There are many legal aspects regarding how much one can reveal about his or her invention prior to filing a patent application in order to preserve the inventor’s patent rights. Suffice it to say that the rule of thumb among intellectual property firms is “the less the better” in the context of an IP strategy.
Generally, in the USPTO there are provisions for publication/presentation of an invention, as well as sale of the invention. The USPTO rules allow a grace period of one year prior to the filing of a patent application for any kind of public activity related to the invention. A “first to file” policy regarding intellectual-property rights is now the norm in most parts of the world. Considering the impact of the “global village” in which we live – with pervasive communication that crosses all national borders – it would be wise to keep your invention disclosure discreet until you have filed a patent application.
Besides deferring and limiting the up-front expenses, the main benefit to filing a provisional patent application (PPA) is that it allows one to make refinements while preserving the original date of invention based on the filing date of the PPA. The inventor then has a year to prepare how to advance the invention into value-generating IP.
Furthermore, by securing provisional patent protection, one is able to discuss the invention through confidential disclosure with others for purposes of determining technological improvements, market demand, and investor interest. However, simply because one has filed a PPA does not mean that it should be shared freely with others. Remember, in the case of someone who chooses not to file a follow-on, non-provisional patent application, the PPA is never disclosed. Thus, one could refile another PPA or a non-provisional patent application on the same invention later. However, once it has been freely disclosed, it may be more difficult or virtually impossible – weakening an IP strategy.
So, how can the PPA disclosure be shared? The important point is that it should remain undisclosed to the public. This can easily be accomplished by having all entities of interest execute a non-disclosure agreement (NDA) prior to any exchange of confidential information. It is important to emphasize that such confidential information may extend beyond the scope of the PPA disclosure itself, including trade secrets (such as know-how related to invention manufacture, operation, or implementation). NDAs typically define the parties of interest, the nature and scope of the confidential information to be exchanged, and terms including limitations on the use of such confidential disclosure. Intellectual property firms are frequently retained to draft such NDAs.
One aspect that is important to consider before executing an NDA is to consider who is your party of interest. Is it simply the inventor(s) on a patent application, is it a different entity such as a company, or both? Do you already have private investors? What are they expecting in return for their investment? Furthermore, assuming that your invention does ultimately generate revenue, there are tax implications related to whoever owns the patent rights and when the rights were acquired.
If these issues are determined to be relevant, the inventors can assign their patent rights, either in part or in full, by way of an executed contract to whichever entity they choose. While it is possible to assign patent rights to an entity that has not been incorporated yet, care should be taken that such an assignment is prepared properly according to the legal jurisdiction of the locale by competent practitioners at intellectual property firms where it is executed (or is going to be enforced) in order to avoid any subsequent questions raised regarding validity or enforceability. Assignment of ownership of intellectual property can also be formally recorded in national patent offices.
A non-compete agreement (NCA) is frequently included as clauses in the NDA to cover other aspects of confidential information that may be conveyed during the engagement of the parties as part of the overarching IP strategy. For example, a supplier or customer list may be provided by the patent owners in order to generate greater investor interest or confidence in the business-plan implementation. The terms of the NCA can be used to prevent the recipient of the information from approaching such contacts directly without the express permission of the discloser.
FlashPoint IP, a leader among intellectual property firms, provides legal counsel in all types of contract preparation, review, and revision, whether you are looking for a contract to be drafted, or have received a contract that you want reviewed and modified with your best interest in mind. Our patent attorneys are adept at synthesizing the many facets needed to create a winning formula for your IP. Contact us to discuss your options regarding IP strategy and positioning, and how best to secure your rights.
