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

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.
Written by Rachel King, Contributor

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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