone in the intellectual property world has been talking about “First To File.” The United States, unlike most of the world, has always used a “First to Invent” system of patents. That means, no matter who goes to the U.S. Patent Office (USPTO) first and files, the patent…

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