Patents exponentially increase an
invention’s earning power. That
means any changes to patent laws carry high stakes for inventors and companies. Over the past 10 to 15 years, various
parties have tried to reform U.S. law to
align with the standards found throughout
most of the rest of the world.
“Most other countries follow a first-to-file
system where the first individual or company to file is entitled to the patent,” says
Mitchell J. Weinstein, head of the IP service
area at Levenfeld Pearlstein LLC. “The U.S.
has always followed a first-to-invent system, but the Patent Reform Act of 2007
would include the significant change of
making it a first-inventor-to-file system.”
Smart Business spoke with Weinstein
about the potential implications of the
Patent Reform Act of 2007 and how companies should prepare for them.
What changes would occur if the Patent
Reform Act of 2007 became law?
The first-inventor-to-file system is a compromise between the longstanding U.S.
first-to-invent system and the global first-to-file system. For example, let’s say you
and I are working independently on inventing the light bulb. I invent it today, and you
complete it next week. Whichever one of
us files first is entitled to the patent. [If you
steal the idea from me, you’re not entitled
to the U.S. patent.]
Even with reforms, the U.S. law will still
be distinctly different from those in other
countries because patents in this country
are filed under the name of the inventor
instead of, as often happens in other countries, under the inventor’s employer. Also,
U.S. law would still include a grace period
of one year under the first-inventor-to-file
system. In other places, once individuals
disclose an idea, everyone has rights to it.
This new system really promotes individuals preparing and filing patent applications
as quickly as possible.
What forces are driving these possible
changes?
Three underlying forces have pushed
these modifications forward. The first involves the desire to streamline the patent
system so that it’s easier, faster and more
effective. The second encompasses making the system itself more transparent. And
the third aims at reining in the rising cost of
litigation as well as damages, awards and
royalty rates awarded to nonmanufacturing owners.
Greater disclosure requirements during
the patent application process shift the
responsibility onto the patent applicants
and off of the examiner. By revealing details
to the public early on, the patents should
come through the system better examined
and tested — and quicker. At this point, a
patent application related to computer technology can sit for five to seven years before
it’s examined. During that interim period,
the inventor has no rights to protect himself
against patent infringement.
What’s the history behind U.S. patent law?
The last true reformation of U.S. patent
law happened in 1952. Over the past 15 to
20 years, legal battles occurred when
inventors kept their patents secret until a
whole industry had developed around the
new technology. After many companies invested billions of dollars, nonmanufac-turing patent owners would come out of
the woodwork and sue everyone in the
industry. These ‘submarine patents’ were
sometimes very questionable, and their
owners would use the cost of litigation as
leverage to enter into licensing programs.
To alleviate this issue, earlier attempts at
reform throughout the past five to 10 years
tried to do away with these questionable
patents. The 2007 reforms are trying to take
this a step further. There has especially been
a big push to move the changes through
with a Republican administration in power.
What recent developments have occurred?
This year there’s been a renewed bipartisan push to get legislation through so that
the patent system doesn’t create a disincentive for research and development in
high technology areas. Government leaders feel the national system needs to conform to the capitalistic, entrepreneurial
and competitive global society.
How should companies prepare themselves?
The most important step businesses
should take right now is to develop and
implement a good process to identify, vet
and patent the most important inventions as
quickly as possible. Another crucial action is
to identify your company’s core competency
areas and to stay aware of what your competitors are doing in terms of the marketplace and patent protection. Researchers
intimately familiar with the technology and
the patent system can help identify potential
opportunities and concerns. These individuals should work hand in hand with an IP
attorney to determine the scope of patent
protection and to avoid stepping into someone else’s territory.
To remain competitive, businesses need to
be smart about their patents. You can’t
patent everything but, for your areas of
focus, you should have an effective patent
program in place. You also need to consider
whether you should go beyond a U.S. patent
to global protection in new markets.
MITCHELL J. WEINSTEIN is the head of the IP service area at Levenfeld Pearlstein LLC. Reach him at [email protected] or
(312) 476-7593.