Intellectual Property Directions

If you’ve ever watched a patent application flow through the USPTO examination process and said “What the heck is going on? I know of some prior art that should wipe that application out ASAP.” Well, your time is coming. But be careful what you wish for!

Under the new America Invents Act, third parties – outsiders like you – get several new chances to muck up someone else’s patent and/or application. Of course, you may actually end up making that inventor’s patent stronger, so think twice before acting. There are actually three opportunities for non-inventors to interject themselves:

First, you can submit information to the patent office during the examination process. This new, pre-issuance submission process is limited to printed materials such as patents, published patent applications and other printed publications. What is new is that these submissions are accompanied by “concise” descriptions of their relevancy. Thus, rather than just dump prior art on the examiner and hope s/he will read and understand their significance, under this program you get to point out why they should block your competitor’s pending application.

• Can be anonymous
• Must be submitted within 6 month of application publication (as a practical matter)
• Effective 16-Sept-12 BUT applies to any pending application.

As the President mentioned last night, the long awaited (feared?) patent reform bill passed the Senate by a large margin yesterday. As I have mentioned in the past, I don’t think the much ballyhooed change to first (inventor) to file will have much impact on large or small businesses. See the NY Times article linked below.

Contrary to what Valerie S. Gaydos, a Baltimore-based investor in early-stage companies, is quoted as saying ["It will create a rush to the patent office, with innovators seeking to file anything and everything. The applications will be less complete, less well written and it will create more of a backlog.”], there is no reason to “rush to the patent office” unless you think a competitor is also working on the identical invention.

That is, unless you, right now, believe that your patent application will be involved in an interference proceeding. Statistically, a minuscule percentage of applications are involved in interferences. And if you DO believe that your patent application will be involved in an interference proceeding under the current rules, well, you had better be rushing to the patent office anyway, since, again statistically, you are unlikely to win if you are NOT first-to-file.

BUSINESS DAY   | September 09, 2011

Fighting Backlog in Patents, Senate Approves Overhaul
By EDWARD WYATT
The Senate sent to President Obama a bill that changes the system for determining priority at the patent office for inventions and provides additional financing for an agency.

Around here (Newton, MA), everybody is anticipating the running of the Boston Marathon in two weeks. As is the case with most race events, the Marathon groups runners into classes, either literally or figuratively, to make the competition more interesting and fair.  Thus, my 52 year old neighbor’s 2:51:44 time was 606th overall last year but rated him 16th out of 2180 runners in his division.

Which brings us to patent reform – huh? One of the much debated changes in the patent reform bill is the change to the “First Inventor To File” rule to determine who gets a patent when two entitities file on the same invention, instead of the current “First To Invent” rule. Many other pundits think this “race to the patent office” puts small entities at a disadvantage. I disagree.

I think the conclusion that FITF is bad for small entities is an exaggeration or extrapolation from a few individual cases. While large entities arguably have the resources to race to the PTO now and think later, it is also true that they have, generally, a multi-gated process for making the decision to file, a process that gets them to the starting line late.

A small entity can get everyone in the company to decide in a day about filing and then work with focused intent to make it happen, whereas large entities will:

1.  have the inventor file an invention disclosure - often asking for economic justifications and almost certainly asking the inventor to explain how the invention is going to fit into the company’s business;
2.  require the inventor’s manager to sign off on the disclosure;
3.  schedule the disclosure to be reviewed at a review meeting – perhaps quarterly, perhaps semi-annually;
4.  at the review meeting, people who have a siloed view will evaluate the disclosure;
5.  the disclosure will be considered competitively in light of the IP budget and other disclosures;
6. if the disclosure is approved, a meeting with the patent attorney, often outside counsel, gets scheduled;
7. outside counsel goes off and drafts [the claims and] the spec. Sends them to the inventor for review;
8. inventor either rubber stamps (bad quality control) or eventually gets around to reading the draft (tick-tock, tick-tock);
9. attorney files the application.

Of course, this too is an exaggeration, but I contend that a small entity is much more likely to identify and act quickly on important IP matters than a large entity will… if for no other reason that this one patent is much more important to the survival of the small entity than it is to the large entity.

What is your experience? Do you think small or large entities will gain an advantage from FITF?

For the fourth consecutive Congress our legislators will attempt to pass reforms to our 60 year old patent laws. My sense is that this year it might actually pass, driven by Mom and apple pie…uuh I mean the (“no-cost”) job growth and competitiveness arguments. Of course, what’s good for one group of inventors may be problematic for another, so we’ll have to wait to see if the bill gets recycled once again or finally enacted.

A draft of the Patent Reform Act of 2011 is available online (http://judiciary.senate.gov/legislation/upload/BillText-PatentReformAct.pdf). Based on a summary at www.qmed.com, here are a few of my thoughts on the first of about a dozen changes.

The Act transitions the U.S. from the first-to-conceive-and-diligently-reduce-to-practice system to a first-inventor-to-file (FTF) system – I think this change is a benefit to everyone (except procrastinators), particularly with our (US) provisional application process which lets an inventor get an application on file quickly.

Everybody benefits by eliminating the cost and record keeping requirements needed to support an interference proceeding (which is how the “first-to-invent” determination was made, if needed). These costs and requirements were particularly burdensome for the small inventor since the primary evidence – the invention notebook – really needs a system behind it to prove its validity. The small or solo inventor is hard pressed to find people to “read and understand” his work on a regular basis or to have an independent system to provide incontrovertible evidence to support his witnesses’ testimony.

Furthermore, we know the small inventor may have to set his invention aside (to earn a living), bringing his “diligence” in reducing his invention to practice into question. With FTF the whole diligence question goes away. And I can make a fair argument that the first person to reduce a conceived invention to practice is the one who deserves the patent (instead of the current US rule that the conception part give you the priority). If invention is 1% inspiration and 99% perspiration, then the patent should go to the person best at doing the 99%!

In a related change, the Act seems (to my eye) to modify the US-only one year “grace period” for public disclosures such that only disclosures by the inventors are given the grace period. The current rule allows an inventor to file for a patent within one year of a public disclosure of his or her invention – no matter who makes the disclosure. If the disclosure comes from someone other than the inventor, the inventor can pull out his evidence that he was first to invent and proceed with his patent application. In the rest of the world, where there is no consideration of who invented first and thus no mechanism for examining the evidence, there is no grace period and any public disclosure is considered prior art to your application. The rule prevents a non-inventor from rushing to the patent office with an application based on the public disclosure. Clearly, in a FTF system, some rule is needed to block fast copy-cats from getting a patent on some other inventor’s work.

This new rule is a compromise between the current one year grace period for all disclosures here and the no grace period in virtually the rest of the world. I think this is a good compromise that the rest of the world could adopt. After all, if the public disclosure comes from the applicant it does not cast doubt that he was an inventor. Furthermore, one of the purposes of the patent system is to encourage inventors to share the details of their invention with society. Allowing public disclosure prior to filing furthers that goal.

I’ll comment on some of the other aspects of the (re)proposed Act in later posts.