Small business: Rules change for bright ideas

This past September, President Barack Obama signed the America Invents Act, which marked a significant overhaul to the U.S. patent system.

The changes are still being phased in, with one of the most significant -- the shift from a first-to-invent system to a first-to-file system -- not taking full effect until next March.

"This is the most significant change to our patent system since 1952," explains John Villasenor, a nonresident senior fellow at the Brookings Institution, a public policy organization in Washington, and a professor of electrical engineering at UCLA.

Part of its intent is to better align the U.S. system with those used elsewhere and to speed up the process, say experts. The United States Patent and Trademark Office outlines the new law at uspto.gov.

Fast Track: Specifically, the law establishes a new Fast Track option that will reduce the wait time from an average of three years to an average of 12 months. The Fast Track fee is $4,800 for large entities, with reductions offered for small entities and independent inventors.

"It will hopefully speed things up," says Brian Fried, a Melville inventor and host of Got Invention Radio, a Web-based weekly talk show, who's had five patents issued and has five applications pending.

Still, the fee for expediting the process could be prohibitive for small inventors who oftentimes can barely afford to file a basic application, says patent attorney David Aker, an adjunct law professor at the Touro College law center in Central Islip and of counsel to Ohlandt Greeley Ruggiero & Perle Llp in Stamford, Conn. Basic filing fees start at $250 to $380 for large entities and $125 to $190 for small entities, depending on the type of patent.

One of the most talked-about changes to the law is the switch to a first-to-file system, for applications filed on or after March 16, 2013, says Villasenor. Previously, the inventor who could prove he or she was the first to invent -- via a lab notebook, drawings, etc. -- would win the patent over a competitor, explains Aker. As of March 16, it will go to the inventor who files a patent application first.

The first-to-file is a bit misleading, though, says Villasenor, noting the law provides for a one-year grace period for an inventor or business that makes a "public disclosure" of their invention before filing a patent application. Disclosures can include presentations and demonstrations at trade shows and official postings on company websites, says Villasenor, who offers more insight at fastcompany .com/user/john-villasenor.

It's still somewhat unclear what will be deemed sufficient disclosure, adds Aker, noting inventors must be careful with making a public disclosure because it can negate their rights to file for a patent internationally.

"It's very complicated," says Harry R. Burger, a Huntington-based mechanical engineer and inventor. "In order to make sense of the actual text of the legislation you basically have to be a lawyer."

Lots of uncertainty: "Part of the problem is when you make big systematic changes like that, the effects of those changes are even more difficult to predict," says Burger.

Fried, founder of the Suffolk and Nassau chapters of the Inventors and Entrepreneurs Club, is advising inventors not to rush. Use the same sound principles you would have previously, including doing the research to make sure your intellectual property is not someone else's, and conducting market research.

Even with the new law, inventors can still file a provisional patent application, which protects your invention for a year while buying time to file a full patent application, he says.

And the basic fundamentals of patent law remain unchanged. "You still need to create something that is new, useful and not obvious," says Aker.