The Inventor's Dilemma: new patent laws a trap for the unwary.

• Author: Baternan, Randall B.
• Position: Patents

On Sept. 16, 2011, President Barack Obama signed into law the America Invents Act (AIA), one of the most significant changes to patent law in more than a century. The last provisions of the AIA went into effect earlier this year. While the AIA does present some new opportunities for protecting inventions, it can also be a trap for the unwary.

Historically, U.S. patent law has been relatively unique because it granted a patent to the first person to make an invention. There was no need to rush to the patent office. Even if someone else filed a patent application first, the first inventor was able to obtain a patent by proving that he or she was the first inventor.

Another feature of U.S. patent law is the one-year grace period for filing a patent application after public disclosure. In contrast, many foreign countries require a patent application to be filed before any public disclosure. This one-year grace period is often used by U.S. inventors and small businesses to test market demand for the invention prior to spending the money to pursue a patent.

Now that AIA has been implemented, inventors and companies should be very wary of relying on the grace period. Under the new rules, a patent will generally be granted to the first party to file a patent application, not to the first to invent. Disclosure of an invention will start the grace period running and will become prior art against third parties seeking to patent a similar invention. However, the grace period provides no protection for aspects of an invention that were not disclosed. This could result in a company losing substantial patent rights if, for example, a third party files a patent application first on the aspect of the invention not disclosed.

POTENTIAL PITFALLS

While it will be several years before the courts have formally interpreted the new law, the initial analysis suggests that it will contain many pitfalls for the unwary.

For example, John Doe invents a new laundry detergent having ingredients A, B and C and it cleans better than any known detergent. Doe knows that chemical C can be substituted with a number of similar compounds that are also effective. Because Doe is an individual inventor, he wants to see if his product will sell before pursuing patent rights.

A month later, Acme Chemical Company develops and starts selling a competing detergent, which has ingredients A, B and D. Chemical D belongs to the same family of compounds and works about as well as C. When Doe...