For many early stage inventors, the prospect of securing a patent represents a daunting next step. Cost concerns, complexity, insufficient data, or lack of foresight dissuade inventors from securing patent protection. However, delaying the filing of a patent can cost inventors tremendously.
The United States has a first-to-file patent system, which means that the first person to file a patent application receives priority to that application. It logically follows that if you wait to file then you can lose all rights to your invention; however, this is not the only concern. Failing to timely file a patent hamstrings an inventor in several other ways. This post details three key risks that follow from delaying a patent filing.
Losing Priority to your Invention. As previously stated, the first-to-file system provides an incentive to proactive inventors. By filing early, an inventor locks in their right to maintain a limited monopoly over the claimed invention. Thus, a first-to-file system differs from a system that bestows patent ownership to the person who first conceives the idea, in that the person who had the idea first nonetheless lacks any claim of right over the invention.
Suppose you invent a novel drug that can treat hair loss, but you do not wish to patent the invention until your data reflects 90% efficacy. Several years pass and the data you wish to include in the patent application reflects 100% efficacy. You go to your attorney on March 3rd, 2021 to help you with the patent application, and they let you know that they will begin a prior art search immediately. Unfortunately for you, the attorney’s prior art search uncovers the exact same drug formulation on a patent filed on March 2nd, 2021. Even if the data on this patent reflected a less effective formula your patent would still be excluded under the United States’ first-to-file system.
The above hypothetical reflects a near-catastrophic example of losing priority to your invention. Not only did delaying your patent put you second in line, but the inventor that filed first now maintains a twenty-year monopoly over the hair loss drug that you spent years of your life—and potentially a significant portion of you or your company’s finances—developing.
Inadvertent Disclosure. Another risk that inventors face when delaying a patent’s filing is the inadvertent disclosure of their invention. Suppose the drug developer mentioned above attended a conference for people working in the hair-loss treatment space, and that the inventor presented their preliminary findings for their drug formulation. After the conference, the inventor collects data for thirteen months before finally meeting with their attorney to start the drug’s patent application. During the prior art search, the attorney uncovers the inventor’s presentation at the conference. Here, the attorney would have to inform the inventor that their prior disclosure precludes the patent filing because the information already exists in the art—the inventor effectively became their own prior art.
Here, the risk is less dramatic than above, but it still impairs the inventor’s ability to market their drug unimpeded. Now the inventor will have to enter a market without the exclusivity protection that a patent offers. In short, the inventor exposes themselves to a potential flood of unfettered competition.
Under 35 U.S.C. § 102(b)(1), an inventor has one year from the time of an inadvertent or intentional disclosure to file a patent. The clock begins to toll immediately from the point of disclosure. In many instances, the risk would be another inventor beating you to the patent filing. However, if the patent application for this invention is particularly laborious, then one year might not be enough time to complete and file the application. At any rate, if you find yourself at a point where you are willing to disclose details of your invention, you should begin the patent-filing process to avoid these risks.
Impairing your ability to freely share information. For many inventors, the invention is but a subset over their overarching goal. The invention might be the foundation on which they plan to build their company around. To build a successful enterprise, an inventor will need to talk with potential employees, customers, and investors. Inventors that wish to delay their patent filing might take comfort in the use of non-disclosure agreements (“NDA”)—particularly with their employees. Here, the inventor might maintain that the invention is their company’s trade secret, and that a signed NDA prevents other companies from replicating the invention because the information is held confidentially. The problem here is that once a person discloses a trade secret, it is no longer a trade secret. The disclosure could thus prevent you from obtaining a patent either because the information became prior art, or a different company used the information to file its own patent.
Accordingly, the lack of patent protection could preclude you from disclosing all of your invention’s details with the parties that might enable your company to succeed. This may present a barrier that is too great for some to overcome, and they might avoid doing business with you or decline your employment offer. Additionally, the lack of patent protection might be a nonstarter for some investors who are worried that established companies could replicate your invention and force you out of the market.
In today’s first-to-file patent system, it has become increasing important to file timely patent applications. Failing to do so not only jeopardizes an inventor’s rights to that technology, but also hamstrings the inventor’s ability to promote that technology.
BioPharma Law Blog posts updates and analyses on IP topics, FDA regulatory issues, emerging legal developments, and other news in the constantly evolving world of biotech, pharma, and medical devices.