For many years, patent reform has been a hot topic in the IP community. There seemed to be political support for many years, but there are always more urgent political matters afoot so patent reform seems to fall at the end. But that hasn’t stopped the same basic bill (with various modifications) being presented to Congress since 2005.
Senate Bill 23 is the latest incarnation and has passed the full senate on a 95-5 vote on March 8, 2011, which is pretty significant bipartisanship!
So, what are the bill provisions and how will it impact you?
There are many proposed changes, but here are the biggies:
- Move to a first-to-file system (similar to other countries). The current system rewards the inventor who can prove that he or she was the first to invent. The new rule would reward the first-to-file. The upshot is if this bill becomes law, don’t wait to file as you may lose out. This is likely to help the larger corporate entities that have the resources to rush to the Patent Office.
- Post Grant review of patents that will make it easier to challenge the validity of a patent, but in a relatively short 9 month window of time after the challenged patent has issued.
- Elimination of the “Best Mode Requirement.”
- Business method patents that are directed to reducing, avoiding, or deferring tax liability will be prohibited – not because there is a carve out (not being patentable subject matter under Section 101 of the Patent Act)—but because they will be statutorily the same as the prior art under Sections 102 and 103 of the Patent Act. Talk about side-stepping business method patent validity!
- Creation of a “micro entity” (a small entity that also hits a few other requirements, like not being named on more than 5 patent applications) and the government fee reduction of 75%. Perhaps this is the bone being thrown to the solo inventors to help offset the “first-to-file” system. However, the sad fact is that the government fees are only a small portion of the overall costs for U.S. patent protection. So, while a benefit, it’s a small benefit.
- Supplemental examination requests for patent holders.
- And, for some, a real biggie: the Patent Office gets fee setting authority to help offset the dreaded “fee diversion” situation that has been taking place for many years.
So, what’s next? The House will need to come up with its own counterpart and indeed House Judiciary Committee Chairman Rep. Lamar Smith (R-Tex.) has praised the Senate’s overwhelming passage of S.23 and promised that a House counterpart to S. 23 will be introduced before the end of the month. President Obama is on the record that he is in favor of the patent reform act. So, will there be new patent laws this year? Hard to say, but I’d say we have a better shot at this year than we have had. Stay tuned!!