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How To Deal With The Impending “First-To-File” Patent Law

Tue, 08/07/2012 - 1:45pm
Eric G. King, co-leader of the Intellectual Property Practice Group, Miles & Stockbridge P.C

In addition to shortened product development cycles and decreasing product lifecycles in the market, technology-driven organizations must now add racing to the U.S. Patent and Trademark Office (USPTO) to the list of concerns that must be addressed to remain competitive in today’s challenging environment.

The America Invents Act (AIA), signed into law on September 16, 2011, brings the most substantial change to theU.S.patent law since the enactment of the current legal regime in 1952. Of the many provisions in the new law, the most radical change is the migration from a “file-to-invent” system to one based on “first-inventor-to-file.”

Under the current and long-standing regime, a patent is awarded based on who was the first to invent, with certain grace periods afforded to the first inventor. These serve to maintain their priority over a later inventor of the same invention — even if the later inventor files an application earlier than the first. However, the existing law — which allows for a relatively leisurely stroll to the patent office — is about to be recast as an all-out race for priority.

Beginning March 16, 2013, inventions will be awarded to the first inventor who files a patent application in the USPTO directed to that invention. In view of this impending change to first-to-file, organizations clearly need to adopt ways to increase the speed at which new patent applications move from conception to preparing, and finally to filing with the USPTO. All phases of the innovation-to-IP cycle should be examined, which includes the business process flow for identifying inventions by technical staff to invention disclosure submission to the internal IP steering committee. Firms should also examine the frequency at which the IP steering committee convenes, reviews and approves invention disclosures for application preparation. In addition, they should be awae of the availability of inventors to work with patent lawyers to prepare the approved applications for filing.

Some concrete steps organizations can consider implementing to compete include:

  • Integrating outside patent counsel into the IP steering group invention identification and decision process.
  • Fine-tuning inventor incentive program for increased efficiency and flexibility.
  • Filing patent applications early and often, as circumstances warrant and resources permit.
  • Making appropriate use of decision support tools and processes.

Integrate Patent Counsel Into the IP Management Process

Experienced outside patent counsel can provide real-time advice regarding portfolio status, existing patent coverage and procedural approaches and anomalies. There can be several benefits to this approach, of which three are discussed below.

First, by having patent counsel available on-the-spot to assist the group in rendering decisions, the group will be able to exercise better-informed allocations of the finite and valuable funds of the IP budget. The group will also be able to more fully investigate the various courses of action available for accomplishing company objectives, as well as gain a heightened awareness of the role that IP assets can play in achieving those goals.

Second, the IP steering group will be positioned to arrive at these decisions faster. In an environment in which time is of the essence for establishing an early invention priority date with the USPTO, the ability to quickly ascertain the strategic fit and relevant weight of inventions developed by technical staff will help keep competitors at bay. Furthermore, with speed comes the flexibility to address new and fleeting opportunities to exploit discontinuities between the evolving needs of the marketplace and the existing products underserving those needs. That is, course corrections for new developments in the product pipeline can be identified and made more frequently, thus reducing waste of development resources and increasing the likelihood that new products will successfully meet the needs of customers.

Third, early participation by patent counsel will be allow development of a clear understanding of the overall patent portfolio, as well as the usefulness and priority of individual inventions. In addition, counsel will gain insight into the strategic fit of inventions or groups of inventions with the product development paths projects, and platforms of the organization. This will logically lead to counsel being able to provide more relevant and meaningful legal advice as how best to achieve their client’s IP goals.

Fine-Tune Inventor Incentive Programs

Formal incentive programs can be used to stimulate development of intellectual property assets. I experienced this first-hand when I was involved with the IP steering group at an early-stage company. In particular, our company found it to be effective to reward inventors for completing three distinct tasks. First, each inventor received a modest, but not insignificant, reward for submitting a compliant invention disclosure to the IP steering committee. Second, each inventor received another, larger reward after the patent application had been filed. Third, each inventor received a final reward after a patent had been granted by the USPTO.

After some experience using this approach, we increased the second payment amount (i.e., after an application is filed) so that achieving this milestone resulted in a substantially larger payment than the disclosure submission payment and the patent grant payment. This adjustment provided a more direct incentive to inventors to be responsive in giving of their time to working with patent counsel so that patent applications could be more efficiently prepared and filed.

This is not to suggest that there exists a single one-size-fits-all reward system; rather, the point to be taken is that the reward system needs to be attuned to encourage the activities desired to occur within a given timeframe. For example, under the new AIA legal regime, consideration should be given to providing front-loaded incentives to stimulate quick submission and to incentivize inventors to work responsively and effectively with patent counsel to develop complete and accurate invention disclosures.

Seek Patent Protection For Approved Inventions Early and Often

The new race to the USPTO will undoubtedly increase the burden on technical staff to produce invention disclosures with greater frequency. However, whatever advantages flow from the increased quantity of invention disclosures will evaporate unless approved disclosures are then prepared and submitted to the Patent Office with equal alacrity.

One approach for quickly getting a patent application on file at the USPTO is to use provisional patent applications. Because some of the formalities required for patents are relaxed for provisional applications, the time required to prepare a provisional application may be less than would otherwise be required to prepare a full patent application. However, one should also bear in mind that a non-provisional application — with all the necessary formalities — must be filed within twelve months of the provisional filing. As such, the total cost for the provisional to non-provisional filing option can be higher than simply filing a non-provisional application directly. The chief advantage of the provisional filing option in the context of the new AIA is the reduced time needed to prepare and file the provisional patent application.

Furthermore, it is good to remember that the patent laws protect inventions, not merely ideas. A provisional patent application is only effective to establish an invention priority date if the application complies with patent law provisions concerning the technical sufficiency of the disclosure. Therefore, because of the importance of filing date priority under the AIA, patent counsel should be engaged as early as possible — ideally, as soon as the invention disclosure is approved for patenting — to begin the process of preparing the patent application. If they are included in the IP steering group process as discussed above, patent counsel may often be able to meet with the inventors contemporaneously to clear up technical questions, because the inventors are likely to be close at hand.

Utilize IP and/or Patent Decision Support Tools and Processes

In order to increase the speed and efficiency of the decision-making process with respect to intellectual property assets, it is unquestionably helpful to have at one’s fingertips an accurate snapshot of the status, quantity and quality of the assets in their portfolio. For example, our firm has developed an approach using a proprietary decision support tool that is designed to provide this type of relevant information to the IP decision-makers in an organization. While it remains a work-in-process, the initial feedback from our clients has been effusively positive. The key takeaway is simply that there are tools available to assist managers in evaluating various options and courses of action for patents, applications, and inventions. Organizations should consider availing themselves of the benefits.

The foregoing discussion clearly illustrates that the new AIA law presents a challenge to all technology-driven organizations. However, as is often the case, the new law also presents an opportunity for the savvy organization to gain ground on the competition by adapting its IP management approach to take advantage of the coming disruption.


Eric G. King is co-leader of the Intellectual Property Practice Group at Miles & Stockbridge P.C.  A registered patent attorney and experienced intellectual property practitioner, Mr. King holds JD, MBA, and MSEE degrees. Mr. King has held engineering and management positions in private industry involving commercialization of new technologies and development of new products.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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