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First-Inventor-to-File system creates uncertainty

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Indiana Lawyer Focus

With the United States switching to a First-Inventor-to-File patent system, innovators developing new products in their garages and in small shops may have to invest in a good pair of running shoes.

Previously, the U.S. patent system operated under the First-to-Invent concept where, in broad terms, whoever invented the technology or pharmaceutical first got the patent pretty much regardless of when they filed the application. On March 16, 2013, the country converted to the First-Inventor-to-File system which means, loosely speaking, that the inventor who shows up at the patent office first will get the patent even if that individual was not the first to create the device.

blinkless-inverter-15col.jpg Daniel Rittmeyer, employee at Mechanical Electrical Systems, wires the patented Blinkless Grid Synchronization Inverter that can switch power sources without interruption. (Submitted photo)

This is the third major provision to be implemented of the 2011 Leahy-Smith America Invents Act. The U.S. Patent and Trademark Office hailed the switch as bringing greater transparency, predictably and simplicity to the patent granting process. In addition, it is another step in harmonizing U.S. patent law with that of other industrialized countries.

However, critics contend that switching systems gives larger, better-financed companies an advantage over smaller companies and start-ups. Some even go so far as to worry the rate of innovation in the U.S. will decline as a result.

Indiana attorneys do not foresee the end of American invention and creativity because of the new system, but they acknowledge the change could be harder on smaller entities than larger ones. What they are sure of, though, is that innovators, regardless of size, will have to get to the patent office quickly.

“It places a premium on filing a patent application as early as possible,” said Jason Houdek, partner at Krieg DeVault LLP. “There always was a premium on that, but it’s just more important now.”

houdek Houdek

Small v. large

Large businesses are not untouched by the switch to the First-Inventor-to-File system. They will have to make decisions sooner about what to patent, which could be difficult to do since the company will have an internal bureaucracy to maneuver.

Moreover, the push to file quickly may be more of an obstacle for some larger companies because of what they develop. For example, a pharmaceutical company filing too soon could be denied patent protection because it submitted an application before the research on the new drug was completed.

Schantz-Matthew.jpg Schantz

Still, the heavier burden of the new system will be born by smaller companies.

The garage innovators and little shops usually have neither the financial resources to immediately file a patent application nor the processes in place to capture what is being developed, said Matthew Schantz, attorney at Frost Brown Todd LLC. Small companies are less likely to have a system for the technicians or developers to alert management that the invention they are working on is special enough to warrant a patent.

“I think the effect on small inventors is unfortunate,” Schantz said, noting many of them have good innovations and are often thinking of something new. “They’ll have a hard time protecting it under the new system.”

Another burden will be marshalling the resources needed to file the patent application. Citing statistics from the American Intellectual Property Law Association, Schantz noted the average cost of filing a provisional patent application is $3,500. On top of that, filling out the application and providing the very detailed explanations of the new item require a company to put in a lot of time and effort.

Houdek agreed that companies, large and small, will have to dedicate more resources to filing a patent application in a shorter period of time, but the costs will probably not be an insurmountable hurdle to small entities. Compared to the costs of opening the company and running daily operations, the $1,000 to $5,000 needed to apply for a provisional patent is minor.

“I’m in the camp (the First-Inventor-to File system) does make it harder, but it is not an end to innovation mainly because the expense of starting a business is much greater than filing a patent application,” Houdek said.

This new patent system may be a wake-up call to the start-ups and solo inventors, said Charles Schmal, partner at Woodard Emhardt Moriarty McNett & Henry LLP. Often small entities do not think about filing applications and are not aware of the law, let alone of the change in patent system. Now, with the need to file first, they may start paying attention.

Protecting innovation

Mechanical Electrical Systems in Indianapolis received its first patent about six months ago. The company, founded in 1979, used off-the-shelf technology to create the Blinkless Grid Synchronization Inverter which can switch power sources without interruption.

Gary Gengenbach, engineer and a silent partner at the company, said MES decided to get a patent after colleagues encouraged them to protect the Blinkless product. He noted infringement could still happen, and then the company would then have to decide whether to put the resources into litigation.

schmal-chuck1.jpg Schmal

In the “First-Inventor-to-File” world, many small companies are worried that the bigger players will steal their ideas then hide behind the new patent system.

“I’m really skeptical whether, in the long term, that (having to file quickly) will be a problem for them,” Mark Janis, director of the Center of Intellectual Property Research at the Indiana University Maurer School of Law, said of smaller entities.

In the short term, he expects there to be some fear and uncertainty, but he is hopeful that after awhile those concerns will dissipate and the patent world will not be all that different from what it was before March 16.

“I think a half-dozen years from now, people will say this was not as big a change as some said,” Janis predicted.

The America Invents Act does contain protections for inventors who discover something first but arrive at the patent office second. Included in the provisions are the derivation proceedings.

According to the patent office, the new procedure will ensure that individuals who did not actually invent the item will not be able to obtain a patent. True inventors will be able to challenge any first applicant’s right to a patent by demonstrating that the first application is claiming an invention derived from the true inventor.

Still, the derivation proceeding, like the former interference proceeding, is complex and expensive. Schmal does not recommend that companies rely on the proceeding to protect their inventions but rather they should file their patents early.

Inventors can also gain some protection by publicly disclosing their discoveries. Publishing in a journal or making a presentation at a trade show could establish who conceived the idea first.

The true impact of the First-Inventor-to-File system will not be known for years, but Schantz sees potential benefits. He believes the need to patent more quickly will spur companies to capture their inventions sooner. On top of that, with the public disclosure rule, innovators will have an incentive to unveil their devices whether they ultimately apply for a patent or not.

All of the innovation becoming public will boost the American economy, Schantz said. The U.S. competes globally not by having the most unskilled labor but by being creative. If First-Inventor-to-File makes companies more aware of their inventions and gets these inventions into the public domain, that will be good for the economy.•

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  1. Am I the only one who sees that the City is essentially giving away the MSA site AND giving millions to build new buildings on the site when this site would be the perfect place for the Justice Complex? Across from City-County, check; keeping it centrally located, check, etc. It's my understanding that the GM site must be purchased by the City from Motors Liquidation Company. STOP WASTING WHAT WE ALREADY HAVE AND OUR TAX DOLLARS! The Ballard Administration has not been known for it's common sense...never voted for him and never will!

  2. This guy sounds like the classic molester/manipulator.

  3. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  4. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  5. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

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