Patent Attorney Breaks Down Impact of the America Invents Act

msmoriarty writes "As you probably heard, on Friday the Obama administration signed the America Invents Act, which changed our system to 'first to file.' Support for the bill itself was split in the tech industry: Microsoft and IBM (among others) supported the act, Google and Apple opposed it. Redmondmag asked a patent attorney to explain in detail the act and what impact he thinks it will have on the tech industry. According to him, there are still many open questions. From the article: 'The Act has not accomplished [first to file] harmonization in a straightforward or unambiguous way. For example, it is not clear whether a prior use or offer for sale of an invention by an inventor or joint inventor within a year of the date of filing would render the invention unpatentable.' He also said that the act clearly favors larger corporations, and he doubts it will speed up the patent process itself, which was one of its intended benefits."

Comments

Simple

[Mensa Babe]

Microsoft supported it, Google opposed it. What more proof do we need that this act is evil? Propably none and even if some then not much. Nevertheless the articles linked in this story even if not bad in content still may be quite hard to follow for anyone who hasn't got an opinion on this matter yet. You can find much more information in the Wikipedia article: Leahy-Smith America Invents Act and even more in the articles linked in the references. I strongly recommend reading it all because otherwise we risk to draw uneducated conclusions from the aspects of this story that may seem obvious but actually are not that obvious for anyone educated in the intellectual property law. Some of the implications of that act would be rather scary so we really need to take some time to fully research the subject and unlike the Redmondmag, the so called "independent voice of the Microsoft IT community", the Wikipedia is actually worth reading.

Re:Simple

[elsurexiste]

Microsoft supported it, Google opposed it. What more proof do we need that this act is evil?

OK

I strongly recommend reading it all because otherwise we risk to draw uneducated conclusions... we really need to take some time to fully research the subject...

If that's not ironic, I don't know what it is.

Re:Simple

[alen]

google and apple like to do a lot of work in secret and then patent it or keep it secret for years.

microsoft and IBM are the opposite and like to patent things as soon as they finish the work on them even if there is no product yet

Re:Simple

[Anonymous Coward]

But Apple opposed it as well. Does that cancel out Google or does it add credence to Google is going evil. I'm so torn.

Re:Simple

[Desler]

IBM is now mostly a services company with little need for new patents.

And yet in 2009, they received 4900 patents and in 2010 they received nearly 5900 which is more than any other company. IBM has for 18 consecutive years held the #1 position in granted patents . Reality doesn't seem to march your assertion.

Re:Simple

[delt0r]

Considering that the rest of the world has had first to file since forever, i think you are wrong. The quality is no worse elsewhere than in the US.

Re:Simple

[Oxford_Comma_Lover]

> Microsoft supported it, Google opposed it. What more proof do we need that this act is evil?

So pro-data-privacy laws, for example, where Microsoft might benefit (via data privacy functionality it builds into healthvault, for example) where Google would not (since its goal is generally to collect all data) are necessarily evil?

The simple fact is that Microsoft has probably the largest patent warchest of any Corporation (not necessarily by dollar value--see bigpharm). They would be out of their minds not to support legislation favoring the big guy, and their board would have to be incompetent to do so under most ways of looking at corporate responsibility. If you had 10% of your savings in microsoft, would you want them to support something that will devalue a large asset of theirs?

Of course there are competing interests. I'm not saying it's the best law, or even an improvement. For many people it's not. For most slashdotters it's not.

On the other hand, you also have some pretty ridiculous transaction costs in the old system that this system gets rid of. If I'm working on developing a drug or software project, why should I need to have a day-by-day log of my progress each day, and a good excuse if I don't work on it on any day, or else I risk losing the patent? First-to-file eliminates the "you'd-better-not-take-a-vacation" rule (and the associated transaction costs) that used to apply when you wanted to prove that you invented before the first person to file. Even though those cases come up relatively rarely, it costs society a fair amount to *prepare* for that eventuality during the research on every major invention.

There is also a problem, in my view, that different fields really ought to have slightly different patent laws. It's crazy that a software patent has the same life as a major new transformative industrial process.

Short version

[durrr]

We're all fucked.

"the act clearly favors larger corporations"

[Anonymous Coward]

"the act clearly favors larger corporations"

Well, duh! Isn't that the sole purpose of all acts and reforms? More advantages for larger corporations?

Re:"the act clearly favors larger corporations"

[fuzzyfuzzyfungus]

Anonymous Coward, I must request that you cease your class warfare immediately.

Strike all instances of "larger corporations" and replace them with "job creators" immediately.

Thank you for your cooperation.

Re:"the act clearly favors larger corporations"

[DCFusor]

Unfortunately, that does seem to be the case. Funny the cognitive dissonance when they mention how it's *small* companies that create most of the jobs and innovation. There is no way you can now break into the big boys club. They just patent everything they can, and while they hate each other -- they can cross-license at nominal or no cost. But a little guy with one patent who starts eating into their market share will always find they've patented about 10 obvious things they can use against him, as the days of anything being simple, covered by just one patent, are long gone. As durrr said above, we're all fucked.

Re:"the act clearly favors larger corporations"

[GodInHell]

See -- you're mixing your terms there. Small, in the political sense, is a reference to "S" class corporations -- businesses with small ownership pools that pay tax like a partnership (owners treat corporate income as personal income). The "S" stands for "small," but many S corporations are anything but small, as in money and employees.

-GiH

Worst thing for America

[KlomDark]

With all the talk about how the US needs to out-innovate other countries, they throw a wrench like this in the works. With first to file in place, that cool hack you just came up with and put on your web site, without patenting it first, can now be 'discovered' by a patent troll, who then files a patent based on your work, and then can turn around and sue you for using something that you invented.

Most creative people dont have the time or money to mess around with patenting their new ideas. This whole thing is just a bonanza for megacorps to steal all kinds of IP from the little guys who do most of the inventing.

Complete crap

Re:Worst thing for America

[Anonymous Coward]

The trolls could do that before. What they could do before, and could not do now, is pre-date the invention by 364 days, so that they could show priority over you. Of course that would be perjury, but the USPTO stopped prosecuting perjury on patent applications when they disbanded their enforcement division for budget reasons in 1974. No prosecutions since then.

Filing a patent on someone else's invention is still itself perjury. Now, we just have to get them to prosecute that.

Re:Worst thing for America

[Desler]

*facepalm* First to file does not get rid of prior art requirements. Do you idiots even bother doing two second of research before continuing to spout this nonsense? Secondly that same company could already do that now so this change won't make any difference in someone trying to patent prior art.

why favor large corporations?

[vlm]

He also said that the act clearly favors larger corporations

Why? He never explained why. I realize they are the boogy-man now, so any time you want to imply something is bad, you imply its good for the big corporations, but the logic seems to be missing. I guess the argument is something like submarine patents will be harder to implement, but ...

Re:why favor large corporations?

[Anonymous Coward]

Yes but, you're ignoring the fact that under the old law, you could think of the idea first, file a patent first, and STILL get the crap sued out of you by a large corporation that claimed they invented it first (" this internal memo from five years ago full of randomly strung together buzzwords clearly shows we invented it first") At least under the new regime, as long as you file first (and were an actual inventor, not someone who just copied an idea), you win. And that's more aligned with the spirit of patent law--we want to encourage people to publish as quickly as possible..

Re:why favor large corporations?

[Zouden]

That's not what he said at all. The first to file rule doesn't override prior art. If someone invents something and publishes it, no one else can come along and patent it. However, if someone invents something and doesn't publish it (keeping it a trade secret), it can still be patented by someone else. This is a good thing because it encourages the publication of inventions, patented or otherwise.

Now, the reason why this act favours large corporations is that it allows for a company to publish an invention to a limited group, ie, other departments, sister corporations, whatever, but keeping it a secret from the outside world. They've satisfied the requirements to establish "prior art", but in reality no one else knows about the invention.

The act has established a new type of trolling: alongside the submarine patent, there is now submarine prior art.

Re:why favor large corporations?

[Baloroth]

But, unless he omitted something, the "submarine prior art" can't be used to invalidate a patent, nor to claim the patent for yourself. All it does is make you (or someone you sell the "trade secret" to), immune to being sued. I'm quite confused how that is a bad thing. It doesn't give as much incentive to publicize the technique, to be used by everyone after the patent period, but given the way patent law was before, that didn't really help before. Basically, it seems that this just makes a company, who doesn't publish their art, immune to patent suits, as long as they were using the art in question, but they cannot invalidate a patent someone else filed. Again, this is unles I am completely misreading what he said or he omitted a major point.

The only way this benefits large companies more than small companies is because large companies can afford to maintain and develop more such art. That is all. So basically it benefits large companies the same way as patent law in general does: they can maintain more of it. All in all, however, this (part of the) reform seems good, since trolls can't file for a patent afterwards and sue some company who was actually using it before them, but didn't publish it.

Re:why favor large corporations?

[Anonymous Coward]

A few ways this favors large corporations:
1. The "internal commercial use" allows a company to escape being prosecuted if they documented the invention and use of a patententable item internally but did not disclose it to the public in a patent but kept it as a trade secret. This seems to benefit large companies. I also think It seems to be against the intent of the constitution. Presumably it is to prevent an employee with access to trade secrets from disclosing them to a third party who then patents them and sues the original inventing company for patent infringement.

2. He seems to say there is a new requirement to do surveilance shortly after the patent is issued to prevent people from utilizing your patent. I assume to prevent submarine patents. A small company may be developing the manufacturing, distribution, and sales parts of the company and may not have the resources to allocate to this. A large company will have a system in place.

3) The additional fee of $4800.00 to get the patent processed in one year may be more affordable to large companies. This may cause the 34 month backlog to extend beyond the 34 months. A small company could go bankrupt waiting for their patent to be granted. The end result is that all small companies will have to pay the $4800.00 as well. It did not say if the patent office would refund the $4800.00 fee if they failed to process the patent in one year. As I understand it, the patent office typically finds problems and then kicks it back to you for further clarification by a certain deadline. If the one year is then pushed out by how long it takes you to respond, it may not be much of an improvement.

4) I believe to invent something you must make a prototype which embodies the invention. Individuals and small companies often looked for partners to fund these prototypes during the one year grace period. I believe he said it is unclear whether this would invalidate the patent due to public disclosure. I believe it is necessary to have the interested parties sign non-disclosure agreements to prevent disclosure to the public under the current system, and I don't see how this changes anything.

False advertising

[roman_mir]

There is no honesty in politics, but can't they be stopped from false advertising? When they name something "Jobs Act" it doesn't mean there will be jobs, but if you are against the act on actual details of the bill, then you'll be labeled as if you are "against jobs".

Same with the Patriot Act - do you think it's easy to be in opposition to a bill named "Patriot Act"? What are you, a terrorist?

"America Invents Act" will only succeed in innovative litigation procedures.

There are 152 PAGES in that bill. (PDF warning)

How about doing something useful to get America 'inventing' again?

How about abolishing the patent system? How about reducing regulations and all other government nonsense and stop standing in the way of inventions and innovations and stop allowing the huge companies from crashing competition with their patents?

Of-course you don't have to stop, but all the inventions and innovations will take place somewhere else, not in America.

The correct way to read names of government bills is to reverse the literal meaning of the names.

This bill can be named: "America Inventing Prevention Act" or "Inventing Anywhere But America Act".

It would be easy to vote against those names.

Get them to give bills numbers and not names and then everybody would have to know the details of what's inside. Stop the false advertising, companies get sued for it, why not governments?

Re:More political theater

[Jawnn]

Worse than that, since it's now "first to file" instead of "first to invent", technically it outright encourages patents on items that have been in the commons for years or even centuries, since if nobody has filed a patent on it yet, it doesn't matter who invented it, it's up for grabs and lawsuits.

Only if you have pockets deep enough to use the legal system to bully anyone who might challenge your patently weak patent. Challenges cost money. For Big Corp, Inc., that's usually chump change. Big Corp wins, citizen loses. Again.

SNYF: situation normal; you're fucked

[fnj]

Microsoft and IBM (among others) supported the act, Google and Apple opposed it.

I think that says all we need to know about the act. It's a big zero. The old situation was no good and this new act is no good either. Big whoop. The corruptocracy of government in collusion with megacorporations continues ... accelerates, actually. Regardless of which band of thugs is in charge in Washington, or even if neither band has clear control. You know why? It's a big charade. They are all the same band of thugs.

Re:Meh

[Yvanhoe]

It is only inevitable if you consider it inevitable. http://fixcongressfirst.org/

Remember that this attorney is pro-patents

[iMadeGhostzilla]

He's saying that patents will be harder to file for smaller corporations, and that a large corporation is more likely to be immune from patent infringement if they internally developed something but did not disclose it before the small corporation filed, and so on.

As far as I am concerned, the fewer patent "traffic" there is and the smaller chance of successful patent lawsuits, the better -- but not for him, since he gets paid more when there is more such traffic.

If anything, I tend to think that a really bad situation got just a little better. And it's still quite bad.

A key benefits of first to file

[gstrickler]

From TFA: However, in the majority of cases (e.g., if there is no derivation issue), the America Invents Act implements a "first to file" rule, and I would strongly advise clients to regard the Act in that manner, and to promptly perform a prior art search and, if the invention appears to be patentable, file a patent application before taking any other action, particularly before using, disclosing, selling or offering the invention for sale. Thus, the rule should be "file first" as well as "first to file."

Thus it encourages early filing and disclosure, which helps prevent people keeping ideas secret. Disseminating info to encourage progress is the primary reason for having patents, so changes that encourage disclosure earlier are good. This also helps simplify prior art claims in patent approval because unpublished prior art does not prevent the patent.

The extension of the Prior Use defense is also a net benefit. While it does allow companies to keep information private (partially offsetting the advantages above), as soon as someone else files a patent application for the same idea, the company who kept it private loses the ability to patent it, thus giving them an incentive to apply for a patent rather than keep it secret. It does allow the company to continue to use their method without infringing on the patent since they were using it prior to the patent filing. You no longer have to worry about someone patenting what you're already doing and making you license it from them.

There are other aspect of the overall act that are only beneficial to specific industries, and some that could be a disadvantage to individual inventors or smaller companies, so it not all good news, but first to file is a good change.