Investing in Inventing: A Patent Process Primer for Startups

August 27, 2018

Trevor Day, Neil P. Ferraro

(As published in IP Watchdog)

Inventions that are worth protecting are at the core of almost every new technology startup. For a newly formed company, it can be daunting to evaluate the amount of time and effort that should go into protecting these inventions. While overlooking the patent process may be enticing to startup founders still deep in research and development, it is important to understand the basics and what to expect when the time comes to seek patent protection. This article will discuss the various stages of the patent process, including patentability searches, patent application drafting, and prosecution of the patent application to issuance. It will also discuss important decisions a technology startup must make when seeking patent protection. Many people have heard that the patent process begins with a patent application, but in reality it begins with an invention. If you have a new or early-stage technology startup or are planning on starting one, chances are this invention forms the core of your business plan for long-term success. As the startup and business plan are formed, a question undoubtedly arises: how do I protect my invention and what steps can I take now with limited funding?

1. The Patentability Search

Before taking any other steps, it is always a good idea to understand the intellectual property landscape surrounding the particular technology area of your invention. Searching public databases of published patent applications and granted patents helps you quickly establish how crowded the space is. During the search, you may find a published patent application or issued patent that describes a closely related invention. Other times, you may find no references that describe technology remotely close to your invention. In either case, the key to this patentability searching is helping to define the scope of protection you can get for your invention. The scope of patent coverage is limited to the inventive aspects which are novel and non-obvious in view of publicly available information. Defining this scope early is critical to making a decision on whether it is worth it to spend a significant amount of time and money to pursue a patent.

Determining the desired protection scope will help you formulate an application and prosecution strategy going forward. If you find your invention previously described in a patent application or granted patent, it wouldn’t make sense to go through the time and expense of obtaining a patent. On the other hand, if you find your invention is novel and key aspects are worth protecting for commercial success, it may be time to move to the next step of the patent process by preparing a provisional patent application.

2. The Provisional Patent Application

Once you have determined the scope of protection you want to pursue, it is time to move on to drafting a patent application. A provisional patent application is typically recommended to early-stage startups for two primary reasons: it postpones significant costs of patent prosecution by up to one year, and it secures a filing date for your invention. These benefits are due largely to the fact that a provisional application is filed with the USPTO but remains unpublished and unexamined. The USPTO effectively holds your provisional application in confidence for up to a year, by which point you must file a non-provisional application. You also gain the right to post a “Patent Pending” notice on any products you produce, which may be helpful in marketing or discouraging others from copying your invention.

So how does filing a provisional patent postpone costs? Simply put, non-provisional patent prosecution is expensive, and many of those costs are derived from a repeated back and forth with a patent examiner in addition to more expensive fees paid to the USPTO . As a provisional application is unexamined, these additional costs are not incurred for the duration of pendency of the provisional application, effectively delaying them for up to a year. Also, the formal requirements for a provisional application are significantly reduced, which leads some startups to seek a “cheap” or “cover-sheet” provisional application with limited description, oftentimes drawn from an internal technical document or memo. While this strategy can reduce the immediate costs of the provisional application significantly, it is critical to remember a provisional application can only protect the invention enabled by its description. It is important to think of a provisional application as a method to postpone the major costs of patent prosecution, not the costs of writing the patent application itself. The old adage “you get what you pay for” still holds true for drafting provisional applications.

The most important part of a provisional patent is that it secures a filing date. Ever since the US switched from a first-to-invent to a first-inventor-to-file system in 2013, establishing this filing date is absolutely critical to securing the rights of your invention. Getting the earliest filing date means you get the rights to the invention, even if someone else independently invents and files a patent on the same invention. The inverse is also true; waiting to file an application carries the risk of letting someone else beat you to the patent office. A provisional patent application is the most cost-effective way to secure rights in the first-to-file system. The filing date of the application also determines what prior art may be used against your eventual non-provisional application. This is extremely beneficial, as any documents published after you file your provisional patent can’t be used as prior art against what is filed in your provisional application, whether the published document is created by you or by someone else.

At a minimum, your provisional patent application needs to provide a description of the invention which is adequate to enable someone to practice the invention. Ideally, your provisional patent application will fully describe and claim the invention in detail as you would for a non-provisional patent application. Not only does this ensure the full benefit of the provisional application, it makes filing the non-provisional application significantly easier when the time comes.

3. The Non-Provisional Patent Application

At some point within one year of filing your provisional application, a non-provisional application must be filed if you wish to preserve your patent rights. At a bare minimum, the non-provisional application should incorporate all of the material from the provisional application reformatted to meet the USPTO requirements. In general, the non-provisional application should be written to address any shortfalls of the description of the provisional application. A good non-provisional application will need a detailed specification, a claim set including any claims filed in the provisional application as well as any new claims, and a comprehensive set of drawings. Of course, your non-provisional application must also include a clear statement claiming the benefit of the provisional application.

As a technology startup, it is more than likely that in the year since the provisional application has been filed, significant research and development has been completed on the invention. In fact, it is rare that the first prototype of the invention is the one that will go to market. If updates have been made to the invention, the non-provisional application should be used to supplement the provisional application with additional detail that improved the invention in the intervening year. Oftentimes a startup will also have gotten a better feel for the competitive landscape and alternative designs. If this is the case, the non-provisional patent application should include these alternative examples and embodiments. The good news is that assuming your provisional patent included substantial material and claims, the non-provisional application updates should be relatively straightforward and easy to prepare.

4. Patent Prosecution

Once your non-provisional patent application is ready and properly filed (along with a listing of the most relevant prior art uncovered during the patentability search), it is time to hurry up and wait, as most patent applications will not be examined for one or more years. The USPTO currently has a backlog of over 500,000 patent applications, so it is unlikely yours will be examined quickly. It is possible to jump the line and receive an earlier examination using the USPTO Track One program; however, this strategy is expensive, limits the number and type of claims, and is not often utilized without a significant reason, like imminent licensing or potential litigation.

Whether or not you choose accelerated examination, at some point the patent examiner assigned to your application will issue a first office action. The office action will take the form of a Restriction or Election Requirement, a Non-Final Office Action, or a Notice of Allowance. Each of these actions require a response to keep the application pending and non-abandoned.

A Restriction or Election Requirement is issued when the examiner identifies more than one independent invention in the claims. In the case of a Restriction Requirement, the examiner has identified more than one invention that is distinct as claimed. In an Election Requirement, the examiner has identified multiple related “species” of an invention. For example, if you claim both a helicopter and an airplane in a single claim set under the broader category of a flying machine, the examiner is likely to require you to choose either the helicopter or airplane as a species of the flying machine. In either case, the examiner is looking to reduce his or her burden, as he or she has a limited number of hours to search and prepare an office action. A response to the Restriction or Election Requirement necessitates a selection between the inventions or species the examiner identified.

After the response to the Restriction or Election Requirement, or as a first office action, the examiner will typically issue a Non-Final Office Action that rejects or objects to one or more of the pending claims. The examiner may cite the most relevant prior art references and explain why your claims are unallowable, whether for novelty or obviousness reasons. The examiner may also reject or object to the claims over clarity issues and other informalities. In the response to the Non-Final Office Action, the claims may be amended to overcome the cited references, or arguments may be presented that explain to the examiner why the claims are allowable in view of the cited references. An examiner interview may also be conducted prior to filing the response, so that the rejections, cited prior art references, and proposed amendments may be discussed. The examiner interview is an invaluable tool for understanding the examiner’s position and determining an efficient course of action. In any case, a response to the Non-Final Office Action must be filed within six months, three of which are free months while the second three require an additional late fee.

As the examiner considers your response, he or she can determine whether to allow the claims, maintain the rejection, or issue a new rejection. If the examiner believes your claims remain unallowable, he or she will issue a Final Office Action. In cases where you presented arguments without significant claim amendments, the Final Office Action may maintain the prior rejection and include reasoning for why your arguments were unsuccessful. If claim amendments were made, the examiner may prepare a new rejection based on additional references or different reasoning. In either case, a response must be filed once again within six months of the mailing date of the Final Office Action. Multiple options are open for continuing prosecution of the application. An After Final Consideration Program request, an appeal, a Request for Continued Examination, or a continuation application may be filed, each of which are used in specific circumstances. In many cases, the options for response may reset prosecution with the payment of additional fees, so that the next office action will be a Non-Final Office Action or a Notice of Allowance. Depending on the importance of the claims and the particular strategy, this may turn into a long back-and-forth with the examiner until the claims are finally allowed or the application is abandoned.

Assuming you addressed any rejections and objections in the most recent office action, or the examiner didn’t have any further objections or rejections, you will receive a Notice of Allowance. A Notice of Allowance is good news, as the examiner has indicated that each of your pending claims is allowable and that you may soon be the owner of a granted patent. Before you get your patent, however, you must pay any outstanding fees, pay an issuance fee, and supplement your application with any required documents so that it is complete. An incomplete application will not issue, even if the claims are allowable, so ensuring the application is complete and correct is paramount. Once you have paid the issuance fee, the application moves into issuance and you can sit back and await your patent.

5. Issuance

As you await your patent, the USPTO will send you a notification of your patent number, and within about four weeks you will receive your patent. The only thing left to do to maintain your patent rights is the timely payment of maintenance fees to keep your patent in force beyond four, eight, and twelve years. With the payment of these fees in a timely manner, the patent will be in force for twenty years from the filing date of the non-provisional application, plus any adjustments caused by delay on the part of the USPTO. You can finally rest easy knowing your invention is protected – congratulations!

Conclusion

The patent process is long and complex, but well worth the effort if it means protecting your invention and your new company. Key decisions made along the way can help simplify future steps in the process and make obtaining a patent significantly more efficient. Early on, determining a patent scope through patentability searches can help narrow a patent application to the important novel aspects that are most worthwhile to protect. Similarly, preparing a thorough provisional application can make the non-provisional application preparation much simpler and afford better protection against later published works or filings by others. By thinking about these key decisions ahead of time and being aware of the patent process, you can be more prepared when the time comes to seek protection for your invention.