Serious Patent News: Some Good, Some Not So

By: Paul A. Jones

Any day now, the Senate will likely pass the America Invents Act, with the President’s signature promised shortly thereafter. The Act will make the most sweeping changes to United States patent law since at least 1952. By moving the United States from a “first to invent” patent paradigm to a “first to file” paradigm it will align the country with the vast majority of other nations, and will most likely substantially reduce costs associated with documenting and litigating “who thought of it first” questions. It will also likely impede the formation and growth of innovative technology-driven startups in the United States. Whether that is a good trade off is something reasonable folks can disagree on.

The new “first to file” paradigm has some undeniable advantages; advantages that to some extent will have their most positive impact on smaller entrepreneurial innovators. Historically, and I can attest to this from personal experience over 25 years of working with emerging technology businesses, the detailed record keeping programs associated with the first to invent paradigm trip up startups and smaller firms more often than they trip up the big players. And even when a small firm has a plausible “first to invent” case, it often lacks the financial and other resources to make it effectively.

So much for the plusses of the new first to file paradigm.

In terms of negatives, any good handicapper would have to say that startups and other smaller firms are going to lose more first to file races than they win, for two reasons. First, they often lack the technical resources to move as fast as their larger and richer competitors in terms of taking an “aha” moment to a robust patent filing. Second, they typically lack the deep pockets and intellectual property resources of larger businesses, which also make timely, robust filings problematic. While the net negative impact on innovation by startups and smaller firms of the first to file paradigm can be debated, I have yet to see a cogent argument that the impact will be anything but negative.

As for me, I like the certainty – at least as to ownership – of the new first to file approach, and the likely reduced operating and legal costs associated with that. And harmonizing United States patent law with the rest of the world has some intrinsic appeal. Time will tell, though, whether those plusses are worth the price in terms of how the change will likely impact the amount of innovation in the United States.

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