Kappos Trying to Sell Patent Reform to Independent Inventors

David Kappos speaks to Inventors on Video about Patent Reform Legislation

The United States Patent and Trademark Office is sending the message that it believes patent reform is needed and that it is not something that will harm independent inventors, and the messenger is none other than the Director of the USPTO, David Kappos.  Just this week the USPTO launched a bi-monthly e-publication aimed at the independent inventor community – Inventors Eye.  The first issue of Inventors Eye takes on the issue of Patent Reform, with a letter from Director Kappos.  A video tape of Kappos essentially explaining the same thing as said in the letter, perhaps with a little more information, is available on the USPTO Website.  The clear message is that the current patent reform proposals are a net benefit to the independent inventor community.  I personally agree with Director Kappos and think that independent inventors and small businesses should not be afraid of patent reform but view it as an opportunity for enhanced opportunity.  There are some things in the legislation that will immediately benefit inventors and small businesses, and initiatives the Patent Office is working on outside the patent reform legislation that should be beneficial as well.

First, something that is not mentioned in the Kappos letter or video relates to provisional patent applications.  According to Patrick Raymond, the Executive Director of the United Inventors Association, the UIA has had productive talks with Director Kappos and the Patent Office is considering supporting the extension of a provisional patent application to 24 months, as first reported by the UIA on February 8, 2010, in its Weekly Industry Update.  The UIA also says that the USPTO, with the help of the UIA, is interested in developing a network of patent practitioners who could provide pro-bono services.

I have been on record repeatedly saying that it is simply ridiculous for provisional patent applications to expire after 12 months.  Yes, having the ability to file a provisional patent application 12 months before filing a non-provisional patent application is quite helpful.  It lets you lock in your filing date, thereby cutting off certain prior art problems that may otherwise exist.  It also lets you say you have a “patent pending” and allows you to start selling the invention without fear of losing patent rights.  But the reality is that with patent applications being published at 18 months after the earliest filing date you will still not know for 6 months what the closed universe of prior art will be when the Patent Examiner starts reviewing your patent application.  For that reason alone, provisional patent applications should remain pending for a minimum of 18 months.

Changing the pendency of provisional patent application to up to 24 months, or at least 18 months, would make an enormously positive change.  It would allow all inventors to file a patent application that cuts off potentially harmful events that would destroy the right to obtain a patent in the US or around the world, while at the same time giving valuable additional time to determine whether there is enough merit or interest associated with the invention to warrant the time and expense associated with a non-provisional patent application.  Unfortunately, this change will need to be done legislatively since the patent laws, specifically 35 USC 111(b)(5) says that a provisional patent application goes abandoned after 12 months and cannot be revived.  I do believe Director Kappos when he says he is interested in making a change, but I urge the USPTO and everyone in the industry to get behind this legislative change and get it into the patent reform bill and see it through to being enacted.  This would be an enormously positive and pro-inventor, pro-small business reform.

Director Kappos is making his case for patent reform by making 4 key points.  First, patent reform would lower patent office fees for independent inventors and presumably small businesses by establishing a new class — micro entities.  Second, the fee setting authority in the patent reform legislation will allow for the USPTO to generate more revenue, thereby improving IT systems and hiring more patent examiners, while not costing micro entities more in the way of fees.  Third, post grant review of patents will be condensed into a 12 month period, serial challenges will not be possible and the threshold for initiating a post grant review will be raised, all of which should result in at settling effect not unlike the quieting of title in the real property scenario.  Finally, Kappos tackles the most thorny issue saying that patent reform will not convert the US into a pure first to file system, but rather into a first inventor to file system, which will have little or no effect on independent inventors and small businesses.

Certainly the formation of a micro entity will be of big help, particularly if the fees are reduced from where they are currently, which seems reasonable.  So the fee setting authority that the bill would grant the USPTO, while a concern for those big users of the Patent Office, should not be a concern for the independent inventor or true small business community.  More resources paid for by large corporations, who are the predominant users of the patent system, benefit the entire system.  So the real concern seems to be associated with post-grant review and first to file.

Of course, the devil is always in the details and as the seemingly endless health care debate has taught all of us over the last 9 months, you never really know what the language of a bill will be until it is placed in final form and scheduled for an up or down vote.  If the patent reform bill that gets voted on does actually limit the length of time a post-grant review can be filed at the USPTO then that would be an enormously positive event and would force those with issues to speak quickly or forever hold their peace.  Combined with a heightened threshold for granting post-grant review and it is easy to see that such a condensed window could and should be a great benefit to all patent owners.  For independent inventors and small businesses it would result in a far more certain grant of rights open to greatly reduced possibility of challenge.  Investors and potential licensees would and should love this type of settling effect, which could and should make deals more possible and potentially even more lucrative.  Of course, you have to have a right worthy of a deal, but if you do this could create a very favorable climate for negotiations.

I also agree, as I have written in the past, with Director Kappos on the first to file provisions.  There is simply no rational or logical reason to fear that others who learn of your invention would be able to steal your invention from you.  As long as 35 USC 102(f) remains, or its statutory successor if there is a complete re-write of 102, in order to receive a patent you must be the inventor.  You cannot take what someone else tells you or you learn of and file a patent application.  That is true now, and as long as it remains true there is nothing to worry about.  In order to be an inventor you must contribute to conception, which is the mental work associated with inventing.  Simply stated, this is not a race to the Patent Office.

With respect to the remainder of first to file, what is left is a change to the current law where the first person to invent may obtain a patent even if they are the second to file.  This is the situation where you have two inventors (or more), each who have engaged in the mental work associated with inventing, albeit independently from each other.  The first to engage in the mental activity, legally called conception, is able in some cases to demonstrate they are entitled to the patent even if the second to conceive is the first to file a patent application.  This would change under the proposed first to file modifications.  This change, however, is a difference without a distinction.  In almost no cases does the first to invent prevail over the first to file a patent application, even now.  The evidentiary requirements are very strict and the deck is stacked strongly in favor of the first inventor to file a patent application.  Acting like there is a benefit provided under the first to invent rule also incorrectly lulls inventors into a false sense of security and leads them to make bad decisions associated with when to file a patent application.

I frequently hear that inventors invent and wait for years to file because they know are the first to have invented and will ultimately win, so why waste patent term.  This analysis is flawed for so many reasons.  First, there is no way to “know” and inventors are routinely fooling themselves when they think their invention is so revolutionary only they could have possibly conceived of it.  The truth is in a world where our physics and chemistry knowledge is limited there are a finite number of solutions to any problem, and other smart people can and do exist and come up with the same or similar inventions.  Waiting is a horrible strategy.  Second, in the situation where you wait you cannot legally ever win because without continued diligence and work on the invention you lose the right to even submit evidence to show you invented first.  Simply, the law doesn’t care if you invented first if you delay, so reality is no longer relevant because you will be prevented from submitting evidence to demonstrate reality.

For more information on the dangers of waiting to file a patent application, and why first to file is not something to worry about in reality, see:

• Kappos Talks Patent Reform at USPTO Inventors Conference
• Much Ado About Nothing Over First to File
• The Risk of Not Immediately Filing a Patent Application

In summary, the inventor who claims they are the first to invent prevails in about .01% of cases, which means that in 99.99% of cases it simply doesn’t matter.  So getting worked up about this change is fine, but it is important to realize that you are getting worked up over something that is of such minor concern that it is statistically irrelevant.  Couple this together with the fact that the change would force inventors to do what they should already be doing, which is to file as soon as possible, and it is a change that will modify behavior that will dramatically benefit inventors.  If you couple this together with an extension of provisional patent application to 24 months, and you not only have something that will do no harm, but a bill that will do a lot to benefit independent inventors and small businesses.

One final thought.  We all know that big corporations simply cannot and do not innovate.  Innovation comes from independent inventors, entrepreneurs and small businesses.  Nothing in the patent reform bill will change that reality.  It is true today, it will be true the day any patent reform is passed and it will be true after the law goes into effect.  Collectively what these reforms will do is make it more difficult for big business, although they don’t yet see the Trojan Horse qualities, and likely won’t until it is too late.  They are too busy patting themselves on the back for getting this far, and by the time that they realize that the small players will have the incentive to treat inventing in a more business appropriate way across the board, their ability to file reexamination requests will be substantially limited, patents surviving past the 12 month post grant review will be much stronger and harder to challenge and invention priority dates will get earlier and earlier making it more difficult to find prior art… well… by then the next wave of big companies will be on the assent and the mega-giants of today will start to become a footnote like so many big-tech companies of the past.