On Tuesday, the U.S. Senate voted to end debate on the America Invents Act ? generally known as the Patent Reform Bill ?setting up the likely Congressional approval by the end of this week. The House of Representatives previously approved its version of the bill, and President Obama is expected to sign the present version of the bill. Therefore, the U.S. patent laws will likely have significant changes impacting companies and inventors.
The key provisions of the expected new law include the following: (i) change the U.S. patent system to a "first-to-file" system from the present "first-to-invent" system in order to bring the U.S. patent system into conformance with the patent laws of other industrialized nations and to create better certainty with respect to priority of patent protection; (ii) expand post-patent grant review procedures to further reduce costly litigation over unpatentable inventions; and (iii) allow false patent marking claims to be filed only by the U.S. Government or a competitor who can show competitive injury, rather than allowing any member of the public to bring such suits.
The change to a "first-to-file" system will likely have a significant impact on how companies and individual inventors pursue patent protection. In essence, the first entity to file an application for an invention will have priority over subsequent filers, even if that first-to-file entity was not the first to invent the new technology. Presently, under the "first-to-invent" system, inventors can establish prior-inventorship even if they were not the first to seek patent protection. However, prior-inventorship disputes lead to costly and time consuming litigation and other related proceedings in the U.S. Patent and Trademark Office.
The new "first-to-file" system is meant to provide the proper incentives for inventors to timely file applications for their inventions and thereby reduce prior-inventorship disputes. In addition, the "first-to-file" system is presently used by most other industrialized nations. Accordingly, this change would bring the U.S. Patent Laws into conformance with the laws of other such nations.
Post-Patent Grant Review Procedures
The bill includes an expansion of post-patent grant review procedures, including the ability of third parties to submit information to the U.S. Patent and Trademark Office in response to issued patents. This change is intended to reduce litigation over patents that should not have been issued in the first instance.
False Patent Marking Litigation
False patent marking claims recently surged after the Federal Circuit's rulings in various cases expanded the relief available through these qui tam suits (suits brought by members of the public on behalf of the U.S. Government). Such cases have exploded into another type of patent-troll litigation. The new bill seeks to limit such suits to only those actually brought by the U.S. Government or by a competitor who can establish competitive injury due to the false-patent marking.
The present version of the act includes several other amendments to the patent laws, including changes to the "best mode" requirement, identification and inventors/assignees, and fee diversion (the use of fees of collected by the U.S. PTO to fund other Congressional programs).
What Happens Next
Assuming the present version of the bill gets enacted shortly, companies and individual inventors should consider their patent application filing strategy and procedures. For example, rather than waiting to file patent applications, it may now be more prudent to file such applications more quickly in order to ensure they are the "first-filed" application. With respect to the post-grant review procedures, companies should consider whether the new procedures provide them with the recourse and certainty needed to ward off potential patent litigation, and also consider whether their own portfolios have similar exposure to these new procedures.