Many patents, still pending
Congress tweaks, but does not overhaul, America’s patent system
Sep 10th 2011 | NEW YORK | from the print edition
AFTER years of dithering, America is set for patent reform. On September 6th a bill proposing to change the system passed its highest procedural hurdle in the Senate. With Barack Obama supportive, this means the America Invents Act could soon be signed into law.
Instead of the “first to invent” principle, which America currently uses, patents will be awarded to inventors who are the “first to file”. This is similar to the system most other countries use. The aim is to avoid long and difficult legal arguments over who was the first to come up with an idea.
As in most cases of patent law it is not going to be that simple. One criticism is that being first-to-file gives big and sophisticated organisations, highly experienced at the difficult job of filing for patents, an advantage over smaller outfits that may be technically brilliant but not legally savvy. Another problem is that first-to-file may make companies rush to put in for a patent before their invention is truly ready.
Moreover, the law does little to address the more basic problem of a patent system that has grown in expense for all kinds of companies that want to protect their ideas. The number of disputed cases going to trial, average awards and legal costs have all ballooned. To many, the system looks like a lottery.
Those who think that patents are granted too easily complain that the bill will still allow too many suits, especially those by “non-practising entities”, which are also known derisively as “patent trolls”. These buy up patents and then license them or sue for infringement, rather than using the patents themselves. The too-many-patents crowd wanted to do away, in particular, with “business-method” patents, which claim to have invented a new way of doing business. Instead, the bill did this only for the financial industry, after strenuous lobbying by Wall Street. And many advocated making it harder to get any kind of patent at all.
The bill does make some changes that could be positive. It creates several new procedures to deter or defeat bad patents. One would let an alleged infringer of a patent challenge its validity at the Patent and Trademark Office (PTO), rather than going to court. This would, in theory, be cheaper and faster. But it could still be followed by a lawsuit.
Second, the bill expands the right of third parties to join the fray at the PTO by showing “prior art”—meaning the invention is already known about and so a patent should not be granted. This might save time and money for firms which would be affected by a dodgy patent, allowing them to argue things out at an early stage rather than later on in a costly courtroom.
One of the biggest criticisms of the bill concerns the PTO’s funding, which some think should be increased so that the office can hire and keep the best examiners and so reduce a huge backlog of applications. Instead, Congress chose to multiply the alternative dispute-resolution procedures at the PTO, giving the office more work to do without a guarantee of more money. The result is a muddle as well as a missed opportunity.