The America Invents Act: Fundamental Changes to America’s Patent System
by Bob White on October 26, 2011
After years of intensive debate about America’s patent system, Congress recently passed the America Invents Act (the “Act”). President Obama signed this Act into law on September 16, 2011. Some of the Act’s provisions were immediately effective, while others will go into effect during 2012 and 2013. The Act is the most fundamental change to the United States patent system in many years, and it will significantly change and update how the patent system works. It will take some time to determine the full effect of the Act and its impacts on American companies and inventors, but we can examine some of the potential effects now.
The Act contains numerous changes and updates to the United States patent system of which companies and inventors need to be aware. Probably the most striking change is that the Act will cause the United States to change from a “first to invent” standard for patenting inventions to a “first to file” standard. This generally means that the priority of a patent filing will be determined by the filing of the patent application and not by the timing of the first party to actually invent the invention (as it is under our current system). This “first to file” standard is already used in many other countries, and commentators believe that this change will make the United States patent system more consistent with the systems of other countries. This change will become effective on March 16, 2013.
Some commentators have said that this “first to file” system will put small businesses and individual inventors at a disadvantage in the patent process. This is primarily because of the possibility that large companies, with their more substantial human and economic resources, will be able to more quickly make patent filings under a “first to file” system. There is some validity to this position, as the patent process can be very time consuming and expensive (especially if the patent involves a highly technical item such as a development in the biotech or pharma areas).
It is possible, however, that small companies and individual inventors may be able to gain an advantage due to their lack of administrative bureaucracy and their ability to move quickly. If they can apply these attributes in the patent filing arena, these small companies and individual inventors may be able to move more quickly with patent filings and thus get patents filed before larger companies can act.
The Act will also allow a company or other assignee to file an application for a patent on an inventor’s invention if the inventor has assigned or agreed to assign the invention to the company or other assignee. Previously, the inventor had to file the patent application even if he had assigned his rights. This should facilitate patent application filings in many situations since the company will not have to locate the inventor to make the patent application filing. Companies should carefully review their invention assignment, employment, consulting and other similar documents with their advisors to determine the status of their rights to inventions and whether changes to these documents need to be made. This change becomes effective on September 16, 2012.
The Act should be good for the patent system overall, but it will present challenges for small companies and individual inventors. Speed and focus will be essential. The key here is to get good advice on the patent process and ensure that your patent attorney and other patent professionals are totally up to date on these substantial changes to the patent system.
For more information, contact the author Bob White.