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President signs patent reform law

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Indiana Lawyer Rehearing

A long-debated patent reform law is now in place, signaling the most significant change to the system in nearly six decades.

President Barack Obama signed the legislation Sept. 16, with Eli Lilly chief executive officer John Lechleiter standing next to him. The America Invents Act – officially known as H.R. 1249 – cleared the Senate in an 89-9 vote on Sept. 8.

Congress wrestled with the proposal for almost a decade. Meanwhile, the Supreme Court of the United States has issued a series of rulings through the years addressing issues like “business patent methods.”

The new law changes the infrastructure of the nation’s patent system from a first-to-invent to a first-to-file system – something that advocates argued would bring the U.S. closer to systems already used in the rest of the world. Under a first-to-file system, two patent applications that cover the same invention can no longer be contested in an interference proceeding. The patent will go to the inventor with the earliest filing date.

Under the old system, interference proceedings were used to determine which of the two patent applicants invented first by reviewing evidence of the actual conception date of the invention. In the first-to-file system, the first inventor to file has the presumptive rights in the patent and the second to file can only overcome that presumption if he or she can prove that the first applicant derived the invention from that other applicant.

Opponents argued that the first-to-file system favors large, well-funded corporations and hurts small inventors who don’t have the resources to file with the U.S. Patent and Trademark Office as quickly.

The law also establishes a process for someone other than the patent owner/applicant to challenge the validity of a granted patent through a post-grant review; allows virtual marking of a patented item; eliminates qui tam provisions in the false marking sections of the law by prohibiting anyone other than the U.S. from suing for penalties associated with false marking; prohibits any patents related directly to or encompassing a human organism; and renders unpatentable any business method or tax strategy.

The law ensures that the patent office has the funding needed to expedite the application process. It currently takes an average of three years to get a patent approved. The agency has a backlog of 1.2 million pending patents, and more than 700,000 have yet to be reviewed, according to the U.S. patent office.
 

Rehearing "Companies urge IP caution" IL March 4-17, 2009

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