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By Kym Reinstadler
Main Street Strategies
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WEST MICHIGAN – File early. File often.

That motto serves as the new mantra for inventors with the September passage of the America Invents Act, the first major U.S. patent legislation reform in 60 years.

Under the new law, individual and corporate innovators can expect a streamlined way to bring products to market, which should reduce costly legal battles and could spur innovation and create jobs.

“Patents will now be issued (based) on who files first, not who was first to come up with a novel idea,” said Chuck Burpee, who chairs the technology and intellectual property group at Warner Norcross & Judd LLP. “It’s going to lead to filing more patent applications on incremental changes and probably a need to keep closer tabs on what a competitor is doing.”

The new legislation probably favors product developers working for larger corporations, which have the deep pockets to file for patent protection and defend them through the legal system, Burpee said.

Up to 500,000 patent applications are received annually by the U.S. Patent and Trademark Office, about half from American inventors, Burpee said. About 200,000 are granted each year.

Most other nations operate on a first-to-file system. The new law aims to reduce a backlog of patent applications and lift a foot off the hose of innovation that could create more jobs, Burpee said.

The America Invents Act could compress the time it takes to obtain a patent from three years to about one year, Burpee said.

Another provision in the new legislation should help reduce the drag on patentable innovations, he said. It allows the patent office to increase filing fees, which will allow for hiring additional examiners.

The new law also creates a nine-month window during which a new patent can be challenged through the patent office, instead of the courts. The goal is to handle patent challenges swiftly and at less cost, although Burpree said most applicants would likely hire a patent attorney to represent them in that process.

Efforts to minimize time, uncertainty and costs will increase investors’ chance for success, said Jody Vanderwel of Grand Angels, a nonprofit group of 36 West Michigan venture capitalists who have invested more than $7 million in 20 Michigan companies since 2004.

Venture capitalists prefer to see patents – or patent applications – as a stamp that an invention is probably sufficiently unique to generate a good return on investment, said Karen Benson, director of innovation services for The Right Place Inc.

A strong entrepreneurial ethic and “let’s roll” attitude in West Michigan provide many opportunities for inventors to vet an idea and develop a business plan to attract the capital to bring an idea to market, Benson said.

However, patents may not be essential to protect all ideas in all industries, Vanderwel said.

Today, much innovation is focused not on products, but on processes, which may be difficult to patent and defend.

It might not make sense for a small business owner to pursue a patent if he or she could not also afford to litigate a patent-infringement lawsuit, said Nate Young of the NewNorth Center for Design in Business in Holland.

“Business leaders need to rethink how patents fit into their overall business plan,” Young said. “Twenty years ago, a patent was the way to keep score and move forward, but the path is not so singular now.”

Speed in introducing a new, branded product to market at a good price will trump patents on the road to profitability any day of the week, Young said.

Dan Clark, who holds nine U.S. patients and four foreign patents on manufacturing processes, says being early to market at a competitive price is more critical to economic success than an invention itself.

He says independent and small business inventors can shield themselves to a large extent from the cost of applying for patents and defending them by keeping mum about novel ideas until they’re ready for market.

Clark’s not kidding.

He’s active in the Grand Rapids Inventors Network and the Muskegon Inventors Network, where, for a nominal fee, the 65 members of each group can sign up to pitch new product ideas and new business plans to a review panel of board members.

“We tell inventors that they need to learn to talk about their inventions without talking about it,” Clark said. “If they give out specifics, the idea can be stolen before they ever get it out of the gate.”

Inventors need to pursue nondisclosure agreements with providers of raw materials and anyone else they approach for information as they need to calculate the viability of an idea, Clark said.

Owning a patent is no ticket to wealth. Marketing, Clark said, is the primary tipping point.

“Today more than ever, you have to be first to market and competitive in price,” Clark said. “That’s ultimately more critical to economic success than the invention itself.” MSS

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• warner norcross & judd
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