Startups are always worried that they might do something that will jeopardize their ability to seek patent protection for their idea or invention.
One area that startups and inventors often falter is in the bars to patentability. There are three bars to patentability. They are the offer for sale, public use and the printed publication. Upon the first instance of any one of these three events, the inventors have one year (i.e., otherwise known as the one year time bar) to file a patent application in the United States. After the one year, they have abandoned their ability to obtain a patent on the invention.
The reason that many inventors falter in this area is that it is difficult to determine which events cause the one year time bar to start running. The inventor is busy designing, researching, manufacturing, redesigning, etc. the product. In all of this effort and business, many thing are said and done wherein its legal significance is unknown. As a result, the inventor and patent attorney may believe that the one year starts to tick when the product is offered for sale to the world (e.g., website launch) and file a patent application right before the one year time period ends. Unfortunately, if there is an earlier trigger event, then the patent application may have been filed too late.
When exactly does the first offer for sale occur? You must look back and track all of your conversations. Certainly, when you place your product on the web with a “Buy Now” button, this is an offer for sale. When you approach a buyer at a retail store to purchase your product to stock their shelves, this is also an offer for sale.
Could your purchase order to a manufacturer to build your product trigger the start of the one year time bar? The answer is yes. The patent statute does not require the offer for sale to be your offer for sale. It can be your manufacturer’s offer to sell you your own product. As such, when you place a purchase order with a manufacturer to injection mold your product or otherwise build your product for you, your offer to buy if accepted is coupled to the manufacturer’s offer to sell your own product to you. Since your purchase order to your manufacturer is oftentimes earlier than your offer to regular consumers or to the retail shops, the filing of your patent application just prior to the one year anniversary calculated from the public launch of your product may be too late. The one year time period should have been calculated from the date of the purchase order to your manufacturer.
When you placed your purchase order with the manufacturer, you were making an offer to buy, not an offer to sell. So how does your purchase order translate into an offer to sell? The offer to sell was not from you. Rather, the offer to sell was from the manufacturer to you.
In Hamilton v. Sunbeam, the patentee issued a purchase order to its vendor to build a patented slow cooker. In response, the vendor indicated that it was ready to start the manufacturing process. In other words, the vendor confirmed that they were ready to sell (i.e., offer to sell) the units to the patentee. The patentee filed a patent application more than one year after the date of the purchase order. The court invalidated the patent stating that there is no supplier except to the offer for sale bar to patentability.
In Hamilton, they were purchasing units for regular sale to the general public. The worrisome aspect of this case is whether purchase of a prototype from a vendor would trigger the one year time bar.
I invite you to contact me with your patent questions at (949) 433-0900 or [email protected]. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.