Q. Now that passage of the America Invents Act (patent reform) is all but certain – it’s only awaiting the President’s signature – what will be the immediate and long-term effects of first-to-file?
A. The administration, the Department of Commerce, and the U.S. Patent and Trademark Office support the passage of the Leahy-Smith America Invents Act, (“AIA”), recognizing that such monumental patent reform will enhance and encourage innovation that improves American competitiveness, economic prosperity and job growth.
The USPTO views the proposed transition of the U.S. to a first-inventor-to-file system as an essential feature of any patent reform legislation.
The transition will, near and long term, simplify the process of acquiring rights while maintaining a one-year grace period that protects innovators. It will ultimately reduce legal costs, improve fairness, objectivity and transparency and support U.S. innovators seeking to market their products and services in other countries.
It is clear that the current first-to-invent system almost never benefits the independent inventor. This is especially the case where the independent inventor would be expecting a benefit when they are the first to invent but not first to file.
In the past seven years, of more than 3 million applications filed, only 25 patents were granted to small entities that were the second inventor to file but were able to prove they were first to invent.
Of those 25, only one patent was granted to an individual inventor. Therefore, it seems clear that the fear that first inventor to file will only benefit large patent owners is unfounded and inconsistent with the facts.
Further, the cost of proving who was first to invent, under the current system, is prohibitive to small businesses and independent inventors. It costs an average of $400,000 to $500,000 in legal fees to engage in interference proceedings to determine who invented first.
Those costs can double if a case is appealed.
Most independent inventors simply do not have the resources to participate in these proceedings.
So the facts demonstrate that the current system of first-to-invent actually favors those with deep pockets and works to the disadvantage of small companies and independent inventors with limited resources.
By contrast, under the legislation, a $110 provisional application will establish effective rights to an invention, securing first-inventor-to-file status with no risk of subsequent disputes.
The USPTO believes that the near- and long-term effects of certainty, predictability and reduced costs of the first-inventor-to-file system will benefit all stakeholders, both small and large entities, regardless of the area of technology.
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