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To Patent or not to Patent?
Patents are granted by the government under the Constitution “to promote the progress of science and useful arts.” When the government issues a patent, the inventor has a “monopoly” for a limited period of time (20 years for a utility patent and 14 years for a design patent). Utility patents protect inventions that are new, useful and not obvious. Design patents protect ornamental appearance. Patent rights are granted in exchange for complete disclosure or description of the invention. This means that you can (theoretically) stop others from making, using or selling products or technology that use the invention. And, you can “license” (grant rights to use) the patent for royalties. Patents are a strategic business tool. Used well, patents provide a competitive advantage, are attractive to investors and licensees and allow time to achieve commercial success. The scope of what is patentable has expanded greatly in recent years and includes business methods and processes as well as more traditional “inventions.” If your idea is “novel and unobvious,” it could be patentable. Unfortunately, it is costly and complicated to obtain a patent. Hence, determining whether to seek a patent is a complex decision and requires a careful evaluation of the market potential. The problem is that the “patent clock” starts ticking and filings have to be made in a timely manner or the opportunity to obtain a patent is lost. In the U.S., the patent goes to the first to invent (so lab notebooks which are dated and witnessed are important). You must file in the U.S. within one year after you show or sell your invention. So, be careful about showing prototypes or talking openly about your invention. Outside the U.S., the patent goes to the first to file. So, you must file outside the U.S. before you show or sell. Disclosing your idea is important to get help with commercializing your idea. To get feedback, you have to convince people that you have something unique and marketable. So the dilemma is how to simultaneously disclose and also protect your idea. To protect your idea: 1. File a provisional patent. This establishes a first filing date in the event that someone later claims they had the idea first. Provisional patents are much simpler and less expensive than a full patent. You can then say “patent pending” and you will then have 12 months to file for the real patent. This gives you the opportunity to develop a business plan and test the commercial viability of your idea before committing to the expense of a full patent. 2. Use non-disclosure agreements. Non-disclosure agreements (so called “NDAs”) essentially provide that no use will be made of the information disclosed, without your agreement. It’s good practice to use NDAs as a standard business practice when you’re discussing your idea with anyone capable of copying it. In reality, NDAs can inhibit discussions with investors and potential partners. Some investors/partners simply refuse to sign NDAs because they never know what opportunity will come through the door next and don’t want to worry about the possibility of a claim. Another reality is that enforcing patent rights is expensive. Big companies (with deep pockets) use litigation as a strategic weapon against small companies. For many smaller companies, strategic partnerships with big
companies can work well as a means of leveraging their inventions,
both patented and unpatented, to commercial success. Such business
relationships must be properly documented in clear and definitive
agreements. Jean D. Sifleet, Esq. CPA eNews
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