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U.S. Congress' patent reforms draw mixed reactions

Posted: 29 Jun 2011 ?? ?Print Version ?Bookmark and Share

Keywords:patent reform bill? first-to-invent? first-to-file?

The patent reforms passed last week by the U.S. House of Representatives drew praise from electronics giants and criticism from individual inventors. The legislative body is still working on the final bill, which will no doubt impact a broad range of issues.

"A lot of people have put a lot of effort over the last ten years in this and our view is the House bill improved on the Senate bill passed earlier this year," said David Simon, associate general counsel for intellectual property policy at Intel.

"I don't think we will change our strategy for acquiring patents [due to the reforms], but we expect that with fewer unjustifiable patents in the market, we will not have to defend ourselves as frequently as we do today," said Manny Schecter, IBM's chief patent counsel.

"While a bill was passed, it was not a bill about invention, [it] was a bill about influence, ignorance and indifference, much like the bills that led to the financial collapse and the great recession," said Steve Perlman, a serial entrepreneur who waited eight years for a patent fundamental to one of his startups.

Congress must reconcile differences in House and Senate legislation before sending a final bill to President Obama who has signaled he will sign it. It's not clear how long that will take or what items might get changed in the process.

"People have been working on this a long time so there's a good chance it will get passed, but with the debt ceiling issue out there it could take time," said Allen Baum, a patent attorney and managing shareholder at Brinks Hofer Gilson & Lione.

One of the most controversial provisions of the bill was its move from a first-to-invent to a first-to-file system to harmonize with most other patent offices around the world. Individual inventors such as Perlman warned the move would spark a rush to the patent office in which big companies would have an advantage.

"Going to first-to-file won't have a material impact on our patent application strategy," said Schecter of IBM which has been awarded the most U.S. patents every year for the last 18 years. "We won't file more or less because of it, and we won't change the way we process our apps because of it," he said.

Both IBM and Intel noted only about 70 out of nearly a million patents a year go into so-called interference disputes at the patent office about which was the first to invent.

Patent attorney Baum said he believes companies will explore how they can file applications more quickly. "Large companies with more resources will be advantaged, but the current system disadvantages little guys anyway," Baum said.

Today "it's hard for small companies and garage inventors to keep the kind of records needed to show they are first to invent, it's very expensive to conduct an interference hearing and little guys tend to lose them," Baum explained.

The harmonization is expected to help major patent offices share more work, such as prior art searches. It is also expected to simplify the job of companies who must apply for patents and sell products globally.

The harmonization is only partial. The U.S. is still unique in having a one-year grace period in which inventors can disclose their inventionsto potential investors, for examplebefore they have to apply for a patent.

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