The Importance of an Agreement Prior to Inventing

If you are going to be inventing with another person, you should consider an agreement with that person.  Here’s why.

Prior Art

“Prior art” in general refers to information that is publicly available prior to the date of invention.  Prior art would include, for example, a publication ( including a patent, published application, journal article, etc.).  Activities can also qualify as prior art.  Examples of such activities include if an invention is “known or used by others in this country” prior to the invention by a patent applicant, or if an invention was in public use or on sale in this country more than one year prior to an application for patent.

“Secret Prior Art”

There is also a type of prior art that is often referred to as “secret prior art.”  An inventor may do a diligent prior art search and discover no publications disclosing his invention.  A prior filed, and not yet published, application that discloses the same invention would still be prior art against his applicationunder 35 U.S.C. § 102(e).

For example, Inventor A conceived of an invention and filed a patent application for his invention on January 21, 2009.  Inventor B, having no knowledge of Inventor A or his activities, conceived of the same invention and filed a patent application for the invention on January 22, 2009.  Inventor A’s application will not be publicly available until at least July 21, 2010 ( when the application is published 18 months after filing).  Nevertheless, Inventor A’s application is prior art against Applicant B’s application, even though Applicant A’s application is secret and unknown to anyone by Applicant A.

Obviousness

In order to obtain a patent, an invention must not only be new or novel, it must also be non-obvious.  This means that it cannot be simply a slight modification or variation (or even an improvement) over the prior art, if such modification, variation, or improvement would have been obvious to one of ordinary skill in the art of the invention.  This can be a real problem when 102(e) “secret prior art” is taken into account.

Inventor C conceives of an invention and files a patent application for it on January 21, 2009.  Inventor D, having no knowledge of Inventor C’s invention or application, conceives of an improvement to Inventor C’s invention and files a patent application for it on January 22, 2009.  Inventor D has the same problem as Inventor B did above if the improvement would be obvious in light of Inventor C’s invention to one of ordinary skill in the art.  This is even true if Inventor C and Inventor D work together on the improvement (in which case the prior application may not technically be “secret” from Inventor D, but is still not publicly available).

103(c)

35 U.S.C. § 103(c) is intended to alleviate this problem.

(1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.

(2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if -

(A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;

(B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and

(C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

(3) For purposes of paragraph (2), the term “joint research agreement” means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

Subsection (1) refers to the situation where the invention and the improvement are owned by the same entity or that the inventors are both obligated to assign to the same entity.  So, as above, if both Inventor C and Inventor D had an obligation to assign their inventions to Acme Corp., this section precludes the use of Inventor C’s application as prior art for obviousness purposes against the application filed for the later improvement.

Subsection (2) refers to the situation where there is no single entity for assignment or obligation of assignment, but there is a joint research endeavor.  If there is a written agreement, and the improvement is invented as part of the agreement, then the original application cannot be used in an obviousness rejection of the application filed for the improvement.

Inventors Should Have an Agreement to Take Advantage of 103(c)

What does all this mean?  When inventors get together with the idea of inventing or creating a new product, it would behoove them to have at least a written joint research agreement.  In that case, none of the individual inventors prior inventions that might otherwise qualify as “secret prior art” can be used to reject any new inventions as obvious.

An even better scenario is when the inventors form a common entity, such as an LLC, to which they are obligated to assign all inventions.  This can avoid potential conflicts of interest when the inventors approach an attorney to represent them individually with respect to the inventions.  That, however, is a topic for another day.

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3 Responses to “The Importance of an Agreement Prior to Inventing”

  1. car jacks Says:

    I must say, I could not agree with you in 100%, but that’s just my IMHO, which indeed could be very wrong.
    p.s. You have an awesome template for your blog. Where have you got it from?

  2. What Joint Inventors Need to Know « INVENTIVE STEP Says:

    [...] as I detailed in an earlier post, there is the problem of “secret prior art.”  Inventor A conceives of an invention [...]

  3. Joint Inventors « INVENTIVE STEP Says:

    [...] as I detailed in an earlier post, there is the problem of “secret prior art.”  Inventor A conceives of an invention [...]

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