Software Scan

The President's Column

Once again Congress is discussing changing the patent system. In this month's Scanning IP section I give my strongly held beliefs about "patent reform" that will be certain to generate discussion.

Send me your comments and critiques. I'm always interested in hearing from you.

Regards,


Bob Zeidman
President, SAFE Corporation

Scanning IP

Once Again, Congress Considers Patent Reform

With all the uncertainty surrounding politics, there is one thing I can be certain of every year. Congress will attempt, or claim to attempt, to reform the U.S. patent system. Patrick Leahy, the chair of the US Senate's Judiciary Committee, recently announced that reform is around the corner, just as it has been every year for many, many years. Fortunately that corner is always pretty far away. As you can tell, I'm not a fan of so-called patent reform. Here's a brief explanation why.

Background

Though each attempt at patent reform is slightly different, the major points are usually the same. Those who support the bill tend to be large engineering companies. Those who do not support the bill tend to be universities, small inventors, and pharmaceutical companies.

Proposed changes to which I object:

• First to File: Right now the person who invents something ("first-to-invent") has the rights to the patent. The bill would change the law so that the rights belong to the first person to file the patent ("first-to-file"), as it works in every other country. However, the US is the most innovative country in the world and the rest of the world should look to us not the other way around. This change will favor the large company with lots of lawyers and money to file patents quickly over the small inventors and the universities that don't have as many resources to file patents. Pharmaceutical companies do have a lot of lawyers and a lot of money, but they spend so much money on research and development that on the small chance that some other company files for a patent first, they have a lot to lose.
• Additional Post Grant Review: Within 12 months of issuance, a third party can file a cancellation petition based on any ground of invalidity. This means that even after a patent is filed, there is a one year period where the patent owner must defend his patent. Any large company can simply request a review of the patent by the USPTO that the patent holder must fight. This will waste resources of the small inventor. Once a patent is issued it should be valid and should be difficult to overturn. The cost of overturning it should rest with the organization that objects to it, not the patent holder. The problem that reform should really be addressing is making the patent examination more efficient so that good patent applications get issued quickly and bad patent applications get rejected quickly.

Proposed change that I like:

• Pre-Issuance Submissions: Third parties can submit prior art during examination of the patent as well as a statement regarding the relevance of the art. This means that those organizations that believe that patent is invalid should submit invalidating reasons before the patent is granted, not after. This will be useful only if it is used to speed up the patent process, not slow it down. I'm in favor of anything to speed up the process and make sure that innovative inventions are issued patents quickly and poor inventions are detected and rejected quickly.

Proposed changes that about which I don't have enough information to evaluate:

• Damages: When a party is found to infringe on a patent, the damages are limited based on the importance of the invention to the infringer's overall business.
• Patent Litigation Venue: Some areas of the country are believed to be more friendly to plaintiffs (e.g. the Eastern District of Texas). This provision limits the ability to bring a case in a district unless there is some legal connection to that district.

There are other provisions about which I don't hold strong opinions and don't seem particularly controversial, but almost everyone involved with patents has strong opinions about patent reform. It will be interesting (and possibly scary) to see what, if anything, eventually happens.

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