Patent Reform in Dispute

An article Politicians and Pundits Make Some Noise About Patent Reform explains that the Senate is set to vote on the America Invents Act (which passed in the House by a vote of 304-107 in June), the first major revision of American patent law in more than 60 years. In March of this year, the Senate approved its version of the Patent Reform Act by a vote of 95-5. With few differences, the bills alter a wide range of current law and practices before the U.S. Patent and Trademark Office (USPTO) including a change in fundamental entitlement to a patent to a “first to file” system; codified limitations on potential recoverable damages for infringement and the procedure in which such damages must be assessed; codification of the requirements for establishing willful infringement; and new restrictions on the venue in which patent infringement actions may be filed.

Until now, the US has maintained an inventor-friendly patent system to favor whoever files for an application first. The proposed legislation changes US law from a patent system favoring the first-to-invent to one favoring first-to-file. This change is an attempt to harmonize U.S. law with the rest of the world by doing away with the granting of a patent to the first inventor. In March, Senator Diane Feinstein unsuccessfully introduced an amendment to the Patent Reform Act of 2011 to preserve the current first to invent process, protect small inventors and help preserve America’s patent leadership. Her remarks which conclude by saying “If it ain’t broke, don’t fix it.” are here.

Proponents of the bill, large mult-national companies and President Obama, say the measure could create high-paying jobs and protect US businesses’ advantage in high-tech and other industries. Many inventors and small businesses worry that the bill would give big companies an unfair advantage. In a blog post, The Prevent American Invention Act, at Foreign Policy, Clyde Prestowitz writes that America’s penchant for invention is due in large part to its patent system, which grants the original inventor patent rights even if another person or corporation files for the patent first. He explains “This is very helpful to individual inventors and small companies because it gives them time to test the viability and commercial potential of their inventions. It also protects them from those big corporations or others who might hear of their invention and rush to be first to patent it.”

In addition to favoring big corporations who can file patents as soon as they hear about a new invention, Prestowitz says that the bill would also give foreign inventors an advantage over Americans. “A German inventor files for a patent in Europe and then, under a bi-lateral treaty, a bit later for the same patent in the United States. Shortly afterward, an American files for a U.S. patent on a similar (not identical) invention. Under the proposed new legislation, the German application would be considered prior art that would block issuance of a U.S. patent to the American applicant. But the reverse situation would not block issuance of a European patent to the German applicant.”

For more on the pending legislation, see the Congressional Research Service Report Patent Reform in the 112th Congress: Innovation Issues and the authoritative insider’s perspective on the benefits and drawbacks of proposed U.S. patent reforms Understanding Patent Reform Implications: Leading Lawyers on Defining Key Issues, Interpreting Current Proposed Legislation, and Projecting Future Developments (Call #KF3114 .U534 2009) available at the Brooklyn Law School Library.