President Obama Signs First Major Change to Patent Law Since 1952

Photo from IPWatchdog - The Bill is Signed: President Obama Signs America Invents Act  

On September 16, 2011, President Obama signed the Leahy-Smith America Invents Act at Thomas Jefferson High School for Science and Technology in Virginia. One of the significant changes resulting from the America Invents Act is a move from a “first to invent” to a “first to file” patent priority system. Until the recent enactment, the United States was one of the only countries using the “first to invent” system.

To gain the right to a patent under the “first to invent” system, an inventor had to conceptualize the invention and reduce the invention to practice. An inventor could not file a patent application based only on the idea of an invention. Rather, the inventor who put the idea to practice first had the right to the patent. A criticism of the “first to invent” system is that it led to extensive litigation to understand who actually reduced the invention to practice first. On the other hand, the “first to file” system gives the right to a patent to the first person who files the application. An inventor does not need to reduce the invention to practice to be able to file the patent application.

It is not surprising that the Act has generated considerable discussion since it is one of the most significant changes to Patent Law since 1952. Proponents of the bill believe the change from a “first to invent” to “first to file” system will decrease the confusion over who has the right to the patent, and will promote innovation and job creation. The change in the system will allow a clear understanding of who has the right to the patent, which in turn should allow inventors to develop products at a faster pace and decrease the amount of litigation over who owns the right to a patent. Opponents of the bill believe bigger companies will benefit, while smaller businesses and independent inventors will suffer because of a larger company’s ability to file patent applications faster. Opponents also worry that the transition to a “first to file” system will create an increase in the number of back-logged patent applications.

Despite the criticism, a change in the patent law was an inevitable and necessary step. There are currently 1.3 million patent applications waiting for determination and numerous cases of costly litigation to confirm patent ownership. The “first to file” system should provide clarity to patent ownership rights, but it is unknown whether this change will impact the speed in which patents are granted. The “first to file” system will not go into effect for another 18 months, so we will have to take a wait and see approach before concluding that the enactment actually helped reduce the current problems with the patent process.

For the full bill text, see America Invents Act of 2011.