For several years, the United States Congress has debated the scope and details of patent reform. A backlog of patent applications has clogged the in-boxes of the patent examiners, and litigation seems to have become the coin of the realm for those seeking to protect their inventions. Both of these developments have made it extremely costly for any inventor – let alone a small tech inventor – to obtain valid protection for his or her intellectual property. Yet the question remains, is the cure worse than the disease?
The current state of play is that a bill in the Senate, the “America Invents Act”, recently passed by a vote of 95-5, and a similar bill in the House was voted out of committee by a vote of 32-3 and now awaits a vote by the full House of Representatives. The intention of both bills is to:
- Simplify and speed up the process for obtaining a patent;
- Enhance the quality of the patents that are granted; and
- Address litigation uncertainty and cost.
As the USPTO laid out, the major provisions of the legislation are:
- Transition to first-inventor-to-file
- Establish post-grant and inter partes review procedures
- Provide USPTO fee-setting authority and revolving fund
- Enable third-party submissions of prior art
- Prioritization of applications important to economy/competiveness
- Four-year post-grant review of business method patents
- Establish supplemental examination procedure
- Limit false marking litigation
- Limit tax strategy patents
- Clarifies use of funding in USPTO’s Global IP Academy and pay levels for administrative law judges
Some of the highlights of the presentation that are pertinent to tech SMBS:
First to File: Many smaller firms that do not have in-house or significant legal resources at their disposal are deeply concerned that a transition to first-to-file will significantly disadvantage their ability to obtain patent protection. The USPTO and supporters of the legislation counter that the transition from “first to invent” to “first to file” actually will benefit small inventors because the legislation includes a more reliable filing date that can better withstand challenges from competitors at a modest cost. A stronger, more transparent and certain one-year grace period for disclosures also is included in the legislation thus, the USPTO asserts, mitigating many of the filing mistakes that occur under the current system.
Litigation: A significant amount of debate over the bill has been focused on the number of “bites at the apple” that exist to challenge the validity of a patent. Once through a post grant review, there is the judicial process. The USPTO noted that federal circuit courts already have addressed many of the key problems with regard to litigation – venue (forum shopping), willful infringement and reasonableness of royalties.
Capacity: A key institutional goal for the USPTO is to get more resources to hire more examiners, apply more broadly appropriate technology to speed up filing, and adopt e-certificates.
Of course, there are two sides to every story, and many inventors have expressed alarm over some of the changes in patent law as proposed by Congress. Some issues – such as treatment of non-practicing entities, a difference in treatment of business method patents, the strength of inequitable conduct standards, or patent marking – have not been addressed or not addressed to the satisfaction of independent inventors.
Review the webinar and reach out to your member of congress if you have questions or concerns about the pending legislation.
