‘First-to-file’ the winner in patent battles

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An entrepreneur who thinks he or she has something unique should consider filing for a patent as soon as possible.

Recent changes in the U.S. patent law favor those who are “first to file,” said Michael Martensen, Colorado Springs attorney who specializes in intellectual property.

It means that entrepreneurs have to be more diligent about protecting their ideas, he said. Some entrepreneurs are tempted to show their product at trade shows to test interest before filing for the expensive patent, Martensen said.

But, that makes it easy to be ripped off, he said.

Consider the case of Innovention Toy’s verses MGA Entertainment. The partners at Innovention filed for a provisional patent before showing their laser board game at the International Toy Fair in 2005. When their game was copied, the patent gave them footing in court, Martensen said.

Under the new “first to file” rule, if Innovention had not filed for a provisional patent and another company took the idea and filed for its own patent, the court would have favored the first company to file, not the company that actually created the product.

Martensen’s rule of thumb is that if an invention can be bought off the shelf and reversed engineered, then an entrepreneur should consider a patent. If the product cannot be figured out, then an entrepreneur should think about keeping the information as a trade secret.

But, patents are expensive — from $5,000 to $30,000 depending on the device — and it could take from three to five years for the patent to issue. That makes it a tough call in the toy industry, when the average toy has a three to five year life span.

His advice to budding entrepreneurs is to check in with area incubators or small business centers and get some legal advice on just how valuable their new invention could be. An entrepreneur should have a business plan and make sure intellectual property is aligned to it, he said.

And, entrepreneurs who file for patents should be willing to fight over them in court — a venture that could run in the millions.

“You have to prepared and understand what the patent gives you,” Martensen said. “It does give you the right to say, stop if someone is infringing. It’s not enforceable until the court says it is.”