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Author Dylan Adams is a patent attorney at the Seattle law firm Davis Wright Tremaine. He holds a master’s in electrical engineering and a bachelor’s in biochemistry. An excerpt from his recent book, Patents Demystified, is reprinted here with his permission. 

Patents_Demystified

After coming up with a new product or business idea, many inventors get stuck. They recognize they have something to share with the world but, at the same time, they are afraid that if they share their idea with others it might get stolen. In other words, they want to be able to develop, sell, and profit from their inventions while being assured that others will not be able to copy their products without permission and without acknowledgement of their inventorship. While it is impossible to absolutely guarantee security of an idea or product, there are several important steps that inventors should take to avoid forfeiting their rights or creating an opportunity for others to misappropriate an invention before it is ready for patenting.

The Need to Keep an Invention Secret

The first rule of inventing is that inventions should ideally be kept completely secret until a patent application is filed. In a perfect situation, a patent application would be filed immediately after invention without disclosure to anyone outside of the inventor or group of inventors. However, the reality is that absolute secrecy is not always practical or possible. Most inventors want to develop the product, raise money, consult experts, and do some market research before they invest the time and money into filing patent applications. Accordingly, being careful of how disclosures are made is imperative. Certain activities can result in the irreparable loss of patent rights, while other activities can be reasonably safe if done correctly. 

Potential Loss of Patent Rights (U.S. and Foreign)

Even after some changes to the patent laws in 2013, inventors must generally file for a U.S. patent within one year of the first public disclosure, public use, or offer-for-sale of an invention. Otherwise, the invention is effectively dedicated to the public domain and anyone is free to use it. On the other hand, in the vast majority of foreign jurisdictions, all patent rights are lost immediately upon a public disclosure, public use, or offer-for-sale of an invention—even if such activity occurs in the United States. As discussed in more detail in the coming chapters, foreign patent protection is not recommended for the majority of companies, but this does not mean that foreign protection should be forfeited in favor of the one-year grace period afforded by the United States.

Foreign protection may be important to potential investors or business partners in the future, and having the option for foreign protection may make the difference between closing a deal or not. For example, while a small startup may not initially have sufficient capital to support foreign patent filings, a venture capital firm or acquiring company may be able to provide sufficient capital and may also have market penetration in foreign jurisdictions that would justify building a foreign patent portfolio. Prematurely giving up the option for foreign patent protection is therefore an unwise decision for even the smallest company, especially given that limiting public disclosures, uses, and offers-for-sale until filing for a United States patent is often a relatively small sacrifice to make. 

Public Disclosures

A disclosure can be considered “public” even if it is to a single person or the posting of a written description of the invention where it might be viewed by a member of the public. In other words, “public” does not require the information being disseminated to a large number of people and, in some cases, proof that even a single person received the information may not be required.

Dylan Smith
Dylan Adams

Information about inventions should not be published anywhere that the general public could theoretically get access to it. This includes public webpages, blog posts, videos, images, or audio recordings—even if there are no active links to such content or if the public is unlikely to stumble upon the content.

Oral disclosures can qualify as public disclosures just as much as publications can, so discussing inventions with outsiders should be avoided if possible. Where oral disclosures are unavoidable or necessary, however, it may be possible to do so without unduly compromising patent rights. In many cases, if confidentiality can be established for a given disclosure, it will not be considered a public disclosure. Establishing confidentiality, discussed in detail later in this chapter, can be used to protect certain public uses of an invention that would otherwise harm patent rights. 

Public Use

In addition to publications and oral disclosures, using an invention in public can also harm patent rights. Again, in many cases, a use can still be considered “public” if it involves a single person—even without proof that a single person ever saw the invention being used. Moreover, using an invention in public can be harmful even if the invention is hidden from view or the function of the invention is not readily discernable.

For example, in 1873, Samuel H. Barnes was issued a patent on improved springs for ladies corsets that provided for improved strength, flexibility, and elasticity. These springs, or “steels” as they were known, were sewn into slots within the fabric of a corset and clothing was worn over the corset. The springs were therefore not outwardly visible while being worn. Mr. Barnes gave his wife and at least one of her friends a set of his new corsets springs, which they proceeded to wear in public for well over a year before he filed his patent application. These innovative corset steels worked so well that his wife and her friends would tear them from corsets that had worn out, and sew them into new corsets. Unfortunately, when Mr. Barnes tried to assert his patent against an infringer, it was invalidated because wearing the steels in public was considered a public use.

patents1
FIGURE 4.2 – Corset-Springs Illustrated in S. H. Barnes’ Patent RE5216.

Cases such as this demonstrate that inventions should not be used in public until a patent application has been filed. As this case illustrates, even a hidden use that occurs under clothing, or is otherwise not viewable, can still harm patent rights if the use occurs in a public place.

This need for complete secrecy applies even more so to patentable methods such as a process of making a product or a patentable machine that makes a product. Patent rights to an innovative method or machine can be lost if the result or product generated by it is made public. For example, suppose a new process of making chocolate bars is developed in secret along with a set of machines that implement the new method. Both the method and machines could be patentable. However, if the chocolate bars produced by this secret facility are made public or sold publicly, then the ability to protect the innovative method and machinery may be lost.

Applied to software inventions, suppose that a public website runs a novel search engine algorithm that provides for faster and more relevant search results. Even if the code that implements this search engine is not publicly accessible or if it is impossible to reverse-engineer the novel algorithm, the fact that the website is available to the public would still harm patent rights to this invention. Exploiting an invention in any public way is therefore inadvisable and should be avoided until a patent application is filed. This includes public disclosures, public uses, and offers-for-sale.

However, if an invention has already been disclosed, marketed, or publicly used, inventors should not be disheartened or assume that all rights are already lost. Instead, a patent attorney should be consulted as soon as possible to get an assessment of what rights are still available and what steps can be taken to preserve any patent rights that still remain. In many cases, an exception may apply or an invention may still be within the one-year grace period.

By maintaining secrecy around disclosures or uses of an invention, it may be possible to avoid the negative consequences of “public” disclosures or uses as discussed above.

Informal, Inherent, or Implied Confidentiality

A formal non-disclosure agreement (NDA) is the next best thing compared to not making invention disclosures at all. However, NDAs are often a poor choice from a business perspective. Many investors such as venture capitalists or angel investors refuse to sign NDAs and will not even meet with companies that require them. Moreover, asking these parties to sign an NDA is often seen as an indication of an inexperienced business person and may ruin a potential financing deal before the meeting has even begun.

FIG. 4. 3 Drawing from U.S. Patent 3,655,201 to Larry Nichols.
FIG. 4. 3 Drawing from U.S. Patent 3,655,201 to Larry Nichols.

However, when it comes to preventing “public” disclosures that will harm patent rights, such formality is not always necessary. For example, where secrecy is implied, inherent, or informally established between parties, this can be enough to prevent a given disclosure from being considered a “public” disclosure that can result in forfeiture of patent rights.

Informal secrecy can be established in many ways, including by simply stating that a given disclosure or demonstration is confidential and should not be shared with anyone else without express permission. There are no special or magic words that need to be uttered—the idea is that the receiving party should understand that the information being shared should remain secret.

The context and circumstances of an invention disclosure can create implied secrecy that qualifies as a non-public disclosure that does not harm patent rights. For example, in 1972, Larry Nichols received a patent on his new puzzle cube, and in the early ’80s, the patent was asserted against the world-famous Rubik’s Cube. (Rubik was able to get a patent on his puzzle cube in 1977, but only in Europe, unfortunately). The defendant argued that Nichols’ patent was invalid because several people had seen his prototypes over a year before he filed for a patent. While doing graduate work in organic chemistry, Nichols made several prototypes that were seen by a few close friends, including two roommates and a colleague in the chemistry department. They had each seen the prototype in Nichols’ room and were given a demonstration of how it worked.

Later, after taking a job at Moleculon Research, the company president took interest in the puzzle upon seeing it in Nichols’ office. The president received a full explanation of how the puzzle worked and Nichols ultimately sold his rights to Moleculon in exchange for future royalties. In each case where his prototypes were seen and disclosed, Nichols did not get a signed NDA from those viewing the puzzle, nor did he request that they maintain secrecy regarding his invention. However, the court considered these to be secretive disclosures because “the personal relationships and other surrounding circumstances were such that Nichols at all times retained control over [the puzzle’s] use as well as over the distribution of information concerning it.” The court further found that Nichols “never used the puzzle or permitted it used in a place or at a time when he did not have a legitimate expectation of privacy and of confidentiality.”

FIG. 4.4 Drawing from European Patents to E. Rubik.
FIG. 4.4 Drawing from European Patents to E. Rubik.

Although cases like this indicate that invention disclosures may be considered secretive based on the context of the disclosure and relationship of the parties, invention disclosures should still be avoided, and extreme care should be taken if disclosures are absolutely necessary. No disclosure should be considered completely safe until a patent application has been filed. Engaging a competent patent attorney and filing a patent application as soon as possible should therefore be a top priority.

Although cases like this indicate that invention disclosures may be considered secretive based on the context of the disclosure and relationship of the parties, invention disclosures should still be avoided, and extreme care should be taken if disclosures are absolutely necessary. No disclosure should be considered completely safe until a patent application has been filed. Engaging a competent patent attorney and filing a patent application as soon as possible should therefore be a top priority.

©2015 by Dylan O. Adams.  Reprinted with permission.  All rights reserved. 

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