Senate passes "first-to-file" patent reform

The Senate overwhelmingly passed the first major overhaul to U.S. patent law in more than half a century and no one in Silicon Valley seems happy about it.
Written by John Hazard, Contributor

The Senate overwhelmingly passed the first major overhaul to U.S. patent law in more than half a century and no one in Silicon Valley seems happy about it.

The patent reform bill overturned centuries of precedent that granted patent protection to the first inventor to file a patent application, rather than requiring patent office examiners to decide who was first to produce an invention. The White House, which promoted the legislation, said the changes would reduce legal costs, improve fairness and support American innovators.

The bill promises to create a clear process for patent examiners and clarity for patent petitioners and challengers, according to the Washington Post, which endorsed the bill in an editorial  last month.

[The current approach] invites people to come out of the woodwork years after a product has been on the market to claim credit and demand royalties...

"first inventor to file" standard, [creates] a bright line - the date on which a patent application was filed - and bringing certainty to the process. Yet the bill is not inflexible and wisely keeps in place protections for academics who share their ideas with outside colleagues or preview them in public seminars.

But critics argued that the first-to-file system favors the big guy over the little guy because it favors organizations with the legal resources to file patent claims early and often. Barney Cassidy, general counsel of Tessera, a San Jose tech company that opposed the bill, shared his views with the San Fransisco Chronicle.

...big tech companies of Silicon Valley - Apple, Google, Intel and Cisco - dominate their markets and are "fabulously successful. They're what everyone wants to be, but they typically don't breed disruptive technologies. Those disruptive technologies are being created by the future Googles, Apples and Intels - two inventors in a garage trying something new."

Cassidy argued that the time-tested system of awarding patents to the first person to invent a product has worked well since Benjamin Franklin and other founding fathers wrote exclusive rights for "authors and inventors" into the Constitution.

For their part, the big tech companies, who banded together as the Coalition for Patent Fairness,  were largely silent on the issue of first-to-file, but opposed the bill because it did not do enough to stem litigation.

IBM supported the patent measure and praised the passage of the bill.

"As the top U.S. patent recipient for the past 18 years, IBM believes that S. 23 will enable significant improvements to a system that has not kept pace with dramatic changes in technology and innovation over the last half century. IBM urges the House to complete its work on patent reform legislation and to act quickly to help preserve American innovation leadership and spur economic growth."

The measure faces a greater challenge in the House of Representatives, where the Republican majority, particularly its Tea-Party wing, are more likely to favor individual rights.

As a reminder of what's at stake, The Street's Joe Mont, today, gather ten everyday product that sprang from the minds of lone inventors tinkering in the kitchen or garage.

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