The America Invents Act was signed into law in September of last year, marking the most significant reform to the U.S. patent system in decades.
The changes will affect not only the process by which an inventor obtains a patent, but also the way patents are protested and defended. Some rules took effect last month, with more to come this spring.
Capital Business spoke with Eldora Ellison, an attorney at Sterne Kessler Goldstein & Fox who specializes in patent litigation, about the changes, and what they mean for companies and entrepreneurs.
What is the biggest change brought about by this legislation?
I’d say there are two big changes. We’re shifting to a system where ordinarily the patent will be awarded to the party that was first to file their patent application. The second big change or set of changes is that there will be new mechanisms for challenging a patent at the patent office.
What will those mechanisms include?
In general they include filing a petition with the patent office to establish that a patent doesn’t meet the patentability requirements. There are different ways to do that depending on the proceeding that you’re in.
For example, you can demonstrate to the patent office that the invention was previously known or that the invention is an obvious variant to something that was already known. In certain proceedings, you can demonstrate to the patent office that the patent itself does not adequately describe the invention or that the patent itself doesn’t adequately teach others how to make or use the invention, or even that the patent is directed to subject matter that’s not eligible to be patented. So you can’t patent a law of nature, for instance.
How will this affect the timing and process of filing for a patent?
Generally you want to file your patent application earlier, since for the most part, the patents will be awarded to whoever was first to file. There are a few exceptions. If you publish, let’s say a paper, and someone files a patent application and then you [file] your application, you can still be OK in terms of being first in the eyes of the U.S. patent office, but normally you wouldn’t want to do that because that jeopardizes your right to get patents everywhere else in the world.
Are we likely to see greater or fewer patent disputes as this legislation takes hold?
I think we’re going to see more. The legislation was intended to create a relatively low cost alternative to lawsuits in District Court by letting you go to the patent office and challenge patents at the patent office.
So there are aspects to the law that are designed to require you to pick one of the two: either pick the patent office or pick District Court as your forum. Even though there are certain aspects of the law where you would be limited to picking one of the two, that doesn’t mean you can only challenge a given patent in one of the two. You can still be in front of the District Court and in the patent office fighting about a patent. Many [companies] are going to want to proceed on two fronts.
The other reason I think there will be more disputes overall is because the patent office and the District Courts use different standards, and the requirements for having the right to participate in one of these disputes also differs. The patent office allows challenges by more people than a District Court will allow a challenge by.
Will defending patents be more costly for companies as a result of the legislation?
A proceeding in front of the patent office is in general going to be less expensive than the same dispute in District Court and that’s largely because the patent office proceeding isn’t going to permit all of the discovery that a District Court would permit, so that’s where the biggest cost savings probably come.
But I think overall, particularly for bigger cases, any accused infringers who are defending themselves in a patent infringement suit, if they have the ability to also challenge that patent at the patent office, they’re going to seriously consider it. So the overall costs may go up.
Critics have said the reform will give large companies an advantage over small entrepreneurs. Do those arguments have merit?
I think they have merit. The way the first-to-file system will operate will benefit companies that have the resources and the ability to quickly file patent applications on their inventions. If they can get their patent application on file quickly, they’re at an advantage.
What advice would you give to small companies or entrepreneurs about securing patents under the new rules?
Everyone who can afford it should file early under the first-to-file system. But if you cannot afford to file early, then you might think about publishing your invention.
By publishing early in the U.S. you could potentially, within a year of that publication, still pursue U.S. patent rights even though you’ve ruined your ability to pursue foreign patent rights.
Some people say our new system shouldn’t be called a first-to-file system, some people say it should be called a first-to-disclose system.