Inventors may want to market their invention first and file the patent application later to save money on legal fees. This plan, however, is problematic. If, for example, a third party files a patent application before the inventor or publicly markets the same product, the inventor would be prevented from being able to secure a patent at all. Moreover, it is possible that the inventor would discover this much later after having invested a substantial sum of time and money, which would go to waste because the third party would be awarded the patent, not you.
There are three bars to patentability: public use, printed publication, and offer for sale (see Figure 2 below). Bars to patentability specify the conditions under which the one-year time period begins before the inventor must file a patent application or be barred from seeking patent protection forever. These conditions are often associated with marketing efforts of the product.
One-year personal grace period
Before I explain each of the bars to patentability in detail, it is important to understand why I call the “one-year grace period” the “one-year personal grace period.” U.S. patent laws permit inventors to publicly use, offer for sale, and distribute a printed publication of their invention for one year before the inventor must file the patent application. The inventor does not need to file a patent application before marketing the product, but may legally wait up to one year after the start of marketing efforts before filing the patent application. If an application is not filed within one year of starting marketing efforts, the inventor is barred forever from seeking patent protection.
Taking advantage of the one-year grace period is not recommended. Although nothing the inventor does personally during that one-year period will bar the inventor from seeking a patent on the invention, the same is not true for the actions of a third-party. If a third-party gives a public demonstration, makes an offer for sale, distributes a printed publication, or files a patent application related to the invention before the inventor files his or her own patent application with the USPTO, the third-party’s actions would be considered prior art and may invalidate the inventor’s patent, as will be discussed below in the section entitled “First-Inventor-to-File Regime.” This is true even if the third-party saw the inventor’s invention and copied it. The inventor may have recourse against the third-party, but such recourse would require an expenditure of time and money. The unpredictable nature of litigation and related costs would make seeking such redress economically infeasible. Hence, the one-year grace period should be treated as being solely personal to the inventor and not necessarily beneficial for the inventor because the one-year grace period does not protect you against the actions of a third-party.
The Three Bars to Patentability: Public use, printed publication, and offer for sale
“Public use” includes any use of the invention where the public has access to such use. Non-public uses may be considered public use even if no one is around to see the product being used. For example, use of an invention by a person who is not under any limitation, restriction, or obligation of secrecy to the inventor would be considered a public use even if the use was behind closed doors.
For example, in the case New Railhead Manufacturing LLC v. Vermeer Manufacturing Co.,7 New Railhead, the patent owner, sued Vermeer for patent infringement of a drill bit and a method of using the bit to drill rock formations. As part of the proceedings, the court considered the types of uses that New Railhead (the patent owner) had engaged in more than one year before the filing of its patent application that could have been considered a public use. The court considered New Railhead’s drill bit and method of using the bit to drill rock formations to be in public use even though it was used underground and out of plain sight, and they lost the case. The result of this case means that even if an invention is used where it cannot be seen by others (i.e., not openly in public), the invention may still be considered in public use. Inventors should bear in mind that even if an invention’s use is not visible to the public, it could still be considered public.
The “experimental use” exception is an exception to the public use bar. It applies when the invention is still being tested and use of the invention in public may be necessary to properly test its functionality. However, once proof of concept has been established through testing, experimentation should stop. Otherwise, any continued use may cease to qualify as “experimental use” and constitute public use, which would bar the inventor from securing the patent if the public use occurred for more than one year before the filing of the patent application. Even if an inventor is using the invention for experimental purposes, he or she should still submit a patent application within one year of starting any public use because it is difficult to know when the exception no longer applies. By filing within one year of the start of use (even experimental), the inventor may avoid potential attacks on the validity of the patent based on whether a use is a public or experimental.
A “printed publication” is a physical or electronic document that is indexed, catalogued, and shelved so that it is publicly accessible. In other words, it is any information that is printed on a piece of paper or stored electronically, available to the public, and categorized so that one of ordinary skill could locate such information if interested. Websites, brochures, and flyers are some examples of printed publications. In the past, most legal disputes over whether a document is a printed publication involved thesis papers stored in university libraries. A thesis paper would be considered a printed publication if it was catalogued by subject matter in a way that the public could access it. Currently, most issues related to whether a document is a printed publication involve online publications, such as online forums. The same general standard discussed above applies.
Offer for Sale
An “offer for sale” is an offer from an inventor to another person or entity to purchase a product embodying the invention. Even if the potential buyer does not accept the offer, it still qualifies as an offer for sale.
The following is counterintuitive. Even if an offer is not from an inventor to another person or entity, it may nonetheless be considered an offer for sale. For example, once the invention has moved out of the experimentation stage, the inventor may outsource its manufacturing and place an order for a production run. The contract from the third-party manufacturing vendor to the inventor may be considered an offer for sale.
In highly contested litigation, the dates on such purchase orders may be determinative as to whether a patent is valid or invalid. In Hamilton v. Sunbeam,8 the patent owner (Hamilton) sued the accused infringer (Sunbeam) for patent infringement of its slow cooker. It was discovered that Hamilton had issued a purchase order to its manufacturing vendor to build its slow cooker more than one year before Hamilton had submitted a patent application. In response to the purchase order, the manufacturing vendor indicated that it was ready to start the manufacturing process and therefore ready to sell the units to the patent holder (i.e., Hamilton). For the court, this constituted an offer of sale and Hamilton lost the case to Sunbeam because Hamilton did not file a patent application less than one year before the offer for sale date (i.e., date of the purchase order from the manufacturer).
Hamilton was not commercializing the invention in the normal sense of making a profit from consumers. However, because Hamilton had ordered units to sell them to the general public, and the manufacturing vendor was ready to sell the units to the patentee, the courts characterized the contract from the manufacturing vendor to the inventor as an offer to sell. The court ruled that this triggered the one- year period in which the inventor needed to file the corresponding patent application. Hamilton lost because the patent application for the slow cooker was filed over a year after ordering units from the manufacturer for sale.
Therefore, it is important to keep track of any “offers of sale” including the dates of manufacturing contracts for the invention, and to file a patent application within one year of any such transaction to avoid this bar of patentability.
Side Note: Another risk of using the one-year personal grace period is the potential waiver of foreign patent protection or loss of ability to seek a patent in foreign countries. As will be discussed in Chapter 6, many foreign countries require what is known as “absolute novelty,” which requires the inventor to initiate marketing efforts after filing the patent application. The United States is a “relative novelty” country, because U.S. patent laws allow for public disclosure of the invention through marketing efforts for a limited, one-year period before the patent application must be filed.
The “first-inventor-to-file regime” dictates that the first inventor to file a patent application with the USPTO is awarded the patent regardless of who was the first to invent or conceive of the invention. The rules of the first-inventor-to-file regime (FITF) must be understood in conjunction with the one- year personal grace period because the FITF rules greatly reduce any benefit of using the one-year personal grace period.
The one-year personal grace period does not protect you against a third party that files a patent application on the same or similar idea as your invention. Under the FITF rules, they would be awarded the patent, not you. This was not the case under the prior first-to-invent regime.
Third parties can also interfere with the original inventor’s ability to secure a patent by engaging in marketing efforts before the original inventor has submitted a patent application (see Figure 2). This is true even if the third party’s activities are based on the inventor’s information. Any public use, offer for sale, or printed publication by a third-party that occurs prior to the filing of the original inventor’s patent application is considered prior art and bars the original inventor from securing a patent. A third party’s marketing effort that occur during the original inventor’s one-year grace period before the inventor files a patent application can therefore bar the original inventor from patenting his or her invention.
An inventor risks third-party interference if he or she markets an invention during the one-year grace period before filing the patent application. The third-party may observe the inventor’s marketing efforts and file their own patent application first. The first-inventor-to-file regime does not take into consideration the date of an inventor’s conception. Instead, the USPTO only consider the filing dates of the patent applications when issuing a patent. Although there may be some recourse against a third-party that submits a patent application on another inventor’s product, such recourse may be expensive to prove and the outcome unpredictable. Therefore, most inventors do not seek such recourse and instead would most likely quit marketing and selling their product to avoid patent infringement liability.
Continuing any marketing or selling of one’s product after a third-party has submitted a patent application risks infringing on the patent rights of the first-to-file inventor if, and when, the patent application matures into a patent. The inventor may believe he or she is protected by a marketing date (e.g., public use, offer for sale, or printed publication) that falls prior to the filing date of the third-party’s patent application and that the inventor’s marketing would invalidate the third-party’s patent. However, in practice, patent litigation would not occur until many years later and the inventor would have to prove that his or her marketing efforts constitute prior art that invalidates the third-party’s patent. This may seem relatively easy, but over the course of years memories fade, documents are lost, and the ability of the inventor to provide prior use evidence may be difficult or impossible. The bottom line is that the original inventor has to deal with an issued patent owned by a third-party. Any litigation based on the third-party’s patent must still be addressed and will cost time and money.
One form of recourse is a derivation proceeding in which the inventor must prove that the third-party inventor (i.e., first to file inventor) derived their patented invention from the “first” inventor. If successful, the “first” inventor is awarded the patent instead of the third-party that filed first. However, a stringent reading of the law appears to require the “first” inventor to prove there was a chain of communication with the third-party by which the third-party derived the invention from the original inventor. This chain of communication is difficult to prove, especially when sufficient documentation of marketing efforts may be lacking.