First-To-Invent Era Is Over

September 13, 2011 - Last Thursday, just before President Obama's speech on jobs, the House of Representatives passed the Leahy-Smith America Invents Act. The new law is considered the biggest change to the U.S. patent system in decades. The US will now join the rest of the industrial world with a system that gives priority to the first to file rather than the first to invent.

The legislation allows challenges to patents after they have been allowed for a set period of time — so-called post-grant review — a process similar to that of trademarks. Further, a re-examination of an issued patent can be initiated by anyone except the patent owner, including an alleged infringer, either after the PTO grants a patent or after the post-grant review.

Bill sponsor Sen. Patrick Leahy, D-Vt., called it "the first meaningful patent reform in nearly 60 years." Sen. Maria Cantwell, D-Wash., spoke harshly against the bill, calling it "a big corporate patent giveaway that tramples on the rights of small inventors." She said, "It changes first-to-invent to first-to-file, which means if you're a big corporation with lots of resources you will get there and get the patent."

Alexander Poltorak, founder and chairman of American Innovators for Patent Reform, a coalition of inventors, companies and licensing executives, said the bill would hurt independent inventors, universities and small companies. "The only ones that are going to benefit are large multinationals that sponsored the bill and that drafted the bill," Poltorak said.

The new law fails to recognize the need for different types of patents that offer different levels of protection for different periods of time. The patent laws of most other industrial countries recognize the difference between a major innovation and a minor improvement. In the US all inventions, regardless of their degree of innovation, will continue to be treated the same.

How the patent office implements the new law remains to be seen.

Practically speaking, assertions of "first-to-invent" have rarely made their way into patent litigation. It's simply too easy to fabricate back-dated notebooks, prototypes and other data. Filing a provisional patent with the USPTO is really not that difficult or expensive - independent inventors should not have too much trouble with this aspect of the law.The big change is that inventors will feel pressure to move ahead more quickly with their inventions, to try and discover if they are worth further investment. This isn't all bad. However, the new procedures for post-grant challenges may prove to be painful and expensive.Time will tell.