After years of political wrangling, US legislators last week passed a patent reform bill and sent the measure to President Obama for his signature. Now, the industry must review its potential impact on their operations.
The Senate overwhelmingly approved the America Invents Act in an 89-9 vote. The House of Representatives approved the bill in March in a 304-117 vote. The biggest change shifts the way patents are awarded, moving from the current “first-to-invent” policy, which grants patents to those who first developed the innovation, to a “first-to-file” standard, which favors the inventor who gets to the US Patent and Trademark Office ahead of anyone else.
Other measures allow the Patent Office to set its own fees, and to hire people and make technical upgrades needed to whittle down a backlog of nearly 700,000 patent applications. There's also a provision that would create a post-grant review process, allowing challenges to bad patents prior to litigation.
Advocates claim the reform will bring the US in line with policies in other countries, speed up the entire innovation process, and help curb the number of patent infringement cases.
As we all know, electronics companies are often tangled up in a never-ending spiral of IP-related legal cases. Bolaji Ojo’s post about brawling OEMs provides a sampling of companies currently involved in such disputes. Obviously, the nation is in dire need of fixing a broken patents system.
“At a time when Americans are innovating faster than ever, a fully funded and functional patent office is fundamental to our economic success. We encourage House and Senate conferees to go even further and end fee diversion once and for all,” said Michael Petricone, senior vice president of government affairs with the Consumer Electronics Association, in a press release. “For years, structural problems in our patent system have stifled innovation while imposing unnecessary costs on our crown jewel companies. This bill is an important step toward restoring common sense, encouraging innovation, and reducing harm by those using the present law to hurt our economy and productive companies.”
However, there is a strong case to be made that the revisions will only really benefit the “crown jewel companies” Petricone refers to, and do little for the individual inventor who may well be the brains behind any new innovation. Companies that have the legal staff, international reach, and deep pockets will dash to the Patent Office faster than any single engineer could.
Perhaps the America Invents Act is the first necessary step in overhauling a patent policy that has seemingly been running amok for quite some time. The insane amount of time and money poured into litigation is mind-numbing; clearly, those are resources that would be better spent on additional research and development.
But, since I have a soft spot for underdogs, I would have liked to see more serious thought put into protecting the source of the innovation, not just the person who managed to get to the front of the bureaucratic queue first. I suppose many of the initial proposals that would have safeguarded individual creators were removed as the bill moved through various Congressional committees. That's often the case. And, it's doubtful, too, that any significant amendments will be added to the approved measure any time soon, given the long and slow process it has already taken to arrive at this point. I guess we'll have to be content with what has taken shape so far, and that it's going to have to be good enough for now.
One last thought crossed my mind just as I was hitting the send button: What effect do you think the legislation will have on high-tech IP companies that earn their bread and butter by building up a patent portfolio and then selling that technology to OEMs? Tell me how you see this shaking out.