Congress works on first patent system overhaul in 50 years - East Valley Tribune: Nation / World

Congress works on first patent system overhaul in 50 years

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Posted: Saturday, August 13, 2011 1:15 pm

The race to patent new inventions and intellectual property may soon follow different rules in the wake of the first overhaul of the nation's patent process in more than 50 years.

The U.S. House of Representatives passed legislation in late June that would have the United States award patents to the "first to file," rather than the "first to invent."

Though the bill would overhaul the nation's patent process for the first time in more than 50 years and bring America in line with other countries that use first-to-file systems, critics worry the new guidelines could present disadvantages to small businesses and inventors.

Granting patents on a first-to-file basis would give companies a new sense of urgency about their patent decisions, said Tim Fogarty, the director of energy programs at Innovation Works, a program which invests Pennsylvania state money in startup companies.

For small companies in particular, he said, that added pressure could compel the organization to incur expenses earlier and allocate precious capital toward intellectual property defense.

Non-provisional applications establish the filing date of a patent application and begin the formal examination process. These applications can run companies anywhere from a few thousand dollars to $25,000 or $35,000, said Julie Meder, an intellectual property attorney at the Webb Law Firm in Pittsburgh. Most of that money goes to legal fees, she added.

Provisional applications, on the other hand, establish the filing date of an application without entering the patent into the examination process, making it a "patent pending." These applications expire after one year, but can cost as little as several hundred dollars and offer a cheaper option to small companies and inventors not ready to file for a formal patent.

Should the new bill become law, Meder expects the number of provisional patent applications will rise as companies with limited resources feel pressured to file for patents sooner and more frequently.

"I think it's tougher on a small company or an individual because of the cost involved," she said. "Whereas a larger company may have the ability to invest on all the technology they think is going to be valuable, with a new company, they have to make a judgment."

Proponents of the bill say that it will improve patent quality and help all inventors. It should also simplify the process for parties filing patents in multiple countries, as each application would fall under the first-to-file umbrella.

In addition to redefining the basis for granting patents, the legislation would alter the patent review process to let third parties submit information on other parties' applications. Like the current process, the new one would give inventors a 12-month grace period between publicly disclosing inventions and filing for patents -- a critical concern for universities, where professors often publish their work before handling the patent process.

In most other countries, patents must be filed prior to public disclosure. But the new bill, while mostly streamlining U.S. practices with those of other countries, would preserve that grace period between public disclosure and patentability for inventors.

While the bill has yet to be signed into law, its prospects look good. The legislation has bipartisan backing and a similar form passed the Senate in March. The White House has also signaled its support for the overhaul.

The most controversial provision of the House version involved funding: It would allow the U.S. Patent and Trademark Office to keep enough patent fees to cover its annual budget and funnel the excess into reserves supervised by Congress.

The Senate bill had given the patent office the rights to all the fees it collected, a measure supported by companies and investors who hope additional funding would help the office clear its backlog of more than 700,000 applications and expedite reviews.

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