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When employees at your company conceive of and develop new devices, you might want to obtain a patent even before knowing if those devices will improve your business. That's especially true if the device is a valuable asset and provides a competitive advantage over your competitors. The American patent system is undergoing a major transformation as a result of the America Invents Act (AIA), which was signed into law last September. Now it may be in your best interest to file a patent application for your innovations as soon as you can. This might prevent issues surrounding the inventorship of your innovation should you ever need to litigate your patent.

The patent system in the United States was a "first-to-invent" system that was geared toward awarding a patent to the first inventor, regardless of whether a patent application was filed after a later-inventing competitor. As such, in many patent infringement lawsuits, the parties would spend a great deal of time and energy proving to the court who was the true inventor. For example, companies would disclose lab notebooks or other types of documentation to provide they were first to conceive the invention. We saw such disclosures int he Apple vs. Samsung showdown in which Apple asserted that Samsung stole its ideas and infringed on Apple's patents. Samsung argued that it had developed similar ideas first. Documents and product plans from both parties were disclosed to show Apple's journey in the development of the first iPhone and Samsung's plans to make a slab-style phone that does not use push buttons. This battle went on for weeks, as both sides tried to prove to a jury that they alone conceived the idea for a touchscreen smartphone device. Apple spent millions of dollars to fight this case and was able to recover a little over $1 billion pursuant to the recent judgment. Moreover, Apple may also succeed in preventing Samsung's smartphone and tablet devices from being sold in the United States. We may even see Apple go after every other phone and tablet manufacturer with a similar lawsuit. This case really exemplifies how valuable a patent may be for your company.

You may wonder, however, whether such litigation matters may be resolved expeditiously if the inventorship issues could easily be addressed, without having to spend days recovering information and presenting it to the court. The AIA might provide an answer. Under the law, the United States will be saying goodbye to the first-to-invent patent system and will now be similar to many other countries by implementing a "first-to-file" system, which is geared towards awarding the patent to the inventor who files the application first. This provision of the AIA will go into effect March 16, 2013.

Had this provisions been in effect many years ago, Apple may have had an easier time proving its case. What we do know now is that if your company is selling innovative devices in the marketplace, you should really be thinking about this new law. While patent applications filed before the above-referenced date can still have the benefits of the first-to-invent system, it may be prudent to protect your company's valuable technology and proceed with filing a patent application. You want to show that you took action to protect your rights first.

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Published In: Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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