Business Viewpoint: Patent law changes remain controversial
BY MARGARET MILIKIN Business Viewpoint
Thursday, October 20, 2011
10/20/11 at 8:51 AM
The new America Invents Act
affects U.S. patent laws more
extensively than any other in
the past 60 years.
The most controversial provision
of the act — passed by Congress
and signed by President Barack
Obama on Sept. 16 — significantly
models the U.S. patent system after
Europe’s by awarding patents to
the first inventor to file an application
rather than to the first person
to invent the technology.
This new law radically alters
patent rights, particularly for small
businesses and individuals who
typically lack resources to rush to
the patent office.
Although some tout the law
as enabling applicants to obtain
patents faster, others predict the
fallout will be harmful to small
In an effort to balance these concerns,
the new law orders government
lawyers to conduct a study
(at taxpayer expense) to gauge the
effects on small inventors occasioned
by awarding patents to the
first inventor to file rather than to
the first person to invent, and to assess
whether this system “creates,
mitigates or exacerbates” disadvantages
to obtaining patents by
small entities. These government
agencies must complete the study
within the next 12 months; however,
the new patent filing system
takes effect in 18 months.
Even though there will be no
direct U.S. data for the government
study, we can look to Canada for insights
on the effects of the conversion.
An empirical study, conducted
by professors at the University of
Pennsylvania Law School, predicts
a negative outcome based on data
collected from the Canadian patent
office following Canada’s conversion
to the European-style, first-tofile
The study showed that the
numbers of patents granted to small
inventors dropped significantly in
the 20 years following Canada’s
implementation of its first-to-file
system. It concludes that the first-to-
file conversion in the U.S. likely
will yield fewer patents issued to
individuals and small businesses,
and will diminish patent quality as
inventors sprint to the patent office
with minimal technological descriptions
based on early prototypes.
The first-to-file provision will affect
other aspects of U.S. patent law,
including the definition of “prior
art” that would invalidate patents.
Large conglomerates tend to support
the first-to-file system because
they believe it will simplify ownership
disputes and they can bear
the expense of early and frequent
patent filings. Other companies
strongly oppose the provision as
harmful to American innovation.
Small inventors and businesses
tend to oppose the first-to-file
system, saying it stacks the deck
against them because they have
fewer resources to compete in the
race to the patent office.
Interestingly, a survey of patent
practitioners shows that those in
the business of obtaining patents
largely oppose the patent provisions
in the new law.
Likewise, these patent practitioners
reject the claim that the
law will create many new jobs, as
proponents maintain, except for
the lawyers who will spend the
next decade litigating the meaning
of the law.
The lawyers win again!
Margaret Millikin is a director at Crowe & Dunlevy.
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