America Invents - Part 1

A number of news sites have reported that H.R. 1249, otherwise known as the Leahy-Smith America Invents Act was passed by the US Senate last Thursday (8th September) and has been sent to President Obama to be signed into law.

The America Invents Act included various provisions intended to streamline the US patent system and harmonise it with patent systems operated by most other countries around the world. Probably the most controversial part of the Act, was the move from a 'first-to-invent' to a 'first-to-file' system

Under a first-to-file system, if Alice is the first person to file a patent for an invention she will have the right to that patent. If Bob was working on the same invention before Alice but files his patent after she does, then he will be out of luck – Alice will still have the right to the patent. Under a first-to-invent system it is possible, in principle, for Bob to be awarded the right to be awarded the right to the patent, even though he filed it after Alice. Wikipedia has a helpful summary of both systems.

Moving away from first-to-invent has been widely criticised as giving too much power to large corporations to the detriment of the small inventor. Much internet commentary has focused on the supposed ease with which those corporations will be able simply steal inventions from those small inventors and then, with their greater resources, quickly file a patent, leaving the hapless small inventor with no way to challenge the theft of their inventions.

Put like that, first-to-file does seem terribly unfair. However, in my mind, this 'lone inventor vs the big bad corporation' argument does miss a couple of points.

1. First-to-invent is great in theory but not so great in practice. Any small inventor claiming the rights to a patent will need to instigate interference proceedings against the patent owner. These are basically a court case to decide the issue – and they're not cheap. I read one article (in an extremely reputable IP blog), stating that interference proceedings could cost up to $500,000. Lets assume that figure is wildly exaggerated and is out by an order of magnitude - $50,000 is still an awful lot of money for the small inventor. To me, first-to-invent seems like more of a hypothetical security blanket than a practical deterrent against that big bad corporation.

2. First to file cuts both ways. If a small inventor beats a large corporation to the patent office and files a patent for a new invention first, he/she doesn't have to worry against interference proceedings being launched against him/her, despite the fact that the large corporation would presumably be much more likely to have $50,000 lying around to do just that. And wouldn't that large corporation make a tempting target to approach for a licensing deal?

3. At the end of the day, litigation is expensive. Regardless of whether a patent is granted under first-to-file or first-to-invent, it is far easier for a large corporation to enforce their own patents against a small inventor, to challenge any patents owned by the small inventor in court or, in the worst case scenario, simply to infringe the small inventor patent, knowing that the hapless small inventor will likely not have the money to sue for infringement.

No patent system is perfect and I believe that first-to-file vs first-to-invent actually makes very little practical difference. That being the case, why not have a US patent system that is more in line with systems operated throughout the rest of the world? Having a broadly equivalent set of rules throughout the world is surely a good thing making patents easier to use for everyone, regardless of where they file.