Patent reform on the way as Obama signs America Invents Act into law

Patent reform on the way as Obama signs America Invents Act into law

Summary: Patent infringement disputes in Silicon Valley could be handled quite differently in a short time as the President signs a new reform bill into law.

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TOPICS: Legal
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The America Invents Act, a bill seeking to reform the way patents are awarded, was signed into law by President Obama on Friday after being passed through the Senate just last week.

Here's how the White House believes this reform will benefit the U.S. in a nutshell:

It will help companies and inventors avoid costly delays and unnecessary litigation, and let them focus instead on innovation and job creation. Many key industries in which the United States leads, such as biotechnology, medical devices, telecommunications, the Internet, and advanced manufacturing, depend on a strong and healthy intellectual property system.

More specifically:

An efficiently operating IP system that processes applications and issues high-quality patents quickly is especially vital to small and new businesses, which create two out of every three new American jobs.

By transitioning to a simpler, more objective, and more inventor-friendly system of issuing patents, the new Act helps ensure that independent inventors and small entities have greater clarity and certainty over their property rights and will be able to navigate the patent system on a more equitable footing with large enterprises.

The Act also establishes a new in-house review process for challenging patents—a process that is faster and significantly cheaper than litigation, which too often stymies technological growth.

Essentially, the new America Invents Act shifts towards a "first-to-file patent system" rather than just a first-to-invent system.

Patents have been a huge source of legal disputes this past year in the tech world, especially in the United States as Oracle, Google, Apple, Microsoft, and countless others are all involved in the patent showdown to some extent -- mainly over mobile technologies these days.

The approval of this bill could have some major effects on the industry, at least within a few years as the law won't go into effect for over a year.

Maybe this will at least please Google Executive Chairman Eric Schmidt, who recently said at Dreamforce 2011 that he thought patents have been handed out too generally in the past and would like to see a more systematic approach to the approval process.

For more about how the new law will work and the potential advantages as well as pitfalls, check out what ZDNet's Joe McKendrick has to say about it.

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51 comments
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  • Software Patent Law? No.

    nt
    Dietrich T. Schmitz *Your
    • yeah like govt can create something by writing a law

      @Dietrich T. Schmitz * Your Linux Advocate
      otaddy
      • Yes, they can

        @otaddy <br>Patents exist because legislatures authorize them and governments grant them.

        Reply to otaddy:

        So you advocate the repeal of all laws and the dissolution of all governmental institutions?

        If there are no problems government can solve, then why not just scrap it and put ourselves at the mercy of your friendly neighborhood warlord?
        John L. Ries
      • Yes you are correct.

        @John L. Ries And the judicial system upholds them, so yes, they did create something.

        What I should have said was: "govts think they can solve problems by writing laws" The law never solves the original problem and creates lots of unforseen problems.

        The patent system is a great example of govt creating more problems than it solves.
        otaddy
  • And here's how it will work.

    Small, independent inventor comes up with a great idea, but doesn't have money to hire a patent lawyer. Whiles he's trying to figure out how to file, big company with $$$ and patent attorneys on retainer take his idea and file. Folks, there was a reason big corp was drooling all over this law.
    baggins_z
    • That was my 1st impression too

      @baggins_z 1st to file means anybody can steal ideas without the need to invent them. Since patent submition cost about $20K, a "garage" inventor will be easily screwed by a big corp with money.

      Another example, an open source project with a very innovative product can lose the product because the single developer/maintainer did not have the money to submit a patent application. I bet you that a lot of companies will be scanning SourceForge for ideas that they can steal and patent.

      What the Obama admin is presenting is not a patent reform ....
      wackoae
      • The quality of the patent application

        Gives an indication of the financial position of the filer. Those without big bucks can support their patents anyway.

        It's a terrible system, entrenchingly anticompetitive.

        The above press releases are the funniest I've ever read.
        Richard Flude
      • Make it public knowledge

        @wackoae
        In the open source case, or in any case where the inventor is more concerned with preventing others from patenting the idea than about acquiring a patent for himself, the solution is simply to publish the idea.

        IBM has maintained a "Journal of Research" for just this purpose for decades. Back when there was a Bell Labs, they had one too. They put stuff in there that they've tripped over, don't want to commercialize, but don't want anybody coming after them with a patent if they ever change their minds.
        Robert Hahn
      • RE: Patent reform on the way as Obama signs America Invents Act into law

        @wackoae - I think it is unlikely that SourceForge will be any more of a hunting ground than it already is. The foundation that the inventor must be the patentor is still in place. If the idea is on a public database like SourceForge, it is pretty clear that said big company didn't invent it. The lab notebooks and such would tell that tale clearly. And if a company were dishonest and fudged the books under the new system, they would have under the old. And what happens if I apply for an NSF grant to study some phenomenon, and Company X decides to patent it? There has to be an inventor/invention connection if this is going to work. Prior art has to come into play, too. So, I don't see this as an erosion of availability for small inventors.

        To me the problem becomes seeking development funding for the idea from companies. You simply can't afford to tell anyone about the idea until after the idea is filed for the actual patent. If you do, you are asking for an end run from one of the companies you shop the idea around to, unless you get a legal document to keep that from happening along the way. Something a small inventor should do, anyway.
        always-a-geek
    • That's the beauty of first to file...

      @baggins_z ..

      (of course, the caveat here is that the USPTO actually implements first-to-file correctly)..

      The beauty of first-to-file, similar to the Torrens system in land titles, is that the filing process for patents becomes a whole lot simpler, and many MANY small inventors can safely file patents without patent lawyers. When you only have to prove that your invention is not obvious and hasn't been previously patented (and in a LOT of cases, one follows the other). Not having $$$ to hire a patent lawyer is less of a problem, when the lawyer isn't needed in many cases.

      Now, said small inventor can go get his/her patent before disclosing the invention publicly. Compare this with the current system (which STILL makes it easy for big corp to steal small inventor's lunch - doesn't work well when Mr. small inventor can't afford a lawyer to fight a "prior art" case) .
      daftkey
      • Sure they can .....

        @daftkey ... because "small" inventors have $20K laying around the floor of their houses that can be used to submit a patent.
        wackoae
      • RE: Patent reform on the way as Obama signs America Invents Act into law

        @daftkey

        First to file does *not* eliminate the issue of "prior art". People are *NOT* going to be simply pulling up ideas from the past and patenting them. Prior art issues will still result in challenges which, if proven, will still result in the patent being revoked. First to file only changes the way that *unpublished* ideas are sequenced, published ideas still make that idea unpatentable.
        George Mitchell
      • @George

        First to file is a direct attack on the prior art requirement.<br><br>It redefines 'prior' to an illogical order that bears no resemblance to time.<br><br>This only works in other places because they have a strong 'must keep the invention secret before patenting', so the order in the patent que fairly closely matches the real order of invention.

        USA doesn't have that, the order in the patent que has trolls with 'vague patents that were never made' at the front, with the proper inventions that took time and research money and work at the bottom.

        It's a patent troll's charter.
        guihombre
      • Wow, drug companies AND the USPTO?!

        @daftkey .. I guess with all the money you Americans save in taxes, they gotta get into your wallet somehow.

        $20k to file a patent? Not sure how many other countries can boast that - definitely not the one to the North of you.
        daftkey
      • RE: Patent reform on the way as Obama signs America Invents Act into law

        @guihombre

        <i>This only works in other places because they have a strong 'must keep the invention secret before patenting', so the order in the patent que fairly closely matches the real order of invention.</i>

        And the Torrens system "only works on other places" because "other places" have mandatory mortgage insurance rules if you buy a house with less than a 20% down payment, and a detailed registry and land titles system.

        That's what I meant by the caveat is whether the USPTO implements the first to file system properly or not.

        My gut feeling is that the government is going to institute this reform law, and then implement the one rule without the rest of the rules that have to go with it, and you're going to suffer the fate of yet another country with lots of money, lots of inventions, and very little experience in running a modern patent system.
        daftkey
      • RE: Patent reform on the way as Obama signs America Invents Act into law

        @daftkey small inventors don't typically have TIME to file - they're busy inventing and don't have access to a fleet of lawyers who know how to dance around the legal and formatting trivia required to get a valid patent accepted.

        Guess who DOES have lots of time, lots of lawyers? Big corps - the ones the patent system is supposed to be protecting the small inventor from.
        spark555
      • I might favor that...

        @daftkey <br>...if software and business method patents were specifically excluded, the USPTO got to keep all fees, serial filers paid more (a LOT more), standards were tighter, and those caught filing false patent applications (or patenting the inventions of others) faced imprisonment and financial ruin, but then again, I'm not sure it's worth the risk that people will lose the right to use their own inventions if they don't file a patent application.
        John L. Ries
      • RE: Patent reform on the way as Obama signs America Invents Act into law

        @daftkey "The beauty of first-to-file... is that... many MANY small inventors can safely file patents without patent lawyers"
        - Despite many years as a design/applications engineer and patent practitioner, I must confess that you have me stumped. In short, the new law is merely a distraction by lawmakers who have yet to even consider issues of patent REFORM... . Nevertheless, you made a statement without any support... So here's your opportunity:
        - First, your "you only have to prove" is entirely incorrect, but you and everyone reading your statement probably already knew that by simply reading the bill.
        - Second, the filing process is already extremely simple... so how does simplifying it further help anyone.
        - Third, if my sole concern was making money, then I'd suggest that ALL inventors should draft, file and begin prosecuting their own applications... My $$$ would multiply many times in the back end with the endless cleanup... if possible at all.
        - You might be a pleasant and intelligent person that simply speaks out too quickly about topics beyond your current understanding and NOT simply a corporate or political stooge... I hope so.
        DigiMediaMan
    • RE: Patent reform on the way as Obama signs America Invents Act into law

      @baggins_z I agree to some extent.

      This bill does little or nothing to fix what's wrong with the patent system. It just changes the timing, and makes it slightly easier for the patent office and courts to declare a winner.

      It does nothing to address the problem of approving overly broad patents.

      It makes it MORE likely that an outfit which didn't really "invent" something winds up owning it for 20-odd years.

      It may reduce the workload on the patent office slightly, which might speed up the process. That's a very tiny bit of good, traded off against an pile of bad side effects, and a huge NOTHING on the main problem.
      spark555
    • RE: Patent reform on the way as Obama signs America Invents Act into law

      @baggins_z - Not necessarily. It may be possible that the process will become sufficiently transparent that a lawyer isn't necessarily required (it really isn't now, it just makes it easier). I am not convinced that will be the outcome, however.

      But what it really means is that the inventor, large or small, cannot afford to communicate his idea until he files the patent. Up until now, once the invention disclosure was filed, the invention date was set. Now, the small inventor will have nowhere to refine his idea to improve the patent, unless he gets a non-disclosure agreement with a non-compete clause signed by whoever he confides in. It makes the job more isolationist, and makes seeking development funding riskier for the inventor, but might benefit him in the long run. Time will tell on that one.
      always-a-geek