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Posted at 02:04 PM ET, 03/28/2011

Q&A: Small inventors raise patent overhaul concerns

As the debate on a patent system overhaul moves to the the House this week, small inventors are raising concerns about two major shifts that a Senate bill proposes.

Alexander Poltorak, the founder and president of the American Innovators for Patent Reform, said has some serious reservations about the bill that passed the Senate. While he said he applauds the move to allow the U.S. Patent and Trademark Office to keep the funds it generates from fees, he believes the Senate bill missed the point of patent reform. He says a shift to a first-to-file system is unnecessary and he is also worried that language that slipped into the Senate the bill will stifle innovation.

“The biggest problem with this bill is really not what it changes, but what it doesn’t,” he said.

Rep. Lamar Smith (R-Tx.), head of the House Judiciary, is expected to introduce a House version of the America Invents Act in advance of the committee hearing on Wednesday.

Below is an edited version of a conversation with Poltorak on the effect patent reform will have on inventors:

Q: What are your main objections to the bill?

A: We’d like to focus on a couple things. First, we believe the motivation in changing the system is misplaced. There are no positive results [to the change]. A study from McGill showed changing systems resulted in no improvement in innovation, but put independent and small inventors at a disadvantage. The negative effects small entities suffer from a switch to first-to-file will reverberate in the general economy and affect job creation

It’s also important to focus on language that was put in S.23 in the Senate, which was not brought to light in the last debate. This language considerably weakens the traditional American grace period.

Q: How does the bill affect that grace period?

A: Currently, inventors have 12 months to file a patent application, and within those 12 months you can publish a paper about your invention, demo your product, and even offer it for sale without compromising your ability to obtain a patent. Under the language of S.23, it says that the grace period now only applies to public disclosure, or publishing papers. Public use, such as demonstrations, would immediately bar an inventor from filing an application. My understanding is that it was not the intent of senators to weaken the grace period, it was just sloppy drafting.

We must expose this language in the House. The exemption only lists public disclosure, and public use is not mentioned explicitly. This must be corrected.

Q: What about other measures in the bill?

The bill adds a third post-grant review, a third-party review, which means any company will have the right to challenge a patent. We already have two forms of post-grant review that work really effectively. People already avail themselves of these procedures. Adding a third post-grant review is not only superfluous but also dangerous.

Most significantly, a third form of post-grant review will force many small inventors to abandon their inventions. Post-grant review will be like litigation — it will be adversarial — and inventors will have to argue before an administrative judge. Smaller inventors will have to abandon their inventions because of the cost.

Not everything is negative about this bill. The provision to stop the diversion of funds from USPTO is very positive. Really, our ideal goal would be to convince the House to just focus on that one element and pass a bill that permanently stops the diversion of funds from the patent office. It would make a tremendously positive impact on the patent system and would generally make the whole process faster.

Q: What changes would you like to see to the patent system?

A: This patent reform debate is a huge missed opportunity to reform the system. The system is antiquated in the sense that the same patents are awarded to inventions of different quality. The current system does not reward breakthrough invention. A minor tweak to some kitchen gadget is granted the same patent as a major development.

Greater inventions need more time to be recouped. For example, new drugs should be given a longer patent life span to allow companies to recoup expenses. In most countries, they use a multi-tier system, and a junior form of patent expires sooner.

In fact, I just received a patent for the auto-examination of patents and would be happy to donate that to the government. It would free thousands of examiners to review senior patents for novelty and non-obviousness.

Q: Do you think you will have a better chance raising your concerns in the House than you did in the Senate?

A:Yes, I do. I think that because our representatives are much more attuned to needs of small business and individual inventors, especially once they realize that the changes in the patent system will affect job creation. I think they will be much more sensitive to these changes.

By  |  02:04 PM ET, 03/28/2011

 
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