16
Sep
billl1

If you've watched or read any of the major American news outlets today, you might have heard a solid 15 second mention about a little piece of legislation known as the America Invents Act. You probably heard that it brings the most sweeping changes to American patent law in the last half-century, and that it should ease the burden of patent filing for both inventors and the USPTO (United States Patent and Trademark Office).

You also know patent litigation is a major part of life as an Android fan, so your interest was probably at least piqued by the passage of this bill.

But what is actually changing for the patent system? That is a more complicated question. A lot, actually. But you've probably only heard about the two truly major changes to the system. (Relatedly, here's a list of things that will be changing this month. They're all pretty boring.)

First, as of March 2013, the U.S. will switch to a "first to file" patent system, as opposed to the current "first to invent" system. There have been heated arguments from some activists that this will drive innovation away from the US, while proponents of the bill say it will ease the already lengthy and difficult process of patent prosecution.

Second, the USPTO now has the authority to set and collect its own fees, instead of having them held in escrow by congress. This means the patent office will inevitably have more money to spend on things like hiring patent examiners, as well as providing funds to help the never-ending challenge to keep the PTO and its technology and methods evolving with the times. This change has mostly been debated by congress, who desired to keep control of the PTO's funds and appropriate what they deemed "extra money" into other programs or agencies.

There has also been a change to stop a continuing and, frankly, deplorable trend among certain patent "trolls" by allowing what is called "virtual marking" on patented technology. Presently, every piece of technology subject to a patent must be physically marked to avoid lawsuits from third parties claiming they were damaged by "unknowingly" selling or manufacturing patented technology (it's as dubious as it sounds). Under the new law, marking may be done "virtually" where possible.

But let's go back to number one.

Why Is "First To File" A Big Deal?

First to file is by far the most controversial portion of the America Invents Act. Opponents have even gone so far as to argue that the Constitution of the United States itself may be in disagreement with a first to file system. Under the Constitution, patentability is discussed as follows:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

Article I, Section 8. U.S. Constitution.

Opponents of the bill have argued that the use of the word "Inventors" in the Constitution limits the patent system to a filing basis of only first to invent, and that first to file is in direct contradiction to the Copyright Clause.

You can expect a case made on this very argument to be making it to a federal court within months, or even weeks of the enactment of the change (March 2013). It's a very interesting constitutional question, and I can honestly see where they're coming from.

But back to the big heading, who cares? The current system in America (first to invent), to put it into an example, works like this. If you invent something, let's say a widget crusher, and no one else has invented such a thing, you are deemed for legal purposes to have invented it from the day you begin working diligently on reducing that invention to practice (as in, making it work).

So, let's say on January 1st, you come up with the idea for the widget crusher, and every day thereafter, you start working on prototypes and diagrams and generally do a lot of inventing. On June 1st, you produce a working model of the widget crusher. You file the patent for the widget crusher on June 2nd (writing a patent takes way longer than that, but for simplicity's sake...), only to find that Mega Corp filed a patent very similar to yours for a Widget Decimator on May 15th. You remember bragging about your idea to some friends, one of whom may have worked for Mega Corp, but you never actually published it anywhere in writing before filing.

Mega Corp began work on the decimator in April, and because they have so many engineers, they completed it in a fraction of the time as you. Under first to invent, all you had to do was show that you began working (diligently) on making the same invention at an earlier date, and that you arrived at a solution without relying on the patent filed before yours. Once you show that, Mega Corp owes you mega bucks for their mega infringement. It doesn't matter if it was mere coincidence, either.

Under first to file, the answer becomes much less clear. You'd have to prove that you actually disclosed the idea (is conversation with friends "disclosure?") first. If you didn't, then you'd have to try and prove inequitable conduct, and that's a high bar to meet.  This could be a massive evidentiary burden, and now there is a presumption that because Mega Corp filed first, they invented first. It's your burden to rebut that, and until you can, Mega Corp goes on selling your invention to the public.

This is a bit of a simplification, but you get the idea - opponents of the bill have generally been small inventors and venture capitalists, and proponents have often been major tech and engineering firms. The faster you are about filing patents, the more you like this bill, basically.

(Aside: In all practicality, the vast majority of patents filed today are deemed to have been invented on the filing date unless there's an attempt by a third party to prove they invented it first. That's because the vast majority of patents are filed by major engineering firms and tech corporations, which are very good at keeping secrets - this keeps interference proceedings simpler.)

There's a "grace period" in the act to protect against the unfair scenario I described as a result of first-to-file, in which an inventor may publicly disclose his invention without foregoing his right to patent it, so long as he files for that patent within one year of the disclosure. But, if a third party non-inventor discloses the invention before the inventor, the inventor forfeits the right to patent because the disclosure operates as "prior art." But a semi-public disclosure of the kind I described would be very hard to prove in court, and it creates a major hurdle for the original inventor.

Proponents of the bill argue that today's lengthy interference proceedings (basically, who invented it first) that are a part of major patent prosecution in our first-to-invent system pose a bureaucratic barrier to actually acquiring a patent, and that their elimination in favor of new post-grant proceedings will reduce the number of frivolous or questionable claims brought before the PTO because the incentive (stopping the patent before it's granted) has been removed.

All in all, there's a lot of considerations here, and both sides are blowing smoke and making hyperbole to some extent. We won't know how first to file will affect our patent system until it comes into effect, it might not even be all that big a deal. But we've got exactly 18 months to wait on that - so try and ignore any doomsayers or hype-men until 2013.

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • sharlzg

    No change is valuable unless it stops hypocrApple's frivolous waste of time peeing on others turf claims.

  • Jon Garrett

    First to file means that everything that shows up at trade shows will be up for grabs.

    This new law sounds like it will make it much easier for patent trolls to operate.

    Why should a person or a company be allowed to patent something they didn't invent.

    • David Ruddock

      That is not how first to file works - and it's a common misconception spread irresponsibly.

      Trade shows operate as a disclosure. Once the original inventor discloses, he has a year to file for a patent. Anyone filing in the meantime will be later barred by prior art.

      It still could hurt inventors because these companies will be able to file in the first place, but it would be in bad faith, and potentially subject to some very serious punitive damages.

      • EngineerGA

        But how do you prove you disclosed this exact invention at the trade show? Do you have to keep photographic evidence or have witnesses? What if the invention is a process that you can't photograph or is only spoken in a one-on-one session? Not all things disclosed at trade shows are put in the transcript, so to speak.

        Let your new idea slip at a trade show, some other guy claims to have not heard it and runs off to start work on your idea, and he can patent it if he beats you to the USPTO because you can't prove anyone heard it or that it was even disclosed?

        I agree with the guy above who says this makes it more complicated. I think it means we will see some pretty bland trade shows that only display things that are already in the "patent applied for" state. I know I wouldn't risk showing off my idea before I got in the patent queue now, since it doesn't matter that I've been working on it for years if some other guy claims ignorance and can steal the idea that you can't prove you disclosed.

        • Telanis

          What are you on? It's easier to prove you were at a trade show than to prove you "invented it first".

  • scorpus

    Dead on about trade shows...

    As I see it, and a point to think about is, that if you read the last word of Article I, Section 8. of the Constitution, the word "discoveries" would indicate just what it says, its when you invent your widget and not when you file a patent for it. I don't see how that can be interpreted in any other way.

  • Randy K

    "There's a "grace period" in the act to protect against the unfair scenario I described as a result of first-to-file, in which an inventor may publicly disclose his invention without foregoing his right to patent it, so long as he files for that patent within one year of the disclosure."

    I had to take training about disclosure since I work for a "MegaCorp" ;) and support an R&D department.

    IF I understood the training, while the US has the one year "grace" period, most of the rest of the world does not, so there for if you disclose a patentable idea you may have issues getting a patent outside the US. What I do remember from the training is that any disclosure at "MegaCorp" has to go though the "MegaCorp" patent law dept first and normally require a NDA.

  • Dominik

    Another win for big corporations IMO. I didn't even know about this act until Steve Perlman spoke out about it. He mentioned that in four sessions of congress, they didn't have one single inventor testifying only reps for big business, who have been driving this bill.
    In fact Perlman gave a nice flowchart about how they progressed with their development of Mova. He showed how many different steps and backtracking and rethinking their strategy it took to come up with a solution that works. Under the current law they would have to file patents everytime they took a step, even if its the wrong step, while under the first to invent system they could just file the shortest path of patents that it took to cover the product start to finish, once it was completed. Invention is a lot of trial and error and you don't always know what's going to work before you try it.
    This of course is not a problem for big corps with Teams of lawyers ready to file a patent everytime one of their engineers sneezes. It sure makes it more difficult for the guy with a great idea trying to start out in his garage or with even the guy who has some savings and few small investors.

  • ABT Benjamins

    A note about the Constitutional clause quoted on copyright. This clause is located in Article I section VIII, in which the powers of congress are defined. It grants congress the power to promote arts and sciences, but a lot of people seem to interpret it as a defined right for inventors. No where on the Constitution is it stated that Congress has to use the powers granted to it.

  • Vince

    So much hulabaloo about nothing...

    • Dominik

      That's the problem, people thinking it's about nothing.
      Inventors and Entrepreneurs have been very vocal speaking out against this bill because many of them wouldn't have been able to do what they did under a 'first to file' system. In the meantime no one even seems to know about this bill and credit goes out to AP for mentioning it, even though I don't think the potential negative consequences were addressed to the degree that they warrant.

  • Vicky

    Hey David, what kind of law are you planning on going into? Do you want to do patent law? I'm an adopting law student, so it's just nice to see such in dept legal analysis.
    And how to you manage being able to still write for AP and all

    • Vicky

      -- How are you able to manage still writing for AP and all the readings as 1L? I've heard a lot of schools don't want you to work your first year.
      (sorry, the message got cut off there)

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