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Top 10 IP Mistakes: No. 5 Being Slow to Patent

istockAnyone that is involved in innovation is no doubt aware that the US recently experienced the most significant shift in patent law since the first patent act in 1790. When the America Invents Act (AIA) went into full effect in 2013 it moved us from a first to invent system to a first to file system. The upshot is that it is now more important than ever to be first to the patent office. Literally, it is a race to the patent office and he who wins the race wins the patent.

Prior to the AIA, United States patent law went to great lengths to ensure that patents went to the first inventor rather than the first person to file a patent application. As it turns out this is difficult to do. Priority contests, also known as interferences, are heavily fact dependent complex cases, and as a result they are also very expensive. The new system does away with this, and instead looks only at filing dates to determine which of two inventors is entitled to patent an invention. It is a much simpler system, and much easier and cheaper to implement, but it does come at a cost. Namely, you have to be fast.

I once worked with a software company that learned the hard way just how important it is to be fast. I have honestly never seen an innovative company drag its collective feet so much in my career. You have heard people complain about the legal system moving slowly, but these guys actually made lawyers look good. To me it was maddening because inventing was complete, and they had actually fielded a product. The slow link was simply getting the information that I needed in order to write the application. Meanwhile, they were in a highly dynamic and competitive space, and they were already behind the eight ball by being a late-comer. Eventually, the inevitable happened. An automated search returned a hit that was directly on point destroying novelty. They not only lost their ability to patent their product, but now they also had an infringing product in the field. So, the best option for them was to pull the product immediately and conduct an expensive design-around and freedom to operate study to protect them from liability. All told, the company incurred tens of thousands of dollars in engineering and legal fees.

The moral of this story is that all of their extra legal and product development expense could have been avoided simply by moving faster. Even before the America Invents Act their sloth would have left them in a very difficult position, but in a post-AIA world their position was indefensible.

Stay tuned for more of the Top 10 IP Mistakes.

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