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Patent Changes Set to Become Law September 9, 2011

Posted by Peter Varhol in Strategy.
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Few doubt that the US patent system has not aged well.  And that agreement extends to the US Congress, which just overwhelmingly passed
a patent reform measure.  Granted, it’s fairly nondescript and noncontroversial, but it is a start.

Probably the biggest change is that the US has now adopted “first to file” instead of “first to invent”.  First to invent meant that inventors seeking a patent had to go through a long and ambiguous process to determine if someone had previously invented their idea.  And it has the potential to reduce or eliminate one of the primary reasons for patent litigation.

First to file means that patent protection is awarded to those who file the patent application first.  This is apparently the standard in the rest of the world, and can greatly simplify the patent process.

Both have advantages and drawbacks.  Arguably, first to invent is more fair, in that we give credit to those who created an invention without going through the
patent process.  But it has largely been responsible for the patent litigation messes of the past couple of decades, as plaintiffs charged that various patent holders had ignored or preempted prior art.

First to file eliminates this point of contention; however, it won’t eliminate litigation altogether, as there are many other potential points of contention.  And in general it favors those with the legal and financial resources to devote to patent portfolios.  In other words, the rich get richer.

Under the new law (assuming President Obama signs it), the Patent and Trademark Office also has the ability to petition Congress for some of the fees that it collects in the patent process, to be able to better service applicants.  That seems reasonable to me, except that they shouldn’t have to petition Congress for that money.  The law also provides for a post-award review period where a patent can be challenged without going through the courts.  That may also help to reduce the need for litigation.

The one thing this new patent law fails to do is address the fundamental problem with business method patents, such as the notorious Amazon 1-Click.  A Supreme Court ruling in 2010 called into question the concept of business method patents, and I would hope that Congress addresses this sooner rather than later.  Otherwise, we are still in for a lot of litigation.

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