Keeping Competitors Away From Your Game-changing Product

By Steve Gruber

Here’s the scenario: Your company is about to launch an innovative product or high-tech process. Then you find out through your marketing or sales group that another company has come out with a product that is nearly identical to yours, or even an exact copy.

Unfortunately for innovative companies, copycatting is ubiquitous. Polymer-based products are notoriously easy to replicate at low cost, and some foreign entities will even get their hands on the mold used to fabricate a company’s product to make identical copies.

It can be very insidious.

Clients see a competing product with similar functionality to their own and immediately believe it’s a copy, even if the competitor developed the functionality independently. At that point, they don’t care how the attorneys deal with the situation — the attorneys are expected to find a way to shut down the knockoff.

Yet, without preemptive legal efforts, this situation can be tricky to handle, especially after U.S. patent laws drastically changed in 2013.

Why Prevention is Important: The 2013 Patent Law That Changed the Game

The America Invents Act, which took effect in 2013, switched the U.S. from a “first-to-invent” patenting system to a “first-to-file” system, which is the system that most of the rest of the world uses.

We had been on a system where regardless of who filed a patent first, you could go back after the fact and prove to the patent office that you were actually the first to invent (e.g., by providing a lab notebook with dated figures showing the invention), even if you were the second to file.

Back then, record keeping was critical. You often saw the U.S. Patent and Trademark Office (USPTO) and legal battles over the first-to-invent question, so keeping notebooks and other documentation of inventions was very important.

These days, the patent office generally awards the winner’s trophy to whoever filed first. Examiners pay little attention to a notebook showing that you invented something first; because you didn’t file it with the office first, you lose.

Complicating matters is that as soon as someone has sold a product, that becomes a bar date to your patent filings. If you don’t have anything on file when the competitor releases their product, your own filing will be barred by the competitor’s sale — even if it seems to copy your earlier invention.

Competitor-proofing Your Products: Your Patenting Options

A lot of people look at patent protection and see big dollar signs. But without professional advice early on, even if you do a lot of the patent work yourself, you could end up spending just as much money to fix patent problems retroactively. Worse, you could see your company undervalued by millions or tens of millions of dollars for a small savings in legal fees.

First, get advice

With the first-to-file system and the on-sale bar, if you don’t get the proper applications on file before your product release, you risk being permanently barred from international protection and may face challenges in the U.S. that can’t be fixed in the future.

That’s why it is really important to get legal advice early on. What to file for and when can be more valuable guidance than the drafting of the application in some cases, and doesn’t take a lot of your attorney’s time to analyze. At least getting that advice allows you to then figure out what kind of patent, and what timeline for protection, is in your budget.

Consider provisional filings

Our firm pushes provisional filings often and quickly after an invention has arisen. It not only helps to keep costs down but also allows you a better chance of protecting inventions that change over time or may not have seemed important early in a product’s development cycle.

Provisional filings have few formal requirements and aren’t ever examined, so disclosure is straightforward and inexpensive. After filing, you have a 12-month period within which to decide whether the invention is sufficiently valuable, or even whether the product the invention was destined for will ever see the light of day.

For inventions that don’t have much value, you can abandon those provisionals and the USPTO will never publish those applications.

For the rest, you can then determine which inventions/products to sink the majority of IP resources into and which ones to allocate smaller amounts to. Either way, that 12-month window often sees huge changes in the invention, the product, or both. The ability to change your disclosure and strategy up to 12 months after the original idea was created can make a big difference.

This provisional-first strategy also prevents you from having to select winners too early in the process, potentially sinking IP resources into losers while inadvertently foregoing protection on ideas that later turned into winners.

Visual and functional patents

Design patents provide another low-cost way to preempt copying. While utility patents protect functional aspects of a design, design patents protect visual or aesthetic aspects.

For instance, a car company may have utility patents on aspects of an engine that is able to produce more horsepower with fewer cylinders or tires that are able to stay inflated after getting punctured. They will also have design patents on the shape of the car.

Copycats may knock off the visual in some cases and the functional in others, but have a harder time when both the visual and functional aspects of a product are protected. So, ideally, you want some combination of functional utility patents and visual design patents.

Design patents are also far easier to draft and push through the Patent Office, so they provide a fast and inexpensive way to broaden protection for new products.

The continued importance of lab notebooks

Even though notebooks and other evidence of invention are no longer helpful in the race to file a patent, they still can be valuable ammo when a copycat beats you to market.

Let’s say you’re in discussions with another company about co-developing a product. Things break down, the deal sours, and two months later, that same company releases a product remarkably similar to the product that you were discussing behind closed doors.

While this public release may bar you from pursuing your own patent protection, you may have a good footing to claw back some losses based on trade secret misappropriation and invalidation of any patents that the competitor tries to file.

These types of legal claims often turn on your ability to prove that the product/invention was actually your invention and was stolen by a competitor via a former employee or discussions that occurred under a non-disclosure agreement.

That’s where the notebooks come into play. By showing evidence of your conception date and disclosure details to the competitor, you can prove to the court or USPTO that your team developed the concept first and that you disclosed the idea to the competitor, thereby enhancing a misappropriation or patent invalidation claim.

Use PR to your advantage

PR can do a lot to protect your intellectual property — even if you don’t have any issued patents, even if you haven’t put a lot of money into it, even if you just have a strategy of provisionally filing for your key product lines.

If somebody gets to market before you do, you at least have something in your quiver for the PR department to go out and say, “They may have been first to market, but we’re the real innovators because our product is patent pending.”

Consumers and other businesses typically don’t see the distinction between a provisional filing, a non-provisional filing, and an issued filing, let alone between designs and utility protection. Nor do they have the time or ability to determine what the claims of your patent say. So, merely being able to spread the word that you have a provisional patent or design patent on file is usually a great deterrent and a great PR weapon against potential copycats.

Given the various strategies to preempt copycats and subtle deadlines relative to each, it is really important to get legal counsel’s advice early on. I try to inform innovators and creators whenever I can of the importance of considering these issues early in the product cycle. The costs of waiting can be many multiples of the small legal investment needed to address them up front.

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