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U.S. sees most significant patent reform in decades

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Indiana Lawyer Focus

Sweeping patent reforms became law Sept. 16 when President Barack Obama signed the America Invents Act, the most significant patent reform legislation in six decades. The AIA incorporates many changes and harmonizes U.S. practices with systems in place around the world, according to some Indiana lawyers. Some believe the revisions are more symbolic than practical, while others believe the changes will impact every aspect of how patent lawyers do their jobs.

“It changes how you go about getting a patent, defend or challenge a patent infringement case, when to file, the internal procedures for documenting patentable inventions … basically there’s a lot that has been affected and it influences all companies, start-ups and individuals big or small,” said IP attorney Todd Vare with Barnes & Thornburg in Indianapolis.
 

Todd Vare Vare

The U.S. House of Representatives passed the bill 304 -117 in June, and in early September the Senate voted 89-9 in favor of it. Research universities, technology firms and various business groups supported the changes, while most of the opposition came from small businesses that worried the reforms favored large firms with access to more capital.

Some changes will go into effect in 2011, while other aspects of the legislation will become effective in 12 or 18 months.

Specifically, the bill streamlines the patent process to eliminate the backlog of 680,000 patent applications and reduces the time it takes for a patent to be approved, currently three years. Reforms are also designed to reduce litigation and costs associated with challenging or defending a patent.

Most notably, the reforms bring the nation’s patent system into conformity with laws observed throughout the world by granting patent protection to the first person to file a patent rather than the current “first-to-invent” process.

Before the change, the existing first-to-invent standard used to determine patent ownership involved an inventor being able to demonstrate that he or she came up with an idea first. The requirements of that process involved steps patent holders and seekers frequently described as burdensome and full of delays in obtaining a patent. The “first-to-file” system gives priority in deciding who owns an invention’s patent to the first person or entity to file for the patent, regardless of the date of invention.


rost-stephen-mug.jpg Rost

Some Indiana attorneys think this new first-to-file process will create a race to the U.S. Patent & Trademark Office in order to obtain patent protection first. Stephen Rost with Taft Stettinius & Hollister said smaller companies will be under more pressure to file a patent application for each new development and invest more upfront to get that done, without knowing the potential for actually obtaining the patent.

Baker & Daniels attorney Adam Cox of Ft. Wayne isn’t sure if the new first-to-file system will have a practical impact, but he finds the change troubling.

“In the U.S., we’ve always valued individual rights and the image of the garage inventor is very pertinent in our culture,” he said, mentioning iconic inventors like Thomas Edison, Henry Ford, Bill Gates and Steve Jobs. “The thought of the garage inventor who invents first but delays filing and eventually loses to the big company who invents later but files faster is troubling. That is one reason we’ve always operated under the first-to-invent system, and this flips that notion on its head.”

But small individual inventors are often passionate and motivated to file quickly, so Cox says the impact may be less than critics expect. Rost said patent lawyers and patent agents may be asked to draft more patent applications because companies will be under increased pressure to file quickly. The number of provisional patent applications will likely skyrocket because they can be used as place holders until an actual patent can be officially requested, he said.

Other notable changes to U.S. patent laws include:

• Third parties are given the opportunity to challenge the patent office’s decision to grant a patent.

• Third parties may cite prior art to the patent office during prosecution of a patent application.

• Business method strategies to reduce taxes are not patentable.

• Only the government and those suffering a competitive injury will be allowed to sue for false patent marking.

• Failure to obtain the advice of counsel cannot be used to prove willful infringement.

• Creates a mechanism by which the patent office will reevaluate and possibly invalidate previously issued business method patents.

• Eliminates the requirement that inventors describe the “best mode” of making and using the invention as a basis for challenging the validity of a patent.

• Allows individual inventors or very small companies to file patent applications at significantly lower fees, allowing those small companies and inventors to afford filing a patent application where they might not otherwise be able to afford such an application.

The changes were designed to give the patent office more resources so it will do a better job of assessing patent applications, with the idea that rejecting bad patents will head off some litigation. The AIA has been promoted by the president as a job creator and a way to speed up the patent application process and end delays.

Half of the patents challenged in court are invalidated. The new law will allow anyone – including a company’s rivals – to scrutinize newly granted patents and give the patent office evidence to show why it should not be allowed.

“Whether these changes are viewed positively or negatively may actually depend on the type of client one represents,” Rost said.

More legal time will be needed to follow competitors’ filed patent applications and monitor those issues, Rost said, and that will increase the workload IP and patent-focused attorneys will have. Vare added on the flipside that companies won’t have to spend as much internally to document the invention process as they did in the first-to-intent system, compiling detailed lab notebooks and records.

“Anybody and everybody has an opinion about it being good or bad, but it is what it is,” Vare said. “As an attorney, you need to take advantage of the provisions you need and know what you might get burned by.”•
 

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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