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One Step Closer: Dramatic Changes to Patent Law Around the Corner

Changes to the U.S. patent system may be coming in the form of the America Invests Act, which the U.S. House of Representatives passed on June 23. The Act, H.R. 1249, is similar to a bill passed by the Senate last spring, and will alter the way the United States treats its inventors. The America Invests Act moves the U.S. from a “first-to-invent” system to a “first-to-file” system. The systems operate as they sound. 

Under a “first-to-invent” system, the first inventor of particular subject matter gets the patent.  Under a “first-to-file” system, the first person to file for the patent, regardless of whether he or she was the first inventor, gets the patent. The U.S. patent system has remained significantly unchanged over the last fifty-nine years, but international patent issues are making this change more important.  The Act is designed in large part to "harmonize" the US patent system with the patent systems of other countries, since the majority of the world already operates on a “first-to-file” system. With the move to a "first-to-file" system comes the concern that big corporations will have an advantage over small inventors. This is especially important because of changes to how inventors share their ideas with potential investors.

As a CNN Money article notes, currently, small inventors can disclose their inventions to potential investors knowing that their disclosure will not result in them losing the right to a patent on their invention.  Under the new system, however, a disclosure prior to the filing of a patent application can result in the loss of the inventor’s right to that patent if someone else files first. Another feature the bills have in common is the improvement in funding for the U.S. Patent and Trademark Office (PTO). The PTO in particular has suffered from diversion of applicants’ fees to other Congressional programs, resulting in long delays in processing patent applications, sometimes exceeding seven years. The bills will allow the PTO to reinvest more of the fees it collects into building the examiner corps and improving its performance. Before any reformation actually takes place, the House and Senate will have to reconcile their bills. We will continue to monitor this legislation and the impact it may have on the U.S. patent system. For more information, please contact a member of the Corporate and Transactional Practice Group at Bingham Greenebaum Doll.

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