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Wealth of Ideas, October 2005
Beneath the usual intellectual property headlines of
big lawsuits and settlements, a major change in the
patent law is quietly making its way through the U.S.
House of Representatives. H.R. 2795, or "the Patent
Reform Act of 2005", as it has become known, seeks
to make major changes to some fundamental aspects of
U.S. patent law.
One of the proposed changes - and one which will have
a negative effect on small businesses and individual
inventors - is the change from a first-to-invent to
first-to-file patent regime. Unlike foreign patent offices,
the USPTO has allowed inventors to make or sell an invention
and still file a patent application on it within a year
of their first public disclosure of the invention (and
for more on that topic, see our December
2004 feature article on Patent Basics: Statutory Bars).
So long as the inventor proceeds with developing the
invention and preparing a patent application, and did
not abandon or conceal the invention, filing within
one year of the date of first sale or disclosure will
secure a patent to the first-to-invent rather than first-to-file
applicant.
The first-to-file system will put pressure on inventors
to turn inventions into patent applications quickly
and set off a race to the Patent Office. Needless to
say, large corporations with their in-house legal departments
and law firms on retainer will have a significant advantage
over an independent inventor or small R&D firm who
first have to find a patent attorney and scramble for
funds to pay for their patent application.
Other provisions of the bill, such as the limitation
on damages, if passed, will significantly affect the
economic value of patent rights for small inventors.
The USPTO would also have more avenues available for
settling patent disputes without litigation, including
a post-grant administrative process for answering questions
of validity. Proponents of this change hope that it
will help to both improve the quality of patents by
subjecting them to more examinations and also help to
reduce the number of costly patent lawsuits.
Many of these changes are designed to cut back on patent
litigation, especially on cases brought by the so-called
"patent trolls" - those who buy a patent solely
for the purpose of enforcing it, rather than practicing
the patented invention. (See "On Patent Trolls
and Other Patent Myths", by Alex Poltorak, for
more information.) However, with the current version
of the patent reform bill sporting wide changes to the
patent system, inventors and innovation will suffer
if this bill becomes law.
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