Derivation Proceeding: You conceive of a new invention. You disclose it to a trusted party. Perhaps the trusted party helped you on the invention. You belatedly find out the trusted third party filed a patent application on the invention without listing you as an inventor. A stolen invention. What do you do?
I always advocate for prompt filing of provisional applications in spite of the USPTO one year grace period granted to the inventor. As you know the US grants patent ownership to the first inventor to file a patent application. Further, the USPTO grants the inventor a one year grace period between first public disclosure or sale of the invention and the deadline to file the patent application. I don’t like to rely on this grace period.
See the following:
You conceive of an invention. You make a disclosure to a trusted third party. Perhaps the trusted third party is your co-inventor. Alternatively, the third party may be a fabricator entrusted to build a working model or prototype. The third party files a patent application without listing you as the inventor or co-inventor. Perhaps now the trusted third party is your worst enemy. What is your remedy? Your invention is already the subject of a pending application listing someone else as the inventor.
Note that the patent examiner is entitled to assume the inventors have been correctly listed in the application. It’s not his/her job to figure out the dispute between you and the patent applicant, i.e., your new enemy.
Your remedy is to initiate a Derivation Proceeding in the USPTO. Be prepared to be patient. I will explain.
To initiate a Derivation Proceeding, you must first file your own patent application for the invention. (Note it will have a filing date later than your enemy’s application. You’re not the first to file.) Second, you must file a petition with the USPTO to initiate a Derivation Proceeding. Obviously your petition must set forth in detail the circumstances of the stolen invention. MOST IMPORTANT, you must make these filings within 12 months after the competing and first filed patent application is published. (Note the USPTO publishes all pending applications within 18 months of the earliest claimed filing date. The earliest filing date may be the date the third party’s provisional application was filed.)
What is a Derivation Proceeding? See 37 CFR 42.405. Simply stated, it is a trial proceeding conducted by the Patent Trial and Appeals Board (PTAB) to determine whether (i) an inventor named in the earlier application derived the claimed invention from an inventor (you) named in the petitioner’s application for patent, and (ii) the earlier application claiming the invention was filed without authorization. The petition must be supported by substantial evidence that the claimed invention was derived from you (the actual/true inventor named in the petition).
The petition is critical. It must contain at least one affidavit. It must contain substantial evidence of your first conception of the invention, the disclosure of the invention to the third party, and that the third party was not authorized to file an application for patent. If the petition is granted, the matter is transferred to the PTAB. However the PTAB may defer action until the examiner determines that the first (third party) application contains at least one allowable claim. This deferral is understandable since the PTAB does not want to spend time deciding invention ownership until there is evidence of a patentable application containing at least one claim.
It must be understood that a person may be listed as an inventor to a granted patent only if that person conceived of the invention described in at least one claim of the patent. Therefore, until the examiner determines that the there is at least one patentable claim, the PTAB has nothing to investigate. Therefore you have to be patient while the patent prosecution of the first filed application proceeds. This can take several years.
Second, it is critical that at least one claim of the allowed patent (filed by the dastardly third party) is substantially the same as the invention that you naively disclosed to the third party and this invention is also subject of at least one claim contained in your own pending application for patent. If not, then there are two separate inventions and yours, the later filed, may be deemed to be unpatentably obvious in view of the earlier/third party filed application (now patented).
There are several take aways from this. Documentation is key. Written evidence that you (the inventor) conceived of the invention, including operative details of how the invention is to work, is essential. Also that you communicated the invention, including operational details, to the third party shown by written evidence. That the third party’s application or issued patent contains at least one claim substantially the same as the subject matter disclosed. Also that the third party claim is substantially the same as a claim of your own pending application. If the third party has materially altered the invention, e.g., added or omitted components that were part of your disclosed operative invention, then there is no recourse and the petition will be denied.
You (the inventor) must be able to prove that you invented the invention, including the details of operational functionality. This requires documentation, e.g., dated lab notebooks clearly describing the invention. Alternately, a prior filed provisional application teaching enablement will be proof.
The prosecution history of derivation proceedings is bleak. Most inventors fail to have their petition granted due to evidentiary matters/deficiencies.
As a practice point, first file your own provisional application before disclosure to third parties, including third parties intended to be utilized to create a working model or prototype. The specification and drawing must teach enablement (operational functionality) as best you understand it. As I have long advocated, make the provisional as all encompassing as possible. See my past articles What is a Provisional Application for Patentand DIY Provisional Application for Patent. Stated differently, have the provisional specification (including any drawings) cover as many variations of the invention as possible.
Note that if your petition is granted and the PTAB finds one of the third party’s allowed patent claims is substantially the same as your invention and a claim of your pending application, the PTAB is authorized to correct the listing of inventors or invalidate the wrongfully derived claim of invention.
Again, your timely filed provisional application may prevent this stolen patent problem.
© David McEwing, 2020