The America Invents Act and the Individual or Small Business Patentee

Patent reform has been making its way through Congress.  The Senate passed a bill, the House passed it in a slightly different form, and it is now going back to the Senate.  If approved by that chamber and then approved by the President, it will become law.

There are many different parts of the bill that could become law, but, if any part of it will, the provision to convert the US into a first-to-file country will be the one.

Currently, the United States has a first-to-invent patent regime.  This means that the person who develops an invention first is the only one who can patent it.  There are some minor exceptions, but this is true in the vast majority of the cases.  Some feel this is truly an American way of patenting – that is bespeaks of American ingenuity and the power of the diligent and hard worker.

The rest of the world uses the first-to-file system.  Many argue that it is administratively easier and cheaper than a first-to-invent system.  It is essentially places an inventor in a race against unknown competitors to have his or her idea described in a patent application.  America may soon be adopting this system, and it has some ramifications for the independent inventor and small businesses, perhaps the most important of which is speed.

If the law passes, delays can be fatal to an invention.  Inventors need to get started right away with the patenting process.  While provisional applications were typically used in more limited contexts under the first-to-invent regime, in the new system, they may provide a valuable way to secure as early a filing date as possible.

For large multi-national companies, not much will change.  These businesses likely frequently file in the US and abroad and so are used to foreign country’s first-to-file systems.  Because of this, they have systems in place to turn inventions into filed patent applications quickly.  They have company-wide procedures and on-staff attorneys and technical draftsmen to convert an invention disclosure into a patent application.  Smaller companies and individual inventors, however, don’t have the benefit of these resources – it will inevitably take them longer to file a patent application, and there is risk in that delay.

Unfortunately, the proposed patent reform likely means the patenting process will get more expensive.  There will be more pressure on attorneys to prepare applications faster, and the extra step of filing a provisional can increase the total cost of the process.

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