One common stereotype about inventors is that they all like to hold their cards close to their chests, hoping no one else snatches their brilliant idea before it comes to the market. But research suggests that most American patent-holders aren’t as concerned with secrecy as previously thought.
“Do inventors really value the secrecy that economists assumed they did based on the prior literature? Our findings are that overwhelmingly, and in every category that we can test, inventors don’t,” said Stuart Graham, study co-author and assistant professor at the Georgia Institute of Technology’s Scheller College of Business.
In a study published in the journal Science, Graham and Deepak Hedge of New York University analyzed the applications of inventors filed after 2000, the first year when the American Inventors Protection Act (AIPA) was passed into law.
The federal law fundamentally changed many aspects of the patent application process in the United States. One of the most important new rules is that all patents have to be published 18 months from the earliest claimed filing date. Prior to AIPA, patents filed only in the U.S. were kept secret and made public only after approval, typically 36 months after filing.
“First, the bill provides inventors with enhanced protections against invention promotion scams by creating a private right of action for inventors harmed by deceptive and fraudulent practices and by requiring invention promoters to disclose certain information in writing prior to entering into a contract for invention promotion services. An inventor who is harmed by any material false or fraudulent statement or representation, or any omission of material fact, by an invention promoter, or by the invention promoter’s failure to make the required disclosures, may recover actual damages or, at the plaintiff’s election, statutory damages in an amount up to $5,000, as the court considers just, plus reasonable costs and attorneys’ fees. A court may award increased damages, up to treble damages, where it finds such conduct to have been intentional and done with the intent to deceive the inventor. And, in an effort to provide better access to information for inventors, the Patent and Trademark Office is required to make publicly available all complaints received involving invention promoters, along with any response of the invention promoter,” said Senator Orrin Hatch (R-UT).
In 1999, during congressional hearings, many expressed concerns that the new rules would harm small inventors, ultimately undermining the inventive spirit of the country. So the final draft of the law contained a loophole that allows inventors to maintain the secrecy of their patent applications as long as they were not also filing for parallel foreign patent protection.
This loophole provided the perfect metric for Graham and colleagues to examine which inventors valued ultra secrecy, as well as how the patents filed by the two types of inventors differed in value.
The team examined 1.8 million granted utility patents filed between 1995 to 2005, finding that almost 85% of inventors filing a patent since 2000 chose to disclose information about their patents prior to their approval. In other words, “those inventors patenting only in the U.S. are choosing 18-month disclosure,” Hedge said.
These findings run counter to the argument that the AIPA would hurt small American inventors. If that would be the case, why would so many opt for disclosure during the study period?
“Small U.S. inventors are not choosing the secrecy route,” Graham said. “When they patent only in the U.S., they are choosing secrecy in only about 15 percent of the cases, not statistically different than the rate among all other types of inventors.”
The study concentrated exclusively on utility patents – this is a category of patents that is typically associated with engineering-related patients. Utility patents deal with machines, processes, compositions, and manufactured articles. However, utility patents also protect technologies such as drugs, medical devices, laptops, and software. Utility patents are the most common patents filed in the US, with almost 570,000 patents filed in 2013.
Tight-lip inventors tend to make less valuable contributions
In the second part of the study, when the researchers assessed how meaningful the patents were by their type of disclosure, another myth was busted. Contrary to previous complaints, which suggested American innovation would suffer due to new AIPA regulations, the study found that patents born out of secrecy were less valuable, on average, than those opting for disclosure.
“When we examine indicators of patent value, we find consistent evidence that the least-valuable and least-impactful patents are those that opted for pre-grant secrecy,” Hegde said in a statement.
The AIPA was never meant to hurt inventors. Instead, it’s a bill that fosters the public’s access to patents and brings social benefits. By having patent information available as early as possible, society can avoid unnecessary duplicative research spending. If rooky inventors find all of this confusing, they can always seek counseling such as InventHelp so they can just focus on what they do best — invent the future.
“We have limited resources in our society that we can invest in innovation and invention,” Graham said. “To the extent that we can more efficiently choose projects and avoid wasteful, redundant efforts, then that’s good for us as a society.”
“This study is a first window into what inventors are really doing. The next question is why are they doing it?” he added. “It remains for us to figure out why inventors seeking to maximize the value of their inventions are not particularly interested in pre-patent secrecy.”
In the future, Graham and Hedge plan on investigating why inventors choose to release information about their work before a patent is officially granted. Some explanations may include marking technology space territory to competitors, earlier announcements to market or licensees, and sharing knowledge so intellectual property can be referenced and linked earlier.
What’s more, the researchers would also like to investigate another common myth in the inventors’ space — namely, that the early release of patent secrecy leads to an increase in counterfeiting or other kinds of breaches of intellectual property.