IBJNews

Congress takes up major change in patent law

Back to TopCommentsE-mailPrintBookmark and Share

The patent system hasn't changed much since 1952 when Sony was coming out with its first pocket-size transistor radio, and bar codes and Mr. Potato Head were among the inventions patented. Now, after years of trying, Congress may be about to do something about that.

The Senate is taking up the Patent Reform Act, which would significantly overhaul a 1952 law and, supporters say, bring the patent system in line with 21st century technology of biogenetics and artificial intelligence. Sen. Orrin Hatch, R-Utah, hails it as "an important step toward maintaining our global competitive edge."

Congress has been trying for well over a decade to rewrite patent law, only to be thwarted by the many interested parties — multinational corporations and small-scale inventors, pharmaceuticals and Silicon Valley companies — pulling in different directions. Prospects for passing a bill now, however, are promising.

As IBJ reported last June, numerous Indiana-based companies would welcome the change.

The Senate bill is sponsored by Judiciary Committee Chairman Patrick Leahy, D-Vt., Hatch and another top Republican on the panel, Sen. Chuck Grassley of Iowa. The committee voted 15-0 in early February to send the legislation to the full Senate.

The overhaul is long overdue. It now takes the U.S. Patent and Trademark Office about three years to process a patent application. There are about 1.2 million applications pending — 700,000 waiting consideration and another 500,000 somewhere in the process. The patent office says it received about 483,000 applications in 2009 and granted about 192,000 patents.

"Hundreds of thousands of patent applications are stalled" at the patent office, Leahy said. "Among those is the application for the next great invention."

The most sweeping, and controversial, change is the transition from a first-to-invent application system to a first-to-file system that is used by every other industrialized nation, but has been opposed by independent inventors. It comes with an enhanced grace period to protect inventors who publicly disclose their inventions before seeking patents.

Companies or individuals seeking patents in multiple countries are confronted by a different set of rules in this country, said Bill Mashek of Coalition for 21st Century Patent Reform, a group that represents big companies like General Electric, Pfizer and 3M. "It puts us at a disadvantage globally."

The bill would create a nine-month "first window" post-grant procedure to allow challenges to patents that should not have been issued and to cut down on litigation and harassment of patent owners by improving the review system for challenges. It provides more certainty to damage calculations.

It also gives the patent office authority to set its own fees at a level that will give it enough funds to reduce its backlog of applications. It requires that smaller businesses continue to get a 50-percent reduction in fees and creates a new "micro-entity" class — with a 75 percent reduction — for independent inventors who have not been named on five or more previously filed applications and have gross incomes not exceeding 2.5 times the average. The standard fee for filing a patent is now $1,090, with additional maintenance fees over the life of the patent.

In a change from current law, tax strategies could not be patented.

Leahy's office lists a diverse group of supporters, including major drug companies, IBM, the AFL-CIO, the Association of American Universities, Caterpillar and USPIRG.

One reason supporters are optimistic about the bill's prospects this year is that courts have dealt with some of the more contentious issues involving lawsuits and damage awards.

"When we started these efforts many years ago, we faced a grim landscape where patent lawsuits threatened to stifle the pace of innovation and shut down our factories," David Simon, associate general counsel for Intel Corp., told the House Judiciary Committee. "Today, the scenario has changed drastically."

Testifying in February on behalf of the Coalition for Patent Fairness, a group of high-tech companies, Simon credited the change to Supreme Court and other federal court rulings dealing with such practices as venue shopping where litigants sued in courts known for handing out large damage awards.

Simon's coalition, however, has not endorsed the Senate bill. In a statement, it said the bill still needs to do more "to lessen the growing burden of abusive and unjustified patent infringement claims."

A group of nine organizations representing small businesses, start-ups and independent inventors was more forthright in its opposition, saying in a letter to senators that the first-to-file system would have "unique adverse effects" on its constituents.

"The bill favors multinational and foreign firms over start-up firms seeking an initial foothold in U.S. domestic markets, and favors market incumbents over new entrants with disruptive new technologies," said the letter signed by groups such as American Innovators for Patent Reform and the U.S. Business and Industry Council.

Louis J. Foreman, publisher of Inventors Digest and chief executive of Enventys, a Charlotte, N.C., product design and engineering firm that has helped develop and file some 400 patents, said the Senate bill will help give independent inventors the two things they need most in applying for a patent: speed and certainty.

Foreman discounted the argument that first-to-file puts the small-scale investor at a disadvantage to the big corporation. "An independent inventor is so much more spontaneous," he said, "I'll outrun a big company any day of the week."

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Hello Dear Are you tired of Seeking Loans and Mortgages,have you Been Turned down constantly By your banks and Other Financial Institutions or Micro Finance scheme. This is let you know with 100% guarantee that we Offer loans ranging from $1,000 Minimum to $1,000,000.00 Maximum at 3% interest rate per Month. We give out LOANS for developing business. a competitive edge/business expansion. email address: michealscottloan124@gmail.com We offer the following kinds of loans and many more; * Personal Loans ( Unsecured Loan) * Business Loans ( Unsecured Loan) * Consolidation Loan * Combination Loan * Home Improvement * Xmas Loans for contact to seek for loan email this email address: michealscottloan124@gmail.com Thanks

  2. My name is Mr Henry Josh and i live in the USA California and life is worth living right now for me and my family and all this is because of one man sent by GOD to help me and my family, i once had a life filled with sorrow because my first SON needed a kidney transplant and all our savings were going towards his medications and this normally leaves us with no money to pay our bills or even put enough food on our table and our rent was due and no funds to pay these bills and life felt so unfair to me and every night my wife will cry herself to sleep every night until one day, i was browsing through yahoo answers and i saw a striking advert of a man that gives out personal loans and that the offer is opened to all and i have heard so many things about internet scams but at this point of my life, i was very desperate and ready to take any risk and at the end of the day, i applied for this loan and from one step to another, i got my loan within 12 hours through bank transfer and you know, it was all like a dream and i called Mr Daniel Jones A Man who is the GOD sent lender i found and said, i have received my loan and he smiled stating that to GOD be the glory and i was so shocked as i have never ever seen anyone with such a GOD fearing and kind heart and today, i am the happiest man on earth because by GOD’S grace, my SON kidney transplant was successful and today he is healthy, i and my family are living very comfortable and happy and if you are in my former situation or in serious and legitimate need of a loan, you can reach this GOD sent lender via fidelityloanfirm@outlook.com

  3. Greetings to everyone reading this comment!!! I am Greg William by name. I am out here to recommend the effort of Mark Oscar,I was in need of a consolidation loan amount of 50,000 and as soon as I got in contact with Mark Oscar Loan Firm on Wednesday last week and on Friday last week as well I receive an alert from my bank(Royal Bank of Scotland Group) that the fund was transferred,I want everybody on this site to contact Mark Oscar now via email on how to get a loan because I got my loan from them and I am very happy,so contact them now. Oscarloanfinance@hotmail.com Thanks!!!!!!

  4. Elected officials, like Mourdock, get vested in 8 years. It takes 10 years for all other public employees, most of whom make a lot less money. So much for the promise to finish out his term.

  5. Great state treasurer and a good man!! Just curious if the folks who didn't quite understand his quote would like to tell my daughter-in-law that God didn't intend her! Mourdock's comment was correct but twisted and the article didn't mention that his opponent and the press let the impression stand that Mourdock meant that the rape was intended. Stupid people!!

ADVERTISEMENT