The America Invents Act, is a bill passed by both houses of the U.S. Congress and expected to become law soon, whereby America will move from ‘First to invent’ to ‘First to patent’ system. Most of the world has ‘First to patent’ as a law.
Below we try to look at the consequences to what it means for collaborative innovation (not just innovation), and we invite you to share your thoughts.
“US patent laws synchronizing with the rest of the world”
1) Reduced wasted efforts will help improve innovator’s focus: In the ‘first to invent’ scenario, inventor delays the filing of patent as much as possible, but continues to invest time and money, in turn, risking re-inventing something which is already invented. This issue gets addressed to some extent in the ‘First to Patent’ scenario.
Effects on Collaborative innovation / Open innovation > Less time will be spent on fighting disputes because innovator validates the IP before spending too much time on it and hence will have less probability of heart burn for the effort spent . Additionally ‘First to patent’ will provide more IP confidence to the inventor than a guesswork that he probably is the first to invent.
2) Bigger market place, better innovation ecosystem: A typical inventor will have similar shortage of money to spend on filing for a patent, like he had earlier, but now he also needs to be the ‘First to patent’. The news that the filing of provisional patent is now made simpler, and the fact that innovator is still needed to shell out money for it, in my opinion, will increase genuine patent applications.
Effects on Collaborative innovation / Open innovation > Once inventors invest money, he would like to benefit from it, either by staring up a business, by approaching VCs or putting it up in a marketplace for licensing it, all of these will benefit open innovation.
3) Leveled playfield will increase innovation affordability: If “First to invent” law has played any role in American innovation dominance, which we think it has, with this change might see some decline, primarily because it affects the investors – an innovation support system. It may not be good for America, but we see that as paving a way for levelled ground, and this levelled ground will benefit the world as a whole. World is currently used to being at the receiving end of innovations happening in America, it’s not that the world cannot invent, but mostly they did not invent as fast as America did.
Effects on Collaborative innovation / Open innovation > Currently innovations are cost heavy as it primarily comes from a developed country, in near further you will see revolution in terms of cost and affordability of innovations.
“Race to patent office or race to invent”
1) Hoarding of Patents by big companies will increase bullying: Biggies would afford to file at will and in volumes. Yes, but can they really afford to file all they invent, we don’t think so, they might rush to file at the beginning, but we feel that they will go back to the same numbers and pace once the fatigue sets in, in a year or so?
Effects on Collaborative innovation / Open innovation > Big companies can misuse their muscle power in specific scenarios by running to the patent office faster than a genuine inventor. This is a bad news for collaborative innovation. Big companies might gain in short term, but they might end up killing SME innovators in medium term, which are one of the channels for corporate innovations. The US corporations which support open innovation ideally should not support this bill. Their international open innovation experience will come handy in aligning themselves to the new laws at home front.
2) Anti - SMEs, Innovators & Start ups: They will constantly feel insecure about their inventions until they apply for the patent, which is extremely counterproductive. You would rather spend time, effort and money on making your idea big, now you have something else to worry about. VCs and Angeles would move away from early stage ventures in short term, America pioneered and became world leader in start up industry because of the superior protection for start up innovation. So far investors invested in the IP even if it is not patented; now they won’t have that option and have to look for far more established companies to reduce their risk.
Effects on Collaborative innovation / Open innovation > A new industry around collaborative patenting might emerge.
3) Too big a change, done too fast: We need to wait and see if someone questions the new law in light of the US constitution. The current patent law refers to the ‘inventor’ which as per the US constitution means the person who invented it first and not the person who filed it first.
Effects on Collaborative innovation / Open innovation > You might think that if we can’t protect the inventor, then there is no reason to look forward to collaborative innovation. For collaboration, first thing the inventor expects is protection. Collaborative innovation will also need to evolve to accommodate this change, and most probably it will soon.
What do you think ?
I do feel the first to Invent is better than first to file (This is for the Solo Inventor)
ReplyDeleteReally the whole idea of a patent is to protect the Inventor, and not large companies
The whole patent system world wide is a shambles of being oversold and over invested
The whole mess is because of software patents. Rest of the industry never had issues that would impact the individual inventor.
ReplyDeleteFirstly, I think that the widespread patenting of software in the US is stifling innovation.
ReplyDeleteOften real innovations are discovered during the development process and stopping the process earlier will lead to less innovation.
I also believe that the juristiction of patents is seriously in question and becoming less relevant. Take military innovations for example - patents are irrelevant where the balance of power is being preserved.
I think the issues are "tried" because there has always been a standing problem to prove who was the first with an idea!
ReplyDeleteRegardless of different laws in different countries, requiring idea generation or open source either you trust your network or that your network is covered by a web of contracts.
It's ALWAYS a good idea to protect an idea before patenting, because patenting sets a limit to how long the final product is protected by patent.
Patenting is thus the last thing you make, before the project / product commercialized.
Until the patent is made, tells you as Idea Makers not everything to anyone.
In traditional open-source all have access to all information - it can be a problem if there come new participants into the project with a hidden agenda.
I do not believe that the proposed amendment in the U.S. will have any effect, either positive or negative - at the most emotional.
Wbr Lars plbrake.dk
Jayesh - I'm skeptical, at this point, that a first to file system in the U.S. can stand Constitutional scrutiny. As early as 1829, the U.S. Supreme Court in Abraham Pennock James Sellers, Plaintiffs In Error v. Adam Dialogue, 27 U.S. 1, 2 Pet. 1, 7 L.Ed. 327 (1829) that "[t]he statute of James was made to abolish monopolies; but it saved, by exception, the rights of the inventors of new and useful inventions, who had before enjoyed exclusive privileges. The constitution of the United States and the act of congress; on the contrary, having no monopolies to deal with; created exclusive privileges in favour of the same description of persons. The one preserved to them a pre-existing monopoly, and the other conferred it upon them." In other words, the U.S. Constitution preserves the monopoly to the first inventor. Congress can confer it - but a change to first to file by act of Congress can't defeat the monopoly preserved by the Constitution.
ReplyDeleteHold your breath. I don't expect the answer anytime soon.
That is an interesting article and truly a serious issue for garage inventors & startups. I had collected some recent articles ,
ReplyDeleteWow, this is a big deal if passed. Thanks for sharing. I deal with this in my work since we help American companies in R&D collaborations with India and elsewhere.
ReplyDeleteThe Constitution only requires the grantee be an inventor. This is a requirement of the Am Invents Act, too. The Constitution doesn't address how to decide the grantee between two independent inventors. That rule, by default, falls to Congress to devolve. The patent system's purpose is a method for speedier dissemination of technology to encourage technological progress. First to file will meet that purpose. Congress will be found to have the authority to grant patents to the first inventor to file.
ReplyDeleteStephen - I admit that I haven't spent hours looking at all of the caselaw in detail, but what I have reviewed appears to support the conclusion that "inventor" is the first to invent, not the first to claim. An inventor can lose rights by not timely filing, etc., but an inventor can't lose rights to a junior claimant - i.e., someone who invents (or steals) later, but files first.
ReplyDeleteGranted, I've been wrong before about the ultimate outcome of Supreme Court cases, but unless someone can show me any precedent that overcomes the Constitutional grant to the first inventor, I'm sticking by my guns on this. I don't care what the statutes say or don't say at this point; this is a question of what the Constitution says and means, not what Congress has done thus far. I think it's a poor argument that "Congress has done X before so it's ok to let it continue" or that Congress can decide that, despite it having been long decided that the Constitutional property right adheres to the first inventor (granted, it can be lost by action or inaction of the inventor - but it's the inventor's right, not Congress's, to lose or give away) that it can remove that right. It is granting property rights by legislative fiat when the property rights aren't Congress's in the first place.
And, I would point out that the Supreme Court from the beginning said that the rights adhere "from the moment of invention," that those rights are "only perfected by the patent," Evans v. Jordan, 8 Fed. Cas. 872, 873-74 (C.C.D.Va. 1813), and that “the right is created by the invention, and not by the patent.” Pennock v. Dialogue, 27 U.S. 1, 12 (1829). If someone can show me authority that counters that interpretation, I'm happy to reconsider, but as of now I'm of the opinion that to allow Congress to legislate that the first person to claim an invention is granted the inventor's rights regardless of whether or not they are the inventor (read: first inventor) would be to allow Congress to modify the Constitution without amendment.
Interesting points, but the relevant language of the Constitution is a grant to the legislative branch: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The Constitution does not define what an inventor is and does not limit the grant of a patent to a first inventor, only to an inventor. The Constitution gives broad authority to the Congress to define a body of laws to "promote the Progress of Science and useful Arts." The current statute will likely be attacked on Constitutional grounds, but with the protection against derivation (stealing from a true inventor) and the requirement that an actual inventor be named on the patent (even if perhaps not the first inventor in time) my bet is that the first inventor to file provisions will ultimately survive scrutiny.
ReplyDeleteThe cases that Duncan points out are compelling, but are interpreting an earlier act of Congress. It will be interesting to see whether the Supreme Court will attempt to use its earlier precedent to limit Congress' discretion, or whether they will defer to the legislative branch. Interesting times are ahead!
Paul - that's certainly that "main stream" opinion as far as I can tell. I'm sort of baffled, I have to admit, that so many people seem to be cheering this on when it seems fairly clear that (broad brush) it places small businesses and independent inventors at a huge disadvantage.
ReplyDeleteThat being said, I understand that the cases were interpreting an earlier Act of Congress. But that doesn't negate the Constitutional analysis that, independent of what Congress chooses to do or not do, the Constitution's rights adhere "from the moment of invention." Congress may have broad power, but I have a hard time seeing how Congress can get around the "moment" of invention and that the right is created, Constitutionally, by the invention. The broader image in my mind is that of the Crown granting monopolies to the King's favorites as opposed to the peasant who is really the inventor.......
I'm betting that the Court (which will end up hearing this - I think we can at least agree on that) will defer to Congress but only to the extent that Congress has the power to determine the means by which the rights are perfected, concurring with 200 year old precedent that "inventor" means "first" because that's when the rights adhere. To do otherwise would be to defeat the entire purpose behind making the right a Constitutionally-granted right in the first place. The alternative is to ignore the Constitution entirely and have Congress determine the right based solely upon a race to the patent office. As I said, I've been wrong before but I just can't square first-to-file with the clear language of the Constitution and precedent.
"The power, in its terms, is confined to authors and inventors; and cannot be extended to the introducers of any new works or inventions. This has been thought by some persons of high distinction to be a defect in the constitution. But perhaps the policy of further extending the right is questionable; and, at all events, the restriction has not hitherto operated as any discouragement of science or the arts. It has been doubted, whether congress has authority to decide the fact, that a person is an author or inventor in the sense of the constitution, so as to preclude that question from judicial inquiry. But, at all events, such a construction ought never to be put upon the terms of any general act in favour of a particular inventor, unless it be inevitable." Joseph Story, Commentaries on the Constitution 3: § 1148.
I am not cheering it on or bemoaning it at this point. I have handled a number of interferences over the years, and that process (which is both complex and costly) certainly is not one that favored the little guy. I am also a bit outside of the mainstream in that I am far from convinced that the new system actually gives big business a real advantage. This was the subject of one of my recent blog posts.
ReplyDeletehttp://pointofnovelty.blogspot.com/2011/09/does-first-inventor-to-file-really.html
Paul - interesting points you raise in your blog. Based upon my experience, however, for small companies (and overwhelmingly for independent inventors) money is the single biggest issue. Your point is well taken, however, that interferences are complex, costly, costly, and costly. My single biggest point related to all of this is that the presumption has been for two hundred years that the first person to come up with an invention is the rightful owner - and the interference allows him to make a case.
ReplyDeleteAs for big business - the ones that can afford to and want to corner the market file continuously. Even now, the default is file faster just to avoid the cost of being the coming in from behind. But...I do see your point. A lot of large companies get bogged down by bureaucracy, reducing efficiency and speed.
It will be an interesting couple of years, I should think.
Paul - You put forward an important point about a disorder one gets into because of mere size, yes; more money may not necessarily mean more patents. Also with micro and medium companies / individuals getting 50 to 75 percent discount on patent filing might creates some sort of level ground if not completely.
ReplyDeleteI would prefer the present first-to-invent system, but I have no doubt whatsoever that Congress has constitutional authority to adopt a first-to-file system. I find it amusing that many patent practitioners believe that inventors have a constitutional right to patent protection. Not so. The Constitution merely provides Congress authority to support the sciences and useful arts by providing intellectual property protection for inventors and authors. Congress clearly has no obligation to exercise this authority---indeed, Congress could determine that sciences and the useful arts would be better promoted without awarding patent protection to inventors or copyright protection to authors. Since Congress could eliminate patent protection altogether, it certainly can adopt procedural rules (such as first to file) that may alter or limit to some extent rights of inventors.
ReplyDeleteGood info.
ReplyDeleteThe global patent system, as a whole apart from being slow and expensive is biased towards the big and wealthy .
ReplyDeleteNeglecting the first to invent and moving to first to patent will only contribute shallower innovation. Instead of investing in their inventions and innovation products, while keeping their lab notebooks organized according to the rules and regulations, they will be forced to spend more on patent applications, lawyer fees and all other expenses related to patenting.
The last thing we wish is making inventors patent pen pushers.
Moreover, the backlog of the USPTO is so big, and the patent system is so inefficient, that adding additional load on it can lead to really unwanted sequences.
One thing is good. We will now see a more unified global patent system. That will most probably ease on those dealing with all aspects of patents.
However, the big question still remains. How to encourage innovation and especially to that emerged from SME’s, startups and individuals? How we make their voices heard?
If the USA cannot protect its interests and apply diligence to its patriots we have a serious problem. Moral Diligence is at stake here.
ReplyDeleteScientific diligence does not apply to a patent either. So, to make a discovery based in science a patent must bne filed top protect the inventor? Where is equal opportunity, the USA way? Free speech and copyrights are non valid in a greater unknown event. Moral dillemmas are not healthy for an inventor. The whole idea is FREEDOM here. The whole corporate super pack and bureaucratic lobby crap sucks. RR