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america invents act, IP, Patent

Can The House Do Patent Reform The Right Way?

UPDATED – SEE BELOW

Unless you’re living under a rock, you’ve heard that the Senate overwhelmingly approved S. 23, the Patent Reform America Invents Act. If the jingle is running through your head, you obviously know that it’s now up to the House of Representatives to determine whether it also approves of the legislation.  Fortunately for those of us who want a bill that will actually improve the patent system, it appears that the House will draft a competing bill, rather than just work from the Senate version.

Even better, the list of witnesses the House Intellectual Property Subcommittee is calling demonstrate attention inventor interests, especially compared with the Senate’s deliberate pandering to large corporations.  On Wednesday, the House heard testimony from Dr. Anthony Atala (inventor of numerous patents involving drug compositions, prosthesis and surgical methods), Michael S. Fulkerson, Ph.D (CTO of Rosetta Stone, owner of one patent and numerous pending (4 years and counting) applications) and Scott Smith, Ph.D (professor of Mechanical Engineering at UNC Charlotte, and named inventor on 15 applications).

In particular, Professor Smith lectured subcommittee about the dangers of the Senate’s ill-conceived race to the patent office policy (also known as ‘first-to-file’):

Universities, small businesses, and independent inventors benefit from “first to invent” over “first to file”. Going from a “first to invent” system to a “first to file” system seems likely to hurt individual inventors and small companies and may face some serious constitutional challenges. Small inventors do not have the resources to engage in a race to the patent office for every potentially patentable idea. Indeed, “first to file” might simultaneously result in a large number of poorly prepared patent applications (increasing the backlog), and a financial barrier further excluding small and very small inventors. While “first to file” provides some measure of clarity, it does not support innovation broadly.

PatentlyO recognized the “race” aspect created by the Senate’s bill:

This invention-date focus will likely drive more provisional patent application filings for US entities.  The prior-disclosure grace period limitation may drive a revival in formal invention disclosure publications.  However, because this narrowed grace period is still broader than that available in most countries, a pre-filing disclosure may negate foreign patent rights.

Via America Invents Act – First to Invent and a Filing Date Focus

Also problematic under the Senate bill is the elimination of prior user defenses, where a prior user accused of infringement might raise defenses under the current version of 102(g).  This defense is not available in the Senate bill.

The House would be right to eliminate the Senate’s patent race from the bill, since such a move would not only contravene 250 years of tradition in the United States, but is also demonstrably bad for innovation.

Canada shifted to FTF in 1989, and a 2009 study found an “adverse effect on domestic-oriented industries and skewed the ownership structure of patented inventions towards large corporations, away from independent inventors and small businesses.” The EU, which has had FTF for a while, last month declared an “innovation emergency” due to how far behind us they are falling in innovation and R&D investments.

Via Patently Absurd or: How to Go From the World’s Best Patent System to Worse-Than-Most in a Single Step

I’m not sure how much more proof is needed to stay the course.  Further, I don’t know how anyone can justify saying that the Senate bill “amounts to no more than a few minor tweaks.”

On Thursday, the House IP Subcommittee heard from law professor (and PatentlyO author) Dennis Crouch on the subject of Recent Judicial Decisions on Patent Law. Among other things, Professor Crouch attributed part of the backlog to the difficulty of assessing obviousness:

The bulk of time spent in the patent examination process and in appeals to the BPAI revolves around the issue of obviousness. In other words, the backlogs can be largely attributed to time spent arguing the difficult issue of obviousness. Unfortunately, nothing in the proposed legislation does anything directly to alleviate this burden.

Ultimately, Crouch concludes:

Because so much time and energy is spent on this issue during the examination process, it may be one where increased substantive rulemaking authority would allow the Patent Office to create a more manageable approach to the statutory question.

Via Patent Reform in the House of Representatives:

For his part, Patent Hawk Gary Odom uses telling images when giving us his perspective on the Senate actions, and noting:

The wailing and gnashing of teeth by inventor groups has hardly begun. Remember kids, you can’t stop progress, but it can steamroll you.

Via Bill Me

Indeed.

UPDATE:

In my haste, I neglected to mention this gem from Brett Trout.

Late Tuesday, the United States Senate overwhelmingly passed the America Invents Act (S.23). Among other changes, this bill favors corporations and patent trolls over individual inventors, by enacting a first-to-file patent rule.

The America Invents Act rewards large companies and patent lawyers. It also punishes small inventors by forcing them to get their patent applications on file as soon as possible.

Via  Senate Passes Bill Favoring Corporations Over Inventors

Couldn’t have said it better myself, although I tried. As I noted last week:

[A patent]attorney, under the new system, would need to convince [his client] that he needs authorization to immediately prepare and file a provisional application in order to avoid minimize the risk of having patent rights lost due to novelty or obviousness for things that happen in between conception and filing. [The] attorney would certainly need to convey the dire consequences and sense of urgency to convince [the client] to immediately authorize this expenditure, including the attorney’s fees for time spent reviewing the disclosure and getting it into condition to file.

Why on earth would the AIPLA and its enthusiastic boosters be on board with a system like that?

Via Serious Opposition To Patent Reform From California Senators

Worth noting is Trout’s comment about what patent reform is actually needed:

What the America Invents Act does not do is increase the quality of patents the USPTO is issuing, eliminate patent trolls or encourage innovation in the information technology sector.

More on that next week.

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Discussion

11 thoughts on “Can The House Do Patent Reform The Right Way?

  1. Excellent article!

    Posted by Scott | March 11, 2011, 12:44 pm
  2. “the House will draft a competing bill, rather than just work from the Senate version”

    The optimists among us hope for something better. The pessimists fear it could even be worse.

    Small entities have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” Congress is rushing headlong into disaster. This bill will be a wholesale slaughter of US jobs.

    “Patent reform”

    Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America.

    Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.

    http://docs.piausa.org/2011PatentReform/

    Posted by staff | March 12, 2011, 9:44 am
  3. As a patented inventor I’m devastated that so many senators voted for the S. 23 – Patent Deform bill, to accept a corruption on the greatest Patent System and Laws in the World as we DO have in America! How they could to counciously vote for desrtoying our own country ingenuity system, which was the power and the train for our superiorty in the World – I cannot understand… I understand that one man like “senator” Leahy could lie the Senate, but why so many listened to him, I do NOT understand! This fact and this bill may turn-over the America in a different direction of unknown uncertinity, economical stagnancy, etcetera…

    All of us the inventors need to revoke whatever bad happend in the Senate and now we are watching the House of Representatives… So, those who are closer to us inventors will help America and American’s ingenuity and economy… We want to have our hope back that the corruption will be overthroun and American best in the Worl Patent System will previll!

    K M Binkowski
    dc machines inventor

    Posted by K M Binkowski | March 13, 2011, 2:02 pm
  4. From what I have heard, it seems that “certain interests” would only allow the inclusion and passage of the fee diversion provision if the patent reform bill also contained a switch to first-to-file. In other words, “no honey, no money.” The USPTO’s dire straits — and the corresponding strain on innovation and the economy — appear to have been enough to seal the deal. There’s a reason some compare law-making to sausage-making; it’s not pretty.

    Posted by patent litigation | March 14, 2011, 2:34 pm
    • Are you kidding? Senators Kyl and Leahy practically said as much on the floor of the Senate. They both said if the Feinstein Amendment survived (stripping FTF), they would have torpedoed the bill.

      Kyl also said that without FTF, nothing in the bill provided “meaningful reform.” I take this to mean that properly funding the patent office is not meaningful to the gentleman from Arizona.

      Not sure how much more evidence you need than that.

      Posted by Patrick | March 14, 2011, 2:42 pm

Trackbacks/Pingbacks

  1. Pingback: Finding A Patent Attorney Takes Time, But How Much Will You Have? « Gametime IP - March 15, 2011

  2. Pingback: House Patent Reform Bill Broadens Prior User Defense « Gametime IP - March 25, 2011

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  4. Pingback: A Radical Alternative Patent Reform Proposal: Eliminating The Non-Obvious Requirement « Gametime IP - March 31, 2011

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