Generally inventors are often unaware of the quid pro quo, that is fundamental to patent system. The display their invention to the world along with the process of making the invention, in return the government gives them the right in form of patents. One of the option for the inventors is to not file a patent, but simply to keep the invention secret. The most common example are the formula for Coca Cola or any other. There are many examples of patents that had virtually no value because the claims were undetectable, unenforceable, or ridiculously narrow. In the process of getting a worthless patent a bad patent, the company gave up their complete road map for how to manufacture and use their product. These bad patents are not just waste of money but their competitive advantage is eviscerated by disclosing everything they know. Part of the analysis prior to filing patent is to first estimate how broad or narrow a patent might be, then evaluate whether the patent at that breadth would be worth pursuing.

How does this happen?

One very typical scenario is when a startup company thinks they really need a patent and then drain their brain to how would they do so. Often just before they do a presentation for the first time and public ally disclose their invention to the world. It is conventional but terrible practice, for patent attorneys to file a provisional patent application in this situation. The attorney gets caught at the last moment and collect whatever information is available, and file a provisional application. Some companies put their deep secrets such as , pages of lab notebooks, internal decision making processes, internal financial projections, even source code for their software in the provisional patent application. This is done with the mistaken belief that the provisional application will not be made public.This situation happens because the patent attorney thinks they will sort it out later. Maybe something in one of the document will support some patent claims that we want to file a patent a year form now. From Patent attorneys’ perspective the larger the pile of information however dis organised the more likely it will be that they can find something patentable. Form client’s perspective they have given up their most valuable trade-secret including all their internal document, in exchange of their patent.

What to do if this happens?

How a investor should respond when a startup files these types of “kitchen sink”, provisional patent application? One option to consider is to abandon the provisional patent application and start all over again. This appears to be very drastic measure on the surface but not as drastic as it sounds. In many cases, these types of patent applications are very thin when it comes to describing the actual patent claims. Consequently, this provisional application does not actually give the right of priority to the filing date, so the real right of priority would only start with the second, non-provisional application. In this case, the company did not have decent protection to begin with, so abandoning the provisional application and writing a good non-provisional application has no downside. In fact, there is a big upside because the company’s trade secrets are not published.

The US allows for a “provisional patent application”, which serves as a placeholder for a “non-provisional” patent application, which must be filed within a year, after provisional patent application. The non-provisional is the only type of patent application that gets examined by USPTO. Provisional patent application are often touted as “the poor man’s patent”.  When subsequent non-provisional application is published the provisional application then becomes a part of the record. If there is no subsequent non provisional application the provisional application will remain a sceret forever. This is just another example of how the attorney’s interest in getting patents can severely compromise the company’s interests. The company would have a very hard time enforcing any of their “trade secrets” when they publically disclose them in a patent application, because they would no longer be trade secrets. For example, a disgruntled employee may join a competitor and bring all the trade secrets with them, and the company could not bring a claim against the employee to try to stop them from sharing the “trade secrets”.