From the legislature to the lab, patent law seems to be on everyone’s mind.
When the America Invents Act (AIA) was passed in 2011, it marked the most dramatic change to patent law in the United States since 1952. This change gave the patent filing process new life – but also shifted the calculus for inventors seeking to control their intellectual property.
To understand patent best practices for startups the United States under AIA, it’s important to understand the concepts of ‘first to invent’ versus ‘first to file.’
‘First to file’
In the past, when a US innovator applied for a patent, he or she had to prove they were the first to invent their creation. The AIA changed this. The new ‘first to file’ system guarantees that the first person to file a patent is able stake a claim on the innovation – regardless of any evidence contesting that person’s leadership on the claimed invention.
Understandably, AIA made a splash in the university research and startup community. Under ‘first to file’, inventors worried they might lose control of their technology if they spoke in public about an invention before filing a patent. The risk increases with time, which is a problem if the inventor still needs to fundraise in order to finance the patent filing process.
Timing Patents for Startups and Inventors
The natural question that stems from this: What are patent best practices for startups and inventors?
Experts were originally concerned about two potential impacts of ‘first to file’. One of those expected due to AIA was that innovators would wait a long time to file a patent until after they had raised money from investors. This would open innovators up to risk as more and more people learned about their invention before they had gained exclusive rights to it.
Additionally, delays in filing would cause problems for the seedsprint community, whose technology scout and technology profiles alike rely on unique intellectual property. Startups and researchers must be able to communicate with potential partners about their new technologies, without fear of repercussions.
Is there an alternative to this heightened risk? There is: moving quickly.
In a 2013 conversation with Jonathan Withrow, a partner at intellectual property law firm Rankin, Hill & Clark, said that many innovators are more likely to rush to file patents than wait, as ‘first to file’ increases the pressure to file a patent application.
Yet rushing to file a patent can cause problems. It takes time for researchers or startup founders to decide how to optimize development and commercialization of a new technology. If a patent is filed before a technology has found its proper market fit, this can lead to problems down the road.
With these two scenarios in mind, and inventor might ask: When is the right time to apply for a patent?
Patent Law Best Practice for Startups: Don’t Delay
Despite the risks of poor market fit, there is consensus among intellectual property attorneys and startup advisors. Most experts agree: It’s better to file for a patent sooner rather than later.
Investing in an attorney and rushing the process a bit is better than risking your idea altogether. Experts encourage innovators to file for patent, even before the inventor has fully researched the future product’s market viability. Waiting too long is just too big a risk to take.
UC Berkeley intellectual property law professor Robert Barr cautions that filing a patent too soon can be a financial burden and an uncertain bet. Nonetheless, he also encourages inventors to file early rather than risk losing rights to their idea.
A recent study out of Harvard Business School paints an even starker picture. For each year that a startup delays in filing a patent, the study found, employment and sales growth falls by 21-28%.
With these findings in mind, inventors must consider the roadmap for technology transfer and/or commercialization before filing. However, they must also recognize that it is possible to lose out on opportunities by delaying a patent.
The Future of ‘First to File’
Given how common it is worldwide, it’s very likely that ‘first to file’ is here to stay. The world’s major economies had already adopted this system by the time AIA came into force in the U.S. While possible, it seems improbable that the U.S. would move to harmonize patent application filing with the rest of the world only to switch back again.
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