The patent "reform" legislation does away with "first to invent", forcing small inventors to prove a business stole their idea. Even if they can show that they invented something first, that's no longer good enough to win in court.  (Source: Hammer & Associates, P.C.)
Bill is criticized for catering to special interests, hurting small inventors

The "America Invents Act of 2011" is an interesting work of legislation.  While the bill -- which seeks to reform the U.S. Patent and Trademark Office (USPTO) -- passed the House by a 304-117 margin and the Senate by a resounding 89-9 margin, it's provoked surprisingly fierce political commentary between the majority and the vocal minority.  Sen. Maria Cantwell (D-WA) complains, "This is not a patent reform bill. This is a big corporation patent giveaway that tramples on the right of small inventors."

But Sen. Patrick Leahy (D-VT) claims that the legislation will be a boon -- the most significant patent reform in decades.

So what kind of bill causes party bedfellows to turn on each other in such a fashion?  Well, the thing everyone seems to agree that patent reform is needed, the system is broken (to some extent), etc.  But no one can seem to agree on how to fix it.

I. What's Not Inside

First, what does the bill not do?  

The bill does not invalidate software or business methods patents [e.g. International Business Machines, Inc.'s (
IBM"outsourcing" patent] -- two classes of patents that are viewed as overly obvious and a damaging factor to innovation, according to many industry experts.  

The bill does outlaw a specific class of patents -- patents on "a financial product or service".  This will effectively kill DataTreasury, a patent troll who makes much of its income off suing banks for infringement of check clearing patents.  Banks fought (and donated) hard to get this provision included.  But more general prohibition on software and business patents, lacking equivalent financial backing in Washington, D.C. was not included.

Likewise, the bill does not prevent companies like Apple, Inc. (
AAPL) from using patents as a competitive barrier.  Furthermore, the measure provides no new limitations on how much damages companies can seek in infringement cases.

Lastly, the bill does not prohibit "forum shopping".  As chronicled in 
a recent NPR special, the Eastern District of Texas is teeming with thousands of lawyers, thanks to it being viewed as a "plaintiff friendly" patent court.  "Patent trolls" -- companies like Intellectual Ventures, NTP, and Platus IP -- flock to this court as they've discovered they're likely to win big cash payouts from the companies they're bringing suits against, regardless of the merits of those suits.

II. What is Inside

So what does the bill do?

As mentioned, it invalidates a select class of business methods/software patents that are crucial to the bill's special interest backers.  In more general provisions, it does create a special new "post-grant review" process that offers companies to offer an expedited avenue to challenge "bad" patents.  

It also changes the USPTO's modus operandi from "first to invent" to "first to patent".  In other words a company can now patent inventions even if a small inventor can prove that they came up with it first.  The inventor can gain control of the IP, but only if they can prove that the company took their idea.  This burden of proof may be very high in many cases, so this provision may allow big companies to trample small inventors as Sen. Cantwell complains.

Lastly, it changes the way the USPTO is financed.  The fees the office collects are now placed in a special account.  While Congress must still authorize disbursement from this account, the USPTO is now the exclusive beneficiary of this money.  Further, the USPTO now can set its own fees.  These provisions are viewed as steps towards a self-sufficient USPTO.

In summary, the new bill does little to stop patent trolls, and actually makes it easier for companies to exploit small inventors.  And it doesn't stop the use and/or abuse of software patents.  But it does offer a way of invalidate some bad patents.  And it does make the USPTO more autonomous, which will perhaps improve the quality of the patent granting process, reducing the 
"rubber stamping" syndrome that has plagued the USPTO in recent years.

"Folks that want porn can buy an Android phone." -- Steve Jobs

Most Popular Articles

Copyright 2018 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki