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April 10, 1995

4 Min Read
Throw a party, lose your patent rights!

Last August, in a precedential opinion, a federal appeals court held a patent invalid because the designer of a prototype had shown the prototype to friends at a private party more than one year before a patent application for the invention was filed with the United States Patent and Trademark Office (PTO). The alleged demonstration occurred, in fact, thirteen months before the inventor filed his application with the PTO. Had the inventor filed his application with the PTO six weeks earlier, his patent might still be valid today.

The case is The Beachcombers, International v. WildeWood Creative Products Inc., and the court is the Court of Appeals for the Federal Circuit, a relatively new U.S. Federal Court of Appeals. Created in 1982, the Federal Circuit typically has the last word in patent cases.

The party. According to the Federal Circuit's opinion in Beachcombers, Carol Bennett, a third party and the designer of a prototype kaleidoscope called "Odylic," hosted a party for 20 to 30 guests on April 12, 1985. At her party she displayed and personally demonstrated the Odylic to her friends to solicit feedback on the device. The Court found that Bennett had "made no efforts to conceal the device or keep anything about it secret."

On May 27, 1986, more than a year after Bennett's party, Patrick MacCarthy filed his application with the PTO on a kaleidoscope design. MacCarthy's application matured into the disputed patent. At trial, the jury found that Bennett's Odylic prototype embodied essentially the same kaleidoscope design disclosed in MacCarthy's patent and that Bennett freely and publicly disclosed the Odylic more than a year before MacCarthy filed his application with the PTO. Consequently, MacCarthy's patent was held invalid.

In this case, MacCarthy did nothing to invalidate his own patent. It was not reported that he had any knowledge of Bennett's Odylic prototype. Bennett's prototype just happened to include the patented features. However, as far as the patent law regarding public disclosure is concerned, it is irrelevant whether the public disclosure was by the inventor named on the patent (as is often the case) or a third party. It might just as well have been MacCarthy himself who unrestrictedly disclosed a prototype of his invention to close friends at a gathering in his home; legally, the result is the same.

On appeal, MacCarthy argued that in a similar case, Moleculon Research Corp. v. CBS, Inc., the Federal Circuit did not find the patent to be invalid even though the inventor had displayed his device to friends more than a year before filing his PTO application. The Federal Circuit, however, noted that in Moleculon, friends who had observed the invention had been asked to keep it confidential and that "the inventor at all times retained control over the use of the device as well as over the distribution of information concerning it."

If you must disclose your invention before filing your patent application to solicit investment capital or joint venture partners, be sure that your audience understands that the disclosure is confidential. Encourage them to sign a non-disclosure agreement, which should be available from any competent intellectual property attorney.

Q: Do I lose any rights if I get my patent application on file with the PTO within a year of any public disclosure of my invention?

A: There are other bases for losing patent rights; however, if you file your application within a year of any public disclosure of your invention, then you are not likely to lose any U.S. patent rights under the "public use" provision of Section 102(b). The "public use" and "on sale" provisions seem to be the ones that most often blindside fledgling inventors and companies, yet often could have been avoided. Note, however, that while the United States gives inventors one year to publicly disclose their invention, some foreign countries have an "absolute novelty" requirement under which there can be no disclosure of the invention to anyone not bound by a confidentiality agreement prior to filing in those countries. You should check with your patent attorney as soon as possible if there are particular countries in which you wish to preserve your rights.

Q: I know that we're moving toward a global economy. Have any recent treaties or agreements had an effect on U.S. patent law?

A: Absolutely. For example, the General Agreement on Tariffs and Trade (GATT) will continue to have a pervasive effect on how we treat United States intellectual property. In response to GATT, U.S. patent law was amended in 1994 so that applications pending before, or patents issued before, June 8, 1995, will have a term of 17 years from the issue date, or 20 years from the filing date, whichever is greater. Patents which issue based on applications filed after June 8, 1995 will terminate 20 years from the date of the earliest filed application.

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