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    America Invents Act Forges Ahead; Concerns Remain About First-To-File, Other Provisions

    Published on 6 December 2011 @ 1:20 am

    By for Intellectual Property Watch

    WASHINGTON, DC – The US Patent and Trademark Office (USPTO) is charging full-steam ahead in implementing the American Invents Act (AIA), but some are warning that the trademark first-to-file provision and other elements may do more harm than good to the patent system.

    AIA, the historic patent reform legislation passed by Congress and enacted in September of this year, includes, among other things, provisions that switch the United States from a first-to-invent system to first-to-file, bringing it in line with many other countries. Although many argue that such a system will make the patent process more accurate and efficient, and will benefit all inventors, many small inventors, businesses and universities say it is the “little guy” that will be hurt by the rush to file with the USPTO.

    Shifting to a first-to-file system “sounds great in theory … but in practice is actually not going to work that way,” Adam Mossoff, a professor at George Mason University’s School of Law, said Monday during the Intellectual Property Owners Association’s (IPO) Patent and Trademark Office Day.

    He noted that few empirical studies have been done on the effectiveness of first-to-file in countries that employ the system. Those studies that have been done show that small companies and inventors are hurt most, he said. David S. Abrams and R. Polk Wagner, of the University of Pennsylvania Law School, released a study in August comparing first-to-file and first-to-invent systems, focusing on Canada’s experience with first-to-file.

    There was a “significant drop in the fraction of patents granted to small inventors in Canada coincident with the implementation of first-to-file,” Abrams and Wagner said in their study. “We also find no measurable changes in patent quality. While the net welfare impact that can be expected from a shift to first-to-file is unclear, our results do reveal that, contrary to the conventional wisdom, the rule change is not free – it is likely to result in reduced patenting behavior by individual inventors.”

    Abrams and Wagner conclude that the first-to-file system will simplify and streamline the US patent system, but at a cost. “A change in the first-to-file rule in the US should be expected to result in the reduction of individual inventors’ share of patents,” they said.

    In most industries, it is small businesses and individuals who remain the engines of innovation – the very entities with fewer resources whom first-to-file skeptics claimed will be hurt the most.

    “In the tech world, individual inventors matter,” Mossoff said, ticking off well-known names like Steve Jobs, co-founder of Apple, and Facebook founder Mark Zuckerberg. ”These are all individuals who started in their garages or dorm rooms” and used outside funding to get off the ground businesses that “utterly destroyed preexisting, well established, successful firms.”

    “Individual inventors like these people are unable to absorb” the huge administrative costs and paperwork burdens that are going to be placed upon them by the AIA, Mossoff added.

    Still, first-to-file advocates say the switch is needed to boost global harmonisation efforts.

    “Moving to a first-inventor-to-file is an extremely important cog in the machinery in going forward with harmonisation,” said David Kappos, undersecretary of Commerce and director of the USPTO. “Harmonisation in and of itself is not critical but what’s important is we find mechanisms to interact better so we can rely on work done in other offices more.”

    There are other concerns with the AIA, as well.

    Dale Lazar, an intellectual property lawyer and partner with DLA Piper LLP in Reston, Virginia, expressed concern about the one-year grace period for first-to-file in the AIA, which allows an inventor to make disclosures regarding his or her invention – whether it be at an industry conference, in an industry journal, or other venue – in advance of filing a patent application. This grace period, however, is not adhered to in every country.

    “I feel much less comfortable relying on that one-year grace period under the new law than I do the current law,” Lazar said, adding that inventors should not rely on the new grace period or base a patent strategy on publishing before filing the actual patent application.

    He also said it’s “dangerous” for inventors or organisations to rely on provisional applications to act as a place saver, so to speak, while an inventor is figuring out the details of his or her invention for the regular application process. A provisional application essentially puts the applicant on record for filing first, giving them time to further develop their idea. It allows the applicant up to 12 months to file a regular application and offers benefits such as priority date upon filing and having a prior art reference against subsequently filed applications for the same idea by a different inventor. Applicants must provide certain information on the provisional application that will hold true with the regular application and invention itself, such as the full scope of the subject matter or invention needs if an inventor wants to claim that on the later-filed application.

    “You have to have a pretty good idea of what you’re going to be claiming in your application … you still need to make sure that the invention that’s eventually going to be claimed in your application is described and enabled,” Lazar added. “This whole notion of filing a quick, cheap and easy provisional application is a dangerous one.”

    He noted that many companies, particularly emerging ones, are unwisely utilizing this strategy. “This has already bitten an inventor in the butt,” Lazar said, referring to the case, New Railhead Manufacturing, LLC v. Vermeer Manufacturing and Earth Tool Co., in which the Federal Circuit affirmed a lower court finding the patent application invalid based on the inadequacy of the first-filed provisional application.

    “Take as much care with the provisional application as you would the regular application, despite the intense time pressure we’re under,” Lazar said.

    Kappos: US is Pushing Global Harmonisation Talks

    Patent harmonisation discussions are moving full-steam ahead with a number of countries, with the US leading the charge.

    The USPTO in March met with a number of Asia-Pacific Economic Corporation (APEC) member countries, and China, Brazil, and other developed and undeveloped nations vowed to move harmonisation forward. Patent offices in Germany, France, the Netherlands and elsewhere have signaled similar interest. Kappos said the rest of the world, particularly Europe, was waiting to see if the US would ever really pass patent reform before they got more serious about harmonisation.

    “They’re taking it very seriously now,” Kappos said. “Not only have we seen greater interest in harmonisation, I think it’s fair to say the IP community … the US IP community, is taking the lead in pushing global patent law harmonisation talks forward with the first time in a decade.”

    The USPTO also is:

    -In the second year of talks with the EPO to move to single, common classification system called the Cooperative Patent Classification (CPC) to improve patent searching. The CPC will be based on the International Patent Classification (IPS) system administered by the World Intellectual Property Organization, using the European Classification system as a basis and incorporating the best classification practices of the USPTO. The offices are on schedule to complete this system by the end of 2012. Patent offices in Japan, Korea and elsewhere have also signaled interest in the CPC.

    -Planning to soon launch a new Web site that is more user-friendly, with visible links to the AIA.

    -In the process of writing draft rules regarding inter-partes examination and post-grant review, among other topics, which will be released in mid-January for comment.

    -Down to a 670,000 patent application backlog; it’s expected to get below 620,000 by the end of 2011.

    -Reducing the time it takes to complete a first action on a patent application. It’s now down to 18 months, and should be under 14 months by the end of 2011. The goal is to reduce that number to 10 months.

    -Experiencing a patent examiner attrition rate of just 3 percent

    -Scrapping a “Project Exchange” pilot that would have allowed applicants to drop a pending application in order to advance another application in the queue. The USPTO is continuing a more successful Green Technology Pilot Program pilot that Kappos has called an “unqualified success.” Under that program, applications involving reduced greenhouse gas emissions, energy conservation and environmental quality are accelerated in their review at no cost to the inventor.

    -Working with the EPO and patent offices in Germany, the UK, France, and other countries to put the finishing touches on a comprehensive matrix of current practices. The USPTO is planning another heads of office meeting in the spring to focus on harmonization.

    “On the back of the AIA, how do we get the European and Asian countries now to move to a 21st century patent system like the US has just moved to?” Kappos asked, stressing the need for a more inventor-friendly grace period and other updated patent practices. The goal is to work toward norm-setting at WIPO sometime this decade.

    Liza Porteus Viana may be reached at lizapviana@gmail.com.

     


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    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

    2. You understand and agree that Intellectual Property Watch is not responsible for any content posted by you or third parties. You further understand that IP Watch does not monitor the content posted. Nevertheless, IP Watch may monitor the any user-generated content as it chooses and reserves the right to remove, edit or otherwise alter content that it deems inappropriate for any reason whatever without consent nor notice. We further reserve the right, in our sole discretion, to remove a user's privilege to post content on our site. IP Watch is not in any manner endorsing the content of the discussion forums and cannot and will not vouch for its reliability or otherwise accept liability for it.

    3. By submitting any contribution to IP Watch, you warrant that your contribution is your own original work and that you have the right to make it available to IP Watch for all purposes and you agree to indemnify IP Watch, its directors, employees and agents against all damages, legal fees and others expenses that may be incurred by IP Watch as a result of your breach of warranty or of these terms.

    4. You further agree not to publish any personal information about yourself or anyone else (for example telephone number or home address). If you add a comment to a blog, be aware that your email address will be apparent.

    5. IP Watch will not be liable for any loss including but not limited to the following (whether such losses are foreseen, known or otherwise): loss of data, loss of revenue or anticipated profit, loss of business, loss of opportunity, loss of goodwill or injury to reputation, losses suffered by third parties, any indirect, consequential or exemplary damages.

    6. You understand and agree that the discussion forums are to be used only for non-commercial purposes. You may not solicit funds, promote commercial entities or otherwise engage in commercial activity in our discussion forums.

    7. You acknowledge and agree that you use and/or rely on any information obtained through the discussion forums at your own risk.

    8. For any content that you post, you hereby grant to IP Watch the royalty-free, irrevocable, perpetual, exclusive and fully sub-licensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part, world-wide and to incorporate it in other works, in any form, media or technology now known or later developed.

    9. These terms and your posts and contributions shall be governed and interpreted in accordance with the laws of Switzerland (without giving effect to conflict of laws principles thereof) and any dispute exclusively settled by the Courts of the Canton of Geneva.

     

     
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