On the morning of Valentine's Day in 1876, Alexander Graham Bell filed a patent application for the telephone. It would become one of the most valuable patents ever issued. By incredible coincidence, Elisha Gray arrived at the patent office later that same day with his independently developed telephone invention. After years of litigation, Bell received the patent, launching the modern telecommunications industry.
Gray slipped into relative obscurity.
Of the 170 or so countries that issue patents on new and useful inventions, nearly all but the United States and the Philippines award patents to the first inventor to file an application. Under U.S. law, patent ownership is granted to the first person to invent a new product or method, not the first to file. But don't be fooled by the letter of the law. Like Elisha Gray, if you are late to the U.S. Patent Office, you will face an uphill battle to win ownership of the patent.
Recently, eBay was ordered to pay MercExhange $29.5 million for infringement of a method patent for operating the equivalent of an online flea market. Inventor Thomas Woolston filed his first MercExchange patent application in April 1995; eBay filed a few months later. Woolston received the patent and now, in addition to a large payout for past infringement, either will get royalties from eBay or will force eBay to change its model.
The legal process for disputing competing patents is called an interference proceeding. The rules are arcane, the costs high and the last person to file-called the junior party-starts this wrestling match from a truly inferior position. The essence of inventorship in the United States is that the patent is awarded to the inventor who can prove the first conception of the idea and the diligent reduction of the idea into practice. It is not enough to conceive an idea and sit on it for years, or even months, while another inventor files an application. For most inventors, producing meaningful proof of idea conception is very difficult, and often the filing of the patent application is the first clear documentation of the invention.
The best advice for any entrepreneur, then, is to file early and often. Filing patent applications on developing ideas does not need to be expensive. A provisional patent application can be self-prepared and submitted for around $80. Provisional applications can be thought of as placeholders; while they are never examined by the patent office, they provide a filing priority date for invention details provisionally disclosed.
John S. Ferrell is chairman of the Intellectual Property Practice Group at Carr & Ferrell LLP (Palo Alto, Calif.).
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