Kappos Talks Patent Reform at USPTO Inventors Conference

The 14th Annual Inventors Conference is presently ongoing at the United States Patent and Trademark Office in Alexandria, Virginia.  The conference started yesterday and continues today.  I am here at the USPTO presently, and I was here yesterday as well and had an opportunity to hear Patent Office Director David Kappos address the attendees during a lunch speech and then again during the reception at the end of the day.  Congressman Dana Rohrabacher (R-CA) also spoke during the reception last night, giving a heavily pro-inventor, pro-patent speech to a very receptive audience.  The event has run smoothly, the presentations have been good and it is always nice to be able to get face-to-face time with friends and allies within the independent inventor community.  The one potential hot-button issue to be discussed at this conference and taken directly head on by Director Kappos was patent reform, and in particular those issues that may be seen by some as difficult to swallow in the independent inventor community.  Credit definitely needs to be given to Kappos for now shying away, addressing concerns and answering questions.  I think he even persuaded some in the audience, one of whom was me.

I have long been opposed to changing US patent law from a first to invent system to a first to file system.  Yesterday I changed my mind on this and I am cautiously optimistic that moving from a first to invent system to a first to file system will be good for independent inventors and small businesses.  There is no doubt that the switch will cause anxiety, as any change would, but I do firmly belief that the positives associated with such a move enormously outweigh the negatives.  In part I came to this belief after listening to Director Kappos, who made as persuasive a case as I have ever heard, but his speech was only the last straw or icing on the cake, however you would like to view it.  There are many reasons why this makes sense, but lets start with what Kappos said on this issue:

The chances that a patent will be subject to an interference based on a 1st to invent claim—that’s our current system—is .01%. In 2007—the most recent year for which we have statistics—the total number of interference cases for all applicants, of all sizes that were decided based on a priority claim was 7!

That means we already essentially have a first inventor to file system.

Moreover, of those 7 cases, only one case involved a small or medium sized entity; your chances of being impacted by this change are 1 in 441,637. Those are lightning strike level odds, folks!

First, I think this is what appeared in his prepared remarks and not exactly what was said to the crowd, but what was said (at least based on my recollection) was very close and even more persuasive.  We all know that interferences are statistically rare, and the dirty little secret is that independent inventors almost never have the right evidence to support a first inventor supplanting a first filer.  Those inventors who are knowledgeable enough to know the importance of an inventors notebook are following the right path, but even those sophisticated inventors typically are very unfamiliar with the legal evidentiary standard required to be met in order to prove they were the first to invent.  Specifically, it is not enough to have notes, you must have notes that are verified and which demonstrate when you actually conceived.  Because conception is a legal conclusion those who are not patent attorneys or patent agents can try as they might, but are almost certainly not keeping notebooks with the required detail.  So a first to invent system is creating an unrealistic belief on the part of the inventor community that they can invent first and file second and win.  In the overwhelming majority of cases, as pointed out by Director Kappos, the party who files first wins.  So changing to first to file will not change much at all.

But what about those who do it right and could benefit from first to invent?  Well, they will not benefit under first to file so there will be some negatives and some costs, there is no way around it.  But what benefits will a first to file system create?  They are massive.  More and more I hear that there are many who advise inventors to wait on filing a patent application.  This advise is simply not in the best interest of the inventor.  As I recently explained, if you wait you may not be able to ever obtain a patent because unknown to you there may be someone else who has created a problem for you under 35 USC 102(b), and there is no remedy or recourse to fix a 102(b) problem.  That is why patent attorneys and patent agents universally recommend filing a patent application, even a provisional patent application, as soon as possible.  That locks your priority date in stone, and stops the 102(b) clock from running.  Filing early reduces the amount of prior art there is that can be used against you, and is simply the best, most preferred way to proceed.

If we move to a first to file system inventors will have every incentive to file something, even a provisional patent application, as early in the process as possible.  This will make it increasingly impossible for invention promotion companies to convince inventors to delay filing a patent application, and it should put an end to an abuse that is almost impossible to believe.  I am increasingly hearing that invention promotion companies offer financing over 3 years and they will not file a patent application until you have paid your last dollar over that 3 year period.  If that is happening it is nearly criminal, and a first to file system should prevent trusting inventors who do not know better to fall into this trap.  So to the extent the US patent laws can incentivize inventors to do what we all know to be in their best interest, which is file as early as reasonably possible, a chance to fist to file could come with enormous benefits and make scams and pretenders hard pressed to recommend anything other than the best, most responsible approach to protecting an invention.

There will be some who undoubtedly believe I am naive, overly trusting and too willing to give Kappos the benefit of the doubt.  I have for quite a while been viewed as a Patent Office critic, which I suppose is a fair way to view my writings and beliefs over the last several years.  If I am being honest and responsible I must and will acknowledge that I think Kappos and the Patent Office are following a very good path, provide lots of reasons for stakeholders to be optimistic and does deserve the support of stakeholders.

Yesterday Kappos asked for patience as he moves forward with his agenda.  I don’t think we need to be patient because it is obvious that he has hit the ground running and moving things along at a pace that is very unlike government speed.  When I listen to Kappos he comes across as sincere, extremely knowledgeable and very interested in the success of the Patent Office and the US patent system.  He cares, he certainly knows the industry and he is forging ahead to make things better, which is an enormously refreshing change.  On top of that, he is receptive to ideas. In the few moments I spoke with him yesterday at the reception he told me to keep writing and to not shy away from pointing out when the Office was doing something I didn’t agree with.  I certainly will do that, but as I told him agree with what the Office is doing.

Maybe I am drinking the Kool-Aid, but I increasingly believe that Kappos is the right man for the difficult job of revitalizing the Patent Office and US patent system.  I never thought I would support first to file, but I am convinced it is the right thing to do.  I also never thought I would in any way ever support enhanced post-grant review, but I have an open mind, and while I will reserve judgment until I see the final details what I heard yesterday is very encouraging.  But that is something I will write about later today at some point.  I am going to shut down now and mingle.


Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Join the Discussion

24 comments so far.

  • [Avatar for staff2]
    November 9, 2009 12:11 pm

    “The chances that a patent will be subject to an interference based on a 1st to invent claim—that’s our current system—is .01%. In 2007—the most recent year for which we have statistics—the total number of interference cases for all applicants, of all sizes that were decided based on a priority claim was 7!”

    Exactly. Why then waste time on this issue when there are so many other issues that affect so many inventors?

  • [Avatar for Gena777]
    November 8, 2009 06:52 pm

    LOL, Kappos has taken issue with those who say he’s “hit the ground running.” He’s said that he intends to “drop out of a chopper shooting,” before hitting the ground. Looks like that’s what he’s doing; it’s heartening that someone so knowledgeable and practical about patent law is finally running the show. As for the criticisms regarding your change of position on this issue, I greatly respect your openmindedness and willingness to change your previous opinions when presented with persuasive evidence that challenges them. It’s generally better to be right than to be consistent.

  • [Avatar for Steve Perlman]
    Steve Perlman
    November 8, 2009 03:32 am


    There was no intent to be condescending.

    What I meant was I’m sorry that I did a poor job writing something understandable, not that you were lacking the capacity to understand. Be that as it may, we’ve been talking past each other, and it was time to agree to disagree.

    I am by no means a Constitutional scholar. I had a law firm pull up all of the scholarly works on the subject in the last 10 years, and not a single one concludes FTF is Constitutional. They are the source of my position on the subject. The papers are listed below my name.

    The Karen Simon paper is cited in the last two CRS Reports supporting the paragraph that says FTF is Constitutional. Here’s her conclusion: “…the first-to-file standard as proposed in H.R. 2795 is unconstitutional”. Well, regardless of whether you agree with her, clearly the citation is in error. I’ve been trying to get them to correct the error for years.

    Anyway, sorry for the misunderstanding. Good luck with your blog.

    Steve Perlman

    1. Rebecca C.E. McFadyen, The “First-To-File” Patent System: Why Adoption Is NOT An Option!, 14 Rich. J.L. & Tech. 3 (2007)

    2. John J. Okuley, Resolution of Inventorship Disputes: Avoiding Litigation Through Early Evaluation, 18 Ohio St. J. on Disp. Resol. 915 (2003)

    3. Max Stul Oppenheimer, Harmonization Through Condemnation: Is New London The Key To World Patent Harmony? 40 Vand. J. Transnat’l L. 445 (2007)

    4. Paul M. Schoenhard, Reconceptualizing Inventive Conception: Strengthening, Not Abandoning the First-To-Invent System, 17 Fed. Cir. B.J. 567 (2008–2009)

    5. Adam Sedia, Legislative Update: Storming The Last Bastion: The Patent Reform Act Of 2007 And Its Assault On The Superior First-To-Invent Rule, 18 DePaul J. Art Tech. & Intell. Prop. L. 79 (2007-2008)

    6. Karen E. Simon, Comment, The Patent Reform Act’s First-to-File Standard: Needed Reform or Constitutional Blunder?, 6 J. Marshall Rev. Intell. Prop. L. 129 (2006)

    7. Edwin Suominen, Re-Discovering Article 1, Section 8 — The Formula for First-to-Invent, 83 J. Pat. Off. Soc’y 641 (2001)

    8. Susanna Chenette, Note, Maintaining the Constitutionality of the Patent System, 35 Hastings Const. L.Q. 221 (2008)

    9. Timothy R. Holbrook, The Treaty Power and the Patent Clause: Are There Limits on the United States’ Ability to Harmonize?, 22 Cardozo Arts & Ent. L.J. 1 (2004)

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 7, 2009 07:43 pm


    I don’t appreciate your arrogance. “I did give you specific examples. I’m sorry you were unable to understand them.” Really, how arrogant and condescending. This is particularly peculiar given that you did NOT provide any evidence, just baseless conclusions that were unsupported.

    The fact that you are careless with your inventions and secure yourself with NDAs and no patent applications prior to showing your invention is not my problem and not a patent system problem. It seems you are unrealistically phobic of provisional patent applications, why I have no idea. If you have an NDA, evidence to demonstrate breach and you do nothing that is very unfortunate. It is also a very typical story told so frequently and listeners tend to not buy.

    If you don’t have $1000 or $1,500 to prepare and file a meaningful provisional patent application then there is nothing anyone can do to help you. Without even those modest resources you are pursuing the wrong career path. Innovation and inventing takes resources, and engaging in the behavior you have described seems to get you now where, but you say you have done this multiple times? It just doesn’t compute.

    You really come across as a bitter inventor who is looking for others to blame, and just a tad bit radical when you start talking about the Constitution. Have you read the Constitution? I know I shouldn’t ask, but I am really curious to know where you think first to invent is memorialized there? Simply stated, it is no anywhere in the Constitution, and first to file will not require a Constitutional Amendment.


  • [Avatar for Steve Perlman]
    Steve Perlman
    November 7, 2009 07:19 pm


    I did read the article you posted, and respectfully, your analysis is based on assumptions that are inconsistent with my experience actually being one of the small entities you refer to, being a top executive at large entities, and working extensively with foreign companies small and large.

    I did give you specific examples. I’m sorry you were unable to understand them.

    Here’s a couple more:

    (1) we have not had interference hearings, but we certainly have had prior art cited in OAs which we overcame by presenting evidence that our invention had been conceived first.

    (2) I have made presentations seeking funding to large tech companies under NDA, only to find the company has filed a patent claiming the same idea shortly after my presentation, even with the very same diagram I used in my presentation. Sadly, this has happened on several occasions. But, under FTI their patent is trivially overcome by showing prior records of the invention (in fact, the NDA and presentation itself would probably be sufficient). Under FTF, I suppose I could sue the company for violating the NDA and for fraud. Much more expensive and time-consuming.

    Of course, we try to get patents filed before disclosures to companies, even under NDA, but we’re startups: We have extremely limited resources, especially early days. FTI allows us to operate far more efficiently.

    I could go on and on, but Gene, respectfully, I think I’ve had my say, and we’ll have to agree to disagree.

    Perhaps we can find common ground in putting Patent Reform on hold until inventors have had their voices heard and have Congressional reports accurately reflect the no Constitutional scholar has published a paper in the last 10 years that concludes that FTF is Constitutional, and FTI has been upheld for over 200 years. As I understand it, Congress and the Administration are obliged to uphold the Constitution. So, FTF would require an Amendment. It might be hard to get a 2/3 vote on such an esoteric issue.

    Good luck with your blog.

    Thank you.

    Steve Perlman

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 7, 2009 06:54 pm


    Trust me, it was not sweet talking from Kappos. True, something he said clicked a switch, but it was not his presentation per se. I think he raises a good factual argument regarding 7 out of nearly 500,000 (or whatever the number of applications is for that year).

    There are so many out there that tell inventors not to patent at all, you can make money on your ideas, hold of on patenting, etc. Now some of that is justified because it makes no sense to spend money before you know whether there is a market, and businesses decisions sometimes dictate unique courses based on unique circumstances, but the majority of those pushing idea protection, services, prototyping, etc. are merely saying “don’t get a patent because you should do what I can offer first.” So many independent inventors don’t know what to do, and listen to the wrong people.

    My thinking… we practically have a first to invent system (that part was driven home by Kappos)… and inventor scams like Invent Help wait up to 3 years in some cases to file an application, others simply say don’t get a patent, which is horrible advice if you want to pursue a licensing strategy, or even a manufacturing strategy that will require investors and funding. Rather than allow the first to invent rule complicate the narrative and confuse inventors who do not really understand evidentiary standards, what if there were a simple rule. Invent and then file first. The charlatans of the inventor world won’t be able to manipulate and prey based on delaying a filing. Those selling snake oil will be obvious, a real benefit.

    Add to this the possibility of early state work sharing in terms of patent searches and preliminary search reports among and between offices, which should speed up the patent process, and I think why not? Done appropriately we could cut into pendency, get to quicker issued patents, stop scams and more. Yes, 7 folks in 2007 would have lost instead of won, but how many will alter their course? Most, decreasing the negatives.

    I am purely weighing pros and cons here, and I have changed my mind. With a thoughtful strategy of provisional filings practically any conception can be turned into a asset. Yes a weak asset or a potential asset, but a foundation is being built.

    Sorry if I came across harsh. Some background. You seemed to me to suggest I was a lecturer, pundit and I hear “academic.” I couldn’t make it in the academic world because I was practical, taught skills, wrote about stuff that mattered and strategies to use patents in a capitalistic culture. All evil things in the liberal academic world. Maybe I am an oddball, not accepted in either in the academic world or in the real world, but I would like to think of myself as a patent attorney who is an entrepreneur and keeps his eye on the business goal…. for what it is worth.

    Cheers to you as well.


  • [Avatar for Robert K S]
    Robert K S
    November 7, 2009 04:16 pm

    “I notice that you decided to ignore my question to you. You asked me if I prosecute and do interferences. I answered you, and then I asked you how many independent inventors or small businesses you work for. You chose not to answer. Interesting.”

    You must have missed it. Top of post #12 in this thread.

    “It is apparent you do not work with these inventors and you have no idea about what records they keep.”

    A substantial minority of my week is spent working directly with inventors. The people I file patents for, I share offices and lunches with. The idea that every inventor keeps an “inventor’s notebook” documenting and detailing every conceived invention, dated and witnessed, is not a reality, although there are certainly careful inventors who do that, and those who have had to navigate patent prosecution are well apprised of the benefits of such. But things like proposals, reports, presentations, e-mails, meeting minutes, these are things that are regularly generated in the course of a research business’s activities and these things are easily attested to in order to evidence solid dates before which conception must have taken place.

    “I know more about patent law than you do”

    I don’t doubt that you do, and I haven’t stated that you don’t. I would classify you as one of the nation’s valued experts in certain respects, which is exactly why it disturbs me that you’ve flip-flopped on this important issue apparently so capriciously. It leads me to wonder whether all of your other convictions are similarly so flimsily based–what else will you be changing your mind about? Now, open-mindedness and flexibility of opinion are critical attributes of any thinking person, and everyone is entitled to change his or her opinion. But, Gene, you’re a person of strong opinions, and your readers rely on them to be firmly founded. In this case, it didn’t seem to take a fleet of bulldozers to upend your foundation–just a few words sweetly spoken by Kappos. Is that really the case? Or were there other factors that led you to rethink your position?


  • [Avatar for Gene Quinn]
    Gene Quinn
    November 7, 2009 03:51 pm


    You say: “Under FTF, there is no question that many of these inventions would never have come into being because we couldn’t have afforded the patents or funded them…”

    This is argument and supposition. I do have questions, and you are not providing any evidence to support your claims. In fact, there is absolutely no evidence this is true, and it is a defeatist way of looking at things. It is really unbelievable to assert you can only succeed under first to invent when the facts demonstrate conclusively that we already overwhelmingly have a first to invent system.

    How many times have you and your company only been able to obtain a patent as a result of winning an interference proceeding as the junior party? Exactly how many of your inventions are patented because you were able to demonstrate you invented first and filed second?

    You say: “It is likely that you are reading this post now on a device which is practicing one of my patents that only exists because of FTI.”

    Exactly why is that true? Stating it is no substitute for evidence.

    You say: “we did just fine protecting our foreign interests.”

    So you are able to operate globally under a regime that is first to file and requires absolute novelty without any grace period, yet you could never survive in the US if the US changes to first to file. How does this make any sense? How is it that you are able to survive a foreign first to file and could never manage a US first to file. There is a disconnect.

    You should read the article I just posted. It is simply not accurate to say that you cannot afford to protect innovations in a first to file system. If you are relying on invention notebooks and invention records to prove first to invent you are relying on things far less detailed and far more cryptic than an appropriate and cost effective provisional patent application.

    US innovation will continue to move forward, and with US inventors having incentive to file earlier I think forward thinking folks with a strategy in place will come out just fine. In fact, I know that to be the case.


  • [Avatar for Steve Perlman]
    Steve Perlman
    November 7, 2009 02:43 pm


    The following comment seems to be the result of misunderstanding what I was saying:

    “First, relying extensively on first to invent is a bad business model. By taking all the time you think you have you have been operating very risky indeed. Whether anyone chooses to acknowledge it or not, 102(b) is real and it says that the publication, public use or sale by another more than 1 year before you file makes it impossible for you to obtain a patent. No invention notebook will ever save you from a 102(b) problem, and the fact that you refuse to use the provisional patent application and instead rely on first to invent means that you so far have been exceptionally lucky.”

    We are well aware of the 1-year publication grace period as well as our requirement to file diligently. To stay safely within the grace period, we need to assess whether to file a patent on an invention within 1 year of its conception. Bear in mind that these inventions continue to be conceived as the product evolves, and as a result, the priority window for successive inventions continues to roll forward through development. Using this approach, we easily file less than 1/10th the patents we would file under FTF. And, the patents are deep, and frequently we disclose results from functional prototypes, covering the actual issues we needed to overcome to build a practical product. To preserve priority under FTF, all you have time to do is file an idea, long before you’ve had a chance to build functional prototypes.

    After 8 startups, operating through two major recessions, going head-to-head against massive established players, I’ve never had a layoff or a down round, and after leasing over 40 offices for my companies, I’ve never even missed a rent payment. There were times where I’ve had to sell every asset I’ve held, and at one point I mortgaged my house, maxed out my credit cards and borrowed all the money my parents could afford to give me to meet payroll and bridge my startup to a VC funding round. Just before the VC funding closed, our one partner (Sony in that case) pulled out. The VC could easily have declined to fund at that point, the company would have folded, and I would have lost everything. But, he saw we had a strong team, he knew our patent position (the company was less than a year old, so we held priority in the US), and he decided to proceed with the funding. More funding soon followed, and after another partner (Philips) came in, Sony came back. And, with that funding we filed a series of patents that were worth filing, because by then we had working prototypes. (You can read about this in a Harvard Biz School case study on WebTV.)

    I have not been lucky by any means. And, while we certainly take big business risks, we do not take patent risks. The above story was just one of many dire situations in my career, and we survived through a large percentage of them because, not only did we have a great team and a marketable idea, but we were backed by solid IP, both filed patents and inventions within the priority window.

    Under FTI, I’ve created inventions that are in every Mac, iPhone and iPod touch, most PCs, and a large percentage of cell phones, video games, and TV-based devices. I’ve created 10s of thousands of US jobs, and products and services earning billions in revenue and profits. Under FTF, there is no question that many of these inventions would never have come into being because we couldn’t have afforded the patents or funded them, and because they were disruptive to established markets of large companies, large entities would have been unlikely to pursue them on their own.

    Most of my patents have been filed by Blakely, Sokoloff, Taylor and Zafman, and by attorneys that have spun off from that firm. I’ve worked with founding partner Ed Taylor since he filed my first patent. When the going has gotten rough, they have scaled back fees, and when we have been down to our last dollar, they have deferred billing, while continuing to pay PTO fees on our behalf or made entire filings to meet statutory deadlines. I’m quite certain that their filing full patents instead of provisionals has not been for the purpose of driving up legal fees.

    It is likely that you are reading this post now on a device which is practicing one of my patents that only exists because of FTI. No trolls or lawsuits. And, we did just fine protecting our foreign interests. The patents were simply used to fund and protect good ‘ole American ingenuity that results in valuable products and services, for nipping the heels of large incumbent companies, for continuing to push forward US innovation leadership while providing solid underpinnings to the US (and world) economy.

    I’d like to keep it that way.

    Steve Perlman

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 7, 2009 01:22 pm


    I notice that you decided to ignore my question to you. You asked me if I prosecute and do interferences. I answered you, and then I asked you how many independent inventors or small businesses you work for. You chose not to answer. Interesting.

    The fact that you think it is absurd that independent inventors and small businesses do not keep appropriate records really indirectly answers the question. It is apparent you do not work with these inventors and you have no idea about what records they keep.

    In terms of an “oddball fact pattern” why don’t we actually keep it to reality and not discuss fact patterns as if you are continuing to try and portray me as an academic that is out of touch with reality. Take a look at this case from a court you may have heard of before… it is called the Court of Appeals for the Federal Circuit. The case is Oka v. Youssefyeh, and the exact date does need to be proven when it matters.


    Look, we can keep this up all day if you want, but in the end what will become clear to everyone reading is that I know more about patent law than you do, I now more about what happens in life with real inventors than you do and despite your efforts to marginalize me as a “pundit” and “lecturer” everyone will see that I understand the practice and profession better than you.

    The reality is you are choosing to ignore reality and react passionately and perhaps even emotionally. You either know, or should know, that the information that is kept by inventors and business is routinely evidentiarily deficient. A receipt proves nothing, a proposal that is not enabling proves nothing. Ideas are not enough, conception is required, and proof that actually demonstrates the substance for which it is presented is required. Exactly how many inventors and small business that you know of are savvy with respect to evidentiary standards? Please do tell.


  • [Avatar for Robert K S]
    Robert K S
    November 7, 2009 12:55 pm

    “Second, under a first to invent system small business and inventors think they have insurance and really don’t. Large corporations and savvy businesses know what is required to prove conception, and individuals and small businesses think they know but their invention records are woefully inadequate to the point of never being useful to demonstrate an actual date of conception if it matters. Large businesses rely on first to invent far more than small businesses, because while small business and individuals think they rely on first to invent they have no proof at all.”

    Leaving aside the absurd blanket statement that small businesses and individual inventors don’t keep evidence documenting their inventions and the unevidenced claim that small businesses and individual inventors have deleterious misconceptions about patent law that somehow are not held by large businesses, this is yet another paragraph that intimates it is written by someone who has never used, thought about, or studied the provisions enabling first-to-invent. Specifically, the bit about “demonstrating the actual date of conception if it matters”. Tell me, Gene, when does the *actual* date of conception matter? No, really? Specifically? In what oddball fact pattern would the *actual* date of conception, down to the specific day, be of import?

    The answer is, only if the invention was conceived the very day before the effective date of the reference (in the case of antedating) or the very day before the other claimant’s earliest proven date of conception (in the case of an interference). Talk about “lightning-strike odds, folks!” In such cases you might as well be flipping a coin to see who deserves priority. The exact date of conception doesn’t need to be proved in any proceeding before the USPTO or the courts. It only needs to be evidenced going back to a date before what the other guy can do, and in actual practice this is usually done simply enough by submitting proposals, reports, presentations, engineering documentation, etc., all of which are regularly generated by most small businesses in the process of developing an invention.

    Read up on the MPEP about antedating and see if it isn’t one of the most rational, sensible, and rigorous processes defined therein.

    Addressing the substance of Gene’s argument, it appears to boil down to: “Some inventors might have misconceptions about what ‘first-to-invent’ means, and so would not benefit by its provisions, therefore, it ought to be eliminated in order to protect them.” I just don’t see this as a rational position. You don’t protect the ignorant or misinformed by harming everyone else.

    Of course, Steve is correct on all points, and thanks for taking the time to post, Steve.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 7, 2009 12:28 pm


    I respect your opinions, and I agree with much of what you write. Inventors should have their voice heard.

    Not surprisingly, perhaps, I disagree with some of what you write.

    First, relying extensively on first to invent is a bad business model. By taking all the time you think you have you have been operating very risky indeed. Whether anyone chooses to acknowledge it or not, 102(b) is real and it says that the publication, public use or sale by another more than 1 year before you file makes it impossible for you to obtain a patent. No invention notebook will ever save you from a 102(b) problem, and the fact that you refuse to use the provisional patent application and instead rely on first to invent means that you so far have been exceptionally lucky.

    Second, under a first to invent system small business and inventors think they have insurance and really don’t. Large corporations and savvy businesses know what is required to prove conception, and individuals and small businesses think they know but their invention records are woefully inadequate to the point of never being useful to demonstrate an actual date of conception if it matters. Large businesses rely on first to invent far more than small businesses, because while small business and individuals think they rely on first to invent they have no proof at all.

    Third, the fact that you don’t understand the power of a properly drafted provisional patent application suggest you are not working with patent attorneys who are business savvy. I hear patent attorneys say that they never recommend a provisional patent because the Federal Circuit has never ruled on provisional patent applications. What they want is for you to spend $15K to $30K for a patent. There are strategies to pursue that are cost effective, and I have never suggested filing a crappy provisional patent application. I know what the overwhelming majority of provisional patent applications are, but that does not mean you need to file crap. It means you need a strategy, which you obviously are lacking.

    Finally, first to invent matters in a nearly statistically irrelevant number of cases. We all know this to be true. We can read the results of interferences and the party who files first wins in the overwhelming number of cases. In 2007 the party who filed second prevailed in 7 cases. It is reasonable to assume that when the law changes, which it will eventually, those who invented first will not rely on first to invent and out of those 7 at least some will not only invent first but will also file first.


  • [Avatar for Steve Perlman]
    Steve Perlman
    November 7, 2009 04:52 am

    Hi Gene-

    I hold 91 patents, and have about 100 pending. I’ve run 8 startups, I’ve been a Division President of Microsoft and a Principal Scientist of Apple. I’ve developed QuickTime, WebTV, Mova Contour, OnLive, and lots of smaller inventions, like the initial Windows Mobile chipset, modems, wireless systems, lens system, and alternate energy systems. I’m a pure Practicing Entity: every patent I’ve filed is for a product I’m developing. I’ve never licensed my patents, and never had to sue anyone for infringement. That said, were it not for the strength and depth of my patents, I never would have been able to get funding for secure partnerships for my ventures. Indeed, in a couple of cases where the startups were acquired, after being part of the acquiring company, we found they had considered cloning our work, ran into our patents, and realized that they needed to partner with us or acquire us.

    We spend between $15-30K on a US patent. As startups, that’s big money, so we are extremely selective and strategic as to what patents we choose to file. So, when we are developing something new, we explore a wide range of alternative inventions (carefully documenting all of them), and then only file the few patents that we determine are necessary to defend the eventual product. It is often the case that the inventions that look promising in the beginning end up being dead-ends, or perhaps just give us some insight into what is the right way to go.

    Frequently, with a new startup, we don’t have the resources to file many (or sometimes any) patents before we seek funding from VCs or strategics to fund the patent filings. Indeed, one of the stated uses for the investment will be to secure patents for our documented inventions.

    Provisionals are only useful if they are almost as complete as a full patent. Modern inventions that are competitive commercially are far too complex to describe in a quick back-of-the-envelope provisional, and the couple of provisionals that I’ve run into in an OA have been trivial to overcome. So, the only time we file a provisional is if the patents essentially complete, but it may have a few typos or hand-drawn figures, or the claims have not been drafted yet, etc., and for some reason the engineers are busy with something else (e.g. a product launch). So, the only provisionals we file are 99% that of a full patent. Frequently a patent is filed a month or so later that is identical to the provisional, but just polished up.

    So, if you want a defensible product, you need to make the investment to file full patents. And, for small entities, that means you just can’t file a patent for every idea. You only file patents that are strategic for your products. And, you just can’t know what is strategic the day you conceive of the product. You need to go down a bunch of different paths, try things, and then once the product is refined, you file the patents that matter.

    For a talk I gave on the invention process, we reviewed the progression of an invention for one of my startups, Mova Contour Reality Capture (www.mova.com) used for the facial capture in “A Curious Case of Benjamin Button” resulting in the computer-generated face of Brad Pitt aging backwards. There were ~100 distinct inventions conceived during the course of Mova Contour’s development. Out of those ~100 inventions, 7 inventions ended being used in the final product, and notably, the most promising initial approach was a dead end, but it gave us the insight in how to use a different approach. So in the end, 7 patents were filed (deep and fleshed-out) under first-to-invent, instead of ~100 that we would have had to file under first-to-file to preserve priority. Of course, the only way we could have afforded 100 filings would have been as a large entity. As a startup under FTF, we would have had to make our best guess as to the approach most likely to succeed. In this case, we would have made the wrong call.

    Lastly, regarding the harmonization claims of FTF, I do not agree. There are a vast number of differences in different countries regarding how they consider priority, obviousness, adequate disclosure, etc. And, if you have patent protection in the US, in our product areas, that usually protects >50% of the applicable market, with the remaining <50% broken up into many different countries with different languages, consumer tastes, business practices, etc. So, if we have a US patent, for a competitor introduce an infringing product with meaningful market share, it has to go into each foreign market piecemeal and it very hard for it to get momentum.

    Getting patent protection across major foreign markets is extremely expensive, largely due to translation costs. We recently did a foreign filing across major markets that had over $100K in translation costs (e.g. Chinese, Japanese, Korean, and other languages). So, we VERY selectively choose patents for foreign filings. In the past, we often would hear from the USPTO within the foreign filing deadlines, to help us assess the strength of patents before we needed to decide on which patents to do foreign filings. With the backlog today, we are sometimes waiting over 5 years for the first examination, so we have to make the call on foreign filings based on our best assessment. It's hard.

    And...beyond cost and the uncertainty from backlog, the other reason we do not foreign some patents is because we have to disclose them to make foreign filings. Many of our patents are taking between 7 and 10 years to issue. If the patent gives up key information to large competitors, we have no choice but to keep it unpublished because they'll clone it and kill us in the market while it is pending. By the time the patent issues, it would only be of value to a troll to retrospectively pursue the parties that cloned it. We make products, so that is of no interest to us.

    So, in summary, we rely upon First-to-Invent extensively. Indeed, I see it one of the key reasons the US has such a vast lead over other countries in the number of startups, and their ability to be a disruptive force against big established players. Perhaps, Kappos' IBM background left him simply naive about how patents are used in startups. But, I doubt it, given his further views on post-grant review which obviously disadvantage startups. As a former Division President of Microsoft, I can assure you Microsoft has been extremely aware of how startups work, and quite specifically they saw how changing the US to FTF (among other changes) would significantly disadvantage startups. When I joined Microsoft in 1997, I was briefed on their strategy to build a massive portfolio for countersuits to swamp startups asserting patents, and they also initiated political lobbying efforts to change patent laws to weaken startups. The evidence is right in the uspto.gov database: From Microsoft's founding through 1996, Microsoft filed ~1000 patents (about 50/year) http://bit.ly/1qGgo4. From 1997-present, they filed 29,000 patents http://bit.ly/mUTdZ plus http://bit.ly/1dNRpO (about 2,500/year). Literally, they filed more patents than they had employees in engineering during that period, and normally only a small fraction of engineers produce defensible inventions. Given that Microsoft’s primary businesses are in software, the number of patents filed is just absurd. It has been part of their deliberate strategy to weaken startup’s ability to assert patents against them, along with FTF, post-grant and apportionment.

    One reason you may not have heard these arguments before about FTI vs. FTF is that inventors have been excluded from the Patent Reform Act process. Over 3 Congresses, only 1 inventor, Dean Kamen, was allowed to testify, and inventors have not been allowed to participate in any stakeholder meetings. As further evidence, the CRS Reports on Patent Reform over the last 2 Congresses state that changing to FTF is Constitutional, and then cite a reference to a Constitutional scholar who concludes that FTF is NOT Consitutional (and indeed, I hired a Constitutional law firm to do a search of all the publications in the last 10 years on the Constitutionality of FTF so I could recommend an alternative citation. As it turns out, there is NO Constitutional scholar who has concluded FTF is Constitutional (the Constitution confers rights to inventors, not filers, and research (and 200 years of jurisprudence) has supported that this was the specific intention when the Constitution was drafted). So, I’ve been trying to get that paragraph of the CRS Report factually corrected for years without success. The co-author of both CRS Reports, John Thomas, was hired by IBM in 2007 (when Kappos was there) to write one of only two papers that support apportionment (the other paper was also written for hire), and Thomas has testified to Congress, along with Kappos, supporting the agenda of large tech companies (e.g. apportionment, post-grant, and FTF).

    Bottom line is this: patents are created by inventors, not patent attorneys, not corporate counsel, and not academics for hire. We’ve been so excluded from the process that even the one Constitutional right (FTF) that every academic scholar today supports (and every court over 200 years has upheld) has been casually trampled over, despite years of effort simply make a factual correction. If this were a Bill on reproductive rights, women would have a voice; on civil rights, minorities would have a voice; or on health care, physicians would have a voice. Instead, we’re limited to sharing our views through vehicles like you website. I do hope this overly long post has given you additional perspective on the FTI/FTF issue.

    I don’t want the US startup economy to be like the rest of the world’s. I like the fact that US startups can use patents to disrupt established companies and force them to innovate. And I don’t want to waste our resources (or the patent office’s) on useless patents.

    But, above all, I want inventors to have a voice in any Bill about patents.


    Steve Perlman
    President & CEO
    Rearden, OnLive & Mova

  • [Avatar for Robert K S]
    Robert K S
    November 7, 2009 12:53 am

    “Let me ask you this, how many independent inventors and small businesses do you work with?”

    I do in-house for three small high tech research businesses and I have a no-moonlighting clause so I don’t do independent inventors. Our small team handles more dockets than most major universities and probably a lot of big firms.

    “Do you think it is appropriate for reputable professionals to encourage inventors to wait to file?”

    No, I do not. Nor do I think that any inventor should “wait to file”, which intrinsically involves forfeiting diligence, which ruins an inventor’s chances for all the benefits of first-to-invent anyway. Instead, an inventor should diligently work toward reduction to practice of the invention. That reduction to practice may be either actual (building the apparatus or performing the method) or constructive (filing the application). In constructive, the inventor’s diligence, or that of his counsel, take the steps I outlined in my previous post. And those steps, let’s be honest, can take months, especially if the inventor has a lot of things going on, or the representative has the responsibility of other dockets to handle (it’s pretty well established that diligence is preserved so long as the practitioner handles dockets in the order they come in).

    This “waiting to file” nonsense is a straw man. Nobody has abused first-to-invent in ways that wouldn’t still be available to them under first-to-file. I think an inventor should “file as soon as ready” and before that “diligently become ready”. New 102 says “file before ready or you may be screwed”–damned if you do, damned if you don’t!

    “I think so much of what you are saying supposes that Dudas is still running the Patent Office and examiners are not issuing patents.”

    That’s another statement that makes me think you’re not handling Office actions any more. I’m not saying a culture shift cannot happen, but it hasn’t happened yet, and if it does happen, it will take the better part of a decade.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 7, 2009 12:27 am


    I do handle Office actions, but I have never done an interference.

    Let me ask you this, how many independent inventors and small businesses do you work with? Do you think it is appropriate for reputable professionals to encourage inventors to wait to file? That is what is happening right now, and it has been for some time, along with many other unscrupulous activities, which are all premised on the first to invent system ruling the day. When the first to invent system ceases to exist most of the remaining scams will find it even more difficult to operate, and those “reputable” professionals who advise holding off on patent protection in lieu of other activities will not be able to pull the wool over the eyes of the inventor community, and as far as I am concerned that will be an enormously positive thing, albeit an unintended consequence of first to file.

    I understand what you are saying, but I think so much of what you are saying supposes that Dudas is still running the Patent Office and examiners are not issuing patents. In the space where I work primarily patents are getting issued, and those I know who are attorneys and agents are seeing the same thing. There is still a long way to go to get where things need to be, but I have seen the changes, a different attitude and I think that bodes well for the future.

    I am not saying this is you, but I have also started seeing situations where small businesses cannot get patents. I have seen situations where in response to a first office action no amendments of any kind were made, no additional more narrow claims were submitted and only vague arguments clearly would not result in a Notice of Allowance were made. It is no wonder in many cases patents are not being issued. If the goal is to get something and then go back for more and get as much as you can over time patents can be obtained. As long as patent attorneys continue to fight over not wanting to make any amendments in fear of losing the doctrine of equivalents, which doesn’t even exist any more, there will be problems.


  • [Avatar for Robert K S]
    Robert K S
    November 7, 2009 12:06 am

    “I simply cannot understand why you think an experience patent practitioner would not advise filing sooner rather than later.”

    On that we don’t disagree. File soon! The sooner the better! But–an information dump provisional can do more harm than good. A patent has to be written around claims. Also, sometimes an inventor doesn’t realize an invention is worth patenting right away, or conversely, it takes a little time to establish in the inventor’s own mind that an invention is novel and non-obvious. While it may be a patent attorney’s wet dream, it’s not a practical policy for every company to file a provisional every time an engineer has a brainstorm. The idea has to be fleshed out, perhaps tested to see if it will work; responsibly, a search ought to be made; claims should be drafted that protect no more and no less than what the inventor believes he or she has invented; and the spec needs to be tailored to support those claims, and also to provide whatever other disclosure is needed to provide room to maneuver in prosecution. So “file as soon as ready” is the operative advice–not “file instantly”, which there would be pressure to do under first-to-file. Maybe some big companies have the legal resources to throw together applications in a couple of days or a couple of weeks. In a small company with an in-house team with a number of dockets to juggle, it’s more like a month or two to get an application prepared, and sometimes that month or two turns into three or four. Under the present system, no big deal, as long as there’s diligence, and it can be documented. Under first-to-file, who cares about diligence? Only the filing date matters. After that, end of story, SOL.

    “What is going to happen is savvy inventors and businesses will file provisional patent applications all over the place focusing on narrow aspects of innovation and protect conception every time it occurs. … I believe big tech will curse the day they supported this because it will be the end of the road for those companies that no longer can innovate because true innovators will file early and often, like they should be doing anyway.”

    Yeah, we’ll have to agree to disagree. But can I ask, do you actually write any Office action responses? Or are you sort of a full-time lecturer and pundit now? Because you’re talking like somebody that’s never written a 1.131 or done an interference. To my mind, a system that lets a keyhole for the light of truth to stay open is always preferable to one that plugs it up. Most aspects of American patent law are reasonably forgiving. But you’re advocating a system that is now less forgiving.

    Sorry to have lost you, Gene. Enjoy the weekend.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 6, 2009 11:46 pm


    I assure you I am no android, and you know well that no one gets me to believe something I don’t believe.

    This will not weaken the patent system. Do me a favor, stop and ask yourself how you will advise clients to handle a first to invent system. What do you tell them to do? How do you help them do this? What do universities do presently when they seek protection on pure science that is maturing?

    Now ask yourself why are more and more big companies lashing out at universities? They want universities to be considered trolls for crying out loud. Now not all universities have this figured out, but those that do are increasingly causing problems for big companies because they are protecting earlier and earlier stages of innovation, which means big companies have to pay.

    Those who can figure out how to navigate these waters will do very nicely. Just take a step back and think strategy for a moment. This is a real opportunity.


  • [Avatar for Gene Quinn]
    Gene Quinn
    November 6, 2009 11:37 pm


    On many things we can agree, but I simply cannot understand why you think an experience patent practitioner would not advise filing sooner rather than later. Are you suggesting that there are patent practitioners out there who advise waiting to file? That is the most reckless advice I have ever heard. You know what the law is, and waiting is foolish. It is not business savvy and it certainly is not a strategy to pursue in a crowded field.

    I did not and never have advocated poorly written provisional patent applications. Most provisional patent applications are crap, and an ever increasing number of nonprovisional patent applications are crap. The trouble with software, for example, is that most of it simply is not enabled, yet patents get issued.

    I really don’t understand how first to file can’t be viewed as a windfall for sophisticated, business savvy companies. Large companies are dominated by attorneys who know better than everyone else and will not change. Large corporations cannot innovate and they cannot address any business matters in a relevant time frame.

    Big business wants this, and it is stupid for them to want first to file. What is going to happen is savvy inventors and businesses will file provisional patent applications all over the place focusing on narrow aspects of innovation and protect conception every time it occurs. What big business will find is that rather than dealing with a handful of patents they will be facing extraordinary numbers of patents. First to file is a patent troll dream, and inventors who embrace it will be able to wreak havoc on big-tech companies who need hundreds of items of conception in a single product.

    It is also just a little be naive for you to think that patent reform has to go through committee. I am not saying it will happen here, but there have been times when patent legislation has not gone through committee and was just added to the Omnibus budget, never having been debated. In this Washington climate where leaders are willing to whimsically change 20% of our economy without reading the bill I don’t know how anyone can think that wouldn’t happen here.

    We are going to have to agree to disagree I am afraid. First to invent will not be a disaster unless strategies do not evolve. If strategies evolve it will be just like every other change that has ever happened. It will favor some and disfavor others, and I believe big tech will curse the day they supported this because it will be the end of the road for those companies that no longer can innovate because true innovators will file early and often, like they should be doing anyway.


  • [Avatar for Robert K S]
    Robert K S
    November 6, 2009 11:30 pm

    Either a friend of David Koepsell stole Gene’s password to have fun with us, or when Gene went to Kappos’s speech the reform bill lobby nabbed him and replaced him with their android. This is not the Gene Quinn we know and love. A weakened patent system won’t harm startup financing?

    David Boundy’s right on all points. If there ever was a job-killer bill, S.515 is it.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 6, 2009 11:21 pm


    With all due respect, you are incorrect. You say “The typical inventor comes up with five ideas for every application that gets filed – under current law, the inventor has a year to sort out which are valuable and which are not.” That is simply not true. You do NOT get one year within which to sort things out. That is exactly why inventors are told that they should file as soon as possible. Inventors can create their own problems under 102(b) and others can create problems unknown to the inventor. It is now the case that those who wait a full year after after public use, sale or publication are running the risk that there are unknowns that will affect them.

    You say: “there was no specification to put meat on the claims.” And that means there was no invention to start with.

    You say: “If you take away the year to let the invention mature and to allow the attorney to do good work, that little nightmare will become the norm, not the exception.”

    David, you are talking as if invention is a singular event, which we both know it is not. Conception happens not once, but multiple times. Likewise, given the existence of a provisional patent application the parade of horribles you list is not realistic. The fact that major corporations do not want to use provisional applications doesn’t mean that there is not a cost effective solution. In fact, savvy businesses and universities use provisional application and file one after another. There are no formal requirements, the only question is whether the invention is disclosed. If the invention cannot be disclosed then there is no invention.

    You say: “Take away the current statute, and financiers and entrepreneurs can no longer talk to each other.”

    That is not true. You are conveniently choosing to ignore the existence of a provisional patent application. If they don’t want to follow procedures in place then they talk at their own risk, but claiming there is not an easy, cost-effective solution ignores reality. Yes, an idea is worthless until you put together a team, but if you need a team to define an invention all you had in the first place was an idea and nothing that could be protected.

    You say: “the ability of innovative companies to get financing will fall off remarkably… The patent system will become all but unaffordable for the most innovative companies, and for startups. You want a job killer? Here it is.”

    I must confess I don’t understand the fear mongering. This is not a job killer, and companies are not going to cease to get financing. Perhaps those who have nothing to show but promise will find it difficult, but why should the patent system reward those who only have an idea and nothing else? Independent inventors live with the reality that they have nothing until they can describe what they have so it is enabled. Why does that requirement cause business problems?

    David, I think it is you who should know better. You really lose enormous amounts of credibility when your argument is based on an incorrect understanding of something as fundamental as 102(b).

    Keeping the status quo is not an option. You obviously have no experience with the hundreds, perhaps thousands of inventors, small businesses and start-up companies that cannot get patents. Perhaps with your connections you can get financing based on a solid team, a proven track record and early stage conception. The vast majority of inventors, small businesses and start-ups cannot.


  • [Avatar for David Boundy]
    David Boundy
    November 6, 2009 08:16 pm

    Gene –

    For all my respect of Director Kappos, on this one, he’s dead wrong, because he isn’t looking at the statutory language or at relevant data. Gene, you’re being taken in by the name “first to file,” when the statutory language does far more than that.

    If all that the bill proposed to do was tweak five words on 102(g), to change who wins an interference, then the 0.1% statistic would be right.

    But that isn’t what S.515 does. S.515 REWRITES ALL OF SECTION 102. S.515 does not affect 140 applications per year, it affects a majority of ALL applications, and affects essentially EVERY application I’ve ever worked on or done a deal with for a U.S. startup that intends to sink or swim on its ability to compete in the U.S. market. “First to file” is a misnomer to hide the truth from the innocent, it is not an accurate characterization of the bill.

    As a practical matter, S.515 makes the grace period so fragile and easily burst by the activities of others that you can’t rely on it any more. Inventors are put in a “file it or lose it” situation almost immediately on conception. The typical inventor comes up with five ideas for every application that gets filed – under current law, the inventor has a year to sort out which are valuable and which are not. Under S.515’s rewrite of s 102, the inventor has to make this expensive decision without the time to gather information. Many many more applications will be filed – Ron Katznelson was able to estimate 20-30% based on data from other countries. This shifts huge costs onto the most innovative companies who must file many more applications.

    The quality of applications will go way down, because of haste. This will drive up costs quite a bit. I’ll give you an example. In 2001-02, I litigated a case involving patents originally filed to Japanese standards. The translations were reasonably good, but all 8 of the underlying patent disclosures were complete crap. Neither side could figure out what the real invention was, because there was no specification to put meat on the claims. If you take away the year to let the invention mature and to allow the attorney to do good work, that little nightmare will become the norm, not the exception.

    The rewrite of section 102 means that the inventor can’t tell ANYONE about the invention, because if there is any further disclosure, the burden shifts to the inventor to prove derivation. OK, the naive will say, what does that matter? Well, an idea is worthless until you put together a team – financing, management, manufacturing, distribution. I’m Wall Street, I do a lot of financing deals, I typically represent the money side of the deal. My side very seldom signs an NDA. But we can usually do the deal anyway, because if the idea is any good, we have a year to get U.S. patent protection, so we can comfortably talk. Take away the current statute, and financiers and entrepreneurs can no longer talk to each other. For most startups, commanding the U.S. market is enough to exclude enough competitors to maintain profitability, and to protect the financing. The s 102 rewrite will cut access to venture capital – roughly half is my gut feel.

    This is HUGE MONEY. Many years, I as one individual lawyer have moved more patent money around than the entire federal judiciary, and there are dozens more lawyers whose practice is like mine. If the current section 102 rewrite becomes law, the ability of innovative companies to get financing will fall off remarkably (most of the deals I do will be affected – I admit my sample bias, but my numbers are damn big all alone), and the cost of the patent system will go through the roof. The patent system will become all but unaffordable for the most innovative companies, and for startups. You want a job killer? Here it is.

    Gene, you should have known better than to accept what the PTO says at face value. The PTO knows as much about patents as a midwife knows about a child. The midwife/PTO was not present at conception, had no idea what the sorting-out and development process was before the mother/inventor gets to the midwife/PTO’s doorstep, and after the baby/patent is born, the midwife/PTO never sees the child again. The PTO does not participate in financing, R&D, or any of the other economic decisions that are driven by patents. Very nearly every single thing that the PTO thinks it knows about patents is wrong, because the PTO is exposed to nothing but sample bias. Anyone that relies on the PTO for anything other than internal PTO operations is being taken for a ride.

    S.515 is the product of a few big multinational companies acting in self-interest, in an environment where the startups and innovators who will be hurt don’t have a voice, often because they haven’t been formed yet. It’s a law designed to squish new entrants and to protect incumbents. The arguments to support it are based on fallacious reasoning and data that are irrelevant to the actual statute.

    Gene, you should know better.

  • [Avatar for Robert K S]
    Robert K S
    November 6, 2009 08:09 pm

    Who are you and what have you done with Gene Quinn?

    “I find it impossible to believe big business will benefit from first to file. We all know that big business cannot innovate, which is why they acquire.”

    Your first sentence here is easily controverted by point out that businesses are the ones lobbying for first-to-file (among all the other provisions of S.515) and small businesses oppose it.

    Your second sentence is dead-on; big businesses are pursuing the “reform” because they want to overall weaken the patent system. They want to make it harder to get a patent, harder to defend a patent from post-grant review, harder to assert a patent and harder to collect damages on proven willful infringement. They want to make patents on the whole worth less or worthless. They seek to do all of this because they are in the position not to need patents to protect their marketplace dominance, which they prefer to do through sheer strength of marketing and sales forces, which are their inherent advantages. To big business, patents become, on the whole, more annoyance and public relations nightmare than competitive advantage. A big business constantly finds smaller entities nipping at its heels with infringement accusations, but when it patents a technology having high commercial value, elements of the public cry foul at one big bully entity having a monopoly on such an important innovation. All of these factors tip the scales, for big businesses, toward favoring minimizing the impact of the patent system and thereby maximizing the impact of the regimes they already have in place to copycat, undersell and out-market any upstart competition.

    As you surmise this motivation is misguided because innovation resides and evolves in an ecosystem, and big businesses grow by gobbling up little businesses who have devised and developed and in almost all cases patented useful innovations. It would be extremely unwise for sharks to make the seas less habitable for smaller fish, the very ones they feed upon, but sharks aren’t blessed with the powers of foresight or the patience of higher creatures. You talk about “adapting” to the new patent laws. For the little fish, there’s no “adapting” to poisoned waters. There’s only getting the hell out of the pool. (Yes, first-to-file will mean an uptick, maybe a permanent one, in provisional filings. That would only mean an essentially higher basic filing fee for all patent applications and, yes, more business for patent attorneys–maybe that’s what excites you? But a poorly-written provisional does not protect against all the bogus references–see next paragraph.)

    Regarding antedating, your statement “If the law changes you simply won’t be able to wait and will have to file early” seems an unlikely thing for an experienced patent practitioner to say. The words make it seem as if you don’t actually deal with Office actions. As a practical matter, in the present “reject, reject, reject” PTO, irrelevant references are bandied about all the time by examiners and it is often more pragmatic to antedate them than to battle an examiner all the way through the BPAI on nonsense issues and bogus rejections. First-to-file will lengthen pendency, not shorten it.

    As for the inevitability of the Patent Reform Act of 20XX (where X is every new Congress year) and thus the implementation of first-to-file, people have been talking about such inevitability for a decade, and it hasn’t happened yet, so that tells me it’s not inevitable. In fact, the real battle over patent reform hasn’t begun yet, and won’t begin until both houses get a bill through committee. That’s when we’ll start to see the big battle of pharma vs. software, who are the two major groups with dollars to throw at the issue. Hopefully, then, the little guys will rally together and be able to add their voices.

    I don’t always agree with everything you write, but this is the first time in reading your blog in several years that I have to say you’re all wrong, and I hope you realize it before it’s too late. You, Gene, are a major voice in this issue. I hate to see you now moving over to the wrong side just because you were mesmerized by Kappos’s oratorical exhortations, or because of your contempt for the fraudulent inventor-helper scams. That issue is a serious one, but it should not dominate your thinking on first-to-invent vs. first-to-file.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 6, 2009 07:24 pm


    Here is my rebuttal…

    1. I have not forgotten that first-to-invent encompasses antedating references, but that is hardly a reason to remain first to file. If the regime changes behaviors will change. Antedating references is allowed under the rules presently, and is justified. If the law changes you simply won’t be able to wait and will have to file early. I just cannot see why it is necessary to keep first-to-invent because of antedating. Antedating is a necessity based on the law as it is today, but is not in my opinion a justification for keeping the status quo.

    2. I have previously believed that the rarity of interferences did suggest we should keep the law as it is. My feelings have changed as I have continued to work closer with independent inventors who think they are doing everything right, but despite best efforts simply are incapable of keeping appropriate records because they do not understand the evidentiary standards. In a perfect world it would be great to be first to invent, but increasingly I believe that is a dis-service to inventors because it creates a false impression. It also allows the many scams and individuals providing bad advice to convince inventors they do not need to file a patent application as early as possible, which is disasterous advice because of 102(b).

    3. I think you are exactly right when you say first to file will just shift from an interference proceeding to a derivative proceeding. I think that could well come back to haunt the USPTO, and rather than having limited interferences it will become commonplace for there to be questions about whether rushed applications were enabled. That is something that needs to be sorted out for sure, but again anything the USPTO can do to convince independent inventors to file earlier rather than waiting will put a crimp in the scam market, which in my mind is a very good thing.

    4. You talk about the statutory bars providing the incentive, and you are right with respect to those who know AND understand that law. The trouble is I see and hear what goes on in the independent inventor community, and so many people tell inventors to wait, don’t file, do something else instead. Sometimes that can be good advice, but the inventor needs to understand the risks and they simply do not. I can’t tell you how many independent inventors do not know or understand 102(b). So there is incentive to file early already, but I can tell you with great confidence that incentive is not understood and ignored either carelessly, recklessly or as a result of bad advice. Again, anything that forces people to file early will make it more difficult for scams to exist. It is nearly criminal for those scams to wait 3 years before filing, they are creating all kinds of statutory bar issues, and a clean, hard and fast rule forcing early filings will be a net positive.

    5. Whether we like it or not this is going to happen. I have resigned myself to that. Whenever patent reform happens, it will have first to file because the USPTO needs to harmonize on some level to move forward with work sharing that could reduce pendency. Anything that can reduce pendency needs to happen. Independent inventors and small businesses were held up at the USPTO previously and they simply cannot get funding or licensing deals without a patent. Things need to change.

    6. First to file will create a massive uptick in patent applications. I think the PTO thinks that will be temporary, I think it will be permanent. What should happen though is there will be significantly increased provisional filings, which will raise revenues and not take up Office resources. Inventors should file successive provisional patent applications and then ultimately decide within 12 months of the first filing whether to move forward and with what, wrapping together multiple provisional patent applications. Inventors will not have to rely on inventor notebooks, they will have a USPTO filing date as proof, which is a good step in the right direction. They will also have an asset (i.e., a patent application) rather thatn an invention notebook. They also get patent pending status.

    7. Big companies will likely not file provisional patent applications. They should be filing them now and they don’t. Some universities file them, using them to sure up conception as it occurs, but big companies frown on filing provisional patent applications. By moving to a first to invent system inventors will file early and serious inventors will file often. That will increase their assets and the portfolio and encourage them to do things from the start that we all know to be business savvy. I think this gives incentive to inventors to do things in their own best interest, and could well mean that big business will have more difficulty getting around and challenging the patents ultimately granted to independent inventors, which could create more licensing opportunity.

    8. You say that small technology businesses will get killed, and I completely disagree. Getting big business to change is a slow process, getting small companies to change can happen tomorrow. If these small companies do not have the resources to file provisional patent applications then they are in the wrong business. If the filing fee of $110 is too much to file a handful of applications and $1,000 to $1,500 is too much to pay for a real provisional to be created, those companies won’t succeed anyway. What first to file will do is allow those who approach inventing and innovation as a business to ramp up and succeed. The myths and bad advice will be busted, and those want to establish themselves will have a great opportunity. We all know that much goes unprotected, and now that will happen at the inventor or businesses’ own peril. They cannot convince themselves that bad business and patenting strategy can be pursued because it is about who invented first anyway. The foundation will be laid for more assets, and the more you have the more likely one or more will be valuable.

    9. I find it impossible to believe big business will benefit from first to file. We all know that big business cannot innovate, which is why they acquire. First to file will not solve the lack of ability for big business to innovate, and it will force small businesses to do what they should be doing now anyway, which will mean far more innovation will be subject to some kind of patent application. This will create more assets and force big business to acquire more small companies, or be targets.

    First to invent is the right thing to pursue at this time. Those who want to succeed will be able to succeed, and the reality is interferences almost never result in anything other than the first to file wins. Yes, there will be some who will need to alter there approach or lose, and they will alter their approach and adapt to the new law. So any benefit that results will be a net positive, and stopping the myth that you can wait to file because if you invent first you win will go a long way to eliminating fraud in the inventor community. This is an opportunity for those who are willing to embrace it.

    More to come I am sure.



  • [Avatar for Robert K S]
    Robert K S
    November 6, 2009 05:28 pm

    It will be disappointing to have lost one of the most vigorous and reasonable defenders on the web of the very important first-to-invent pillar of the American patent system.

    I have three major remarks.

    First, Gene, you seem to have forgotten that first-to-invent encompasses not just interference proceedings, but more importantly, also the capacity to antedate references under 37 CFR 1.131, which is only used when not claiming the same invention as the one supposedly anticipated or rendered obvious by the cited reference(s).

    Second, the rarity of interference proceedings is an argument to keep first-to-invent, not the opposite. First-to-invent opponents make out interference proceedings to be some abused system by which loads of undeserving applicants weasel their way into priority. This simply isn’t the case. It’s important to have the option of interference, even as rarely as it is used, precisely to preserve fairness for those lightning-strike odds inventors. A system that is fair from the philosophical perspective provides for those who have been dealt with unjustly and allows their cases to be heard on the merits. Moving to first-to-file would just be removing one relatively simple and inexpensive level of fairness from the system. Palmam qui meruit ferat.

    Third, the particular implementation of the change from first-to-invent to first-to-file as elaborated in the pending patent reform bill (S. 515) would be disastrous. It would replace interference proceedings with derivations proceedings. In the former, each party proves what he or she did himself and at what date, on the basis of evidence in the party’s own possession. In the latter, a party is forced to prove what the other party didn’t do, on the basis of evidence in the opposing party’s possession. This is hardly a sensible way to go about things. Patent practice before the USPTO is supposed to be more relaxed and more civilized than litigation. Why would we want to bring all of the contention and animosity of litigation practice, like discovery and deposition, into the patent system? Those interested can read S.515 here:

    You say that the benefits of a first-to-file system “are massive”, but proceed only to note that it would encourage inventors to file earlier, encouragement which, as you point out, is already provided by the existence of 102 (b) and (d) statutory bars. Benefits of the move are not only not “massive”, the are nonexistent, as they would merely remove the sensible one-year grace period and put in place an unwarranted filing anxiety that would result in less carefully crafted disclosures that would be less likely to enable maturely conceived embodiments, and would further result in inventors being less likely to make public disclosures of any matter that might possibly lead to a 102 or 103 on a later-issued patent or that might be swept up by another and placed into a competing patent application filed earlier. For numerous reasons I won’t go into, support for first-to-file or the other provisions of S.515 on the basis of “patent harmonization” is misguided; harmonization with international states can be no part of the “massive” benefits of first-to-file.

    You also say that you are now more convinced than before that first-to-file would benefit “the little guy” (small businesses and individual inventors), but you don’t really elaborate how, except through your implication that they will benefit by having good representation. These are the people who don’t have vast resources to put into patent matters and don’t have the expertise or time to put into litigious patent challenges such as derivation proceedings. Think of all the small technology businesses that have excellent in-house patent representation. These are the folks who are going to get killed by first-to-file, and they’re also the ones who are responsible for much of the innovation in this country.

    By most appearances Kappos is a significant step up from his recent predecessors. But he has long been one of the most vocal advocates of first-to-file and of the particular implementation of first-to-file created by S.515. He’s of the big-business pedigree, so the position was natural for him to hold while he was still chief patent counsel for IBM. First-to-file benefits big business, secrecy, and harms small endeavors and academia. Now that he no longer has any responsibility toward IBM and every responsibility toward the improvement of the American intellectual property system, Kappos must now represent the interests of more inventors than just those employed for big businesses, and for him to be pushing first-to-file as if it should be a major priority of the Kappos PTO is a shame insofar as it takes the spotlight off issues and areas actually deserving of change and for which there is much greater consensus.

    All the best,
    Robert K S