New Patent Laws May Affect Startups

February 24, 2013

This year is set to be a banner one for anyone interest in intellectual property and related issues-including many start ups. That is because on March 16th, the U.S. will switch to a "first to file" system pursuant to the America Invents Act (AIA). This will apply to all patent applications filed on or after that start date.

As discussed in a helpful TechCrunch primer on the situation, this is a change from our current "first to invent" system. In the old system while filing was obviously important, rules made it more likely that one who invented something first, even if they didn't file first, to ultimately obtain the patent.

What does this mean? Essentially, the idea is straightforward: the first inventor to file a patent application for an invention will be awarded the patent. This is the case regardless of whether another actually invented the item first. In other words, filing in a timely manner because much more important than ever before.

Importantly, there is one exception to this general rule built into the law. The "first to file" concept does not apply where an inventor makes a public disclosure of his invention before the first patent application is filed. The public disclosure itself does not end the matter. To take advantage of this exception the inventor must still file a patent application within one year from the date of the disclosure.

This exception is incredibly important, because it is intended to act as a limit on "patent trolls." In other words, even though filing increases in importance, it still may not be possible for outsider to swoop in and steal a patent, just because they beat an actual inventor to the office. So long as the inventor made some public disclosure-a press release, even a blog post-then they still may be protected so long as they file within a year.

Therefore, it may be easiest for business start-ups concerned with how this law might affect them to consider that there is basically two paths to "win the patent race." The primary method, as implied in the law, is to be the first to file a patent application. The second is the be the first to publicly disclose the invention. But even then, it is not necessarily that simple. That is because even if you file first, it won't matter if someone made a public disclosure within a year. Alternatively, even if you make a public disclosure, it won't matter is another had already filed by time you disclosed.

While the general change to a "first to file" system may seem logical, it will undoubtedly have significant changes on how the process works. For one thing, it will make it critical for many companies-particularly those in competitive sectors-to file as early as possible

Needless to say all intellectual property issues are quite complex, and with laws changing frequently, it is impossible for any business, including start-ups to navigate these complex waters on their own. For help on any number of legal issues affecting start-ups in our area, please contact the Sacramento business attorney at our firm for tailored guidance.