When Creating a Buzz Impacts Patentability

Caution signAs an inventor, it’s not surprising that you want to tell others about your invention, especially if your company is releasing new products or functionality based upon it. For example, you may display a poster and an abstract at a conference, send a marketing team off to a trade show, or give a talk at a networking event. However, in doing so, you may have just unintentionally and permanently voided your right to a patent!

One of the most critical things to understand about patents is how disclosures can impact your patent rights, regardless of whether you are an inventor, an engineer, or the CEO of the next hot startup. Mishandling your IP in the early stages of a product launch can create a long-term risk that could complicate your efforts to win a patent, and potentially even kills financing or licensing deals for many years to come.

This article gets into some of the risks around the issue of disclosure. After we discuss what can go wrong, I’ll cover the best approaches for prevention in Part II.

In most cases, the rules are fairly simple. You want to prevent any type of communication that “enables” the public to understand how your invention works until your patents are filed. “The public” is typically defined quite broadly – anything from a thesis on a shelf in a remote college library, to a discussion with a few dozen of your closest friends, or a particularly juicy blog post can count. If someone can prove later that your invention was communicated to the public before your patent’s “priority date”, the patent may be invalidated. This can occur both before and after a patent has been granted.

The short-term risk comes during the actual prosecution (the filing and approval) of a patent. When you file a patent, the Patent Office conducts a search to see if your idea has already been published. You also have a duty to disclose to them any materials relevant to the patentability of the invention. If they see evidence that your inventors have already publicly disclosed important facets of an invention, you may be rejected out of hand. Alternatively, you may end up in a debate regarding whether a long-forgotten PowerPoint slide bullet from an early pitch deck was sufficient to enable a “skilled artisan” to arrive at your invention. Much of the work of successfully arguing for a patent lies in proving that the innovation is truly “new” and not known before it was filed – a public disclosure can make that a much bigger challenge.

So are you all set once you win your patent? Sadly, no. Despite all of the checking and proving needed to win a patent, the Patent Office itself typically won’t be the one to tell you that you’ve violated the disclosure rules. They may not necessarily find the incriminating slides on-line, or hear that the poster was displayed to an audience of thousands. You may not have been told that the disclosure took place – or perhaps you acquired an interest in the patent long after it was filed and everyone involved in the disclosure had moved on. However, even if you hand the information over to the Patent Office, in all likelihood, you and your lawyers will craft arguments and revise the claimed invention in such a way as to allow the Patent Office to grant the patent in spite of those disclosures.

Bigger issues are likely to come up during deal making or litigation – very inconvenient times for the management and shareholders of a company. It is surprisingly common in these scenarios for the other side to challenge the value or validity of an issued patent.

During litigation, for example, you can bet that an adverse party in litigation is going to look for any and all reasons why that patent can’t be used against them! There are two arguments a defendant commonly makes in defending against a patent infringement suit: 1) I didn’t infringe and 2) even if I did, that’s not a valid patent anyhow. One way to prove that a patent is invalid is to find documentation (other patents, journal articles, web pages, etc.) showing that the public knew about the invention before the application was filed. This can include determining that someone at the company disclosed the invention improperly before the filing. Sometimes you’ve got documentation lying around that gets identified during discovery and proves that the improper disclosure occurred (e.g., emails between speakers preparing for a conference). In other cases, disgruntled ex-employees/partners or bitter rivals can be practically guaranteed to come out of the woodwork eager to impact one side or the other in a suit.

Similarly, anyone looking to do a deal with the inventor based upon the value of the patent – especially someone being ‘encouraged’ to enter a pricey licensing agreement – is going to do his or her diligence, and use information like this to challenge the value of the patent. If a patent isn’t valid, why should they pay a licensing fee? Even if there’s just a risk that it might be invalidated later, why should they pay as much as you’re asking?

So the impact of giving that talk with the nitty gritty of the invention disclosed, or doing a public beta, or posting a web page that gives away enough of the secret sauce to cause trouble, can burden a company with long-term risks that go far beyond applying for the patent.

In Part II, I’ll talk about the strategies you should use to protect yourself against these risks.

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