On June 23, 2011, the House of Representatives voted to pass H.R. 1249, also known as the America Invents Act, moving forward a proposed overhaul to U.S. patent law that some consider to be the most significant change to the system since the Patent Act of 1952.
One of the most debated changes in the patent reform bill is the shift from a "first-to-invent" system, which is unique to the United States, to a "first-to-file" system, used in the rest of the world. Under the current system, patent rights are granted to the first person who conceived of the invention and diligently reduced it to practice. While the first applicant to file would receive prima facie rights in the patent, a second applicant may initiate interference proceedings to ascertain which of the applicants was the first to invent. Under the first-to-file system, patent rights would be granted to the first person to file an application, regardless of the date of actual invention.
Opponents of the change argue that the first-to-file system puts small businesses and sole inventors, and entrepreneurs at a disadvantage, as such small entities may not have the resources available to promptly draft and file patent applications on their inventions. The change is considered to favor large entities, whose funds and resources allow them to easily cover the costs of drafting and filing applications with the USPTO.
An amendment to strike the shift to the first-to-file system was tabled by a vote of 87-13; however, some opponents vowed to continue to strike this portion of the bill.
Another significant change in the America Invents Act affects the funding of the Patent and Trademark Office. Presently, the fees collected by the USPTO are not allocated specifically to the Patent Office's budget, but may be appropriated to other programs by Congress, requiring the USPTO to participate a separate appropriations process to receive a portion of the collected fees. H.R. 1249, however, would allow the USPTO to maintain the collected fees in a dedicated account, even though the use of those funds would be subject to Congressional approval. In contrast, S. 23, which passed in the Senate in March 2011 by a 95-5 vote, calls for the creation of a "USPTO Revolving Fund," essentially letting the Office keep the collected filing fees. Greater control over funding will enable the Patent Office to better address its backlog of pending patent applications, which number over 700,000. The differences between the two versions of the bills will have to be reconciled before the bill can become law.
Other changes to the U.S. patent system proposed by the America Invents Act will be the subject of future posts on this blog.
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