Advanced Ceramics / IP in Depth / Columns / Resource Management

IP in Depth: Preparing for First-to-File

February 1, 2013
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On March 16, the U.S. Patent and Trademark Office (USPTO) will switch from the current “first-to-invent” system to a “first-to-file” system. The first-to-invent conceptFirst-to-file was effectively incorporated into the second Patent Act of 1793 (although not expressly spelled out until the Patent Act of 1836). After 220 years, the change to a first-to-file system now conforms the USPTO to systems used in all other countries around the globe.

Current Practice

The nearly obsolete first-to-invent system allows the USPTO to go to great lengths via interference procedures to ensure the actual first inventors receive the right to be granted patents for their inventions when disputes arise. Cost estimates for such interference procedures range as high as $400,000-500,000. Accordingly, the first-to-invent system is believed to favor large companies over small inventors. Less than 1% of patent applications end up in interference proceedings. From 2004 to 2011, more than three million patent applications were filed; of those, only one small inventor was successful in winning an interference procedure.

The change to a first-to-file system is one of many changes set forth in the Patent Reform Act (or America Invents Act) of 2011 that President Obama signed into law in September. The first-to-file system is one of the last provisions of the act to be implemented.

In general, patent practitioners have followed the enactment of the Patent Reform Act and have studied the various provisions of the act over time. However, companies may be less familiar with provisions of the act, including the first-to-file provision, which may well affect their business’ R&D and intellectual property rights and strategies.

Under the first-to-invent system, the first person to invent something could be reasonably confident in their priority in time over a later inventor—as long as uninterrupted due diligence could be established from the date the invention was conceived until either a patent application was filed or the invention was reduced to practice. During the examination of a patent application under the first-to-invent system, the applicant could overcome a prior art reference by “swearing behind” the reference—i.e., swearing that the applicant had conceived of and worked on developing his/her invention before the date of the prior art reference.

Essentially, under the first-to-invent system, the first applicant to file for an invention wins over the second inventor to file, unless it can be shown that the first applicant derived the invention from the second applicant. One day could literally make a difference in obtaining or losing rights to an invention.

Upcoming Changes

The first-to-file system will only apply to applications that have an effective filing date of March 16, or later. Accordingly, the first thing companies should consider before the first-to-file provision becomes effective is to prepare and file patent applications before March 16 on any new technologies or inventions currently in development. Applications filed before that date, including provisional applications, will remain under the current first-to-invent provisions.

Companies should also consider revamping their invention review and patent decision-making procedures to accelerate the preparation and filing of patents on inventions that merit protection. It is not uncommon for companies to take excessive time to prove and sometimes over-test new technologies and then procrastinate when it comes to the process of drafting invention disclosures and working with patent counsel to draft and file patent applications.

Under the current first-to-invent system, patent counsel typically determines patent filing due dates on the basis of anticipated public disclosures, offers to sell, and the 12-month grace periods offered to inventors between disclosing their inventions and applying for patent protection. Under the first-to-file provisions, patent counsel will need to set more immediate filing deadlines and increase communication with clients.

Patentability search times, which can take up to three to four weeks, may need to be ordered earlier during the development or conception of new technologies; in some cases, the drafting of applications might need to begin before the results of patentability searches are obtained. In the case of provisional applications, companies might consider developing internal invention disclosure forms that can be reviewed and filed by patent counsel as provisional patent applications to expedite application filing (and reduce costs) while waiting for the results of patentability searches.

Companies or their patent counsel can develop invention disclosure forms that include an explanation of how the inventive concept was conceived. Under the first-to-file provisions, such a form could be used to establish that an invention was not derived from another patent applicant.

Patent practitioners have been studying the changes brought about by the Patent Reform Act for some time. It is now time for companies to become familiar with how the changes will impact the lifeblood of their businesses: R&D, intellectual property rights and strategies.

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