Now that the Senate is set to vote on the Patent Reform Act of 2011 this week, the mainstream media is weighing in on the issues. This Saturday, The Washington Post published an editorial in support of patent reform, (“Why The patent process should be overhauled,” Feb. 26, 2011) but it butchered the background facts so thoroughly that it did more to confuse the issues than enlighten the public. I sincerely hope that Senators are better informed when they place their votes this week.
The First To Invent System
The Washington Post says that the U.S. patent system “lags woefully” behind the rest of the world with its unique “first to invent” system. According to the post, not having a “first to file” system
invites people to come out of the woodwork years after a product has been on the market to claim credit and demand royalties.
This may have been a problem before the U.S. adopted the “18 month publication” rule, but for the past 10 years (since 2000) most patent applications are published 18 months after they are filed. Applicants can request “non publication,” but only if they forego foreign patent protection. Most foreign patent applications also are published within 18 months, so now there is very little risk that a “submarine” patent will surface for the first time “years after a product has been on the market.”
And, just to make things clear, if a product was on sale in the U.S. more than one year before the patent application was filed, 35 USC § 102(b) would prevent (or invalidate) the patent.
In describing the “first to file” provisions of the Patent Reform Act, the Washington Post says that it
wisely keeps in place protections for academics who share their ideas with outside colleagues or preview them in public seminars.
Lest my corporate clients be concerned, the Senate bill draws no distinction between academics speaking at seminars or marketers promoting a product at a trade show. Rather, the proposed law would exclude from prior art (within a one-year grace period) any disclosure made by the inventors or by someone else who obtained the information “directly or indirectly” from the inventors, and any disclosure occurring after such an inventor-originated disclosure has occurred.
There may be good reasons to abandon the “first to invent” system for a “first to file system,” but it’s not because it would prevent competitors from “coming out of the woodwork” years after a product has been marketed. And, limiting the “grace period” currently offered by 35 USC § 102(b) may enhance competition, but the downsides deserve more careful consideration before we change the rules that inventors have played by for decades.
The Lengthy Examination Process
While I agree that the time it take to prosecute a patent application can be problematic, The Washington Post loses credibility when it refers to the “secretive and lengthy U.S. process.” Although “secret” patent prosecution was the law of land before 18 month publication was adopted in 2000, all papers issued and filed during prosecution of a published application are available to the public, and can be readily and freely accessed on the USPTO’s Patent Application Information Retrieval website. Thus, competitors can monitor prosecution of patent applications that attempt to cover their products, and need not be blindsided by an infringement suit “long after their products have gone to market.”
I myself have written about problems with the lengthy patent examination process (and suggested possible solutions), but the Patent Reform Act doesn’t address any of the issues that arise during ex parte examination. Indeed, if any patent law is enacted that changes any of the substantive requirements for a patent (such as changing to a “first to file” system), patent prosecution will be even further protracted as the USPTO and applicants learn how to apply the new rules, and call on the Federal Circuit to weigh in with its interpreation of new statutory provisions.
Inter Partes Proceedings
In a brief reference to the proposed changes to inter partes proceedings, the Washington Post asserts
Third parties, currently shut out of the process, would be given clear rules and time limits to challenge patents that have not yet been approved. They’d also have a chance to lodge objections after a patent has been granted . . . .
This passage makes it sound like third parties cannot do anything before grant now, but will be able to do significantly more if the Patent Reform Act is enacted. That’s not how I read the Senate bill, however.
There is a section in the Senate bill on “Preissuance submissions by third parties,” but third parties already have a limited right to submit prior art under 35 USC § 301 and 37 CFR §1.99. The Patent Reform Act would minimally expand that right, such as by permitting (actually, requiring) the third party to explain the relevance of the prior art, and accepting submissions up to 6 months (rather than 2 months) after the application was published, as long as no Office Action has issued yet.
This passage also makes it sound like post-grant, inter partes proceedings at the USPTO would be a completely new option, but of course we already have an established reexamination process under 35 USC § 311, et. seq. The Patent Reform Act would bring significant changes to the post-grant review process, but unless you understand the current reexamination process, and factors that limit its popularity and effectiveness, you can’t evaluate whether the Senate bill offers a better system.
Patent Office Funding
The Washington Post editorial gets at least this much right:
The PTO has long been overwhelmed and underfunded.
While the editorial focuses on the fee-setting authority that the USPTO would be given under the proposed law, it glosses over the real cause of the USPTO’s funding problems (fee diversion), noting only that Sen. Tom Coburn (R-Okla.) may introduce an amendment that “would allow the agency to keep all of its fees.” I think the possibility of a $300 million fee diversion for FY 2011 and a $700 fee diversion for FY 2012 deserves more attention.
The editorial also notes that, under the Patent Reform Act, the USPTO would be able to “provid[e] discounts to solo inventors and small companies.” But this is not news when you know that Small Entities already enjoy a 50% reduction of many USPTO fees.
Muddying The Waters
There are problems with the U.S. patent system, and the Patent Reform Act of 2011 may be a step in the right direction, but by supporting the proposed law with commentary that is misleading at best and incorrect at worst, The Washington Post has muddied waters that already were murky. Before Senators vote on the bill, I hope that they are thoroughly briefed on the real issues behind the drive for patent reform, and understand the specific changes—and likely impact—of the proposed law.