Congress Reforms the Patent Process

The America Invents Act, a new law passed by Congress last week and expected to be signed into law by President Obama, is the first significant reform of the Patent application process in sixty years. The Act makes a number of major changes in how inventions are protected in the United States. The most important change is a shift from a “first to invent” to a “first to file” system of patent protection. Under the “first to invent” system of patent ownership, an inventor who did not file for a patent had the right to challenge the validity of a patent issued to another inventor on the grounds that the inventor had been the first to conceive the patented idea or process. Under the “first to file” system, ownership of a patent is determined by which entity was the first to file a patent application, not the first person who conceived of the idea or process. Advocates of the America Invents Act argue that most countries follow the “first to file” system of patent protection and that the “first to invent” system created uncertainty as to the validity of granted U.S. patents as well as inconsistencies with patent systems in other countries. Critics of the new Act argue that the “first to file” system primarily benefits large, well financed corporations who have the resources to monitor and file patent applications. These critics argue that smaller companies and entrepreneurs will be placed at a disadvantage under the “first to file” system, because they will lack the resources to file patentable ideas and processes. In addition to switching from a “first to invent” to “first to file” system of patent protection, the America Invents Act makes significant changes in the patent application review process. Given its mixed verdict, whether The America Invents Act reduces patent litigation and promotes or stifles patent innovation will be closely watched issues over the next few years.