U.S. Now a First-to-File Nation

by Craig Simmermon

On September 16, 2011, President Obama signed the Leahy-Smith America Invents Act (“AIA”) into law. Lawmakers describe the AIA as patent reform that streamlines the patent application process along with other aspects of patent law. The AIA substantially modifies the patent laws of the United States. As a result, the legal strategies used by intellectual property owners must also be substantially modified in order to optimize and protect their patent rights. All inventors and businesses should be aware of the new patent laws and make the appropriate adjustments to their intellectual property protection strategies.

The most sweeping change resulting from the AIA is the transformation from a “first-to-invent” patent system to a “first-to-file” patent system. With the new system, the legal owner of an invention is the first entity to file for patent application and not necessarily the first entity to invent or conceive of the invention. Every patented invention must be “novel” and, thus, one-of-a-kind. This means that there can be only one patent for any particular invention, where the question of ownership of the one patent obviously could become a very important issue. Under the former law, if another inventor files a similar patent application prior to the filing date of your patent application, where you “conceived” of the invention prior to his filing date, you still were designated the legal owner of invention and, thus, had priority rights in the invention and the patent. Under the new law, you are not the owner of the invention and you do not have rights in the invention because you were not the first inventor to file for patent application. Under the new law, the other inventor receives priority and all rights in the patent because he filed for patent application first. As a result of the new law, inventors and businesses should take steps to insure that they are the first-to-file for patent application in order to prevent another inventor or business from capturing your intellectual property rights.

The “first-to-file” system took effect on March 16, 2013. This means that now, the United States is a first-to-file country, with a patent law system that legally recognizes the first inventor to file a patent application as the true owner relative to other inventors of the same invention. Thus, as between inventors of the same invention, it truly is a race to the patent office to determine the legal owner of an invention and the bona fide patentee of an invention.

Inventors and businesses should also note that, in most cases, a patent application should be filed prior to commercializing or selling the invention. The patent application should be filed before you start to sell your invention or disclose it to the public. This is due to the novelty requirements of most foreign countries. If an invention is sold prior to the filing date of the corresponding patent application, patent protection will have been forfeited in most foreign countries. Foreign countries require the filing of a patent application prior to commercializing the invention in order to meet novelty requirements and qualify for a patent grant. In the U.S., inventors are allowed a one-year grace period after their first sale to file the patent application; thus, inventors are allowed up to one year after they start to sell to file their patent application. Importantly, however, with the first-to-file system described above, this one-year grace period would not grant you ownership if another inventor files for patent before you. Therefore, even with the U.S. grace period, it is wise for inventors and businesses to file their patent applications as soon as possible and prior to practicing their invention.

The drafting and filing of a patent application is very detailed work that can take up to two months or longer for the attorney to complete. The reason for this is primarily because of the complexity of patent laws and typical abundance of prior art. Importantly, inventors and businesses must budget time for patent work in business operations planning in order to allow the patent attorney at least two months to perform research and draft a high quality patent application prior to the first sale of the invention.

Intellectual property protection and specifically patent protection is the best way to insure your company's profitability. Without it, any commercial program in any competitive arena simply becomes a race to the lowest feasible sale price in the marketplace. Patent protection will provide your business with the opportunity to avoid such intense price competition. In this regard, patent protection is very likely the most cost-effective investment you could make in your business. If you think your products or services may be patentable, you should contact a knowledgeable patent attorney immediately.

The Law Office of Craig A. Simmermon