The success or failure of an idea often hinges upon timeliness. Was the time right for a particular innovation? If you have a great idea and want your business to capitalize on it, you need to apply for a patent. However, the average patent application takes almost three years to process. By the time you obtain your patent, someone else may have taken your patent pending idea to the marketplace, and your innovation may not be innovative anymore.
“The Fast Track Exam enhances your intellectual property by expediting the patent process,” says Jay Moldovanyi, partner with Fay Sharpe LLP. “Getting that patent prevents competitors from copying your patented idea themselves.”
Smart Business spoke with Moldovanyi about how to determine if you should fast track your idea.
How does a Fast Track Exam enhance your IP?
The Fast Track Exam is helpful for situations when you introduce a new product to the marketplace and you want to prevent another company from creating and selling a knock-off version of your intellectual property.
For example, say you run a stapler company and you want to introduce a brand new stapler. How are you going to prevent a competitor from introducing the same stapler?
It’s important to note that a patent is a negative right, not a positive right. Let’s assume your patent is for a new shift mechanism for a bicycle and someone else has a patent on the bicycle itself. Can you sell bicycles with your shift mechanism? No, because someone else has the patent on the bicycle. Can the owner of that patent sell a bicycle with your shift mechanism? No, because they need your permission to put your patented shift mechanism on their bicycle.
You have to make a deal with the bicycle’s patent-holder in order for you to sell bicycles with your shift mechanism. Conversely, he has to make a deal with you; otherwise he is unable to sell a bicycle with your shift mechanism.
You can’t enforce that negative right if you don’t have it. That’s why it is important for businesses to patent-protect their intellectual property.
What are the pros and cons of using a Fast Track Exam?
The upside of the Fast Track Exam is that you are going to get a patent faster. Normally, patents take almost three years to make it through the system. The average is 34 months. A Fast Track Exam can get the examination done in 12 months.
The downside is simple: It is very costly to expedite a patent’s consideration. The cost of a Fast Track Exam is $4,000 on top of normal patent application filing fees, which are dependent on your company’s total number of employees.
The total cost is broken out into a basic filing fee, a search fee and an examination fee. When you add those up, for a large entity (more than 500 employees) the fees are $330, $540 and $220, so the total is $1,090 for a normal patent application (there can be other costs for additional claims, etc.). For a small entity of fewer than 500 employees, the total cost for normal patent application is $545.
That is just for the patent application — in effect, just to get the show rolling. There are many more fees as you go through the process.
What are some examples of ideas that may be critical enough to fast track their patent application?
A new cell phone design, new engine design for motor vehicles, new antenna design for cell phones, new polymer composition to be used in tires — these are all examples.
The business owner has to decide which applications are important enough to fast track. That decision should be made in consultation with the lead engineer/VP of engineering and a patent attorney.
You have to have justification for spending that money. You certainly don’t want to do it cavalierly and file a Fast Track Exam for every application. The patent office has actually made this more difficult by capping the number of applications for expedited patents at 10,000 per governmental fiscal year.
Why does it take so long for patent applications to be considered, and why are all the fees necessary?
The reason for all those fees is that the patent office is fully user-funded; no taxpayer money goes to the patent office.
The process takes 34 months, on average, because the patent office is overloaded with patent applications. There is an avalanche of patent applications that have been submitted in the last five to 10 years. Because of the backlog, the patent office created the Fast Track Exam as a stopgap measure — prioritized examination for a fee.
Also, the patent office hasn’t been able to hire as many examiners as they would like because Congress controls its budget. Even though the patent office is fully user-funded, Congress has to appropriate that money to the patent office in order for them to use it. Bills have been introduced in Congress to overhaul the patent system, but so far none has been passed.
Fast track is indefinitely postponed because Congress has hit the USPTO with a $100 million budget cut for the 2011 fiscal year (ending October 1, 2011).
Jay Moldovanyi is a partner with Fay Sharpe LLP. Reach him at (216) 363-9127 or email@example.com.