The U.S. Patent and Trademark Office is going through a revolution of sorts as it implements the America Invents Act, which is the first significant upgrade to U.S. patent law since 1952. 

Entrepreneurs who rely on old books and online articles for information on how to file new patent applications may be terribly mislead. Be careful. Bad advice always leads to bad decisions.

Here are five things to know about patents:

No. 1: Need for speed

The U.S. Patent and Trademark Office (USPTO) now awards patents to inventors on a first-to-file basis, rather than inventors who prove they were the first- to-invent a new process, plant or technology.  This change harmonizes how patents are awarded in most other nations in the world.

No. 2: Patent ownership. 

Unlike trademarks, patents are issued to one or more individuals who invented the claimed process, plant or technology, not businesses. As such, for businesses to earn an ownership stake in a patent, they must obtain a written assignment of rights from the patent inventors. Of course, businesses can buy patents from other individuals or business entities too.

One of the first things sophisticated angels and venture capital funds do during their due diligence process is make sure a company really owns what it claims it owns.  If a company has not yet received proper assignments of inventions, assume that investors won’t write checks until all assignments are in place.

No. 3: Patents create temporary monopolies

Inventors don’t have to obtain a patent in order to make, use or sell an innovation in the U.S.  However, without a patent, the inventor has no legal ammunition to prevent others—let’s call them copycats—from commercializing the innovation in the U.S. Copycats are free to take the innovation to another country too, unless the original inventor has already secured patent coverage in that country.

The most common form of patent is a utility patent which expires 20 years from the date the patent application was filed.  The same is true for plant patents.  Design patents expire 14 years after the design patent is issued.

No. 4: Increasing importance of provisional patents

The USPTO allows inventors to file two types of applications:  a provisional patent and a non-provisional patent. A provisional application is a shorter application than a non-provisional patent, which may help entrepreneurs to file fast to establish the all-important date priority for patent award purposes.  Then inventors have 12 months to file a non-provisional patent application. 

No. 5: Measuring patent value.

Entrepreneurs should not expect a big bump up in company value just because it filed one or more non-provisional or provisional patent applications.  What matters most is the “rigorousness” of the patent claims and what the invention represents in the commercial marketplace.  Ideally the patent, if issued, has strategic versatility and can be applied to several different product applications or industries.

For more information on how to file a U.S. patent, application fees and conducting patent searches, visit www.uspto.gov.

Susan Schreter is a 20-year veteran of the venture finance community and entrepreneurship educator.  She is the founder of www.takecommand.org, a community service organization that offers the largest centralized database of startup and small business funding sources in the U.S.   Look for Susan’s upcoming book Start on Purpose: Everything You Need to Know and Do to Startup with Strength.