Patent Law Reform in the U.S. - The First-to-File Debate

Lindsay HellerNovember 8, 2005

Patent laws have been criticized in many ages, in many lands, and by

many people.

My friend, Eric (the Pepsi can man), reading part of Dickens’ “A Poor Man’s

Tale of a Patent”

Overview History 101

(and you thought this was patent law) U.S. Constitution and The Patent Act

of 2005 Major Arguments of the Pro-First-to-

File Crowd Special Concerns of Universities Major Arguments of the Anti-First-to-

File Crowd For or Against: Where do YOU stand?

A Little Bit of History

Patent Law starts in Europe

Most are First-to-File except common law countries

U.S. – First-to-Invent Eventually everyone

harmonizes but the U.S.

We stand alone Lots of groups want

us to change (WIPO, AIPLA, NAS, ABA, etc)

THE UNITED STATES CONSTITUTION

ARTICLE I, SECTION 8:

“[t]he Congress shall have Power…[t]o promote the

Progress of Science and useful Arts, by securing for limited Times to …INVENTORS the

exclusive Right to their respective…Discoveries.”

THE PATENT ACT OF 2005

Introduced June 8, 2005

Still in debate in the House

It’s going to be awhile before anything happens in the Senate

There are lots of changes, but we’re just worried about first-to-file

This section of the proposed act is a good example of the first-to-file changes

§ 102 - As Proposed

(3) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY FILED.—A patent or application for patent is effectively filed under subsection (a)

(2) with respect to any subject matter described in the patent or application—

(A) as of the filing date of the patent or the application for patent; or

(B) if the patent or application for patent

is entitled to claim a right of priority . . . or to claim the benefit of an

earlier filing date . . . based upon one or more

prior filed applications for patent, [then it is] the filing date of the

earliest such application that describes

the subject matter

THE PATENT ACT OF 2005§ 102 - Currently In ForceA person shall be entitled to a patent unless –

(a) the invention was known or used by others in this country, or patented , or described in a printed publication in this or a foreign country,

before the invention thereof by the applicant for patent.

(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country

more than one year prior to the date of the application for patent in the United States.

§ 102 - As ProposedA patent for a claimed invention may not be obtained if— (1) the claimed invention was patented, described in a printed publication, or otherwise publicly known –

(A) more than one year before the effective filing date of the claimed invention; or

(B) one year or less before the effective filing date of the claimed invention, if the invention was patented or described in a printed publication or otherwise publicly known before the invention thereof by the applicant for a patent; or

(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application . . . names another inventor and was effectively filed before the effective filing date of the claimed invention

THE PATENT ACT OF 2005§ 103(a) {Showing proposed amendments using MPEP claim amendment conventions}:

[A patent may not be obtained though the invention]

A patent for a claimed invention may not be obtained

though the claimed invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter [sought to be patented] of the claimed invention and the prior art are such that the subject matter as a whole would have been obvious [at the time the invention was made] before the effective filing date of the claimed invention to a person having ordinary skill in the art to which said subject matter pertains.

Pro First-to-FileCommon Arguments In Favor of FTF:

FTF will bring us into step with rest of world which will benefit everyone

Changing to FTF will have no real difference in who ultimately gets the patent since the patent usually goes to first inventor to file anyway

FTF will reduce transaction costs inventors face when filing in different countries

Getting rid of FTI and interferences will reduce costs to create and patent inventions and will result in greater predictability for inventors

There will be earlier and better disclosure of inventions which = good for progress

In FTI system, inventors keep inventions secret (no need to file earliest) which = obstacle to progress

If we all have FTF the international patent system will be more unified so there will be better and wider patent protection for inventors

The Influential Mossinghoff “[Nothing] is more

important…than the United States moving to a first-inventor-to-file system…”

A lot of people use his study in arguments for why we should be first-to-file

Contrary to popular belief, small entities hurt more by first-to-invent than helped

Mossinghoff’s Study on Small Entities

Interferences only occur 0.1% to 0.2% of the time

During 22 year period, 286 small entities advantaged, 289 disadvantaged

Do you think his study is all that useful? Did he take into account the concerns of NAPP, about how small inventors won’t be able to afford attorneys and therefore move more slowly through the quagmire that is the patent system?

THE AIPLA Data by Professors Lemley and Chien on

interferences: 94 initiating parties – 18% individuals or small

businesses - 77% large entities 145 respondents – 43% individuals or small businesses - 53% large entities So interferences used by large entities against small

entities more often than the reverse

The AIPLA mentions a cloud over important inventions that is present in a first-to-invent system

Cloud?? What exactly is the cloud they are talking about?

I Blow My Nose at You - The French, er, I Mean English, Stick

Their Nose In UK says that if US

inventor wants foreign patents, he has to file first anyway

But is this a big deal? Isaak showed us how expensive foreign filing is – how many inventors want to foreign file?

Saving Provision for the First Inventor Who Chooses Not to Patent

35 U.S.C. 273 – prior user rights for certain method inventions

35 U.S.C. 252 – intervening rights for reexamined and reissued patents

Provisional Applications

VIEWS OF EDUCATIONAL ORGANIZATIONS

Most Educational Organizations Want to Move to First-to-File

Except They Want to Maintain 3 Aspects of the Current System:

1. Being able to file provisional applications

2. 12-month grace period

3. Inventor signing an oath that he/she is the inventor

Grace Period –

So inventors can publish articles

Helps maintain open and unfettered academic discourse

Could allow “scooping” – but benefits greater

Anti First-to-FileCommon Arguments in Favor of FTI:

It’s been working for a long time  - if it ain’t broke, don’t fix it (no reason to abandon known for unknown)

FTF unfair to true inventor because patent could be granted to someone else

FTF favors large entities over small independent inventors

FTF encourages filing of too many poorly drafted premature patent applications, which will increase the costs of the patent system; these costs will be borne disproportionately by small independent inventors

FTF will cause inventors to have to file before they can evaluate market for their invention

FTI deters theft of inventions (via interference proceedings)

FTF will encourage “paper inventions” (unworkable ideas that never reach form of actual inventions)

FTF will cause greater risk of malpractice Patent litigators will lose valuable work when

interference proceedings disappear

Anti First-to-File

Would hurt small entities But would it? Mossinghoff’s data

seems to say otherwise Race to get applications filed

Wisconsin Alumni Research Foundation Disagrees With Educational Organizations

Lower number of patented inventions come out of public research in Europe

U.S. technological leader of the world because of First-to-Invent system and our Constitution

The open environment of universities need the first-to-invent system

Is FTI Why We Are the Technological Leader?

YES Hawkins Ko

NO Yates

Everyone else? What do you think?

NAPP Comments

Applicants could “trip” in the race to file But is there real threat of race to PTO? There is

tiny # of interferences -> 0.1-0.2% Huge concern among attorneys at my firm – they

are currently swamped, that think switch to FTF could cause huge problems

But is this a valid concern? Professor Morris points out – unless FTF leads to

more applications, there’ll be a transition During the transition, they will deal with backlog,

then it will get back to normal – the same stack on the desk like before

Besides, now they have a 102(b) deadline anyway

NAPP Comments

Quality of Disclosure

FTF have adverse consequences on quality of patents

This will cause increased litigation expenses because AI’s will challenge patents on quality

Will that happen? Or will the standards be lowered and claims

be narrower?

NAPP CommentsNegative Impact On Practitioners

Malpractice concerns What happens if attorney takes “too

long” to file? Will this drive attorneys away from

patent prosecution?

Oops – wrong malpractice!

So Should We Switch to FTF?Your Views

FTI Fans

Hawkins (WARF) Frostick (WARF) Shui (NAPP)

FTF Fans

Ko (AIPLA and UK IPAC) Olin (Mossinghoff,

AIPLA) Murshak (in 5 yrs) Yates (Educational

Orgs) Cleary (Harmonization,

Mossinghoff, AIPLA) (in 5 yrs)

Cohen (with caution) (Educational Orgs)

Kolb (WARF)

FYI: Canada says their switch to FTF has been smooth and without all the problems commonly touted by the opposition

THANKS, EVERYONE!