To Patent, Or Not To Patent

Jeffrey Szuma

Suppose you’re the Owner, CEO or General Counsel of a small-to-medium sized company that has developed a new widget you think might be patentable. You know that obtaining a patent can be an expensive proposition. But you’re also concerned that your competitor may soon develop the same widget independently. If you don’t obtain a patent on the widget and your competitor does, you wonder whether your competitor can stop you from selling your widget if you developed it first. The question you might ask is: “Should we patent our widget, or not?”

As is often the case, the answer is: “It depends.” Under current U.S. patent law, you may be able to sell your widget even if your competitor obtains a patent, although filing your own patent application can have advantages. However, the Patent Reform Act of 2009 now pending in Congress could change things significantly.

Michael Brodbine

Before exploring your question further, we first have to define the term “invention.” Under U.S. patent law, invention requires both the conception of the widget (i.e., the idea) and the reduction of the widget to practice. Reduction to practice can take the form of an actual reduction to practice by building a prototype, or a constructive reduction to practice by filing a patent application on the widget.

Returning to your question of whether to seek a patent, if your primary concern is preserving your company’s ability to sell its widget, you might be able to do so even if you don’t file for a patent but your competitor does. Under the current U.S. patent law, where two parties develop the same device, the patent is properly awarded to the party that was first to invent. Thus, if your competitor obtains a patent and sues you for infringement, you could try to prove that your competitor’s patent is invalid because your company was the first to invent that widget. If your company was first to conceive, and you then worked diligently to build a prototype and put the widget on the market, your competitor would not be able to stop you from selling your widget because you invented the widget first and did not abandon, suppress, or conceal it.

Of course, even if you avoid liability under those circumstances, the fact that your company invented first would not have prevented your competitor from obtaining a patent and suing you, or the great expense of defending the lawsuit.

As a result, while not inexpensive, filing a patent application on your widget may be a more cost effective option. This may be so even if your primary concern, as mentioned, is simply preserving your ability to sell your widget (rather than preventing your competitor from doing so). The publication of your application during its pendency in the U.S. Patent Office creates “prior art” against your competitor’s later filed patent application or issued patent. Filing a patent application has the added benefit of being a reduction to practice of the widget, which can help you establish an early date of “invention.”

It is not necessary for your application to actually issue as a patent to prevent your competitor from obtaining a patent. Even if your application is ultimately rejected, it is the publication of your application that can create “prior art” against your competitor.

You can also create “prior art” by publishing an article that fully describes your widget, such as in a trade publication. Even though such a “defensive publication” is not a reduction of the widget to practice, if it (or your patent application) is published more than one year before your competitor files its patent application on that same widget, your publication is an absolute bar against your competitor’s patent application, or could be used to invalidate a U.S. patent issued to your competitor.

Filing a patent application on your widget also does not guarantee that your competitor will not be granted a patent. However, your published patent application or a “defensive publication” can act as evidence of your prior invention of the widget. Even if your competitor obtains a patent, that evidence of your prior invention may dissuade your competitor from suing you for infringement, or at least result in a quicker, less costly resolution of the lawsuit.

Finally, the currently pending Patent Reform Act would change the U.S. patent system from a “first-to-invent” to a “first-inventor-to-file” system. If adopted, this change would mean that your competitor, having developed the widget independently, may be able to obtain a patent and stop you from selling your widget. Even though your company may have been first to invent, if you didn’t file a patent application or filed after your competitor did so, the patent could properly be granted to your competitor as the first inventor to file.

Jeffrey Szuma and Michael Brodbine are Shareholders at Brooks Kushman P.C. in Southfield, Mich. Jeff Szuma has an electrical engineering background and 20 years of experience prosecuting patent applications and investigating patent infringement and validity issues in a variety of electrical technologies. He can be reached at [email protected]. Mike Brodbine is the head of Brooks-Kushman’s Patent Prosecution Department. He has extensive experience in patent prosecution of chemical related technologies, as well as patent infringement and validity investigations and can be reached at [email protected].