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dleske
Whether your jurisdiction is "First to Invent" (USA) or "First to File" (rest of ...
KB3001
I agree James. I think this move favours big businesses.
House passes patent reform bill
Rick Merritt
6/23/2011 7:57 PM EDT
SAN JOSE, Calif. – The U.S. House of Representatives passed a patent reform bill by a vote of 304-117, the last major hurdle in revamping the U.S. patent system.
The final bill still needs to be reconciled with an earlier version passed by the Senate in March. President Obama has signaled he will sign the resulting bill into law.
The so-called America Invents Act shifts the U.S, patent system from first-to-invent to a first-to-file system to harmonize with most other patent offices around the world. It creates new procedures at the patent office to challenge patents after they are granted in an effort to reduce rising patent litigation in court.
One major difference between the House and Senate bills is how they open the door to the overburdened patent office keeping all the fees it generates. All sides agree the office needs help given it faces a backlog of at least 700,000 applications and it takes on average three years to grant a patent.
Both bills would allow the patent office to set its own fees. Today the office lives on an annual budget approved by Congress and any additional fees generated from applications are returned to the general fund unless Congress passes an annual exception to the diversion.
In the last several years Congress has allowed the funds to flow back to the office. However over the last decade it has also siphoned off more than $800 million in fees to the federal general fund.
The Senate bill would let the office keep all its fees. The House struck a last minute compromise in its bill that would put the fees in an escrow fund. The patent office must petition for the money each year as a way to keep Congressional oversight over the office.
The bill includes a number of other smaller but still significant measures. For instance, it would also expand rights of companies who are the first to commercially use an invention, even after someone else wins a patent on that invention.
Congress has debated patent reform for at least six years. The last major patent reform act was passed was nearly 60 years ago.
"No longer will American inventors be forced to protect the technologies of today with the tools of the past," said Lamar Smith (R., Texas), who sponsored the House bill. "H.R. 1249 brings our patent system into the 21st century, reducing frivolous litigation while creating a faster and more efficient process for the approval of patents," he said.
Smith charged that the current patent system has become a burden to innovators.
"Unwarranted lawsuits that typically cost five-million dollars to defend prevent legitimate inventors and industrious companies from creating products and generating jobs," he said. "China is expected to surpass the United States for the first time this year as the world’s leading patent publisher," he added.
The bill was controversial to the end. It faced as many as 33 amendments earlier this week, including two that wanted to strike the first-to-file provision as unconstitutional. In the end all the amendments failed, except a friendly one from the bill's sponsors.
Much of the debate in and out of Congress on patent reform is whether provisions favor large corporation or small startups and individual entrepreneurs. Another line of debate has pitted big product companies against generally smaller patent licensing firms.
IBM was quick to come out in favor of the bill. The company has won the most U.S. patents every year for the last 18 and now holds a war chest of more than 75,000 patents.
Top Silicon Valley companies also lobbied hard for reform under groups such as the Coalition for Patent Fairness which includes Apple, Cisco, Dell, Google, HP, Intel and others. The group clashed on some specifics with the Innovation Alliance which represents a group of tech companies who tend to have large licensing activities such as Tessera and Qualcomm.
Some entrepreneurs charge the first-to-invent system will force a rush to the patent office that will favor big companies and disadvantage startups.
There's no doubt patent licensing has become a big business. So called patent trolls have popped up in recent years, buying up patents with the sole aim of licensing them without any plans for products or further technology development.
The trend has spawned other companies who have retaliated by buying patents to prevent litigation, some even actively developing technology for the sole reason of controlling the patents.
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Neo1
6/23/2011 11:37 PM EDT
It says most of the amendments were removed, so there not much change except the first to file clause. Have they really rationalised the patenting method or just revamped the patent process with a new law?
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wilber_xbox
6/24/2011 1:22 PM EDT
Can this patent reform skew the statistics of published patents per year by USA just because there is a backlog of 700,000 patents? Let's say the patent office can hire more staff then the time of granting the patents will be lesser than before.
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Vesperman
6/24/2011 5:16 PM EDT
To protect the oil and power companies, the U.S. Patent Office has unfairly classified secret 5000 energy-related patents. There is no need to power our cars and trucks with economically and environmentally disastrous petrofuels! Please sign my petition to end suppression of energy inventions at http://signon.org/sign/end-suppression-of-energy.
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chipcheng
6/24/2011 9:35 PM EDT
Great! First to File is for individuals and start-ups. big companies file patents much slower, but individual engineers and start-ups might move fast to file.
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KB3001
7/3/2011 2:37 PM EDT
I am not sure that is always the case. If companies want to move fast, they would as they have the resources to do it. I have always been a fan of first-to-invent.
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Sanjib.Acharya
6/24/2011 11:12 PM EDT
I am happy to see the change regarding "prior use right" even after a patent application granted to another company. I'm not sure if I have comprehended correctly going through this article, it looks like the bill is reformed to make it difficult for a company to "mass sue" a number of companies, as we have seen many such cases in the past. The not so good one: patent filing is going to be costly?
@Rick, is it possible to get a list of the summary of changes in the proposed bill with a comparison to what they are in the current patent law?
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DrQuine
6/26/2011 1:56 AM EDT
A summary listing of the before / after law would be great - but probably should wait until after the Senate and House bills are reconciled. Perhaps this will be another opportunity for EETimes to be recognized as a key quick information source in the industry.
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sdupre
6/25/2011 9:46 AM EDT
I'm curious about this section...
"it would also expand rights of companies who are the first to commercially use an invention, even after someone else wins a patent on that invention."
How would this affect licensing a product? If you license a patent to a company who then brings your product to market, does that make it more difficult to maintain and keep that patent? Or does that still come down to the specific contract? agreement
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DrQuine
6/26/2011 1:50 AM EDT
It is wonderful to have a timely report on the details of this new legislation - especially when the process has dragged on for so long. The rest of the world has done well with unambiguous "first to file" regulations; we certainly can adapt quickly (and already have been managing with foreign filings).
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rick.merritt
6/26/2011 2:26 AM EDT
@Sanjib. Details of the bill are at http://judiciary.house.gov/issues/issues_patentreformact2011.html
The only amendment that passed was the friendly managers amendment relating to the Congressional process the PTO has to go thru to keep fees it generates that exceed its annual budget.
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Sanjib.Acharya
6/26/2011 8:07 AM EDT
Thank you Rick!
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JamesJD3
6/27/2011 3:09 AM EDT
This first to file thing seems to be very bad for small businesses. Instead of writing papers and bringing products to market, I must now file patents on every invention.
Do I understand this correctly? Even if I publish or have a witnessed signed notebook, someone that files a patent can prevent me from using my invention.
I can’t afford to patent every invention I have.
James Donald
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KB3001
7/3/2011 2:39 PM EDT
I agree James. I think this move favours big businesses.
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Robotics Developer
6/27/2011 9:12 PM EDT
It would seem the best thing to do is to file, file, and file. File early and often just to make sure. I am wondering about the first to use clause the article talked about. How would that work? If I patent an idea but someone else then brings it to market do I lose the patent, do they get rights to use MY patent. Just wondering... I did hear from a patent attorney earlier last week who said that "first to file" may make it easier (lower cost) to protect ideas as it prevents lawsuits over "who came up with the idea first". Still not too sure but time will tell, the devil is in the details...
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Code Monkey
6/30/2011 12:30 PM EDT
With "a vote of 304-117", it looks like the patent reform bill is a done deal. I blame the trolls. Now all we need is Congress reform.
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dick_myers
6/30/2011 2:06 PM EDT
Oh great. With the patent "reform", if I'm selling a product and some aspect of it is patented by the coming new breed of patent trolls, then I could end up paying to sell my own design! This is also terrible for the little guy who doesn't have the resources to churn out patents.
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ahshabazz
7/1/2011 5:50 AM EDT
Amendment 10 (The actual First-to-file clause), which was brought to the floor by MI-Rep., J. Conyers, was successfully voted down after being declared out-of-order because a member had not been recognized in the Well. This was the heart of the Bill. I'm not sure aspects of this article are correct.
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parity
7/1/2011 11:03 AM EDT
If reason stands here, the first to commercially use a technology might apply to Company A who had been using the tech to build widgets, perhaps keeping it as a trade secret, after which Company B later re-discovers the tech and files for a patent. At that point, Company A would be held harmless for infringement and licensing ????
OTOH, it might be meant to prevent trolls from patenting some technique that everyone in the industry thought was obvious and did not merit a patent.
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dleske
7/14/2011 5:56 AM EDT
Whether your jurisdiction is "First to Invent" (USA) or "First to File" (rest of world), patentability still requires Novelty and Non-Obviousness. This should prevent patents being issued for techniques which are already in use and on sale.
I do think it is good to strengthen provisions for challenging bad patents. This can help ease the tension between trying to rush patent processing (to reduce the backlog) and issuing junk patents.
Remember that the origin of 'Letters Patent' was _not_ fairness to inventors, but was to advance the State of the Art by giving inventors incentive to publish (in return for a limited period of exclusive license), rather than retaining new ideas as Trade Secrets.
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