The last time the United States made significant changes to the nation’s patent laws, Professor Gyro Gearloose hit the comic pages as America’s favorite mad inventor in Walt Disney’s Gladstone’s Terrible Secret, May 1952.
The art of inventing has changed considerably since then and now a bipartisan group of senators wants to bring the U.S. patent system into sync with patent processes around the world. They propose to move from a “first-to-invent” system to a “first-to-file” system.
Moving to a “first-to-file” system could have a significant impact on inventors such as orthopedic surgeons who “tinker” part-time on their inventions. More on that later in this article.
Senate Passes “America’s Invents Act”
U.S. Senator Patrick LeahyThe U.S. Senate took the first step towards patent reform on March 8 by voting 95 to 5 to pass the “America Invents Act.” The legislation was co-sponsored by Democrat Senator Patrick Leahy of Vermont and Republican Senators Chuck Grassley of Iowa and Orin Hatch of Utah.
President Obama quickly praised passage of the bill and promised to sign it if it passes the House. However, it was unclear whether or not the House would follow suit and act on the measure.
Senator Leahy said during hearings that this would be the first major patent reform in 60 years for a process that was fine for a 1952 economy. Congress passed some reforms in 1999 and expanded ways in which granted patents could be challenged.
Members of Congress have introduced patent reform bills in each of the last three sessions of Congress, but have failed to pass the legislation after several groups, including small companies and individual inventors protested.
Current Backlog
Under our current patent system, an inventor announces his or her invention and goes to the USPO (United States Patent Office) to seek a patent grant. On average, that inventor’s application will sit for two years before a patent examiner even begins to consider the request. Then it takes another year before a final decision is made.
Process for Obtaining a Utility Patent
In 2009, the patent office received some 483, 000 patent applications and granted 192, 000 patents. According to the USPO, there are approximately 1.2 million applications currently under review or waiting for a review, including 700, 000 applications waiting to be acted on and 500, 000 in process.
Opposing Views
According to published media reports during public testimony, reforming the U.S. system is favored by large international companies so they can get in sync with other patent application processes around the world. However, some smaller companies and inventors opposed the bill saying large companies have all the lawyers, will win the paper battle and race to the patent office.
John F. Dolan
Fredrikson & Byron, P.A.“The bill favors multinational and foreign firms over start-up firms seeking an initial foothold in U.S. domestic markets, and favors market incumbents over new entrants with disruptive new technologies, ” said the letter signed by groups such as American Innovators for Patent Reform and the U.S. Business and Industry Council.
John Dolan, an attorney with the Fredrikson & Byron law firm in Minneapolis and a former patent examiner, told OTW that the change from first-to-invent to first-to-file would be a major change for inventors and will likely make it more difficult for part-time “tinkerers” to file for a patent.
The biggest difference in the proposed legislation is that under the current system, an inventor needs to demonstrate to the USPO that he was the first person to come up with the idea and concept of the invention.
Under the proposed bill, the inventor doesn’t have that requirement and simply needs to be the first to race to the USPO to file for a patent.
Inventor Safeguards
To assure fairness and protect an inventor who believes his idea was stolen, Dolan says the proposed bill has a post-grant review process where inventors can challenge someone else’s filing. According to proponents of the bill, this would also keep more disputes out of court.
The bill would create a nine-month “first window” post-grant procedure to allow challenges to patents that should not have been issued and to cut down on litigation and harassment of patent owners by improving the review system for challenges. It provides more certainty to damage calculations.
Senator Hatch reportedly said it can cost $500, 000 in legal fees if there is a dispute over who is the first to invent a product. Under the new system, said Hatch, an inventor can pay $100 for a provisional application to protect his invention.
New Patent Office Fee Authority
The proposed legislation also gives the patent office authority to set its own fees at a level that will give it enough funds to reduce its backlog of applications. It requires that smaller businesses continue to get a 50% reduction in fees and creates a new “micro-entity” class—with a 75% reduction—for independent inventors who have not been named on five or more previously filed applications and have gross incomes not exceeding 2.5 times the average. The standard fee for filing a patent is now $1, 090, with additional maintenance fees over the life of the patent.
There would also be an expedited process, for an extra fee, that would guarantee a final decision within one year compared to the current three-year wait.
Impact on the Tinkerer
Now back to what the proposed changes mean to the part-time inventor/tinkerer.
Attorney Dolan, also an inventor, told us that trying to make an invention reality takes time when only spending minutes or an hour each day. The inventor thinks he’s described the concept but still wants to take more time to flesh it out.
The inventor, said Dolan, would have to change his mentality in terms of having a good idea of having generally met the things he needs to file a patent application:
What are the components of the invention?
How does he make it?
How does he end up using it?
It will now be beneficial to write it down and file as quickly as possible.
If the inventor has spoken to colleagues or friends about the concept, how does he protect himself?
This is a post-filing issue, says Dolan. Currently if a patent application has been filed by an individual and somebody later files an application and both cover the same invention, there’s a procedure called interference where both parties go in front of a reviewing board and they’ll try to determine who was the first-to-invent.
Under the first-to-file proposal, the interference practice will be gone because first-to-invent is gone. But, says Dolan, there will be a derivation hearing.
“For example, the tinkerer invents something and discloses it at a conference or to his buddies down the street. He then sees a patent application down the line. He can file for a derivation proceeding and will be able to show that he developed the invention. But, he must be able to show a link to individuals disclosing it. If the inventions have truly been developed independently, whoever gets to the patent office first will win.”
Race to the Patent Office
Dolan thinks we’ll see an even bigger backlog of patent applications initially as many inventors will file relatively quickly to win the race to the patent office. Inventors will believe he has to file quickly.
Tinkerers will have to understand that if they have an invention, they need to put it on file once they have met the legal burdens. Dolan said in essence, many times it’s a race to the patent office anyway because once you’re in the first-to-invent process you have to actually show that you were the first-to-invent.
His experience with individual inventors is that many times they have difficulty in providing that evidence. Companies have an easier time with that because they have protocols in place with workbooks, daily entries, witnessed and dated and it’s easier for them to show first to invent.
Removing the first-to-invent burden may be of help to the tinkerer, but the patent process is expensive. Before you had time to flesh out ideas and spend more time in the lab, do more tests and prove your concept more clearly. They could do that because they had the records showing they were the first to invent.
Now, they won’t have that luxury and may end up filing more in increments. So instead of filing one application, they may file more frequently because they’ve made changes. Filing more applications to cover what they want.
“The first-to-file concept is something that is inevitably going to happen, ” says Dolan. “We have been operating outside the norm with the rest of the world for some time.”
