Can you start selling your invention before patenting it?

By: Xavier Pillai

Chemical, pharmaceutical, and biotechnology companies spend large sums of money so that their employees burn the midnight oil and come up with great inventions, be it on a novel drug treat heart disease or a process to make large quantities of a chemical used in the manufacture of a plastic. They know that patents are powerful when it comes to resisting competition. They also know that a patent provides an exclusive right up to twenty years. Thus, once they get their patent, they should be smiling all the way to the bank ...correct?

The answer is not always "yes". The competition will try to unravel the patent and find many ways to discredit the patent. If businesses find out, five or ten years down the road that their patent is invalid, then all that investment and related jobs go down the drain.

One way a challenger could tear up the patent is that he could claim that you sold the patented invention before applying for a patent. The United States Patent and Trademark Office, like many other patent offices through out the world, has strict rules and regulations for filing patents. One such rule says that you must file your patent within one year of selling your product or offering to sell it. If you wish to sell your product overseas, you would need a patent in one or more of the European countries or in Japan, for example. The European Patent Office has stricter rules than the US Patent and Trademark Office. In Europe, you should file your patent first; selling comes later.

Although the inventing companies deliberately do not wait more than a year to file the patent, question often comes up as to when did they actually start selling. This is because, in modern business life, often several parties work together to come up with a new product. For example, one company may agree to give funding for carrying out research while another company may agree to do the laboratory work. There could be several exchanges between the two companies, often over a period of 3, 4, or 5 years or more. Unbeknownst to the parties, such exchanges could have triggered the legal selling date or offer date.

Take the case of the DNA patent where the company obtained a patent for DNA for detecting gonorrhea. The company that developed the DNA sent out a sample of it to its agreement partner and received payment for it. However, it waited 13 months to file the patent. The high court for patents in our nation's capital ruled that the patent is invalid for having waited too long. The laws relating to patents are highly complex and hence it would be prudent to seek competent counsel, when filing a patent, or if you are contemplating buying a company with patents or licensing a patent.

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