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 in 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-based innovator applied for a patent, he or she had to prove they were the first to invent. 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 is, what are patent best practices for startups and inventors?
Experts were originally concerned about two potential impacts of ‘first to file’. One concern was that, due to AIA, inventors would wait a long time to file a patent, often, until after they had raised money from investors. This would open inventors 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 make it challenging for innovators to communicate with potential strategic partners about their new technologies, without fear of repercussions.
Is there an alternative to this heightened risk? There is: moving quickly.
According to Jonathan Withrow, a partner at intellectual property law firm Rankin, Hill & Clark, 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, too. It takes time for university researchers and startup founders to decide how to optimize the development and commercialization of 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, an inventor might ask: when is the right time to apply for a patent?
Patent Filing Best Practice for Startups: Don’t Delay
Despite the risks of poor market fit, there is consensus among intellectual property attorneys and startup advisors: it’s better to file for a patent sooner rather than later.
Investing in an attorney early on and being proactive about the process is better than risking your idea altogether. Experts encourage innovators to file for a 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 encourages inventors to file early rather than risk losing the 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 that employment and sales growth falls by 21-28%.
With these findings in mind, inventors must consider the roadmap for technology transfer and 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 United States.
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