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Is patent reform bad for business?

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On June 23, 2011, the U.S. House of Representatives passed House Bill H.R. 1249 (the Leahy-Smith America Invents Act), following Senate approval of bill S.23 (the America Invents Act) on March 8, 2011. Thereafter, President Obama indicated that he will sign into law the patent reform bill that arrives on his desk.

In view of the overlap between the bills, the reality of the United States joining the rest of the world by switching from a “first-to-invent” system to a “first-to-file” system is growing stronger. While such a change is touted as harmonizing the U.S. patent system with most other countries, U.S. businesses, both large and small, as well as individual inventors, should assess the impact of the switch on protection of their critical intellectual property assets.

For the last two centuries, U.S. patent law has provided that anyone who first conceives of an invention and reduces the invention to practice (either by actually making/using the invention or by filing a patent application) is considered an inventor, and will be eligible for patent protection if: (1) the application describes the invention with sufficiency so as to enable someone skilled in the relevant “art” to make and/or use the invention; and (2) other requirements such as novelty, usefulness and non-obviousness are satisfied. Under our current system, if two (or more) inventors independently file patent applications to similar inventions, the inventor deemed to be the first-to-invent is then given priority over the other party or parties.

In contrast, under a first-to-file system, priority is typically given to the first application filed, thereby creating a virtual race to the patent office.

Over the years, opponents of the first-to-file system have argued that such a system encourages applicants to file a greater number of applications quickly under the fear of losing the race to a competitor. In addition, the perceived rush to file could result in a greater number of applications being filed without having enough content (e.g., examples, data, etc.) that would be necessary to satisfy the requirements of patentability.

The net result, in the eyes of these opponents, is added costs to the inventor/company resulting from quickly filing multiple applications, some of which will experience significant prosecution costs and may never issue due to premature filing.Other associated concerns include an increase in the already existing back-log of pending applications awaiting examination, less time being devoted to examination of all new applications and a corresponding decrease in the quality of U.S. patents.

In light of these concerns, it becomes even more critical that patent applicants satisfy all existing U.S. requirements for patentability. The rush to file also increases the likelihood of a deficient application barring patent protection by a more complete later filing by the applicant for a similar invention. For all of these reasons, rushing an application to the patent office, without first ensuring that the subject matter is sufficiently supported, may be a waste of company resources that could result in a worthless patent, or worse yet, no patent protection whatsoever.


Submitted by Antony M. Novom. Novom is an attorney in the La Jolla office of Sughrue Mion PLLC, specializing in patent prosecution and strategic management of patent portfolios. He can be reached at anovom@sughrue.com.

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