obvIPat - Obviously Patentable

The blog for inventors, in-house counsel, & entrepreneurs.

Patent Reform and Making Life Certain: First To File Versus First To Invent

by Orlando Lopez

As a House Judiciary Committee voted on Thursday April 14, 2011, to send to the entire House the marked version of the Patent Reform Act (renamed the America Invents Act), the time is ripe for another view of what drives the first to file rush. The first to file provision is present in the versions of the House bill and is likely to stay there.

One usual argument for the first to file provision is patent law harmonization. The US is the only inventor-centric patent law system and moving to first to file would put the US in sync with the rest of the world. The opposite view is that our patent law system plays a role in the formation of new companies and we already have the world’s best record in starting new technology companies. Granted, this is largely due to an efficient capital market, but is also helped by patents. Those that oppose harmonization stick with the old adage, don’t change a good thing.

Through the many years I spent working in corporations, I never met a Chief Patent Counsel who liked the first to invent system. In fact, most of them have had choice words, of the kind that I cannot print, for the first to invent system. I believe the reason for this is certainty. Corporations like certainty if they can find it.

Consider the following situation (one that keeps many project managers awake); a project manager has convinced the requisite VPs to support a particular new product. Searches and freedom to operate studies have been performed and the patent applications were filed as early as possible. Investments have been made in product development. Unexpectedly, a patent is published, granted to a single inventor, where the inventor did not publish the application, and it appears to cover some of the same inventions as the new product. Now, assuming that the patent applications for the project were filed earlier than the patent (somewhat unlikely given the USPTO’s record in speedy prosecution, but anything is possible), under a first to file system there be no issue; however, if the single inventor had conceived earlier than the project group, had reduced to practice and had been somewhat diligent in patenting (such that there was no abandonment, suppression or concealment), the project manager has a problem. The Chief Patent Counsel has the unenviable task of explaining to the VPs our first-to-invent system.

The need for certainty might explain why most corporations ranging from IBM to Microsoft have endorsed the change to the first to file patent system.

From the point of view of inventors and small entities, as expressed in the letter to each Representative from a group of entities, including the National Small Business Association and the IEEE, the grace period is an important part of the Patent Act. The grace period is changed in the House and Senate versions of the America Invents Act (a.k.a Patent Reform Act). Those changes in the grace period create uncertainty in inventors and small entities, throw away more than 100 years of jurisprudence and restart the process of interpretation, by the Courts, of the grace period.

There is room here for compromise. The language in the section of the present patent law that relates to the grace period, 35 USC 102 (b), makes no reference to the date of invention. The language in 35 USC 102 (b) could be left intact and that portion of the law would still apply to the first to file system. Maybe, in the new spirit of compromise, the House can draft a bill that meets the needs of both large companies and the small inventors.


Leave a Reply