Earlier today I wrote about the FOX News piece on patent reform last night on the 6pm news show Special Report. What was shown during Special Report seems to have been a condensed version of a longer (4:27) piece from earlier in the day. While I’m sure everyone will find something to disagree with and argue about, it does strike me as pretty fair treatment of the issues and arguments of the parties for and against patent reform.
As the video explains, the argument is being made that those who learn of an invention from an inventor can simply race to the Patent Office and beat the inventor and obtain the patent. If you read the bill that criticism is not grounded in truth, and in fact is exactly wrong, but there are those making that argument. So the fact that what is said at that point in the tape is wrong doesn’t make it bad news reporting. Sadly there is just that level of failure to appreciate the issues that is running rampant.
It has also come to my attention that various of the usual conspiracy theorists in the industry are actually challenging what I wrote recently when I explained that the United States already has a de facto first to file system. It is almost hard to believe that anyone who has looked at the data and seriously considered the issue could come to any other conclusion, yet there are some of high regard who seem content to pretend that my statement is incorrect, or even a myth.
Let’s just look at the true data on filings and Interference proceedings, which is the proceeding the Patent Office engages in to determine if the second to file an application is really entitled to the patent because they are the first to invent. See chart below:
This information relates to fiscal years, so covers data since October 1, 2004 (i.e., the start of fiscal year 2005) and runs through about 1 week ago for 2011. During this period of time there have been a total of 2,914,329 patent applications filed and grand total of 502 Interferences, which corresponds to an Interference in .01722% of cases. The Junior Party is the party who filed second and is claiming to be the first to invent, and they have prevailed 113 times, which corresponds to the second to file prevailing in .00387% of patent applications filed since October 1, 2004. To do the math, that would mean that we have 99.99613% of a first to file system already. Said another way, in 99.99613% of cases the outcome would be identical if we had a first to file system. Folks, there is no myth here. We have a de facto first to file system and those who take issue with that reality must either be ignorant to the facts or have an agenda.
Wrapped up in the first to file provisions of S. 23 are also changes to the grace period. As I have repeatedly explained over and over again for the past several years, there is nothing to fear about a first to file system (see above) AND there is no reason that a first to file system must be linked with changes to the grace period enjoyed by innovators. It seems those that would prefer to marginalize my factually correct statement about a de facto first to file statement conveniently ignore my complete views. Those who mischaracterize the truth seem to have an unhealthy and unnatural emotional attachment to a first to invent system that simply doesn’t exist, at least 99.99613% of the time.
With respect to the grace period, it is foolish for anyone to rely too much on a grace period today and think they are safe. We all know the grace period is not absolute, but the commonly held belief is that it is absolute in all cases. The fact that the grace period today is less than what popular misconception believes doesn’t mean it shouldn’t exist in robust form moving forward. Those who understand the pro and con of the grace period can and do make important, eyes-wide-open decisions that relate to a host of legitimate concerns, including finances.
In the United States innovators are allowed to publicly demonstrate an invention, sell it or even publish information about it for up to 12 months before they file a patent application. If you don’t first file a patent application before such activities you give up the ability to obtain a patent outside the U.S., but not in the U.S. The rub, however, is that third parties can create a publication, sale or public use event that you don’t know about and start that 12 month clock running, so every patent attorney and patent agent knows that you are safer to never assume you have 12 months because events unknown to you can and do compromise the current 12 month grace period. This reality, however, doesn’t mean we shouldn’t have a grace period.
S. 23 still provides a grace period for inventor activities, and the horror tale told in the FOX News piece above about someone stealing your invention and beating you to the Patent Office is simply not possible, although they did correctly explain some make that argument. The proposed 102(b) in S. 23 would prevent stealing and winning the race to the Patent Office, but the grace period is lessened with respect to third party activities, and specifically what “disclosures” would create a grace period are unclear. I think folks are correct to worry about what the Federal Circuit will rule if proposed 102(b) becomes law because over time their decisions have grown less predictable, not more predictable.
I personally think patent reform will be a net positive if the Patent Office gets fee setting authority (which is in Section 9 of S. 23) and there is an end to fee diversion (will need an amendment to accomplish this, but should be offered by Senator Coburn). Some people I respect enormously disagree. What I would say to you is this: as you formulate your position just make sure you are armed with truth rather than the misrepresentations that swirl about.
We do have a de facto first to file system, that is not a myth. There is no great government conspiracy, but there is legitimate room for disagreement on more than one point. But we should all agree that a fully funded Patent Office is absolutely a positive because it will work to ultimately decrease the pendency backlog, streamline the patent process and foster the creation of jobs. No one wins if technologies have to stay pending at the Patent Office past their useful life. That creates no jobs, just a drain of resources that could be better spent elsewhere.