Patent Reform 2007 - Guest Commentary - Patent Reform Act or Patent Dilution Act?

by Guest Contributor
Mark David Torche, Esq.,
Registered Patent Attorney, Patwrite LLC

First let me say that I am a strong believer in the free enterprise system of economics and have nothing against big business and large corporations per se. Of course my law firm specializes in working with private inventors and small businesses, so I naturally tend to identify with the issues most important to them.

The United States Constitution (Article 1, Section 8) empowers Congress: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Since its inception in 1790 with the passage of the first Federal Patent Act, the US patent system has arguably been the most successful promoter of private innovation in recorded history.

Of course there have been many changes in the system since then, but it has remained a system that tended to equal the playing field and even a poor person with a great invention could force the "big boys" to play nice because of the patent system. We merely have to look to other parts of the world to see the difference in patent philosophies and the way they impact their respective societies.

Almost all countries have a patent system of sorts, but if you look at who is filing and enforcing those patents, you'll see that the U.S. system is well represented by the private inventor. In other countries, the vast majority of patents are filed by large corporations. Additionally, the court systems in other countries are much less accessible to private inventors so even if they have a patent, it is very difficult for them to enforce it.

In spite of its tremendous success record, or perhaps because of it, every few years the U.S. patent system comes under tremendous pressure to fundamentally change it. It is relatively easy to see where this pressure is coming from: big business.

Large multinational corporations do not want to have to deal with a strong independent inventor class that forces them to pay millions in royalties and license agreements. Even though these corporations hold and file many patents themselves, they have the deep pockets necessary to enforce their market share even without a strong patent system.

The U.S. patent system is about to quietly undergo a radical change if the bill that is currently under consideration in the U.S. Senate and recently passed by the House becomes law. Most people are unaware of the drastic changes proposed to the patent system as it seems to be overshadowed by more publicized issues like the war in Iraq or the coming presidential elections.

Changes proposed:

I will not attempt to outline all the changes addressed by this legislation; only the ones that I feel are the most serious to the well being of the private inventor and small businesses that depend on the patent system to protect their inventions.

1. First-to-invent to First-to-file:

This is a fundamental change. Since its inception, the U.S. patent system has always held the basic philosophy that the first person to invent something should be rewarded even if someone else beats them to the patent office. Of course this is not without controversy and expense, but it meshes well with the American sense of "rightness" and has served the private inventor reasonably well throughout its history.

At the very least, a fundamental change of this magnitude deserves a thorough and public discussion allowing all the issues to be presented. This legislation has been mostly 'submarining" through the legislative process with little public debate. Most of the rest of the world already has the first to file system, but again, there is not nearly as robust a private inventor class in these countries. We should be very careful before making such a major change.

2. Patent Searches, Patent Office to Patent Applicant:

Of course I always advise my clients to get a good search before filing a patent application and the U.S. system does not allow patents on inventions that are not unique and new. If your invention is already in the public domain, you are not entitled to a patent.

A good patent search can save would-be inventors lots of money if it turns out that the invention is already known. However, the patent office still performs its own patent search, with full disclosure on the part of the inventor (i.e. the inventor has a legal duty to disclose all known prior art that he or she believes is related to patentability) and relies on its own search to determine patentability.

If the current legislation passes, each applicant would be required to perform the search that the patent office will rely on. While this may sound like a minor change, in reality, this effectively guts the patent system. How, you ask? Because, no patent search is perfect, not the one performed by the applicant (or representative like patent attorney or agent) or the one by the patent office.

The problem with this proposal is on the enforcement side. If it can be shown that the applicant deliberately didn't reveal something germane to patentability, the patent can be invalidated along with civil and criminal penalties. This means that the private inventor presenting an issued patent to a large corporation faces the likely challenge to the patent by the company's legal department. If the search overlooked something - not something that would preclude patentability since that could be used even now to invalidate a patent - but merely something that was relevant to patentability but not disclosed, then the patent will likely be invalidated for fraud on the patent office. This means that basically every patent that has any economic advantage will be subject to invalidation.

There are other major problems with this legislation such as a new way to compute damages, etc. but in my opinion, the two issues above are the most important to the private inventor and small business and should be voted down.

We need to be very careful before radically changing the system that has allowed individuals such as Thomas Edison and George Washington Carver access to a strong patent system. Our system is unique to the United States and is part of the American reality of the "rags to riches" mentality that is unequaled in the rest of the world.

If you have any questions regarding this legislation or other intellectual property law issues, please feel free to contact us toll free at 866-424-7529 or email mark@patwrite.com. His web site is at www.patwrite.com

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