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October 01, 2011

New Patent Reform Law is Most Comprehensive Revision in 60 Years

Institutes “first-inventor-to-file” rule

Legislation signed Sept. 16 by President Obama contains the most comprehensive revision and improvement of U.S. patent laws since 1952, the original date of codification.

“The Leahy-Smith America Invents Act provides much-needed transparency, objectivity, predictability and simplicity in our nation’s patent laws,” according to ABA President Wm. T. (Bill) Robinson III.

Under the new law, P.L. 112-29 (H.R. 1249), the United States will join the rest of the world by instituting a “first-inventor-to-file” rule for obtaining a patent. Although the ABA does not have a position on the entire legislation, the association supports the “first-inventor-to-file” rule, which would replace the current and more complex “first-to-invent” standard that relies on “proof-of-invention” dates.

The ABA backs the shift because the United States stands alone in the world in using the “first-to-invent” standard, which increases the opportunity for competing claims to the same invention and facilitates protracted legal battles in administrative and court proceedings that are extremely costly in both time and money.

In addition to establishing the use of the “first-inventor-to-file” rule for the United States, the new law also institutes more timely and cost-effective administrative mechanisms for identifying and removing improperly issued patents, greater transparency in the patent approval process through expanded opportunities for public input, elimination of subjective factors in determining a right to obtain a patent, and elimination of frivolous bounty hunter lawsuits based on technical errors in marking of patented products.

P.L. 112-29 allows congressional appropriators to maintain control of U.S. Patent and Trademark Office (USPTO) funding, which comes entirely from user fees. Although the USPTO is allowed to set and adjust fees, Congress will appropriate the amount the office receives from those fees. Excess fee revenue will go into a reserve account for the agency’s use, subject to the appropriations process. The ABA preferred an earlier version that would have established a revolving fund into which USPTO fee collections would have been deposited and from which the office would have had immediate access to operating funds. 

The association and its Intellectual Property Law Section played a key role in developing the legislation.

House Judiciary Committee Chairman Lamar Smith (R-Texas) called upon the ABA section six years ago when he convened a small group of intellectual property law experts and practitioners to help him identify intellectual property issues in need of review and reform and to recommend specific improvements. Shortly after the patent reform effort began, the section established a Blue Ribbon task force that developed Agenda for 21st Century Patent Reform, a white paper analyzing and making recommendations on the major issues under consideration by Congress. The white paper was revised eight times over a five-year period as new issues became part of the process.

The ABA welcomes enactment of the new law.

“This modernization of our patent laws is well-designed to enhance the efficiency, effectiveness and timeliness of the U.S. patent system, and to improve the competitiveness of America’s inventors and innovators in the worldwide competition,” ABA Intellectual Property Law Section Chair Robert Armitage concluded.

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