WHAT TYPE OF PATENT SYSTEM IS BEST FOR AMERICA?

There is much debate today about whether the United States should retain its current first-to-invent patent policy or should it conform to the rest of the world and adopt a first-to-file patent policy.  The Patent Reform Act of 2007 was passed by the House of Representatives in September of 2008 and it is still waiting for a vote in the Senate.  If the Senate approves the act, it will change America’s patent system to a first-to-file system.  I believe that such a change would be devastating to the American economy, as well as our form of capitalism.  I will explain the two systems and articulate why I believe that the current system (first-to-invent) is the better option.

1. The policy behind the United States Patent System

The modern American patent is a government issued grant, which confers upon the patent owner, from the time the patent issues, the right to exclude others from “making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a period of 20 years from the filing date of the patent application.  In return for obtaining this grant, the inventor must disclose the invention in detail to the public so that a person of ordinary skill in the art to which the invention pertains can make use of the invention.  This “contract” between the government and inventors ensures that inventions will be made public as quickly as possible so that others can build upon the technology.  A patent is essentially an incentive for an inventor to spend large sums of time and money to create an invention that will be disclosed to the public and will benefit the public.

1. First-to-Invent Specifics

The United States uses a first-to-invent system.  Inventions are generally defined by the 1) conception of the invention and 2) the reduction of the invention to practice.  When the inventor conceives of the invention and reduces the invention to practice within a reasonable time, the inventor’s date of invention will be the date of conception.  Whenever two inventors file patents applications on the same invention, there will be an interference hearing before the Board of Appeals and Interferences at the U.S. Patent Office to determine who conceived of the invention first.  Furthermore they look to see if the inventor reduced the invention to practice in a diligent manner.  The interference hearing is very expensive.  The main advantage of the first-to-invent system is that it allows the true inventor the right to a patent as opposed to the first person to make it to the Patent Office.  Furthermore, this system is more in sync with the United States Constitution which gives Congress the power to secure exclusive right to grant patents to inventors, not the person who can file a patent first.  On the other hand, the major disadvantage of this system is the cost of resolving disputes at interference hearings and the fact that the rest of the world is on a first to file system.

1. First-to-File Specifics

In a first-to-file system, the granting of a patent for a given invention lies with the first person to file a patent application for protection of the invention, REGARDLESS of the date of the actual invention.  This system is followed by most of the world, excluding the United States.  There are many benefits of such a system.  These benefits include: 1) encourages inventors to quickly file for patent rights, 2) avoids the potential for fraud in swearing-behind references, 3) there will be no need for an interference hearing, 4) a patent would be more difficult to obtain, and 5) there would be global harmony.  Disadvantages of the first-to-file system include 1) granted patents would favor the wealthy, 2) there would be a decrease in innovation, and 3) the contract between the inventor and the government will be void.

1. Why Should America Retain the First-to-Invent Policy?

There is an old saying that “if something ain’t broken, don’t fix it”.  That is essentially   the case with America going to a first-to-file system.  There is no substantial evidence that America will be better off going to a first-to-file system.  Evidence seems to suggest otherwise, however.  Recent research indicates that patentees in first-to-file countries lag behind US patentees in patent disclosure breadth.  Furthermore, the U.S.continues to lead the way as the first country to recognize the patentability of software and business methods.

I believe that the most important reason for keeping the first to invent system is because this system protects the “little” inventor.  Oftentimes, the little inventor may not have the necessary funds to file a patent.  Larger companies will always be able to file a patent, thus, eliminating the rights of the little inventor.  Similarly, there will be little incentive for a person to invest large amounts of their time and money into developing an idea when it is very likely that someone may beat them to the patent office.

The biggest argument proffered by proponents of first-to-file systems is that such a system is simple because it will be synchronized with the rest of the world and the need for the costly interference hearings would be eliminated.  This argument is really dishonest because America continues to lead the rest of the world in patents – and hearings before the Board of Appeals and interferences are rare.  Out of 444,510 patent applications filed in 2006, only 129 were involved in interference proceedings.

References

1. http://www.iptoday.com/articles/2008-4-poltopak.asp.
2. E. Archontopoulos et al, When Small is Beautiful:  Measuring the evolution and consequences of the voluminosity of patent applications at the EPO, Information Economics and Policy, 19(2), pp. 103-132, (June 2007).
3. http://www.patently.com/patent/2008/03/moving-to-first.html