Cities and counties across South Carolina are now actively targeting research and development, technology and knowledge-based companies as part of more comprehensive economic development efforts. Whether it’s running incubators or facilitating research and development by established or new technology-focused companies, local governments are seeing that the role of technology companies in South Carolina’s economy continues to grow. As such, this post covers a topic that, while not directly related to governmental finance or local governance, is important for all communities which are focused on innovation: the America Invents Act. The AIA represents some of the most sweeping and transforming changes to the United States patent laws in the last fifty years. Some AIA provisions have already gone into effect while others will not go into effect until March 2013. Regardless, the ramifications of the AIA for the nation’s innovators are likely to be felt for the next fifty years.
One of the most significant changes will occur in March 2013 when the United States’ patent system will be transformed from the world’s only “First-to-Invent” system to a “First-Inventor-to-File” system, which is more in line with the rest of the world. So, why is this so significant? Because under the new First-Inventor-to-File system, a first inventor that first conceives of an invention will not be entitled to a patent if a second inventor, who separately conceives of the invention at a later time, files a patent application before the first inventor files. Under the old First-to-Invent system, the first inventor is entitled to the patent over the second inventor by producing evidence (e.g., in an interference proceeding) of the prior invention date. Under the new First-Inventor-to-File system, the second inventor, who was the first to file the application, is entitled to the patent over the first inventor even though the first inventor was the first to conceive of the invention.
The reasons for the change to the First-Inventor-to-File system are noble: to harmonize our patent system with foreign patent jurisdictions and to reduce litigation costs associated with determining who is the first-to-invent between two or more inventors claiming the same invention. Harmonizing our patent system may help to streamline international filing by making it easier for inventions originating in the U.S. to be patented overseas and inventions originating in foreign countries to be patented here in the United States. The new First-Inventor-to-File system may also reduce or eliminate expensive litigation to settle inventorship disputes where courts often base first inventorship determinations on tenuous evidentiary bases (e.g., old or questionable hand-scribbled notes, drawings, etc.).
There are likely to be drawbacks with the new system, however. For example, many patent practitioners believe that the new First-Inventor-to-File system will create a “race to the patent office” mentality, which is likely to favor the sophisticated, deep pocket patent factories of big businesses, such as Google, Apple, Microsoft, etc. This may hurt the less sophisticated and resource-limited inventors (although every bit as innovative), such as individuals or small businesses, who often need time to develop the invention, raise capital, learn the patent system, explore commercialization opportunities, etc.
While the change to the new First-Inventor-to-File system seems simple enough, it may be prudent for technology companies and publicly funded research entities/incubators to reexamine the way they conduct research and development, publish findings, and secure intellectual property rights in their inventions and discoveries. One way to do this is to file utility patent applications as early as possible and contemporaneously with ongoing research, technology development, product development or engineering rather than waiting until the research, development, or engineering has concluded and / or results are fully analyzed or published. Additionally, it may be wise to delay any publication or disclosure of the results until such time that the utility applications are filed.
The process of drafting and filing utility applications, however, usually takes time, which, under the new system, can cause a loss of intellectual property rights. Therefore, another way to ensure that intellectual property rights are protected is to file provisional applications to secure the earliest possible filing dates for inventions. The requirements for provisional applications are significantly relaxed relative to those for utility applications, which can be a time saver. For example, because of the relaxed requirements, provisional applications can often be drafted in a fraction of the time it takes to draft utility applications. While it is important that the content of provisional applications cover the full scope and features of the invention, the provisional applications need not include claims or fully developed specifications. Filing provisional applications may, thus, secure the earliest possible filing dates and provide a one-year grace period to convert the provisional into a fully developed utility application.
While the full effects of the AIA are yet to be realized, there are proactive measures that can be taken by inventors and centers of innovation to ensure that investments in and intellectual property rights are secured under the new First-Inventor-to-File system.