The Patent Reform Act of 2005: Significant Change That Could Affect Your Business
James R. Farmer
Pending before Congress is H.R. 2795 – the Patent Reform Act of 2005. Introduced by Texas Republican Rep. Lamar S. Smith on June 8, 2005, the Act proposes sweeping reform to United States patent laws and, if passed in its current form, will provide the most significant alteration to United States patent laws since enactment of the Patent Statute of 1952. The alterations will also prove some of the most controversial since enactment of the first Patent Act in 1790. One of the more controversial of the proposed alterations concerns replacing the current “first-to-invent” standard for patentability with the radically different “first-to-file” standard. If passed into law, the “first-to-file” standard will dramatically change the landscape for obtaining patent protection and force individual inventors and small to medium-sized concerns to rethink their entire approach to acquiring patent protection.
Under current law, the first to invent or discover a new, useful and non-obvious process, machine, manufacture or composition of matter is entitled to receive a patent therefore, assuming that all other requirements of the Patent Statute are met. Compelling rationale behind the “first-to-invent” provision is that it protects the “little guy” – individual inventors or small to medium-sized technology-oriented concerns that generally do not have the means – e.g., devoted capital resources and a battery of in-house patent attorneys typically associated with large corporations – to rush to the patent office with well-prepared and thoroughly reviewed applications for patent protection immediately following their inventions or discoveries. Thus, under current law, an applicant for patent who proceeds with reasonable diligence following his or her invention may actually receive a patent, notwithstanding his or her application being filed months, or even years, following the filing by another claiming the same patentable subject matter. Conversely, under the proposed “first-to-file” provision, the first inventor to file his or her application will be the one entitled to receive the patent. The protection afforded the “little guy” under the current system will be lost and a host of unintended consequences will result, including a rush to the patent office with applications for patent that are prepared hastily and, quite potentially, defectively, leaving the inventor with little or no patent protection at all.
The quality of patent rights successfully obtained by an inventor depends, in many instances, on the time and effort devoted to preparing the patent application. Preparing a quality application often requires a thorough study of the prior art obtained through a patent search and constant back-and-forth review and revision to draft applications between the patent attorney or agent and the inventor. The result is an application containing disclosure sufficient to support the claimed invention. The process takes time and can be hampered by such inevitable factors as the attorney or agent’s backlog of patent applications and the inventor’s lack of immediate capital. Even a simple prior art search, typically performed before commencement of the drafting process, can take several weeks if not months to complete, while a search for a more complicated invention can require substantially longer periods of time. The current “first-to-invent” system thus affords individual inventors and small to medium-sized concerns the time critically necessary to prepare quality applications that satisfy the strict disclosure requirements of the Patent Statute without being subject to various inequities arising through happenstance or just plain bad luck.
The landscape changes dramatically under the proposed “first-to-file” scenario. As mentioned, the scenario will generate strong incentive to file applications as quickly as possible. While applications covering simple inventions may not be affected by the change, applications covering significant technological advances are likely to suffer greatly from inadequacies in disclosure, resulting in claims being rejected during prosecution or invalidated during infringement litigation. Indeed, one consequence of the “first-to-file” scenario often discussed is the cost of infringement litigation. Given the anticipated decrease in the quality of disclosure, alleged infringers can be expected to attack patent validity for failing to comply with the disclosure requirements of Section 112 of the Patent Statute. This will inevitably lead to an increase in the cost of litigating infringement actions – a troubling prospect given the already typically high cost of both prosecuting and defending infringement actions.
A related consequence concerns the expected increase in the use of provisional applications containing broad, but inadequate disclosure. The hastily filed provisional applications will be followed by quality prepared non-provisional applications claiming priority to the parent provisional. The strategy will, however, provide little by way of solution, as the battle concerning adequacy of disclosure will merely refocus to determining whether the allegedly infringed claims are adequately supported by the disclosure in the parent provisional. An even further consequence – one that should especially trouble attorneys and agents – is the potential for malpractice claims arising from applications filed later than they might have otherwise been. Imagine, for example, the dilemma faced by a patent attorney desiring to spend a Saturday or Sunday finally reviewing an application before filing the following Monday. The practitioner could have no way of knowing that a third-party planned to and actually filed its application the Friday before, a date where the practitioner could have filed his or her client’s application but for the desire to quality control the finished product. Could the client assert claims of malpractice against the practitioner for failing to file the application that Friday? Only time will tell should the “first-to-file” provision be enacted into law.
Enacting the “first-to-file” provision into law will generate a host of unintended consequences that negatively affect individual inventors and small to medium-sized concerns. For that matter, the proposed provision should be rejected by Congress. If, however, the enactment is passed into law, inventors and technology-oriented concerns must be prepared to act quickly or their right to patent protection will be jeopardized. A few suggestions follow. First, the patent process must begin far sooner than typically occurs. This means commencing the prior art search and application drafting process – whether provisional or non-provisional – well in advance of the expected filing date of the application. Patent applications of higher quality will result, leading to issued patents providing broader claim scope and more solid protection against infringers. Second, greater efforts in securing funds for the patenting process must also begin sooner, as the luxury of delaying this process until after the invention is tested and refined, particularly in crowded and rapidly evolving fields of technology, will be lost. And finally, secrecy should become sacrosanct. Information provided to the public through journal articles or trade show presentations should be carefully scrutinized and limited only to that which is absolutely necessary and previously disclosed to the patent office, either through provisional or non-provisional patent applications. This reduces the likelihood that a competitor will read between the lines and seize upon inventive concepts being explored and then rush to the patent office with hastily developed modifications that will frustrate the rightful inventor’s attempt to secure patent protection. While each of these suggestions already applies to a certain extent, if the “first-to-file” provision is enacted into law, the suggestions should become mandatory policy for individual inventors and small to medium-sized technology-oriented concerns. Meaningful patent protection is otherwise placed at great risk. To monitor this bill, visit http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR02795:@@@X
James R. Farmer, Ph.D., is a patent attorney with the law firm of VanCott, Bagley, Cornwall & McCarthy. Dr. Farmer assists clients with patent litigation and prosecution, opinion preparation, license agreements, due diligence and counseling in a wide range of technical disciplines, including aerospace, mechanical, electrical, and chemical engineering. Prior to practicing law, Dr. Farmer held post-doctoral fellowships at Princeton and Brigham Young University, where he specialized in the areas of engineering physics, fluid mechanics and applied mathematics. During this period, he collaborated extensively with scientists from both private and government research laboratories, including NASA Ames Research Center, the David Taylor Model Basin and Intelligent Aerodynamics, Inc. He can be reached at jfarmer@vancott.com or 801.237.0354
Under current law, the first to invent or discover a new, useful and non-obvious process, machine, manufacture or composition of matter is entitled to receive a patent therefore, assuming that all other requirements of the Patent Statute are met. Compelling rationale behind the “first-to-invent” provision is that it protects the “little guy” – individual inventors or small to medium-sized technology-oriented concerns that generally do not have the means – e.g., devoted capital resources and a battery of in-house patent attorneys typically associated with large corporations – to rush to the patent office with well-prepared and thoroughly reviewed applications for patent protection immediately following their inventions or discoveries. Thus, under current law, an applicant for patent who proceeds with reasonable diligence following his or her invention may actually receive a patent, notwithstanding his or her application being filed months, or even years, following the filing by another claiming the same patentable subject matter. Conversely, under the proposed “first-to-file” provision, the first inventor to file his or her application will be the one entitled to receive the patent. The protection afforded the “little guy” under the current system will be lost and a host of unintended consequences will result, including a rush to the patent office with applications for patent that are prepared hastily and, quite potentially, defectively, leaving the inventor with little or no patent protection at all.
The quality of patent rights successfully obtained by an inventor depends, in many instances, on the time and effort devoted to preparing the patent application. Preparing a quality application often requires a thorough study of the prior art obtained through a patent search and constant back-and-forth review and revision to draft applications between the patent attorney or agent and the inventor. The result is an application containing disclosure sufficient to support the claimed invention. The process takes time and can be hampered by such inevitable factors as the attorney or agent’s backlog of patent applications and the inventor’s lack of immediate capital. Even a simple prior art search, typically performed before commencement of the drafting process, can take several weeks if not months to complete, while a search for a more complicated invention can require substantially longer periods of time. The current “first-to-invent” system thus affords individual inventors and small to medium-sized concerns the time critically necessary to prepare quality applications that satisfy the strict disclosure requirements of the Patent Statute without being subject to various inequities arising through happenstance or just plain bad luck.
The landscape changes dramatically under the proposed “first-to-file” scenario. As mentioned, the scenario will generate strong incentive to file applications as quickly as possible. While applications covering simple inventions may not be affected by the change, applications covering significant technological advances are likely to suffer greatly from inadequacies in disclosure, resulting in claims being rejected during prosecution or invalidated during infringement litigation. Indeed, one consequence of the “first-to-file” scenario often discussed is the cost of infringement litigation. Given the anticipated decrease in the quality of disclosure, alleged infringers can be expected to attack patent validity for failing to comply with the disclosure requirements of Section 112 of the Patent Statute. This will inevitably lead to an increase in the cost of litigating infringement actions – a troubling prospect given the already typically high cost of both prosecuting and defending infringement actions.
A related consequence concerns the expected increase in the use of provisional applications containing broad, but inadequate disclosure. The hastily filed provisional applications will be followed by quality prepared non-provisional applications claiming priority to the parent provisional. The strategy will, however, provide little by way of solution, as the battle concerning adequacy of disclosure will merely refocus to determining whether the allegedly infringed claims are adequately supported by the disclosure in the parent provisional. An even further consequence – one that should especially trouble attorneys and agents – is the potential for malpractice claims arising from applications filed later than they might have otherwise been. Imagine, for example, the dilemma faced by a patent attorney desiring to spend a Saturday or Sunday finally reviewing an application before filing the following Monday. The practitioner could have no way of knowing that a third-party planned to and actually filed its application the Friday before, a date where the practitioner could have filed his or her client’s application but for the desire to quality control the finished product. Could the client assert claims of malpractice against the practitioner for failing to file the application that Friday? Only time will tell should the “first-to-file” provision be enacted into law.
Enacting the “first-to-file” provision into law will generate a host of unintended consequences that negatively affect individual inventors and small to medium-sized concerns. For that matter, the proposed provision should be rejected by Congress. If, however, the enactment is passed into law, inventors and technology-oriented concerns must be prepared to act quickly or their right to patent protection will be jeopardized. A few suggestions follow. First, the patent process must begin far sooner than typically occurs. This means commencing the prior art search and application drafting process – whether provisional or non-provisional – well in advance of the expected filing date of the application. Patent applications of higher quality will result, leading to issued patents providing broader claim scope and more solid protection against infringers. Second, greater efforts in securing funds for the patenting process must also begin sooner, as the luxury of delaying this process until after the invention is tested and refined, particularly in crowded and rapidly evolving fields of technology, will be lost. And finally, secrecy should become sacrosanct. Information provided to the public through journal articles or trade show presentations should be carefully scrutinized and limited only to that which is absolutely necessary and previously disclosed to the patent office, either through provisional or non-provisional patent applications. This reduces the likelihood that a competitor will read between the lines and seize upon inventive concepts being explored and then rush to the patent office with hastily developed modifications that will frustrate the rightful inventor’s attempt to secure patent protection. While each of these suggestions already applies to a certain extent, if the “first-to-file” provision is enacted into law, the suggestions should become mandatory policy for individual inventors and small to medium-sized technology-oriented concerns. Meaningful patent protection is otherwise placed at great risk. To monitor this bill, visit http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR02795:@@@X
James R. Farmer, Ph.D., is a patent attorney with the law firm of VanCott, Bagley, Cornwall & McCarthy. Dr. Farmer assists clients with patent litigation and prosecution, opinion preparation, license agreements, due diligence and counseling in a wide range of technical disciplines, including aerospace, mechanical, electrical, and chemical engineering. Prior to practicing law, Dr. Farmer held post-doctoral fellowships at Princeton and Brigham Young University, where he specialized in the areas of engineering physics, fluid mechanics and applied mathematics. During this period, he collaborated extensively with scientists from both private and government research laboratories, including NASA Ames Research Center, the David Taylor Model Basin and Intelligent Aerodynamics, Inc. He can be reached at jfarmer@vancott.com or 801.237.0354
Copyright 2006. Published for general informational purposes only, and should not be construed as legal advice. If you need legal advice please consult with your attorney.