The tech industry has a paramount interest in patents and protecting intellectual property, and it’s worth a review of the recent, rather historical, changes to patent law.
Pres. Obama signed The America Invents Act, AIA, on Sept. 16, 2011, at Thomas Jefferson High School for Science and Technology in Alexandria, Va. Three major provisions of AIA significantly change the United States patent process.
AIA allows direct funding of the U.S. Patent and Trademark Office. Congress will assign a budget for the office, but the patent fees will be placed in escrow and that money can be released when it exceeds the allocation.
This new law sets up a review process for patent applications. Third parties may question the validity of a patent for nine months after issuance.
The most important change, however, is “first-to-file,” which makes the U.S system similar to other nations and eliminates “first-to-invent.”
Different parties of interest have presented arguments pro and con about this legislation. Many commenters have questioned the effects on shop, garage and backyard innovators. One widely claimed drawback facing independent, individual inventors is their lack of funds to complete the “reduction to practice” requirements of patent law. A functional operation of the patent, beyond the conceptual state, must be demonstrated to show either actual or constructive practice, which are legal “terms of art.” This often requires capital funding, and disclosure may be necessary to convince lenders or investors.
Under first-to-invent, an inventor could prove with good documentation that a practical invention had existed before a patent thief filed. With first-to-file, the process can be hi-jacked any time. A co-worker, relative, employee, investor, etc., may find opportunities to seize a concept and patent it first, especially if that person can access quicker funding or superior developmental facilities in order to complete the reduction to practice. This burdens inventors with the need to protect ideas from all potential patent thieves.
Internal and external security for patentable concepts now require stricter controls by inventors. The following six suggestions should matter to a tech entrepreneur or company with any degree of protected intellectual property:
- Non-disclosure agreements must be re-written by legal counsel. Similar documents, such as confidentiality, proprietary information and secrecy agreements should be re-considered now, and all such contracts must be mutual. Employee and partnership forms require immediate updates.
- A “need to know” basis must be uniformly imposed to restrict access to information by non-key personnel.
- Different forms and types of knowledge about patentable concepts should be kept in separate storage, even on different computers. Drawings should be in one location, written descriptions in another. Working models must be separate from documents. All information technology resources must be password protected, isolated, and physically locked down.
- Loose lips may sink patentable ships. Idle discussions, any chatter, about concepts must stop.
- Presentations at meetings with venture capital people or bankers, suppliers, sub-contractors, etc., should proceed from a carefully controlled hierarchy of how much and what types of information to disclose. Presence of expert legal counsel is highly advisable.
- First-to-file has no legal precedent in U.S. courts, so do not “trust” outside parties. Protect all information.
Be cautious and file as soon as practical. And if you need help understanding the value of your patents and intellectual property, there are no better experts than OceanTomo, based here in Chicago.