Blog & Company News

Oct 27, 2011

Fear Not, Inventors: The New Patent Law Is Here!

[caption id="attachment_393" align="alignright" width="472" caption="America Invents Act"][/caption] In September, President Obama signed the America Invents Act, the first major change to the U.S. Patent and Trademark Office in decades, The Huffington Post reported.1 And as anyone who has dealt with the Patent and Trademark Office knows, the outdated system became woefully unprepared to deal with modern business, and more specifically, the explosion in the volume of patent applications related to software and technology. Dealing with the Patent and Trademark Office became a barrier to entry for entrepreneurs. Exacerbating the problem of endless litigation was that patents were being granted for relatively common business practices, with language that was so vague it practically invited lawyers to hash it out in court.

Patent Trolls

Worse yet, patent litigation has flowered into a bona fide business model that crushes innovation. In July, This American Life and NPR’s Planet Money teamed up to present a story, “When Patents Attack,”2 which introduced listeners to the term “patent troll.” "Patent trolls" buy up patents and tie up companies in years of litigation as a means to crush businesses, or maybe just make a buck, or billion. CNNMoney reported that the new law doesn't block "patent-troll lawsuits."9

First to File

The Brookings Institution released a brief3 that touched on the major changes that the America Invents Act creates. One major change is the switch to a "first to file" system. Prior to this legislation, patents in the U.S. were granted on a "first to invent" basis, which invited litigation to determine who truly was the first to invent. In the rest of the world, patents are issued to the first inventor to file.

Fees, Please

Another major part of the America Invents Act allows the Patent and Trademark Office to set and keep the fees it generates, CNN reported.4 In the past, any money the Patent and Trademark Office received was sent to Congress. Now, any excess fees will go into escrow and the Patent and Trademark Office will be able to petition Congress for those fees, according to the article.

Post-Grant Review Process

The America Invents Act also creates a post-grant review process, Washington Post reporter Brad Plumer wrote.5 This allows bad patents to be challenged and supporting evidence to be reviewed in the Patent and Trademark Office rather than in the courts.

Proponents and Critics

The law has its supporters and detractors. Leo Gerard, United Steelworkers international president, said in a prepared statement6 that the bill’s signing “represents an important step” though there’s more to do. "The U.S. manufacturing sector files the vast majority of the world's patent applications, but our success is under attack by other nations as well as by global companies who want to profit at our expense,” Gerard said in the statement. “Enforceable patent protection is an important policy tool necessary to ensure manufacturing success.” In contrast, James Besson of Boston University said the law “really doesn't create jobs for anybody except maybe patent lawyers,” according to The Huffington Post.1 Billionaire entrepreneur and Dallas Mavericks owner Mark Cuban offered on his blog7 suggestions for patent reform—such as doing away with software patents altogether. For more information, visit: 1. “Patent Reform Bill Signed Into Law After Years of Debate” 2. “When Patents Attack” 3. “The Comprehensive Patent Reform of 2011: Navigating the Leahy-Smith America Invents Act” 4. “Obama Signs Patent Reform Bill” 5. “Everything You Need to Know About Patent Reform in One Post” 6. “USW: America Invents Act Advocates Good Jobs, Patent Reform” 7. Blog Maverick: “My Suggestion on Patent Law” 8. “New Patent Law and Its Impact on Small Businesses” 9. "Patent Trolls Cost Inventors Half a Trillion Dollars"