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New Law Affecting Local Patents

Flight nurse Ryan Heck recalls an all-too-familiar story. It was Memorial Day weekend and a man on the Hopi reservation had suffered a heart attack and needed a helicopter to transport him to the nearest hospital with cardiac facilities.

“Flagstaff Medical Center was full,” Heck remembered. “So the next call [the doctors] made was to a hospital that was 85 miles away. There were 35 hospitals that were closer that were not called or screened because it’s such a cumbersome process.”

That means the patient’s treatment was delayed, a situation that is potentially deadly to heart attack victims.

As an emergency nurse, Heck had been frustrated for years by the antiquated system for scheduling medical transports. He believes the current system – where doctors or nurses simply call hospitals until they find an available bed – endangers patients’ lives.

So he decided to do something about it.

He and Flagstaff software engineer Troy Marino developed Stat Transfers, a computerized system that will allow doctors to use their smart phones to quickly ascertain the nearest hospital with available beds and appropriate facilities for patients needing transport.

Heck and Marino enlisted the help of the Northern Arizona Center for Entrepreneurship and Technology, a business incubator in Flagstaff.

Soon, they were applying for a patent to protect their idea.

A patent is an intellectual property right granted by a government to an inventor “to exclude others from making, using, offering for sale, or selling the invention” for a limited time in exchange for public disclosure of the invention when the patent is granted.

About half of NACET’s clients have applied for patents, says Annette Zinky, a business counselor at NACET.

“We have companies that have patented testing and diagnostic systems,” she said. “Some have patented materials used in biotech and life sciences.”

A new law called the America Invents Act is supposed to spur innovation and the economy by changing key provisions in America’s patent laws.

“This much-needed reform will speed up the patent process so that innovators and entrepreneurs can turn a new invention into a business as quickly as possible,” President Barack Obama said when he announced he was signing the act last fall.

The U.S. Patent Office currently has a backlog of nearly 700,000 applications. The new patent laws are being phased in this year.

“Prior to the America Invents Act, in the United States, what determined ownership of an invention was the person that invented it first,” explained Ken Kisicki, a Scottsdale intellectual property attorney who assists Heck and other clients at NACET. “In every other country in the world, what is important is who filed for the patent first.”

Under the new rules, a patent would be awarded to the first person or business to apply for the patent, not to the entity that can prove it was the first to invent the product.

“I think first-to-file is tipped in favor of small entities,” Kisicki said.

In the past, entrepreneurs like Heck and Marino would have had trouble proving they were the first to invent a product if a larger company had filed for a patent on a similar product. That’s because large companies have teams of lawyers.

“What chance does he have?” Kisicki asked. “Now what matters is who gets to the patent office first.”

Other provisions in the act also give advantages to small entities, including reduced filing fees for very small companies like Stat Transfer.

Alex Hobson, a Flagstaff patent agent, says the rule changes will force companies to get their ideas out into the public domain, which will spur innovation.

In the past, large companies such as Flagstaff’s Gore Medical, which researches, invents and manufacturers medical products, would typically hold onto its intellectual property as long as possible before applying for a patent.

Before the rule changes, inventors kept copious notes to prove they were the first to develop and test an idea. Now, that strategy could mean losing out if someone else files a patent on the same idea first.

Hobson says inventors can also apply for a provisional patent. This requires less detailed information on the process or product, costs less, and establishes a priority date for the patent. However, entrepreneurs only have one year to apply for an actual patent after they receive a provisional patent.

Hobson says the new rules make it critical for all inventors – whether they’re developing an idea in their garage or a corporate lab – to apply for a provisional patent or a patent immediately.

“If people have a good idea, they should get something filed this year,” he advised.

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