Provisional Patent Applications: The Top Three Reasons Why Your Technology Startup Portfolio Companies Should Consider Filing

By George Likourezos, Esq.

Introduction

Your startup portfolio companies who are developing novel technologies should know that every patent system in the world is a first-to-file system. This means that the inventor who files a patent application on a particular technology before another inventor has the first right to the grant of a patent. Thus, it is important for technology startups to think about filing a patent application on their technology as early as possible, and a provisional patent application is the perfect vehicle to do so.

Patent Prosecution Overview

To understand the benefits of a provisional application, a broad overview of the patent prosecution process is merited. The first step in obtaining a patent is the conception and reduction to practice of an invention, which does not require a working model or system, but rather demonstrating the concept can be shown to work through detailed drawings, formulas, and the like. Next, a patentability search of prior art references is highly recommended, as a search allows the patent drafter to write an application that best defines the invention over the prior art, speeds up prosecution by preempting rejections, and improves the application’s defensibility. A patent application will then be filed as either a provisional patent application or a non-provisional patent application. A provisional application is considered a “placeholder” that will allow a non-provisional application to claim priority if filed within one year.

I. Benefit #1: Obtaining an Earlier Filing Date

Obtaining an early filing date is pivotal in patent prosecution because it prevents a patent examiner from citing references published between the provisional filing date and the non-provisional filing date. Such references, if applicable, may alter the protectable scope of an application filing or potentially prevent a patent application from maturing into a patent. Since the non-provisional application will have the benefit of the provisional application’s filing date, the applicant may rely on the earlier date to prevent those cited references from being used against the application.

A provisional application can be filed when there is sufficient information on the technology being developed. Additional provisional applications can be filed after the initial filing to further describe current or new inventive features, different aspects of the invention, or provide data.

Within one year of filing, the provisional application must be converted to a non-provisional application to maintain priority rights. The non-provisional application will claim priority to the initially filed provisional application, along with any other provisional applications that were filed within one year.

For this reason, it is important to include as much information known at the time of preparing the provisional application to ensure that the invention is adequately described. The applicant cannot rely on the earlier filing date of the provisional application to antedate a cited reference for a particular inventive feature if that inventive feature was not described in the provisional application.

II. Benefit #2: Early Patent Pending Status for Investors

The earlier your technology portfolio companies file, the earlier their technology will be granted the status of “patent pending.” This status is highly attractive for future investors, since it demonstrates that the founders believe their technology is novel and that they took the initiative to file a patent application. Additionally, the provisional application can be used to explain their technology to prospective and existing investors under a confidentiality agreement.

III. Benefit #3: More Time for Critical Business Decisions

Even if your technology portfolio companies decide not to convert their provisional application to a non-provisional application, the provisional application will not be published or examined. Therefore, even if they believe their technology can be kept as a trade secret, it is advisable to file a provisional application to decide later if converting to a non-provisional application is the best course of protection. Moreover, if they do convert to a non-provisional application, and have no plans to seek patent protection outside the United States, they can instruct the United States Patent and Trademark Office to not publish their non-provisional application until it issues as a US patent.

Additionally, filing a provisional application allows your technology startup portfolio companies to have an early discussion about developing and protecting their technology with a patent attorney. The patent attorney’s understanding of the technology is critical to performing a thorough patent search to find references which may be relevant or similar to the technology your portfolio companies are developing. Finding damaging references prior to prosecution will save thousands of dollars in fees and wasted years of waiting for an avoidable rejection. Moreover, finding damaging references early will buy time to change the course of technology development if the patent attorney determines the reference will bar the technology from patent eligibility.

Conclusion

Provisional patent applications are an essential tool for protecting inventions by technology startups at the early stages. Besides the top three points above, provisional applications further provide comparatively lost costs to first-time non-provisional filings, time, and cost savings to avoid semantic or formal patent office rejections, and more.

Remember that investing in technology companies carries inherent risks, so it is advisable to consult with financial and legal professionals to ensure a comprehensive assessment of any potential investment opportunity.

A resource you can consider as an investor in conducting your due diligence is the intellectual property law firm of Carter, DeLuca & Farrell. Carter DeLuca has assisted hundreds of companies to scale and grow, avoid patent infringement, identify investors, and protect their intellectual property, and has also assisted many investors in making informed business decisions when investing in technology-based companies.

For a free consultation made available through Spotlight Family Office Group, please contact us at Info@SpotlightFamilyOffice.com.