The most controversial provision of the act — passed by Congress and signed by President Barack Obama on Sept. 16 — significantly models the U.S. patent system after Europe's by awarding patents to the first inventor to file an application rather than to the first person to invent the technology.
This new law radically alters patent rights, particularly for small businesses and individuals who typically lack resources to rush to the patent office.
Although some tout the law as enabling applicants to obtain patents faster, others predict the fallout will be harmful to small inventors.
In an effort to balance these concerns, the new law orders government lawyers to conduct a study (at taxpayer expense) to gauge the effects on small inventors occasioned by awarding patents to the first inventor to file rather than to the first person to invent, and to assess whether this system "creates, mitigates or exacerbates" disadvantages to obtaining patents by small entities. These government agencies must complete the study within the next 12 months; however, the new patent filing system takes effect in 18 months.
Even though there will be no direct U.S. data for the government study, we can look to Canada for insights on the effects of the conversion.
An empirical study, conducted by professors at the University of Pennsylvania Law School, predicts a negative outcome based on data collected from the Canadian patent office following Canada's conversion to the European-style, first-tofile system.
The study showed that the numbers of patents granted to small inventors dropped significantly in the 20 years following Canada's implementation of its first-to-file system. It concludes that the first-to- file conversion in the U.S. likely will yield fewer patents issued to individuals and small businesses, and will diminish patent quality as inventors sprint to the patent office with minimal technological descriptions based on early prototypes.
The first-to-file provision will affect other aspects of U.S. patent law, including the definition of "prior art" that would invalidate patents.
Large conglomerates tend to support the first-to-file system because they believe it will simplify ownership disputes and they can bear the expense of early and frequent patent filings. Other companies strongly oppose the provision as harmful to American innovation.
Small inventors and businesses tend to oppose the first-to-file system, saying it stacks the deck against them because they have fewer resources to compete in the race to the patent office.
Interestingly, a survey of patent practitioners shows that those in the business of obtaining patents largely oppose the patent provisions in the new law.
Likewise, these patent practitioners reject the claim that the law will create many new jobs, as proponents maintain, except for the lawyers who will spend the next decade litigating the meaning of the law.
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