The
tidal wave of online usage of social networks has spilled over into
collaborative business networks. Social
networks such as Facebook are being used to create and market new ideas and innovations
using social networking webpages. Collaborative
innovation networks have sprung up as online communities of like-minded people who
choose to work together on innovation projects. The speedup in investor expectation for
startups to get to market using online development and product marketing tools
has also given rise to online startup funding networks known as
crowdsourcing. For example, Kickstarter
allows users to post project funding proposals on its website to vie for online
(crowd) funding. But what happens
to patent (i.e., invention) rights in collaborative online inventing? A brief outline of
some of the perils and pitfalls of this phenomenon and recommendations for
protecting patent rights follows.
CONFLICTING CLAIMS OF OWNERSHIP
Where a collaboration group has involved
diverse users who may later disagree how they will exploit the result and share
profits flowing from it, conflicting claims of ownership can arise. This can lead to full-blown disputes
and/or litigation that can tie up the innovation creators in destructive legal
wrangling for years.
In crowdsourcing, the typical terms
of use, such as Kickstarter‘s for example, provide no guidance how to contract for
“rewards” or “promised benefits” with online funders. An inartfully drafted promise of benefits for crowdsourced
funds can lead to funders later claiming a share of ownership or ongoing
benefits (royalties) from invention rights.
As is already well-known to
established companies undertaking joint research projects, it is important to define
in writing in advance a collaboration group’s mission, membership and at least
a general framework for ownership and apportionment of rights and benefits. This can avoid or at least mitigate
conflicting claims of ownership later.
LOSS OF INVENTION RIGHTS
Erroneous myths and misconceptions
persist when it comes to invention rights, and specifically patenting, in
collaborative inventing. Many of
those not familiar with the patent process still believe that they can mail a
stamped and sealed invention disclosure to themselves to establish proof of their
date of invention. However, the
U.S. Patent Laws were reformed by the America Invents Act (AIA) of September
2011, with full effect from March 2013, from the former “first-to-invent”
system to a “first-to-file” system like the rest of world. Under the “first-to-file” system now in
effect in the U.S., patent rights belong to the inventor(s) who first files a patent application containing a complete enabling disclosure how to put the invention into
practice. It does not matter that
an inventor has been working on their invention idea for years, or even for one
day, before someone else files their patent application. The first party to file will win! It is important that a patent
application be prepared and filed as soon as the invention has been completed with details of its best implementation.
Another common misconception is
that a quick provisional application can be filed to establish an official
invention date and buy one year of time for a formal patent application to be filed. But this is true only if the
provisional application contains an enabling disclosure of what will later be
claimed as the invention sought to be patented. All too often an amateur inventor will self-file a
provisional application with marketing verbiage stating their “idea” or “wish
list” for their invention but leave out crucial details of proposed implementation. Later on during Patent Office
examination, they may be dismayed to have the patent examiner cite disclosures
of the same or similar idea by others earlier, and learn that their provisional
filing date cannot be relied on as a date of invention because enabling details
of implementation that might be patented were not disclosed in the provisional.
Collaboration networks often hold live events that connect online where an invention idea may be worked on publicly by a
collaboration group. Such public events published online may constitute a publication of what the group has worked on,
which would cause an immediate loss of patent rights due to publication by others occurring before a patent application has been filed. The U.S. Patent Office imposes a
requirement for disclosure of all material prior art known to an applicant for
patent, including their own prior publication, otherwise any issuing patent may
be attacked later for invalidity. The
collaborative group members must disclose their prior
publication to the Patent Office, which will have the effect of restricting them to patenting only a significant
technical improvement over what the group publicly disclosed.
PRIOR ART AGAINST PATENTING
People not familiar with the
reformed U.S. patent system may also believe in error that their own prior
public activities (public disclosure, use, sale, or publication) cannot be
cited as prior art against their own patenting if they are within the one-year U.S.
“grace period” for inventor publications prior to filing. But the
“grace period” only applies to prior publication by the inventor(s) themselves. It does not apply to prior public disclosures by
other parties who may participate in development of the
invention, such as marketing consultants, manufacturers and component suppliers,
startup agencies that publish invention pitch descriptions, grant funding
agencies that publicly post RFP descriptions and project submissions, etc. Even a crowdsourcing project proposal
by a related business entity can be deemed a prior public disclosure by another
party. Such prior public
disclosures by other parties have immediate effect as prior art against
patenting.
Patent-killing prior art can also include prior public use or sale of the invention in foreign countries, or prior filing of a foreign patent application anywhere in the world. Foreign filing dates are typically 18
months earlier than their date of publication, which makes it even more imperative
that a U.S. patent application be filed as soon as an invention is completed. In one recent U.S. patent court
decision, a foreign publication by an off-shore manufacturer of an invention
product for its U.S. owner was held to be qualifying prior art against the owner's patenting in the U.S.
POINTERS FOR PROTECTING PATENT RIGHTS IN COLLABORATIVE
INVENTING
(1) Define in advance the collaboration
group’s mission, membership, and rights and benefits in any invention(s)
developed.
(2) File a U.S. patent application as soon
an invention has been completed, taking care to explain full enabling details of its best
implementation at that time. Take care to name as inventors all those making a substantial contribution to the conception and implementation of what is claimed as the new or improved subject matter (each named inventor must review and sign the application).
(3) If the collaboration group intentionally or inadvertently made the invention subject matter public more than one year before filing its patent application, it must disclose that information to the U.S. Patent Office, and take
care to claim only significant technical improvements over what was publicly disclosed.
(4) Be aware of what your competitors or even your own business partners or suppliers may publish in the U.S. and/or globally. There is no grace period for third party publications, so you must file your U.S. patent
application as soon as possible before any such public disclosures are made.
(5) Be aware of the risk that
collaboration networks are public forums whose online publications can kill later-filed patent rights, so manage your participation and online disclosures accordingly.
Leighton K. Chong
IP & Patent Attorney
December 2014
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