It looks like the most sweeping reform of our patent system since 1952 is going to happen. The House and Senate have both passed similar versions of the bill and it now goes to reconciliation. If you’re an inventor or your small business files for patents, you should have been paying attention because not everyone is happy about the changes being made.

Originally the bill was known as the Patent Reform Act of 2007, then the Patent Reform of 2009 when the earlier bill was not enacted into law and subsequently reintroduced. Then it became the Patent Reform Act of 2010 for the same reasons. Finally the name was changed to the America Invents Act (S. 23) – I guess it sounded more new, hip, and positive than “reform,” which suggests that you’re merely improving on something existing. Well, it’s definitely new and the news is not good for small business owners and independent inventors.

The most contentious changes are the following: 

• We move from a “first-to-invent” system to a “first-to-file” system to harmonize with the rest of the world, particularly Europe (hmmm, where have I heard this before?). I’m not sure why the rest of world isn’t harmonizing with the U.S., which has the strongest patent system in the world, but what do I know. Sen. Dianne Feinstein attempted to amend the Senate version at the behest of small business owners because it would unfairly benefit large corporations, but, unfortunately, her amendment was tabled. What this means is that potentially someone other than the original inventor could file first for a patent. That certainly doesn’t bode well for technology team harmony. After Canada switched over in 1989, it later found that over time more inventions were filed by large corporations than by independent inventors. Exactly the opposite result that one would hope for.
   

• The new law would also establish a post-grant review period, which gives a company the chance to challenge a patent’s validity. This clause focuses specifically on business method patents, but depending on which version ends up in the final bill, the scope could be substantially greater. In any case, this new “transitional proceeding” is like giving the fox the key to the hen house! It is well known that large corporations have no problem infringing on entrepreneur’s patent rights. This just makes it a bit easier since they can tie up the entrepreneur and potentially force him to abandon the patent if he doesn’t have the resources to defend it.