Analyzing Patent Reform Chances and First to File Provisions
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
Zies, Widerman & Malek
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Posted: Mar 10, 2010 @ 5:12 pm
By now most are likely aware that patent reform is back, once again, with the current draft legislation available for everyone to read. It is becoming harder and harder to take patent reform seriously, given that it has started to become a little like a bad horror movie where the villain is killed only to reappear in the next episode, a la Jason from the Friday the 13th movie franchise. Over the last 5 years or so we have been told that patent reform is a done deal, only to have it called off and proclaimed dead due to lack of compromise. Is this time different? At the risk of sounding extremely naive, I think this time is different and it is going to happen. It looks like most of the contentious issues have been ironed out enough to have generated a bill that can be passed and become law. However, the continued focus on health care reform by the Obama Administration promises to cripple Congress for at least a few more weeks, likely longer. By the time Congress is operational again, will there be enough interest to do something, even anything?
Now don’t get me wrong, I think the crippling of Congress and virtual shutting down of government is potentially a good things because at least when Congress cannot accomplish something they are at least not screwing things up. Nevertheless, with such partisan fighting, Congress’ spring recess and the earnest start of the 2010 political campaign right around the corner, I don’t know what, if anything, Congress and the Obama Administration will achieve. After all, before this craziness with health care the Democrats enjoyed a majority in the House of Representatives and a filibuster proof majority in the Senate until just last month, yet they accomplished nothing. So it is hard to see a path forward where much gets accomplished, particularly if health care passes through the use of reconciliation. Having said this, now that a “passable” bill has been written, patent reform could be of sufficiently low political importance that Democrats and Republicans can get something done. If health care dies the Democrats will need to pass something desperately, perhaps many things, to show they actually accomplished something. Therefore, if health care dies I predict patent reform passes. If health care passes I predict patent reform will die, as the Congress and government slip into heightened posturing in advance of the 2010 elections.
So why is this time different? Well, patent reform is not a partisan issue, rather a geographical issue. There will be no party-line votes, but regional alliances that stretch across the isle in support of whatever industry is geographically relevant. The big industries will likely not declare patent jihad on this bill like they have in the past, although only time will tell for sure. The major provisions seem to be sufficiently watered down to the point where there is really little reform, or perhaps it is best to say that any reform would be “small r reform” and not “big R reform.” I personally have a hard time calling this patent reform, and would rather it be referred to as “patent change” because things that are essential for true reform are simply not present. So to the extent this legislation won’t be useful, helpful or a step in the right direction it is probably more likely to get enacted, which is indeed a sad commentary in and of itself.
If this were “reform” it would provide: (1) meaningful obviousness alterations that would do away with KSR v. Teleflex; (2) meaningful inequitable conduct reform that prevents every utterance during prosecution to be the basis of fraud accusations during trial; and (3) more resources for the Patent Office to hire additional patent examiners and invest in state of the art computer systems, rather than rely on state of the art circa 1980 computer systems presently in place. As it stands there are some tweaks that could help a little in some areas, but more burden is likely going to be placed on the USPTO and changes that would lead to a truly better patent system are ignored. The tragedy is that once this is done, if it gets done, it will be many years before Congress does anything again. They will be too busy congratulating themselves for finally passing “patent change” and reform hopes will be all but gone. Hopefully Senators Hatch and Kyl, who are among the patent literate in Congress, can sneak in some real reform.
While many of the hottest issues seem to be smoothed over we always need to watch out for a pocket of resistance that could form, and the biggest pocket of resistance might come from independent inventors and small businesses concerned with the first to file changes proposed. I have written at some length that first to file changes should not be feared. See IPWatchdog posts tagged first to file. I continue to believe that, but in reading the legislative language there is something that inventors should be focusing on specifically, which will likely get lost in the debate over first to invent versus first to file, namely whether the 12 month grace period that remains will apply to sales.
First, allow me to point out that putting so much energy into keeping first to invent does not seem warranted. The reality, whether anyone wants to believe it or not, is that first to invent is a false promise, particularly for independent inventors. In order to satisfy the first to invent requirements inventors must demonstrate that they conceived of the invention prior to the conception of the first to file and exercised diligence straight through and uninterrupted until they reduced to practice. Reduction to practice can either be shown by a working prototype (or successful process demonstration) or by the filing of a patent application that satisfies the disclosure requirements of 35 USC 112 first paragraph. The reality is that independent inventors, and even many small businesses, do not keep the records necessary to ever prove prior conception or diligence. I have even heard inventors say they invented and are waiting because they know they invented first. If that is you, kiss diligence goodbye, so even if you invented first you will never prevail. On top of that, prevailing would be quite expensive to do. On top of that, how many inventors accurately identify in their notes the point of innovation sufficient to demonstrate conception of the key aspect that might later be the focus of an Interference? While you think of the answer also consider how many even keep notes. Cryptic notes are not enough, and evidentiary standards need to be met. First to invent has always been a false promise for the independent inventor, so getting rid of it is not going to change much, if anything, except in a positive way.
I have also heard from many that the loss of the so-called grace period would be devastating. I agree 100%. Under 35 USC 102(b) there presently exists a 12 month grace period within which the inventor can engage in certain activities without losing the ability to file and obtain a US patent. The US is unique in this respect, with most other countries adhering to absolute novelty laws, which means there is no grace period and if you, for example, sell a product before a patent application is filed you lose the ability to obtain a patent. That is not so in the US, at least not if you file within 12 months of the sale or offer for sale.
The truth is, however, that relying on a 12 month grace period is extremely dangerous. Every patent attorney and patent agents has had to deal with 102(b) prior art found by a patent examiner. If only the application had been filed earlier it could have issued as a patent, but the inventor waited too long to file. I have seen this as a patent attorney, and as an inventor myself. It happens, and I suggest it happens many times every day of the week, every week of the year and every year! The grace period is essential, but we do a tremendous disservice to inventors to act like it is something that can be relied upon. The insidious part of the grace period of 102(b) is that things you don’t know about and could never have realistically known about create problems. The best strategy is to file early, not to wait. Sometimes, however, filing early is not an option for one reason or another.
The grace period is essential, particularly for independent inventors and small businesses, because you want to have some idea whether there is enough interest to warrant moving forward with a patent application. What better way to know than to test the market?
Lets assume there will be no event to trigger a 102(b) problem for a moment. You engage in activities such as publication of your invention, offering for sale, public use or actually selling the invention. You now have 12 months within which to file a patent application. If you file a provisional patent application you have another 12 months within which to file a nonprovisional patent application. So a lot of times I recommend to inventors they take it step by step and pursue their invention in a business responsible manner, testing, perfecting and protecting in a step by step approach. If at some point the invention is not working out cut your losses and move on. If you engaged in a step by step approach rather than putting all your money down at first for a nonprovisional patent application, you will have conserved resources for your next invention.
I recommend that inventors not believe they have a full 12 month grace period before a provisional patent application though. Take only as much time as necessary to determine if moving forward makes sense, then file something. Of course, if you want international rights you have to file first anyway. But at least some grace period is essential, and not having any grace period would be a significant alteration in the law that is, in my opinion, unjustified.
Luckily, the proposed legislation does retain the grace period, despite what you might have heard. Here is what would become the new 35 USC 102, in relevant part, if the pending legislation is enacted without change:
§102. Conditions for patentability; novelty
(a) NOVELTY; PRIOR ART.—A person shall be entitled to a patent unless—
(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or
(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.
(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION.— A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
What would become 102(a) defines an absolute novelty standard, but what would become 102(b) retains the 1 year grace period. The grace period provided in proposed 102(b), however, is unnecessarily sloppy and ambiguous. Proposed 102(b) uses the term “disclosures,” which is a term without definition in current 35 USC 100, and not defined in the proposed legislation, at least anywhere I can see. So does the exceptions that allow for a 1 year grace period apply to all of the items set forth in proposed 102(a), or to a subset of items? Specifically, is “public use” a disclosure? Is “on sale” a disclosure? And what the heck does “or otherwise available to the public” mean, and would that be a disclosure?
I really don’t think independent inventors or small business should be fearful of moving to a first inventor to file system. Under the proposed legislation you still need to be an inventor, so there is no reason to fear that someone who learned of your invention, stole it or otherwise misappropriated it would get the patent instead of you if they beat you to the Patent Office. There is still a grace period, which applies to something, but what I don’t know. Rather than focusing on the non-issue of first to invent and unjustified worrying about someone stealing your invention and winning a race to the Patent Office, inventors and small businesses should be asking questions about what proposed 102(b) means and demand tighter language that keeps the 12 month grace period currently available under present 102(b) in tact.
About the Author
Gene Quinn is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.