First to File Coming?

As I write this, Sen. Orrin Hatch of Utah is speaking on the Senate Floor during debate on S.23, what was previously known as the "Patent Reform Act of 2011," but what Sen. Leahy is now calling the "America Invents Act of 2011".

Senator Hatch points out that there has not been meaningful patent reform in over half a century, but that during that period there have been significant technological advances for which corresponding changes in intellectual property laws are needed.

The proposed change with the greatest significance is a move to a "First to File" system of patent issuance. Today, the United States uniquely has a "First to Invent" system. Should S.23 be passed into law, the individual or entity who files a patent application on an invention first would be the one that receives the patent on the invention, irrespective of whether another invented it first. "First to File" is another initiative to harmonize the United States patent law with the rest of the world.

Senator Grassley of Iowa is now speaking, and he believes one result will be improved-quality patents. He says the ability of third parties to submit prior art during the examination process will facilitate that.

Still, some question whether changing the patent system to a "race to the patent office" will really result in higher-quality patents. Many foresee patent applications being submitted without the inventions being fully fleshed out, for the purpose of being the first to file and receiving priority over all others, including those who might have a fuller conception of the invention but less in the way of resources.

Stay tuned... there may be a vote this week, perhaps even today.

Publishing of Patent Applications

Did you know the Patent and Trademark Office will reveal your invention 18 months after your application is filed by default? Isn't the office supposed to keep your invention a secret until it's patented? Is there a way to keep it confidential?

On one of the forms that accompanies a patent application to the Patent and Trademark Office ("PTO"), there is a section called "Publication Information". The form is the Application Data Sheet -- what practitioners and the PTO refer to as the "ADS" -- and it mostly contains demographic information about the inventor. In the "Publication Information" section, there's a checkbox called "Request Not to Publish". By default, the contents of a patent application are published 18 months after filing. An inventor may, but not always, be able to prevent the application from being published.

It usually takes 3 years for a patent to issue from the time the application is filed. My clients have been surprised to find out that the PTO would disclose what they've invented before a patent issues. The general rule for most of the PTO's history is that they keep the applications that are before them confidential. Has something changed?

Yes, in fact something did change. Several years ago, in the interest of harmonization with patent procedures in patent offices around the world, the United States began publishing applications just as other countries do. There is increased pressure for our patent law to be consistent with that of the rest of the world. One significant proposed change is for the United States to move from a "first to invent" system to the "first to file" system, but that's a topic for another day.

With respect to application publishing, there are some drawbacks for U.S. inventors that result:

1. If the patent never issues, prior to application publishing, an inventor could choose to practice the invention as a trade secret and still have some level of protection of intellectual property rights. But once the application publishes, it can't be a trade secret any longer either.
2. The patent office charges the inventor a publication fee! (Adding insult to injury, naturally.)

So why does the PTO have a checkbox on the Application Data Sheet called "Request Not to Publish"? If the inventor does not plan to seek patent protection outside the United States, then there are no world harmonization concerns and the PTO will grant the inventor's request not to publish the application.

There is one very important wrinkle, which is that should the inventor decide to seek patent protection internationally after asking the PTO not to publish the application, the PTO must be notified of that decision. They will then publish the application as they would by default. But failing to inform the PTO that the inventor is seeking patent protection overseas in that instance means the application will automatically go abandoned. In other words, it will receive no further consideration for a United States Patent.

The upshot of all of that is that for clients of mine who only seek U.S. patent protection of their invention, I advise them not to publish. Otherwise it's more expensive and forecloses the possibility of ever invoking trade secret protection. But inventors who take this advice and later change their minds about going for international patents must inform the PTO. The consequences of not doing so -- a probable loss of your patent rights in the invention -- are drastic.

EDIT: here is one reason why you might elect for the application to be published even when there is an option not to.

Microsoft v. i4i, U.S. Supreme Court - What's at Stake?

On April 18, 2011, the United States Supreme Court will hear arguments in the Microsoft v. i4i case. The outcome of the case may be that the Supreme Court makes it easier for patent infringers to contest the validity of the patent in question, if the Court finds for Microsoft. On a go-forward basis, the rule would be that the burden of proof for a finding of patent invalidity would be the lower "preponderance of the evidence" standard, rather than the "clear and convincing evidence" standard in use today.

The principal issue in the case being argued is what it takes to invalidate a patent. When a patent owner believes another party has infringed on the patent owner's patent, that owner will bring a patent infringement suit as the plaintiff. The alleged infringer, now the defendant in the case, may argue that there is no infringement because the patent is invalid and should never have been issued.

The question for the Court is what burden of proof is used to find a patent is invalid. Currently, a patent is presumed valid, and the burden of proof needed to invalidate it is called "clear and convincing evidence."

That is a phrase that is less familiar to most individuals than other burdens of proof we commonly read about in the news or see on TV. Most of us are familiar with the concept of burden of proof from criminal law: a defendant must be found liable "beyond a reasonable doubt" to be guilty. In a civil trial, the burden of proof is a lower threshhold, called "preponderance of the evidence."

The most common example contrasting these two burdens of proof is that of O.J. Simpson, who was found not guilty of murder in the criminal trial brought by the government because the jury was unable to reach a verdict of guilty beyond a reasonable doubt. He was later found liable in the civil suit brought by the families of the victims, where the burden of proof was the lower preponderance of the evidence standard.

The clear and convincing evidence standard is used in civil trials, like a patent infringement suit. It is a higher burden of proof than preponderance of the evidence. It is not as high of a burden as beyond a reasonable doubt. But for a court to hold that a patent is invalid, the finding must be borne out by clear and convincing evidence. That means it is harder to get a patent invalidated than most common matters brought before a court in a civil suit.

Microsoft is arguing that in some instances, the threshhold should be lowered to "preponderance of the evidence." Is that a good thing? That is probably a post for another day.

EDIT (6/9/11): The decision has been handed down and the Court left the standard at clear and convincing evidence.