The “Matrix” for First-Inventor-To-File: An Experimental Investigation into Proposed Changes in US Patent Law

Guest Post by Brad Pedersen and Justin Woo (Read their Full Article at http://ssrn.com/abstract=1518660)

The Patent Reform Act of 2009 would replace the current “first-to-invent” (FTI) system with a new “first-inventor-to-file” (FITF) system. While touted as a way to harmonize the US system with “first-to-file” (FTF) systems used in other countries, an experimental investigation of a matrix of two hundred typical fact patterns for two competing inventors was analyzed under all three systems (FTI, FITF and FTF) to test this assumption. Based on the matrix analysis, it appears that if FITF is adopted there likely will be changes in applicant behavior and significant extra costs for at least several years as a result of the transition to a new system; and, it is unclear whether FITF really gets the US any closer to patent harmonization.

RawAnalysis WeightedAnalysis
 Caption: Scenarios where both parties have filed applications

The proposed FITF system has a tendency to behave as an entirely different system in certain scenarios, rather than as a midway point between the existing FTI and FTF systems. A raw analysis of the results reveals a discrepancy wherein a larger percentage of second inventors are awarded a patent under the FITF system than predicted by a shift toward a FTF system. A weighted analysis reflecting likely applicant behavior from the implementation of the FITF system emphasized, rather than diminished, these discrepancies with expected results.

It appears that the “springing public disclosure” exception created under the proposed FITF system to replace the one-year grace period found in current US patent law is one of the primary reasons for the discrepancies. This exception allows applicants to control the start of the grace period that disqualifies the public disclosures and even prior filed applications of others from being prior art based on the timing of the applicant's own public disclosure. The springing nature of this exception provides unique incentives for applicants to manipulate the timing of the public disclosure of their inventions in order to manipulate the grace period, thereby creating results seemingly inconsistent with core principles of the existing FTI and FTF systems.

For a link to the entire paper, go to:http://ssrn.com/abstract=1518660

116 thoughts on “The “Matrix” for First-Inventor-To-File: An Experimental Investigation into Proposed Changes in US Patent Law

  1. “THEFT BUSTER”

    My first Invention, this device took me 3 years to build, I sacrificed my business my home and 30 k to Invent it and make my product.
    I started it in 1989, unfortunately my patent was copied, but I am the first to Invent this product and I can relate to this article…
    I did not have the funds to fight what happened to me, but I haven’t given up Inventing; myself, my family and friends know who is: “THE FIRST TO INVENT” “THEFT BUSTER” and I am not done yet, in fact I am just getting warmed up. “THINKING OUT OF THE BOX FOR AMERICA”

    Thank You, Respectfully
    Michael V. Caldwell, Inventor

  2. Examiner Mooney – much as you like to pretend that you are a respectable practitioner, your biases simply give you away. The very “Charles H. Duell” type of pronouncement above – “…a patent is made objectively more difficult for everyone.” only makes sense to someone brought up in the anti-patent environment of the Office.

    If the basic supposition that a patent is truly earned by meeting the requirements of the Law, there is NO valid reason NOT to HAVE more patents or even to WANT to have more patents.

    None.

    If the Law is met and we DO have more patents, that means a couple of things:
    - The Office is SUCCEEDING in its role to promote advancement. As more use of the system – resulting in more (earned) patents – MUST mean more innovation is being shared with humanity.
    - An earned patent ADDS to humanity. It does not detract. Only for a limited time, is the addition muted for exclusivity.
    - “promotion” SHOULD feed on itself. Humanity should accelerate its ability to grow, understand and cultivate wisdom. A government that PROMOTES innovation should be lauded. Increased filings should be expected. Malcolm’s lack of understanding of what “promotion” means is clearly evident. There is no caveat next to “promote” to so limit promotion to only those items that can achieve promotion by NO other means. NONE.
    - The “let’s close the doors” crowd is being excised from Office.

    I DO premise this on my long-standing articulated belief that NO stamping of applications is appropriate – that means stamping EITHER reject-reject-reject OR pass-pass-pass is desirable. Applications MUST be examined. Those that merit MUST pass. When more patents are passed with merit, this means more shared innovation. Anyone wishing for (deserved) patents to be difficult to be obtained betrays a FUNDAMENTAL misunderstanding of why the Office is even in business. It is in taking such joy in a wrong position that reveals not just arrogance, but ignorance.

    Not surprising that one such person is Malcolm.

  3. Mooney

    Agreed!

    Although I know what YOU mean when you refer to “a patent” being more difficult to obtain, I worry that such a generalization is counter-productive to a good patent system.

    A patent on a novel and unobvious invention that is fully disclosed and enabled and of statutory subject-matter should NOT be difficult to obtain.

    Any application lacking one of the above should be IMPOSSIBLE to obtain.

    It doesn’t make sense to talk of a good patent (you know what I mean) being difficult to obtain.

    What that would mean would be that it would be difficult to prove either that the invention was novel, that it was unobvious, that it was fully disclosed, that it was enabled, that it was of statutory subject-matter, or any combination of all or some of the preceding.

    I don’t see the merit in making any of the above difficult to prove, in order to further the goal of having only valid and enforceable patents issue.

    They should be easy to prove. Conversely, they should also be easy to disprove for an examiner, if that be the case. Ideally there is a bright line for all of those questions.

    However, there is no bright line–there is a bright hazy area, with dark areas on either side. The dark areas should be easy–easy to prove or disprove, as the case requires.

    But patents should NOT be more difficult to obtain, across the board. That would be inefficient. Difficulty entails time and expense for both applicant and government. In the end, a patent results that is either going to cost you a lot (if made difficult), or little (if made easy). Lower costs means greater private and social efficiency.

    Making a patent more difficult to obtain does not automatically lead to better resulting patent “quality”.

  4. IBP The goals of increased patent and examination quality and start-up or early-stage friendliness are not incompatible.

    I agree with this entirely, IBP. I believe I said essentially the same thing in my immediately preceding comment. You asked me to explain my Tower of Babel comment and I did.

    Referring again to your quoted assertion, it’s also true that an environment can be created that is friendlier to start-ups or early stage businesses at the same time that the obtaining a patent is made objectively more difficult for everyone.

  5. Mooney–

    Your talent for misconstruction and repackaging is truly impressive.

    You should read posts more carefully before you comment, because many of your comments are immaterial or otherwise miss the mark.

    You read too much into things. I never suggested “turning back the clock to the good old days of 10 years ago”. In point of fact, I believe that there currently exists a vast number of invalid patents that were issued in the heyday, and that that is a bad thing.

    Allowing everything is not at all what I was talking about. The goals of increased patent and examination quality and start-up or early-stage friendliness are not incompatible.

    All this is obvious, I just didn’t want you to have the last word with your crappy post.

  6. Ned,

    I believe you overestimate the awareness large corporations have of what the little guy is doing. Your name has to have some cachet in the technical or business worlds before you are noticed by the large guys

  7. What can I say? Asia practises FtF with a grace period. The Asian way of adjudicating patent disputes is a bit special, however, and perhaps accommodates FtF+Grace better than more litigious societies can.

  8. Max, obviously, we should go to a FTF system if we change. What is proposed in congress is a hybrid system that has big problems. Others have noted some of them. I just illustrated how to legally kill the first inventor who publishes first and files later. He is opening himself up to abuse that simply would not happen in a FTI system and could not happen in a FTF system.

    What we have on the table is the ugliest possible system imaginable for the first inventor.

  9. Ned, I don’t dispute your tales of what IBM etc do, or your tales of patenting variations, modifications and improvements.

    I just question your bald statement that:

    “Now the inventor cannot get a patent”

    Under FtF the little guy does get his dominating master patent on the new field of innovation.

    Followers can follow, and cover the new field with dependent improvement patents but, hey, that in principle is good, and behaviour that a properly functioning patent system is supposed to encourage, isn’t it. FtF functions as a patent system should. You should try it sometime.

    Under FtF, when an inventor publishes something, the world proceeds on the basis that the inventor has already filed (so he was first, and will get the monopoly), and already has an unstoppable lead in the race to a valid patent (except in the rare event that what he is shouting about is nothing more than an unpatentable method of doing business, presentation of information, mathematical equation, program for a computer, or a problem yet to be solved).

  10. Mooney, you obviously have a bad taste in your mouth from that era. I cannot say that I disagree with your sentiments.

    Indeed though, the little guy cannot afford an interference today. So he avoids it by claiming around the other patent and instead filing a Rule 1.31 affidavit. In the future, denied that right, he simply loses his patent rights entirely, even if the subject matter disclosed in the other inventors patent is his own.

    Perhaps we should skip the interference in the patent office thing entirely. Just grant both parties the patent and let them fight it out in court.

  11. MaxDrei, IBM, AT&T, Microsoft are all known to litigate in the manner I suggested. As to what they plan to do a hybrid FITF system, I do not know. But what I suggest here, filing improvement patents to surround the first inventor, was an historical fact in the US once upon a time. The practice was noted in the congressional testimony leading to the Patent Act of 1836. It is or was a known practice in Japan against, particularly, US companies. It was called “patent flooding.”

    So don’t tell me that mankind has so changed his nature never to take advantage of loophole in the system that Kappos and his merry crew assure us will never happen. If it is legal, they can and will do it because it provides them enormous advantages. And it is legal under the new statute. So I guarantee you that will happen.

    To the extent they say it will not happen, even though legal, they are lying through their teeth.

  12. Ned: If the only recourse is interference, the little guy cannot afford an interference. So the big guy can always get away with murder.

    This is a problem with the current system.

    Regarding my earlier Tower of Babel comment, what I was referring to was the fact that there is more than one way to achieve “innovation nirvana” and making it easy for people to obtain patents is just one way (in theory). Unfortunately for proponents of turning back the clock ten years ago to the height of USPTO nonsense, the experiment was a failure. The innovation that is most encouraged by absurdly high allowance rates and an “anything goes/new claiming paradigms” mentality tends to be socially useless “innovation” that benefits only the patent owners, and/or “innovation” that would have occurred without patents (that benefits the patent owners even more). Who needs “start-ups” “innovating” methods of inserting ads into TV re-runs? The answer is nobody, or at least nobody that needs additional help from the US government.

  13. Ah, of course. Thanks Ned. Now I see. Anybody who wants a patent publishes first, then later files something at the PTO. That scenario hadn’t occurred to me.

    Neither had it occurred to me that the likes of IBM have teams of fire-fighting patent attorneys lounging around waiting for the day when the bell rings and the PA screams

    “Red Alert. Inventor has published”

    whereupon they all start writing patent applications.

    This, I readily concede, is not how I imagined life inside IBM’s patent department.

  14. MaxDrei, the first inventor, in the scenario I proposed, would not be able to get a patent because his invention will be disclosed in the other patent applications all of which would be filed before the first inventor files his patent application.

    Now the likes of the VP IP IBM who is now in charge of the patent office may say that this would never happen. But the best con men always say that just as they are picking your pocket.

    If the only recourse is interference, the little guy cannot afford an interference. So the big guy can always get away with murder. The new system will be rigged in favor of the big guy more than ever.

  15. Ned, I don’t understand your:

    “I will immediately file a number of “improvement” patent applications surrounding his “idea.” Now the inventor cannot get a patent”

    I assume you’re talking about FtF land. Why can’t he get a patent? I don’t understand.

    And tell me about James Dyson. He of the bagless vacuum cleaner. How much of a market share does he have a) in Europe and b) in your country? How many vacuum cleaners was he selling ten years ago. How important were his patents, in beating Hoover and the others?

  16. Fascinating thread.

    After reading the above, and putting my VP IP hat on for a major company with an attitude (think Bill Gates), if any inventor publishes on “my” turf, I will immediately file a number of “improvement” patent applications surrounding his “idea.” Now the inventor cannot get a patent, for his invention is disclosed in each of my filings and he would have to engage in “interferences” to demonstrate that what they disclose is his invention.

    But I have the bucks, an he does not. If the inventor tries take me on, I will kill him with massive litigation costs. For every lawyer he has, I will have 30. I will depose every engineer and every executive in his company assuming there is a company. I will destroy him.

    Tell me this is not possible.

  17. is the implication of your last statement that you favor a system that does not strongly encourage the origination of new ventures and new entities?

    Not at all. Among other reasons, that’s why I support a robust single-payer healthcare system. The present system in the US has effect of locking people into jobs that they might otherwise leave because they need their employer to pay their health insurance. Talk about a drag on innovation!

    But of course it’s nothing compared to the effect of KSR (joke).

  18. Mooney–

    To be clear, not all economic and social differences between the US and other countries are relevant to the invention/patenting/start-up paradigm; and those that are relevant are not too numerous to list.

    It’s another chicken-and-egg question: does the EPO patent system a)simply reflect underlying pre-existing euro realities, or does it b)create its own behavioural, attitudinal, and normative realities?

    The answer is that it is likely a bit of both. Because it drives things as much as it responds to them, it is not ridiculous to assume that a similar system in the US would drive things in a similar fashion.

    Although not identical, the R&D and business cultures there and here are, I believe, sufficiently similar that the comparison is not ridiculous.

    What actual value it has should be determined by careful consideration of ongoing discussions on the matter.

    And to be clear, is the implication of your last statement that you favor a system that does not strongly encourage the origination of new ventures and new entities?

    Note that I never suggested that such a system actually currently existed.

  19. MD “Start-Up” doesn’t have the almost religious importance it appears to have in the USA.

    To be clear, it has religious importance in only a few small parts of this country. Most people who start their own businesses do not use the term or characterize their new business as such.

    IBP What he did was to point out that the european system reflects a different ethos with regard to invention and entrepreneurialism, and is likely not as effective as the U.S. system at addressing the needs of early-stage ventures.

    To be clear, the economic and social differences between the US and other countries are too numerous to list, which makes looking to Europe for evidence that a change to FTF will have a substantial negative effect on “start ups” rather ridiculous.

    the US should maintain a system that strongly encourages the origination of new ventures and new entities. It shouldn’t be eroded any more than it already has been.

    Have you heard the one about the Tower of Babel?

  20. Body, I thought Dr Katznelson was asserting that Mr Perlman would have found it impossible to succeed under FtF as he has done under FtI. As to Pedersen/Woo, I see now that all those scenarios in which inventors publish before they file result in a “Nobody gets a Patent” outcome under FtF. If nearly all the scenarios involve publication before filing, as they do, then of course European absolute novelty FtF “fails” in nearly all cases.

    ROW follows the maxim, tell the PTO before you tell anybody else. So does US Big Corp. The big debate is on the universities and start ups and how vital it is to them to be able to openly disclose their ideas before they put their ideas into a filing at the PTO.

    As has been written in other threads, fully effective European apps are often but a small fraction of the length of US apps.

    Europe, of course, thinks it is no more than common sense and self-interest first to file an app before you hand your invention over to an exploiter, like mailing your copyright work to yourself before you hand it over to a record company or a publisher. So, to Europeans, the Pedersen scenarios seem a bit alien. I accept, however, not in the USA.

  21. Max–

    Ron never characterized FtF as “useless” for start-ups, nor did he characterize FtF as “unable” to protect start-up innovation in Europe.

    What he did was to point out that the european system reflects a different ethos with regard to invention and entrepreneurialism, and is likely not as effective as the U.S. system at addressing the needs of early-stage ventures.

    Ron, I’m a bit disappointed that you’re letting Mooney get under your skin.

    The question you’ve posed is somewhat unanswerable–top ten by what standards? Many of the “top ten” are likely to be consumer-oriented goods, the success of which likely has more to do with the consumer culture in a particular jurisdiction rather than on its patent system.

    But even big companies, easily capable of managing FtF, could make it into the top 10, and can be fairly characterized as surviving on their patents alone–large drug companies, for example, a large portion of whose revenue can derive from a very few patents, one or two of which effectively put them on the map and vaulted them from also-ran to pre-eminent status. Not exactly started up from scratch, but arguably a similar development trajectory.

    Certainly by patent-derived revenue, many such things would be in the top 10.

    I still agree with your basic premise, and continue to believe that the US should maintain a system that strongly encourages the origination of new ventures and new entities. It shouldn’t be eroded any more than it already has been.

  22. Dr Katznelson, I can’t name 10 FtF start-ups out of which blockbuster inventions in computing and biotech have emerged. I can’t even name even 10 such blockbuster innovations that have ever emerged in Europe, over the whole of recorded time. But that doesn’t prove there aren’t any. I know that such inventions are coming out of research in the continent of Europe, outside the laboratories of global corporate titans.

    The word “Start-Up” is not part of the daily vocabulary in Europe. “Start-Up” doesn’t have the almost religious importance it appears to have in the USA. Europe is not very good at being entrepreneurial. Hitting the jackpot is not what European engineers and scientists think about or see as a realistic possibility. Maybe the patents system is like the media, or politics, or business: the people get the one they want. Meanwhile, I continue rationally to believe that FtF is compatible with entrepreneurial innovation.

    Filing with an enabling disclosure is (it seems) far less demanding in Europe under FtF than it is in the USA under FtI. Thousands of European patents are opposed every year. Lack of enablement is one of only three grounds of opposition. Yet it succeeds very rarely indeed (Readers, have you ever lost a patent in Europe, for want of an enabling disclosure?)

    In EE and MechE, sufficiency/enablement follows, more or less automatically, once the inventor has “solved the problem”.

    Which begs the question: does society reward he who formulates a research objective, a technical problem, or the one who cracks it? The one who says “Wouldn’t it be good idea to fly to the moon” or the one who announces “Here’s how to fly to the moon”.

    Caveat: some patentable inventions (at least in Europe) are of the so-called “problem invention” category. They are those which are patentable as soon as the problem is uttered (because the solution to the problem is obvious, once you say what the problem is). The inventor of such an invention has no difficulty coming up with an enabling disclosure.

    So, I suspect that you and Mr Perlman are wrong about the uselessness of FtF for start-ups, and wrong about the inability of FtF to protect start-up innovation in Europe, because of your misconceptions as to the law on enablement, in Europe.

  23. MM,
    Why not start with an easier task? Ignore the frequency term “seldom” and you get to choose YOUR definition of “valuable and widely used”. You even get to choose YOUR definition of a startup.

    List the top 10 valuable and widely used inventions made by startups.

    MM, surely, you have some information about startup inventions to answer this, don’t you? If you cannot name the top ten, how about making this task even easier for you: name the top one such invention. If the one you chose happens to have been invented by a startup that filed its priority application under FTI, then name the first one down the line that had been filed under FTF. Let’s see some specific substantive information coming from you. This should be easy for someone who knows about startup inventions.

  24. RK List the top 10 valuable and widely used inventions made by startups.

    Didn’t take long for that goalpost to be moved.

    The assertion now appears to be that “[valuable and widely used] inventions seldom occur under FTF scenarios.”

    Again I ask: really? The problem is that there is so much subjective terminology here it’s impossible to test the premise. Can we start by defining “seldom”?

  25. MM,
    When I wrote “such inventions,” I referred to Mova. List the top 10 valuable and widely used inventions made by startups. How many of them were made by startups filing under FTF priority laws?

  26. “What have the Chinese invented in their boom?”

    Does “Chinese” refer to the people as individuals, companies in China, or China the country? Countries don’t usually “invent”, so this must mean the first or second option. There are _plenty_ of Chinese working in the US and elsewhere and filing apps in the US. Some of the Chinese researchers are now quite top notch. I can’t say how relatively numerous they are, but I can say from firshand experience that they can be quite creative. As to innovation in Chinese companies, it is increasing.

  27. Troll The Chinese I deal with

    What do you mean by “deal with”? I assume by “deal with” you mean “steal from” or “screw over.” I mean, how do you make America stronger by dealing with the Chinese? It’s world of limited resources, isn’t it? Your dealing with the enemy, aren’t you? Help me out here. I’m trying to keep up with the patent teabagger logic but the playbook is constantly changing, it seems.

  28. They are evolving and evolving quickly – they recognize the value of a strong system in order to promote innovation locally. That’s why they are moving in that direction, as seemingly, the US moves in the opposite direction.

    Right, because any steps that make it marginally more difficult for a patent troll to obtain and enforce a patent in the US makes the patent system “weaker.” Got to love that logic. But what else should we expect?

  29. NAL,

    I agree with you. The Chinese are changing and I have done some prosecution for Chinese companies that are becoming aware of the value of intellectual property. Imagine a U.S. company stealing the Chinese invention being sold in the U.S. and shipping it off to Taiwan for manufacture and then selling it in the U.S.

    The irony of it all. It’s enough to make a baboon grin.

  30. Ron: Unfortunately, many such premature guesses would have proved wrong, so, under FTF, costly applications would be filed for some useless inventions and patent protection would be lost for other valuable inventions. Investors will not assume such risks, which is why such inventions seldom occur under FTF scenarios.

    “Valuable inventions seldom occur under FTF scenarios?” What?

  31. NWPA,

    Pragamtic would be a better term.

    The Chinese I deal with are more capitalistic than most Midwesterners and rival some of the US best on the two coasts.

    When it was beneficial to have loose IP protection and pirate as much as possible – that’s what they did.

    They are evolving and evolving quickly – they recognize the value of a strong system in order to promote innovation locally. That’s why they are moving in that direction, as seemingly, the US moves in the opposite direction.

    MaxDrie on another thread boldly asserts that the US strength should not be coupled with the patent system. He is outright wrong. While recognizing that the two are separate, they are also inter-related. Perhaps MaxDrie will become the student again (?) and learn rather than post his theories based on ignorance.

  32. Many companies in the U.S. and Germany have been forced to survive by innovating with their bread and butter being taken by the Chinese.

  33. MaxDrei, maybe you can point to the odd innovation, but the engine that has driven China’s growth has not been technical innovation.

    So, China’s patent system is generally unrelated to its growth, except for the fact that China not enforcing IP in thier country has helped them. Free rider is the term we want here.

  34. Thanks Ron.

    I don’t know if you have more time on your hands than do I, but you’ve saved me from expounding at length on a similar scenario, for Max’s benefit.

    Well, maybe not. I recently limited myself to ad hominems against Max, because his comments are all drawn from the same well, and have ignorance (not pejoratively) as their basis.

    Ad hominems are easier, quicker, and often more fun.

    Using the word “ignorance” brought back a memory. Halfway through my first year of law school, the various year classes were being ranked by quartile. Those in the third year, fourth quartile, actually got t-shirts printed up and wore them in class. The caption printed on the front:

    “The Lowest Quartile: Ignorance of the Law IS Our Excuse”

    More seriously, I think that those of us who work with start-ups and early-stage entities may be a dying breed. It’s not just Max and/or euros who don’t get it: at my local IP section meetings in a large U.S. city, very few of the other practitioners seem to understand the salient issues.

    The basic difference is that early-stagers need to look outside their own organization for partners, especially financially, whereas the established players can often do much more in-house–hence, the greater need for disclosure for early-stagers, and the more exposure to any pitfalls associated therewith.

  35. Night can you write about the Standard for next gen telecoms that China will (reputedly) impose on its domestic market and, from there, the ROW? Or did they steal that from somebody (Japan was it, or Europe?).

    As to innovation, did they really invent low labor costs, trashing the environment and a devalued currency. They got that from somewhere else too, I suspect.

  36. Is China really a fair comparison? Isn’t most of what China is doing is taking from the rest of the world. Their innovation is keeping their currency low, allowing companies to trash the environment, and having few labor laws.

    In fact, the U.S. and Germany have innovated enormously to stay a step ahead of the Chinese IP theft engine.

    What have the Chinese invented in their boom?

  37. Deeply impressive. Thanks Dr Katznelson. It’s true, that I act for mature US corps that file foreign, rather than start-ups that don’t.

    And I had not really grasped what you point out, that:

    “Your FTF patent system denies a patent to first inventors in 90% of the scenarios and precludes a patent grant to any party in 83% of the scenarios.”

    Nor that:

    “Urging prompt filing of enabling disclosures is often urging the impossible”.

    But I wonder how old China’s biggest companies are, and how many start-ups they have seen there over the last 20 years and how your entrepreneurial friend Perlman would have got on, in reality, in an environment as entrepreneurially friendly as the USA, but with FtF instead of FtI.

    Now I shall have to go back to the Pedersen/Woo scenarios, to try to understand why under FtF, hardly anybody ever gets a patent. That’s another thing that doesn’t fit with my experience.

  38. Wow, that was great Ron. I have spent years working with start-ups and your explaination fits well with my experience. I also worked for a large and old European corporation (one of the biggest and oldest) and Maxdrei’s attitudes seem to fit well with the practices at the old European corporation.

    Interestingly, I think that the patent attorneys probably were more like Maxdrei and didn’t really get how innovation happended within the large corporation. That reframe of give me an enablying disclosure is one that I remember a friend of mine at the corporation getting when his invention was a work in progress.

  39. MaxDrei,
    From your vantage point, everything I say makes very little sense. Descriptions, events, practices and patenting scenarios for American startups that I describe, simply do not seem to connect with the spectrum of experiences and realities with which you are familiar. No doubt, you are a reasonable, thoughtful and probably an excellent European patent attorney. Why then do we have this “disconnect,” wherein you cannot see the risks that some of us see in changing our U.S. system to a filing date-based patent system?

    I suspect it is because you can only see what comes your way. Entities, events, practices and patenting scenarios that do not arise, and indeed cannot survive, in your European economic system and your FTF world are not there for you to observe, experience and understand.

    We have an early-stage company environment that you do not see. It is readily apparent from your assertions above: “American corporations with an eye beyond the US domestic market already live in a FtF world, one in which being first to the Patent office is imperative. One is already filing, just as early as possible, whether a key employee left yesterday or not.
    Many American startup companies do not fit your image, which apparently you formed based on mature and larger firms. All the startups with which my colleagues and I have been involved, raised money from investors under a ‘due diligence’ process that focused entirely on our ability to succeed in the U.S. Any business plan that relied on foreign revenues for its success was discounted. In some cases we seek no foreign patents on technologies developed for U.S. standards or markets that do not even exist outside the U.S. International business is often the icing on the cake with more distant prospects. (Of course, these prospects become more important in the later stages of the company, perhaps after the founders/inventors’ exit). You apparently do not see much of the corporate “newborns” or the “young”, as they are a small minority in Europe. The figure below provides a partial explanation. The Schumpeterian “creative destruction” is much more prevalent in the U.S. and it has profound effects on the competitive dynamics that make patent protection essential for the “newborns and the young.”

    The higher rate of firm formations in America is accompanied by higher employee mobility and more intense knowledge and technology diffusion. U.S. engineers’ average time with one employer is less than half that of their European counterparts. These factors and others compel U.S. startups to adopt non-trivial defensive procedures to protect their IP and the current provisions of FTI make that possible. However, many such events, practices and patenting scenarios do not arise, and indeed cannot survive, in your European economic system and your FTF world. Your FTF patent system denies a patent to first inventors in 90% of the scenarios and precludes a patent grant to any party in 83% of the scenarios. Figure 7 from Pedersen & Woo illustrates this. With such odds, most of the scenarios that early-stage American startups face, do not exist in Europe. Thus, your utter dismissal of my example of the procedures for key employee departures is understandable, as these may not be relevant in your world.

    It is also apparent that your clients’ work may not expose you to the real workings of the invention process, one that is often clearly evident in basic and disruptive technologies developed by startups. Your comment on enabling disclosures is illuminating:

    In FtF country, people like me constantly urge their corporate clients not to make non-enabling disclosures, for fear of setting up obviousness attacks on their in-the-pipeline improvement inventions. Instead, we urge prompt filing of enabling disclosures of those improvement inventions, in priority filings (provisionals, if you will) at the earliest commercially sensible dates.

    Urging prompt filing of enabling disclosures is often urging the impossible. The belief and conviction that this is possible appears to be a theme in many of your postings. You must be involved with minor or incremental inventions, and perhaps explaining your misapprehension of our American startup environment. The following example of an actual American startup invention process would be illustrative.

    Consider an actual profile of a five-year R&D and invention effort of the Mova® system developed by my friend Steve Perlman. It is described in Steve’s Columbia University presentation available at link to j.mp. Slide 35 shows that no less than fifty important inventive ideas had been conceived, evaluated and tested over periods spanning months or years in the course of this system’s development (labeled by “invention” squares). The majority of these inventions proved to be useless. During that time, only about six patent applications had been filed (labeled by “path to success” arrows). In most cases, there was no way of filing prompt and enabling applications. As Steve explains in his presentation, the prospects of such a development effort under FTF would have been dire. Because the cost, effort and time lost to have acted on every one of these inventions would have been prohibitive, this R&D team would have had to frequently face a painful dilemma as to which of these inventions should be written up and filed in a patent application. Unfortunately, many such premature guesses would have proved wrong, so, under FTF, costly applications would be filed for some useless inventions and patent protection would be lost for other valuable inventions. Investors will not assume such risks, which is why such inventions seldom occur under FTF scenarios.

    Max, from your vantage point, everything I say makes very little sense. This is apparently because you simply do not know enough about a process that is rather rare in your world. You can never be concerned about the sky falling if you have none.

  40. Fantastic posting from Dr Katznelson, to reveal the “Sky is Falling” attitude to FtF.

    Why should it only be the departure of a key employee that precipitates this panic response?

    American corporations with an eye beyond the US domestic market already live in a FtF world, one in which being first to the Patent office is imperative. One is already filing, just as early as possible, whether a key employee left yesterday or not.

    Those who were making serious and effective preparations before the other fella filed first need not panic. They get a “right of continued use” of the invention patented by the other.

    Hold fast to your seat Ron. Don’t panic. It will all be all right on the night. As I say, little guys are more nimble. They ought to be able to file first. And then they have the pleasure of seeing Big Corp beg for a licence. BC can’t do anything to break the validity and enforceability of your filing, before theirs. BC1 wants you to license him, and not his competitor BC2.

    But don’t take my word for it. Instead, ask some of those innovative medical doctors in Germany or UK, courted so generously by the US device companies.

  41. IBP,

    There are several, but here is one possible scenario involving a compulsion to preemptively publish prematurely:

    Employees’ development records and engineering notebooks could not be relied upon for priority. As any responsible patent counsel who seeks to avoid liability, you would have to advise your client to institute new procedures. Under these procedures, every departure of a key employee (perhaps to join a competitor) would necessitate an immediate diversion of his colleagues’ time to write and publish (and/or file patent applications) on potentially patentable, but not fully developed, subject matter on which the departing employee worked. You will explain that you will be there to assist in and facilitate this task.

    You will also have to explain to your client that you do not recommend this procedure in order to create more billable hours but because it is a necessary precaution, as proving derivation at the USPTO is going to be next to impossible. You will explain that the USPTO discovery procedures place the burden of showing entitlement to discovery on the movant seeking discovery, rather than imposing on the adversary the burden of showing why discovery should not be obtained. The movant usually can’t satisfy this “interest of justice” requirement as interpreted under USPTO rules.

    You may likely discuss with your client the possibility of using trade secret laws, which might be more effective in compelling discovery, but you will have to concede that you may lack expertise in all the different state laws that could be involved in such enforcement action if the competitor that hired your departing employee is in a different state.

  42. “just those that are vocal and post here (for example, Malcolm, 6) tend to make such errors as you have done.”

    You on the end of one of my OAs would be a sight to behold. All scream and no substance.

    Furthermore, your attempts at justifying your bais is laughable. We all know from your extensive writings what you feel, and how you feel about examiners in general, and that it has little to do with me or any alleged, supposed, or verified mistakes I might make or have made. And the way you feel certainly isn’t “respectful”. At the same time, your bias is likely justified (or at least would be if we lived in a perfect world like you believe you do) so we need not fault you for the bias itself. But who knows, perhaps you’re reforming.

    Also, Jules has stated what his job is, several times iirc. Especially when he was discussing the subject of PGpubs awhile back.

    But we have to be all cloak and dagger thanks to the rules of the road, so I don’t blame him for playing coy.

  43. Ron, I had penned a response to Mooney supporting your statement that “While FITF will “nudge” inventors to publish early, they may be compelled to do so with premature, less developed and non-enabling public disclosure…”

    I thought about possible scenarios involving such compulsion, and tried to think of some where the compulsion was irresistible or unavoidable. Could you provide any such examples?

    I have had clients working under funded projects (in the medical field), where in exchange for the funding a work and publication schedule had to be met, and where it was agreed that any resulting IP rights would be owned exclusively by, and for the sole benefit of, the client.

    In such a case, the funding agreement would have needed to have been altered to change the publication schedule in view of discovered IP that formed a possible basis for a future patent application.

    Either that, or the scope of any claims that would eventually be filed would have to be adjusted such that it comported with that subject-matter that was enabled in the originally-published disclosure.

    Although the first route is obviously preferable, both routes suck.

  44. Brad: “As you can appreciate, this level of minutia is important, but so far into the weeds

    You have apparently missed my point. The matter of enablement of the public disclosure is at the same level as enablement of the subsequently filed application. You (appropriately) make a point in your ‘matrix’ to resolve between such 112 enablement scenarios in the application phase but you fail to do so in the public disclosure phase. In view of proposed 102(b)(1) priority law, both enablement variables control entitlement to a patent in the same way and no one variable is “minutia” or “far into the weeds” compared to the other. If anything, a prior public disclosure is less likely to be enabling compared to a subsequent filed application. You have assumed that prior public disclosures will always be enabling. Check with Justin: You apparently ignored a whole set of scenarios that will result in a loss of patent under FITF. My point is that your correct and insightful observations have even greater support under a proper “fully decoded” analysis. FITF would result in higher losses of patent rights than your analysis shows.

  45. Sorry Jules,

    I thought you were an examiner. My bad.

    However, you are still (again?) incorrect – I HAVE addressed the context, pointing out that MaxDrie may have been using the saying incorrectly – in the context of which it was used. Obviously, MaxDrie, did not mean to imply that he himself was a twister. However, simply assuming that context overrides the meaning of the saying is expressly to get the saying wrong.

    It is NOT that the saying proves nothing without substantive facts to support it. The saying says what it says. It isn’t and cannot be wrong. Only wrongly applied. Or over-analyzed as you have done. Don’t conflate what the saying means – it doesn’t change based on use.

    If you mis-apply the saying, than your supporting facts don’t fit (the saying isn’t wrong – your application is wrong).

    Are you sure you are not an examiner? – blaming the tool rather than the user is very much like the vocal examiners that post here.

    Unlike our friend Mr. Black Pot Mooney, I do have respect for examiners in general – just those that are vocal and post here (for example, Malcolm, 6) tend to make such errors as you have done.

  46. IBV This is not minutia, but critical detail that can make or break a patent application, and in turn a startup or small entity.

    What, exactly is “this”, IBV?

  47. Jules Finally, why on earth do you keep calling me an examiner?

    It’s a Troll thing, Jules. You have must have made a comment at some point that evinced a positive view of the USPTO or that disparaged an applicant’s behavior. In the Troll world, “only Examiners” make such comments.

  48. Noise,

    I never did say the argument was foolproof, so you may very well be right. I think we are coming from a different perspective. You have not addressed the context of the saying, which is very important, and in most cases, it is used in defense, which implies that whether the accusee partakes in the behavior is questionable. For that matter, whether the accuser partakes in the behavior is questionable as well. So the saying itself proves nothing without substantive facts to support it.

    Finally, why on earth do you keep calling me an examiner? Feel free to team up on me, as I have a relatively thick skin. Just don’t assume my silence is an aquiescence or anything else for that matter. I do my best to respond, but silence implies nothing.

  49. Ron–

    My how detailed and long-winded was your review of the paper.

    I agree totally with your observations–or rather you agree with mine, as I made them in an earlier post.

    I do however disagree with Brad’s characterization of these concerns as “minutiae” (trifling details), and I find your level of analysis and expose important. This is not minutia, but critical detail that can make or break a patent application, and in turn a startup or small entity. I do agree that the legislative process will, unfortunately, view it as minutia.

    And although you present no evidence for some of your observations, they do accord with my own experience in my practice.

    As Brad points out, if this passes, these details may get sorted out through the courts–but at what cost, and to whom? This represents another layer of effort and cost to those entities that can least afford it. Further, it presents itself at a time in the patent application process which, from the point of view of one funding the applying entity, can be a deal-breaker.

  50. Jules,

    With all due respect – you are wrong.

    Consider the portion of the phrase “knowing one”. The thought is that in order to recognize the action in another, being of the same ilk prepares you. If anything, you are the one splitting hairs, but alas, you have not a hair to split.

    MaxDrei, I am not aware of your declining to respond, in fact, your responses in the face of my criticism have grown more thoughtful and thus more interesting. Perhaps we both should rip on Jules, after all, as a good examiner, Jules should be more diligent in his arguments.

    Happy Monday everyone!

  51. Gosh. A “running scorecard”. I had no idea we were providing so much entertainment. Nice to know, because I do think these columns should be fun.

    I went through a period of declining to respond to Noise’s noises, so I’m all the more impressed, Jules, that you think a scorecard worth bothering with.

    Noise, I suppose now we must continue. Think of our public.

  52. “The saying ‘It takes one to know one’ does NOT imply that only the one saying the item represents the item, but rather, that the one saying the item represents the item AS WELL AS the the person to whom he is addressing.”

    Splitting hairs, are we? Let me get in on this. The accuser may be the only one immediately guilty of “being one”. The act of pointing a finger does NOT imply that the other person IS “one,” only that the accuser knows what he is accusing the other person of. It does not matter whether the accusee is or ever has been “one”. This is overly confusing, but I would not have conceded to the “logic” of Noise. All in good fun though, it reminds me of the saying: “when you point a finger, there are three pointing back at you”. So I agree with MD’s original point, that the accusation may say more about the accuser than it does the accusee.

    MD, Noise, I have a running scorecard between you two. The tally will remain hidden for the time being. Good day.

  53. To Phil Munsun, I followed your link Phil. It told me that a definition of a patent troll “seems allusive”. Do you understand that? Sorry, but I didn’t. Neither did I find anything any more informative than that, anywhere else on the page, so I don’t know whether it represents an “alternative” view. It is manifestly against reform, is it not? That would make it no different from everybody else round here, right? So, what’s with the “alternative” (except that it sounds good).

  54. “The matrix shows that the patent will be granted to A because B’s disclosure is an exception under proposed 102(b)(1). However, this will be true only if A’s public disclosure “describing the invention” supports the claims under § 112. If A’s disclosure fails to support the claims, A must rely on his disclosure that was filed after B’s public disclosure. The latter disclosure need only meet lower standards for rejecting A’s claims under §§ 102, 103.”

    Ron – thanks for the detailed comments. This is the kind of feedback Justin and I hoped for.

    We did consider this scenario and I think it is reflected in the matrix (but I will confirm with Justin as he is the master of the matrix). One concern we had was that it is not clear from the language or intent of proposed 102(b) that the public disclosure has to be enabling (under 112) to invoke the springing public disclosure. My sense based on the discloses vs. enables language of proposed 102(b)(4)in terms of the prior art effect of earlier filed applications of others is that courts are likely to use a similar standard for the publication that invokes the springing public disclosure. If so, this will continue the current tension in the case law between the cases requiring proof of enablement for a non-patent reference vs the cases which find that a reference can be effective as an anticipatory reference for all that it discloses (even if what it discloses is false). As you can appreciate, this level of minutia is important, but so far into the weeds, that it is unlikely that such potential ramifications of the legislation will get much attention in a final push toward passage. So, if patent reform does pass, and as you observe, we will most likely be left to figure all of this out by expensive court battles in the future.

    Brad

  55. Phil, suppose you are one of those inventors. What is it you want, you really really want? Commercial success perhaps. What is it that you can realistically expect? The opposite.

    So, if there is interest in your (duly protected)invention, from

    “… large firms with far greater resources are much more capable of bringing the invention to a market ready stage before the real inventor.”

    are you (as a real inventor) going to be sad or, more realistically, delighted at the prospect of very lucrative royalty flow, that must inevitably come, because you filed first, the boot’s already on your foot, cocked and ready, and there’s nothing Big Corp can do about that?

    So, Phil, are you a real inventor, like JAOI? Who have you been reading/listening to? Don’t you think that somebody’s having you on Phil?

  56. One of the problems with first to file is it could force the inventor to file their apln before their invention is market ready.

    Also true under our present system.

    Patent reform is a fraud on America.

    Keep the government out of my PTO!!!!!

  57. One of the problems with first to file is it could force the inventor to file their apln before their invention is market ready. Think of Chet Carlson and xerography. Once disclosed and published large firms with far greater resources are much more capable of bringing the invention to a market ready stage before the real inventor.

    Patent reform is a fraud on America.
    Please see link to truereform.piausa.org for a different/opposing view on patent reform.

  58. MD In FtF country, people like me constantly urge their corporate clients not to make non-enabling disclosures, for fear of setting up obviousness attacks on their in-the-pipeline improvement inventions. Instead, we urge prompt filing of enabling disclosures of those improvement inventions, in priority filings (provisionals, if you will) at the earliest commercially sensible dates.

    This is how I advise my clients as well (who nearly always file internationally but the same principles apply everywhere when the client’s product pipelines are long). Many clients tend, however, to ignore this advice. Even when the best course would surely be to describe and claim only the narrowest unquestionably enabled subject matter, get a quick allowance without any prosecution history, and rely on the doctrine of equivalents, clients tend to opt for the boiler-packed spec with prophetic examples. Why? The money-rollers like it that way.

    But when you have no intent of developing a product in a particular sub-field but you suspect that your competitors may be moving in that area, why not drop a bucketload of poison pills into the art? File an app then publish it online and send them a link to the web page where it was published (noting date of publication) just out of courtesy, “for their files”.

    I know in chem/bio there are examples of entity’s who have filed and published applications reciting millions of peptide and nucleic acid sequences, along with a slim description of “isolated compositions” and/or formulations, for the sole purpose of blocking others from patenting same.

    It’s extremely effective.

  59. I’ve skimmed through the Pedersen Woo paper now.

    I like Dr Katznelsen’s reference to “carpet bombing”. Looks as if it might be rational behaviour to publish before filing (unless you want patents outside the USA). That prior publication might one day come in handy, as an attack on the validity of the filings of others, all over the world.

    As to the validity of your own ROW filings, that pre-filing publication might be finessible. Your competitor, and the EPO, might not find it (no discovery or duty of candor, but do you have to announce it when filing at the USPTO?) and even if they do, you can argue it doesn’t count cos it ain’t enabling.

    In the USA, one would (I suppose) be inclined to assert that the other party “derived” it. It is said to be impossibly difficult to prevail but that’s not the point, is it? Important is whether you can get the complaint up and running. And that’s not so hard, is it? Point to the fact of the publication, the fact that everybody in the industry notes such publications, and invite the inference.

    As the Paper notes, derivation proceedings are as rare as hens’ teeth in FTF country, but will be an ever-present feature under FItF. English Appeal Court Judge Robin Jacob has pointed out in a case in England involving a University inventor (Southampton, as I recall) that derivation squabbles burn money in litigation like nothing else on Earth. Is this what the corporate proponents of new 102 really want? I guess so.

  60. Dr Katzelson, thanks for the decent tone and, Noise, good point about whether or not the accuser is also a twister.

    Patent law is difficult enough for me, even when (as in Europe) the standard for “disclosure” (what is derivable by the PHOSITA from a single document)is the same whether it is during legal analysis for the purposes of enablement, sufficiency, priority, novelty or the question whether prosecution amendments add matter to the pending app.

    When the standards are all different, I can’t cope. Neither can anybody else. Which leaves the game open for lawyers’ games, too complicated for me to play.

    That, I think, is a shame and a danger. If patent law is to command respect, then first it must be logical and understandable.

    I’ll leave to the experts the debate what corporate publication games FItF will stimulate. In FtF country the choice always was between filing and publishing. Doing neither of these is the course that carries risk. That risk is mitigated, these days, by Europe’s “right of continued use” for all those who have made serious and effective preparations to practise within the claim, even before the filing date of the claim.

    Dr Katznelson, maybe I am misunderstanding your point but I’ll make one more observation, provocatively, so you can gauge the depth of my incomprehension.

    In FtF country, people like me constantly urge their corporate clients not to make non-enabling disclosures, for fear of setting up obviousness attacks on their in-the-pipeline improvement inventions. Instead, we urge prompt filing of enabling disclosures of those improvement inventions, in priority filings (provisionals, if you will) at the earliest commercially sensible dates. These enabling disclosures, of course, are going to get published 18 months later, unless in the meantime their owner withdraws the attempt to patent. Then they remain trade secrets.

  61. Malcolm Mooney’s statement in a companion post explaining that the reasons that those who take more time in diligent reduction to practice before filing will lose under FITF/FTF is because they snooze: “You snooze, you lose. And those less skilled with manipulating the legal system will always lose.

    Malcolm Mooney has zero evidence for this statement. But it doesn’t stop him.

    Malcolm was apparently too distracted to understand the point of my comment. Brad & Justin also had zero evidence as to the number of applications that would not meet § 112 enablement requirements but that did not stop them from creating the matrix and counting such cases in their tallies. My point is that their matrix failed to break down the cases in which the public disclosures would not meet § 112 enablement requirements, because these would produce a different outcome. Consider Scenario 2C, the second entry on page 33 of the paper. In this case, A invents before B and because of the “nudge” under FITF to publicly disclose, A publishes a disclosure before B. However, B publishes a disclosure before A’s filing date. The matrix shows that the patent will be granted to A because B’s disclosure is an exception under proposed 102(b)(1). However, this will be true only if A’s public disclosure “describing the invention” supports the claims under § 112. If A’s disclosure fails to support the claims, A must rely on his disclosure that was filed after B’s public disclosure. The latter disclosure need only meet lower standards for rejecting A’s claims under §§ 102, 103.

  62. many of our smaller startups will lose patent protection because their premature public disclosures may not secure a patent, but will rather secure competitive advantage to incumbent competitors

    Ron K. has zero evidence for this statement. But it doesn’t stop him.

  63. MaxDrei,
    You say “I wonder what it is under existing FtI that has rendered them, up to now, unable to get up to such naughty tricks already.”
    That’s easy. Their publication prior to my filing cannot trump my corroborated evidence of earlier invention and diligent reduction to practice. They know this, and therefore do not even think about “naughty tricks” of a springing public disclosure based on rumors they may have heard from investors that I had contacted during my efforts to raise money.

    Brad,

    As I go deeper in studying your paper, I am more impressed with the amount of thorough work that you two have done. However, your correct springing public disclosure observation highlights only part of the problem. The majority of cases are those where the art of record does not involve a competing applicant (Figures 3 and 7 in your paper). Your analysis overestimates the number of scenarios under which applicant A’s public disclosure prior to B’s disclosure/filing would in fact save Applicant A from losing the patent. It appears that you assumed that an applicant’s public disclosure would always satisfy § 112, enabling a patent grant. The mere timing of the public disclosure event is insufficient. While you have specifically “fully decoded” and addressed the “Meet § 112” variable under the Provisional Application and the Non-Provisional Application columns, you have not introduced or “fully decoded” this variable under the Public Disclosure column.

    This is by no means a trivial matter. While FITF will “nudge” inventors to publish early, they may be compelled to do so with premature, less developed and non-enabling public disclosure. Your FTF analysis for Europe may indeed remain unchanged because standards for enablement of a prior art reference for purposes of anticipation of a claim are largely the same as those required to support the allowance of such a claim under Article 83 of the EPC. (MaxDrei, correct me if I’m wrong). Not so for the U.S.

    Whereas U.S. enablement standards for anticipation are comparable to those of the EPC, they differ from the enablement standard under § 112. In re Hafner, 410 F.2d 1403, 1405 (C.C.P.A.1969) (“[A] disclosure lacking a teaching of how to use a fully disclosed compound for a specific, substantial utility or of how to use for such purpose a compound produced by a fully disclosed process is, under the present state of the law, entirely adequate to anticipate a claim to either the product or the process and, at the same time, entirely inadequate to support the allowance of such a claim.”)

    The result is that public disclosures would sustain rejections of claims under §§ 102, 103 more often than they would support claim allowances under § 112 (by effectively excluding otherwise invalidating intervening prior art of others). Therefore, coupled with your reasonable assumption that FITF adoption will increase incentives for public disclosure (as your Figure 5 suggests), your relative outcome scenario graphs in Figures 3 and 7 overestimate the fraction of cases of a patent grant under FITF.

    I see nothing in S. 515 that proposes to “harmonize” our § 112 enablement requirements with any other system (and I am not suggesting that it should). MaxDrei and our other European friends can argue that “nudging” American inventors to disclose earlier is a good thing. However, they seem to forget that our enablement laws are more demanding and that many of our smaller startups will lose patent protection because their premature public disclosures may not secure a patent, but will rather secure competitive advantage to incumbent competitors. Even under European enablement law, the “nudging” effects of FTF may be a major reason that small business patentees have been “nudged” out of the market. Compare in Figure 3 the 87% of cases where no party gets a patent under European FTF to the 10% in the American system. Small firms depend on patents to survive much more than large firms.

  64. “…That, for me, reveals you to be the twister, not me.”

    careful, MaxDrie,

    The saying “It takes one to know one” does NOT imply that only the one saying the item represents the item, but rather, that the one saying the item represents the item AS WELL AS the the person to whom he is addressing.

    …a bit like our pal Malcolm as he charges everyone with being a Troll and posting strawmen.

  65. Ron, you say that I didn’t miss anything, but I did, didn’t I? You wrote “non-enabling” and I, in my haste, plainly missed it.

    Sorry.

    But now the subtlety of your point eludes me. You wrote that, under FItF:

    “Incumbents will be able to publish non-enabling papers describing their “new approach and vision” including the desired outcome, thereby blocking the startup’s patent under KSR’s broad interpretation of Section 103.”

    and I wonder what it is under existing FtI that has rendered them, up to now, unable to get up to such naughty tricks already.

    And what if they do? Where’s the harm? All too subtle for me. Maybe I’m unable to see it because my jurisdiction doesn’t do obviousness with the KSR precedent.

    You assert that I’m determined to twist things. That prompts me to remember the old English saying that “It takes one to know one”. You say you can see that I’m a twister. That, for me, reveals you to be the twister, not me.

  66. Here’s a new question if people are still reading: Aren’t there currently jurisdictions with FTF + grace?

    I believe Canada used to have a one year grace period. Not sure if they still do. I thought some other countries had one as well.

    Would the US be so unique in having a grace period?

  67. “Uh, even right now, a first inventor can market a product and a second inventor can market a product.”

    peace maker – we are talking about the same product – your ignorance is astounding – what part of exclusive right do you not understand?

    If you are talking about different products, then your discussion has no reach to the foal points at hand.

    Ther is none so blind as the person who walks around with eyes closed procaliming it is merely dark.

  68. MaxDrei: “Have I missed something? Why is all this early enabling disclosure so very very bad?” (Emphasis added)

    But I said:
    “Incumbents will be able to publish non-enabling papers describing their “new approach and vision” including the desired outcome, thereby blocking the startup’s patent under KSR’s broad interpretation of Section 103.”

    No Max, you have apparently not missed “something.” Rather, you appear determined to twist some things – not to miss them.

    Brad,

    Although there is significant uncertainty, you are stretching logic a bit by suggesting that courts will look to copyright derivation law to interpret derivation in the context of patents and turn away from patent derivation law that has been well developed to address the unique aspects related to patents. The fact that derivation inquiry is often part of an interference proceeding does not mean that derivation determinations are limited to, or only made in, the context of interferences. The basic question of derivation deals with (i) who invented first and (ii) demonstrating communication of the subject matter from the first inventor to the adverse party. This law is also applicable in misappropriation cases that involve no interference at the Patent Office.

    That said, I agree with you that very little is understood as to the real intent and working of this statutory package and that, if enacted, we would be up for major costly disruptions and uncertainties that will take years to resolve.

  69. Uh, even right now, a first inventor can market a product and a second inventor can market a product. And if the law is changed to allow the first-to-invent-and-file inventor and the first-to-file company to both have rights to rights to market the product, then two entites can have rights to market the product covered by the patent. Maybe try opening your eyes, Noise above Law.

  70. Malcolm:

    The grace period of the current system I was referencing is the one year backward look from the filing date provided by 102(b). As such, the current grace period is not measured by the date of a publication or public disclosure and is not affected by whether a publication is made 1 day or 6 months after a provisional application is filed. In contrast, the springing nature of 102(b)(1) means that the one year period is measured forward. Most often, this won’t have much meaning as the filing date will control, but there may be fact patterns around ongoing development, filing of string provisionals or CIP cases where the timing based on date of publication may be significant for applications in a family filed over more than a one year span.

    Ron:

    I can appreciate the concerns about defensive publications and their seemingly increased importance under certain fact patterns. Whether this ultimately will tilt in favor or against startups is a question we probably won’t know the answer to in advance of adoption of the system. To answer Max’s question, the issue of enablement in the US is different than in Europe because of the possibility of different levels of disclosure in provisional or CIP filings. As such, it can be necessary to determine the proper priority date for a claim set and it may not be entitled to priority of the earliest case in the chain. Trying to speculate on exactly how the proposed FITF system will intersect with the process of determining the correct priority date in a chain of filings is mostly crystal ball gazing at this point.

    In terms of the derivation issue, you correctly quote the law of derivation in the context of interferences, which is a judicially developed doctrine. It may be that this is what happens under the new derivation proceedings, but I did not assume that just because the courts had defined derivation in the context of interferences that such case law would wash over onto an entirely new legislative section, especially without any legislative history (so far) indicating an intent that this is what should happen. The other possible path of case law development would be to look to the law of derivation in the context of copyright law, where the concept of derivation is actually used in the legislation, not just the case law. If that is how the new Section 135 is argued and developed, then we would have a whole other challenge on our hands as the number of potential “derivations” likely would be far greater than the very rare number of interferences (< 0.02% of cases filed in any given year). My chief concern in the context of derivations is the lack of legislative intent. It should be noted that the current markup of amendments makes significant changes to Section 135 in response to feedback from IPO and other groups so discussions about the details or impact of this aspect of patent reform are probably still premature.

    Brad

  71. Interesting. As MM points out, in his inimitable way, many people assert that it’s a positive feature of a functioning patent system, that it gets out into the open, earlier than otherwise, enabling disclosures of new technology. But Dr Ron seems to be arguing above the opposite, that this is a negative feature. Have I missed something? Why is all this early enabling disclosure so very very bad? More Ron please. More. So we can all understand FtF better.

  72. Ron:

    Because merely incremental inventions cannot form the basis for establishing a startup company

    What a load of horse hockey. C’mon, Ron. Be serious.

  73. This change will elevate the practice of “defensive disclosures” used by large firms to new heights and will give them a potent tool to preempt “those pesky” patents by ‘carpet-bombing’ areas that they perceive to become critical.

    Otherwise known as the public disclosure of innovations. Last time I checked these comment threads, that was the best thing ever in the history of the world.

  74. Good paper, Brad Pedersen and Justin Woo.

    I commend you for undertaking this detailed study and addressing adaptive behavior issues.

    You say that you were surprised at the “springing public disclosure” opportunity of third parties to kill patents covering actual inventions of those who diligently engage in developing their enabling inventions. This should come as no surprise – it is precisely a result intended by those who pushed for this Section 102 rewrite. This change will elevate the practice of “defensive disclosures” used by large firms to new heights and will give them a potent tool to preempt “those pesky” patents by ‘carpet-bombing’ areas that they perceive to become critical.

    Because merely incremental inventions cannot form the basis for establishing a startup company, inventions of small startups are more likely to be basic and disruptive. In contrast, a major fraction of large-firm incumbents’ inventions are incremental. These firms often go public early with new improvement they make, whereas startups cannot afford to expose their solutions too early. However, incumbents will need no actual solutions to defeat real solutions’ patents. Under the proposed statute, by knowledge of a mere rumor of the subject matter that a new startup in their space is attempting, incumbents will be able to publish non-enabling papers describing their “new approach and vision” including the desired outcome, thereby blocking the startup’s patent under KSR’s broad interpretation of Section 103.

    I believe that regardless of actual evolving practices of large incumbents under the new Section 102 provisions, if enacted, mere defensive concerns of startups about this possibility will have profound devastating effects on their ability to raise funds from investors and strategic partners. I cannot imagine how startups will be able to make early private disclosures without assuming great risks of losing patent protection under this proposed system. Funding of new inventive startups would be much harder.

    You addressed the “derivation” issue as if it were a new process, without taking into account the fact that the proposed statute does nothing to change the nature and scope of the legal meaning of derivation, as it has been judicially construed for years. You correctly point to complexities of the derivation process and appropriately caution readers of this issue. Unfortunately, I am concerned that you underestimate the burdens involved in showing derivation. Because the legal standard for proving derivation requires a showing of earlier conception by the party alleging derivation, all derivation determinations will in fact subsume determinations of the first inventor. [ Price v. Symsek, 988 F.2d 1187, 1190 (Fed. Cir. 1993) (Derivation is a question of fact. To prove derivation, the movant must establish prior conception of the claimed subject matter and communication of the conception to the adverse claimant.) (Emphasis added); Brand v. Miller, 487 F.3d 862, 869 (Fed.Cir.2007) (To meet the burden of proof on derivation, a claimant “must make two showings. First, he must establish prior conception of the claimed subject matter. Second, he must prove communication of that conception to the patentee that is sufficient to enable [him] to construct and successfully operate the invention.”) (Internal citations and quotations omitted)]. The purported “judicial efficiency” of eliminating interferences is merely a smoke screen lacking a legal basis.

    These points amplify your correct and important observation that the resultant “FITF Creature” is a new unique patent law system that had never been tried before rather than a any compromise between the current FTI and FTF systems.

  75. Brad: While the current system does not preclude publication, it also doesn’t provide what seems to be an incentive to control the timing of publication because the grace period is not measured by the date of the publication.

    The sentence doesn’t make sense. Could you clarify? What do you mean by the “current system”? Is there a “grace period” in the “current system”, in your view?

  76. Malcolm:

    The curious thing that we discovered about the proposed system was that the grace period has changed from the current backward look (from filing date) to a springing forward look (from date of publication). While the current system does not preclude publication, it also doesn’t provide what seems to be an incentive to control the timing of publication because the grace period is not measured by the date of the publication. In terms of how many fact patterns this could impact, that is really the $64M question.

    All in all, the springing nature of the grace period (v2) is what surprised me the most about our analysis and what seems to get skipped over in a cursory review of the language of the proposed changes to Section 102.

    Brad

  77. “With two entities having rights to market the product … Everyone wins!”

    Yes – especially the lawyers when it comes time to settling who deserves what money (even as I close my eyes to the horrible lack of patent knowledge in that two entities CANNOT have rights tot he same product).

  78. Why not just have both a FTIF (first-to-invent-and-file) and a FTF first-to-file system without FTF’s subsequent public disclosure acting as a bar to FTIF. That way, the large corporation can get a piece of the action via FTF and the broke inventor can file via FTIF once he sees his inventions on the market place. With two entities having rights to market the product, you can lower prices somewhat. Everyone wins!

  79. Changing the wording of claims prior to filing, that is.

    Like Brad said, there will be an impact on “running development” cases.

    Further than just cases in which a provisional is filed, that impact may have a disproportionate effect upon both university-based researchers (who can have publication and disclosure schedules to meet, and contingent funding), and upon small entities who are to some extent dependent upon publicly-available grant monies.

    In both situations, piecemeal publishing can necessarily occur.

    So what about the situation where party 1 (applicant) conceives before party 2, somehow publishes that conception, then diligently and continuously works to reduce to practice, but reduces to practice after party 1? Is party 2 an “iventor”? Does “invention” require reduction to practice AND conception, or is it open to anybody in possession of disclosure or products that embody the subject-matter of the claims?

    blah, blah, blah…this is all barking up the wrong tree.

  80. Unless I’m mistaken, this represents a step backward for applicants.

    As it stands now, to swear behind, an applicant requires knowledge and evidence of only his/her own actions.

    Under the new regime, an applicant would be required to prove that a third party was an “inventor”–i.e. prove that that third party conceived and reduced to practice “the invention”.

    What a hassle. Added costs, time, and uncertainty for the applicant.

    Or, working backwards, changing the wording of claims such that prior disclosures by third parties no longer read on those claims, thereby disqualifying those third parties as “inventors”.

    Exactly what is the benefit achieved as a result of this additional burden on applicants?

    Ugh.

  81. Brad: The most likely case where you would expect to see differences in behavior are cases involving “running development”, i.e., where there is an initial identification of an invention, a provisional is filed and then further work on refining species or alternate embodiments is undertaken prior to converting the provisional to a utility.

    This is true of a substantial majority of biotech apps, in my experience.

    In this kind of fact pattern, applicants may learn that there can be procedural advantages to publishing the content of the provisional so as to invoke the springing grace period and that the scope of the provisional can also serve as potentially invalidating art to other, perhaps even beyond the extent to which the provisional is enabling (see proposed 102(b)(4)). The unique combination in the proposed legislation of provisional, springing public disclosure exception and the prior art effect of earlier filings that describe (as opposed to enable) subject matter create opportunities to work the patent system in ways that do not exist under any of the current patent systems.

    Note that our present system provides the “opportunity” to publish a provisional application as well, wherein the provisional publication can preclude a later filing (as obvious or anticipated) even where the provisional would not necessarily enable a patent claim.

  82. Whenever there is talk of “reform” of a government agency, something inevitably gets screwed up, or more importantly, valuable rights are invariably sacrificed. Just think of “health care reform” if you need some help breaking out into a cold sweat.

    Right, therefore we should never attempt to reform a government agency.

    [eye roll]

  83. While its sometimes helpful to use acronyms to distinguish different systems, Dennis and the commentators are correct that FITF does not convey the differences among the proposed legislation and the current FTI and FTF systems. In terms of shorthand, FTF + grace period (ver.2) is probably as close as you can get.

    The main points we attempted to make with the article is that FITF (or FTF + grace v.2) as proposed is not equal to (FTI + FTF)/2 and that the complexity of the new system will guarantee an increased “cost” to participants for several years while we all learn the new rules of the game.

    In terms of likely differences in applicant behavior, the article highlights that the expected differences in behavior may only be in 10-20% of cases. The most likely case where you would expect to see differences in behavior are cases involving “running development”, i.e., where there is an initial identification of an invention, a provisional is filed and then further work on refining species or alternate embodiments is undertaken prior to converting the provisional to a utility. In this kind of fact pattern, applicants may learn that there can be procedural advantages to publishing the content of the provisional so as to invoke the springing grace period and that the scope of the provisional can also serve as potentially invalidating art to other, perhaps even beyond the extent to which the provisional is enabling (see proposed 102(b)(4)). The unique combination in the proposed legislation of provisional, springing public disclosure exception and the prior art effect of earlier filings that describe (as opposed to enable) subject matter create opportunities to work the patent system in ways that do not exist under any of the current patent systems.

    While it is true that only about 25% of cases are US only filings by US entities, it should not be assumed that this is the only group of cases that would want to take advantage of the grace period that the US system provides. At least some percentage of non-US entities may only file in the US (either because they need the grace period or because they only want US protection).

    When coupled with the likely fact patterns that may change applicant behavior, we think our estimate of a shift of 10-20% of applicant behavior as best practices under the new regime would become known seems reasonable. The bottom line, as we suggest in the paper, is that our assumptions about applicant behavior and the specifics about the matrix are only our best guestimates. We welcome and encourage others to test and challenge our assumptions in the hope that a more informed discussion about the proposed changes to Section 102 can occur.

    Brad Pedersen

  84. “More sepcifically, what difference leads to a different outcome in a fact pattern and why?”

    LH: the excellent article does a wonderful job of spelling all this out for the reader.
    A cheeseburger and lasagna have their own individual merits as a meal, but after you pop them both in the blender you get YUCK.

  85. Whenever there is talk of “reform” of a government agency, something inevitably gets screwed up, or more importantly, valuable rights are invariably sacrificed. Just think of “health care reform” if you need some help breaking out into a cold sweat.

    If the system was so broken, then 1) the big fish wouldn’t use it, which they do; and 2) the smaller fish would be screaming because they wouldn’t be able to assert their rights against the big boys, which they can and do.

    In a country of laws, the size of the fish shouldn’t matter. In view of the above, any talk of reform invariable means that the big fish just want to tinker with the system to make it harder to be held accountable to the smaller fish.

    Since most of the real meaningful innovation often comes from the smaller fish, tinkering with the system to the disadvantage of the smaller fish tends to stifle the true innovative capacity of the tech sector and ultimately our economy and, in turn, the world economy.

  86. “But what’s the difference? No one has explained it yet.”

    The acronym FITF does not highlight any of the real differences between FTF and FITF. The differences are thoroughly explained in the paper which goes into the nuances of proposed legislation.

  87. Joking and glib responses aside what’s the f’ing difference?!?

    Max has pointed out that in most FTF jurisdictions, the owner files, which in many cases is not the inventor.

    More sepcifically, what difference leads to a different outcome in a fact pattern and why?

    Is someone actually going to make me research this information up on my own? I have way too much real research and work to do and one of you blowhards has to have the 411.

  88. ” am sorry to admit that I do not know the difference between FTF and FITF.”

    FITF is a used solely to describe the system that would created in the US by the proposed legislation. There are currently no FITF jurisdictions using the definitions from the paper.

  89. Rereading my original post, my pointb was what the authors were referring to as FITF is what I always thought the ROW was. Obviously, the US is unique at this point with FTI.

  90. Max,

    So are you agreeing with me? Yes, the Applicant is usually the not the inventor as many inventions are made while in the employ of an entity of some kind. In the ROW, that entity is the Applicant.

    However, AFAIK, there still has to be an actual inventor in there somewhere who assigned his rights to the entity. An entity cannot file on an idea that someone not obligated to assign to that entity came up with, correct?

    So, are there differences in outcomes between FTF jurisdictions where the Applicant-owner files and the FITF jurisdictions where the inventor files?

  91. Sign me up for the Michael R. Thomas Patent Reform Act. I too want a patent system that is more integritious. While we’re at it, can we also make it more honorableous and awesometastic? Thanx.

  92. Lionel, are you serious? I had thought that the USA was the ONLY surviving jurisdiction where it has to be the inventor that files. Everywhere else it is the owner of the property (the invention) that is the one that asks for protection for his/her own property. (Makes sense, doesn’t it?)

    But who’s the “owner”?

    Answer: the inventor or his/her successor in title.

    Am I missing something here?

  93. Who uses FTF? It si my understanding the ROW uses what you would call FITF. In what jurisdication can uyou file and not be an inventor?

  94. Let’s hear from those in jurisdictions who have

    1. FTF with a grace period, together with

    2. A 50:50 split between domestic and foreign patent owners, and

    3. A functioning system of litigating patent disputes even-handedly;

    to see whether FTF + Grace makes any sense. (Me, I think it hurts everybody, including universities and individual inventors, who more effortlessly get pulled over the table by the corporations when there’s a grace period than when there isn’t one).

    Interloper, any idea why in the 1960′s Europe flushed away that old UK idea that only the owner can file, and replaced it with a “Anybody can file but only the rightful owner is entitled to be granted a patent” rule. was that a retrograde step, do you think?

  95. I must confess, I fail to understand the difference between FTF and FITF. In most jurisdictions based on traditional UK law (Canada, Australia, New Zealand) one can only validly file an application if one is the inventor or has aquired rights in the invention from the inventor. Non-inventors without entitlement can’t file.

  96. I think we all already knew, that a foul compromise throws away the plus points of both FTF and FTI and puts nothing worthwhile in its place.

    And why bother? The chance that any other country of significance will “harmonise” with FITF is zero.

    Do I see it right? As it is perceived by a majority of voters, the economic advantage of a uniquely “strong” American patent system, intentionally different from anybody else’s, trumps any fey unpatriotic pleading for “harmonisation”.

  97. Hi-Ho Michael R. Thomas,

    Yup, Yup — I am beginning to comprehend, and that scares the s-hit out of me.

    What gives you such clear insight?, I wonder, I wheely wheely wonder?

  98. [Continued] Although it is very nice to see this much thought and effort being put into a published analysis of, especially, the proposed new 102 and its exceptions and consequences, it would be highly desirable to see some others doing so.

    BTW, re my prior point, with nearly half of U.S. applications coming from foriegn applicants under FTF systems with NO grace period, and a remaining high percentage of U.S. applications coming from U.S. based but multi-national companies, why would a U.S. FITF affect THEIR publication or filing behavior?

  99. The term system here is misleading all they are doing here is changing the term first to invent to first to file they arent doing anything to improve inventorship acuracy My new plan does everything to do that witch should lead to harmonization if the other countries want a integritious system also.

  100. It would be useful to see a serious, factual analysis of this article, especially the likely EXTENT of the actual differences and alleged consequences.
    [Not filing a patent application until after publishing already loses almost all foriegn patent rights, and even for U.S. patenting it creates an high risk of ultimately losing out as to anyone else who files or even publishes earlier, with few U.S. patent claims obtained by using a Rule 131 "swear behind" declaration surviving when tested in litigation.]

  101. With my new patent system the word integtrity fits and Harmonization should be a by product of non corruption. Using systems such as instant patent examination on filing worldwide establish correct inventorship coupled with instant internet checks for the existance of products on the market make a rock solid inventorship deteermination.The otheer factor is disallowing reasearch and development and not filing for one year before before recording intellectual materials.

  102. Sooo — the reason we are even thinking about moving to FTF is harmonization. But what is on the table if not FTF, but an entirely new system, unique in the world, that portends many complications for Americans that does not actually result in harmonization.

    Do I have this right?

  103. Speaking of gratuitous tinkering, why don’t we just put a loud exhaust pipe, bumperstickers, mudflaps and fuzzy dice on the USPTO too while were at it. That would really improve things. We could install a horn that blows La Cukaracha to harmonize with our brothers to the south.

  104. Harmony schmarmony

    As any good engineer knows, nothing defeats a successful design than gratuitous tinkering.

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