Patent reform has been in the pipeline, in one form or another for a number of years. It seemed as if it got caught in Committee (the Senate Judiciary Committee) in a never-ending-loop, and just didn’t have the steam or backing to make its way to the full Senate. The America Invents Act now appears to be on its way, having been passed by the Senate in an overwhelming 95-5 vote. A bill was introduced in the House that closely tracks the Senate bill.

Although there are a number of issues that will likely have to be worked out in reconciliation, the following are the major points that are expected to remain, that will or may impact US inventors and filers.

First to file replaces first to invent

Under the present US Patent system, a patent is awarded to the “first to invent”. That is, even if you were “second” to the Patent Office, if you could show that you were the first to conceive and reduce to practice your invention, you would be granted a patent over the first person to file. Under the proposed first to file system, in order to be granted a patent you will have to be the first to file a patent application in a patent office (US or foreign) for the invention. This change harmonizes US law with just about every other major country or region in the world.

Some critics contend that the first to file system disadvantages independent inventors and small companies that may not have the same resources as larger companies. However, those arguments did not prove out and the benefits to moving to the first to file system in predictability and ultimately lower cost (including lower cost for the independent and small entity inventors), outweighed any disadvantages.

Post-Grant Opposition System

Another new proceeding in the Senate bill is a post-grant opposition proceeding. This provides for a nine-month period following the grant or issue of a patent during which any third party can challenge the patent on a wide variety of grounds, significantly wider than the grounds presently available under the reexamination procedure. This type of procedure has been available in the European Patent Office for some time and has been shown to be invaluable in eliminating patents that should, for a number of reasons, not have been granted initially.

Challenges to patents can be on any legal grounds and need only challenge the validity of a single claim of the patent.

Third-Party Submissions

Under the bill, during prosecution of a patent application, third parties can submit any printed publication, along with an explanation of the importance of the submission, and the printed publication will be considered by the Patent Examiner when examining the application. This will allow third parties the opportunity to submit prior art (although it must be a printed publication), early in the prosecution of an application, rather than having to challenge the application after issuance either in reexamination or litigation. Because the submission is during prosecution of the application, the presumption of validity that attaches after the patent has issued does not apply.

Fee Setting Authority

Although the implications of this provision are more procedural than substantive, the bill provides the US Patent and Trademark Office with the authority to set its own fees and funding. In the past, Congress had the authority to set fees and funding. As a result, a significant amount of the revenue generated by the PTO was diverted into the general treasury and did not make its way back to the PTO. That diversion will now end.

While this may result in an increase in fees charged by the PTO (although small entities should still be able to take advantage of reduced PTO fees), the elimination of fee diversion will allow the PTO to increase resources in both manpower and technology, in an effort to reduce the backlog and pendency of patent applications.

Other issues

There are a number of other issues that remain contentious as between the bill passed by the Senate and the bill presently in the House. One issue is the expansion of prior user rights that was not in the Senate bill, but is present in the House bill. This gives a prior user, that is, a party that is using a method before the issuance of a patent to another, greater rights to continue using that subsequently patented method. Although this defense has been available to prior users in the area of business methods, the House bill proposes to expand the scope of this defense.

Other presently unresolved issues include the elimination of the best mode requirement in patent applications, and the publication of all US patent applications (the elimination of the non-publication request), and easing the requirements for assignees filing applications without requiring an inventor’s consent.

As the House bill makes it way though debate and into reconciliation with the Senate bill, more information will be made available.