Some Hope for the Patent Reforms

by Dennis Crouch

Patent Law Persists: At this point, it appears very likely that the Leahy-Smith America Invents Act (H.R. 1249) will become law later this month. In my patent law course yesterday, we discussed some details of the proposal and ultimately concluded that patent law will be roughly the same under the new law.  To be patentable, an invention must still be new, useful, and fit within one of the statutory classifications.  The primary difference on that front will be that the inventor’s pre-filing activity becomes even less important and third-party activity just prior to the filing date becomes more important.  Innovative companies will need to rethink filing strategies to fit the new rules, but this will not normally be CEO level strategic rethinking – but instead general counsel and chief patent counsel planning. The law of patentability will be more complicated and unstable for the next decade as we go through the transition, but the dust will settle and the patent system will remain.

The Great Unaddressed Problem: For many, the greatest problem with the major reform measure is that it does nothing to directly assist the US Patent Office (USPTO) with issuing patents in (1) a timely manner; (2) for only deserving inventions; and (3) that concretely and understandably define the scope of the patent right. 

PatentlyO112The USPTO, under the leadership of Director David Kappos, strongly supports the legislation for two primary reasons: (1) funding and (2) international harmonization.  Under the new law, the USPTO is very likely to be able to spend more money on much needed programs that address my administrative concerns listed above.  With harmonization, the USPTO has the potential of working more closely with worldwide patent agencies to improve the patent prosecution process.  In this sense, the hope is that the law may indirectly address my concerns.  

Funding – Increased Revenue: The USPTO has (almost) always been fully “fee funded” in that the office never spends more than it collects in fees from patent applicants and patentees. The new law will likely lead to fee increases based upon two primary provisions. First, the Bill provides for an immediate 15% surcharge on essentially all fees being charged. Second, the Bill allows the USPTO to adjust its fees in order to “recover the aggregate estimated cost . . . relating to patents . . . including administrative costs of the Office.”  This office-level aggregate largely frees the USPTO to set particular fees as it wishes so long as it estimates that the spending and revenue match.  Although not explicit, this law may also provide the USPTO with authority to adjust its fees in ways that intentionally shift applicant behavior (such as by increasing the filing fee for continuation applications in order to discourage those filings).

Funding – Fee Diversion:  Although the USPTO will likely be collecting more revenue, the Office is often not authorized to spend all of its fees collected. Over the past 20 years, almost $1 billion in USPTO user fees have been spent on other non-patent-related government programs.

More Funding – Despite Fee Diversion: Although new law does not prevent fee diversion, the USPTO still believes that it will be allowed to increase its spending because fee diversion is normally closely tied to the amount collected.  Even with fee diversion, a 15% increase in revenue will still likely result in at least 10% increase in allowed spending. Further, several members of the House of Representatives appropriations committee have offered their non-binding commitment to fully-fund the USPTO.

Harmonization: Many patent office leaders around the world believe that international cooperation in the patent prosecution process is a critical element of dramatically improving the patent prosecution process.  Many patent applications are independently and redundantly examined in patent offices around the world.  That scenario appears ripe for some level of cooperation and coordination that could seemingly reduce delay and costs while improving quality.  One (of many) stumbling blocks in this process has been the international perception that the US’s first-to-invent patent system is dramatically different from the rest-of-the-world — and therefore that separate examination is necessary because of the differences in the laws.  Although the new laws of patentability would not exactly match the laws of any other country, the worldwide perception is that the US is joining the world with a first-to-file regime that will now allow for greater cooperation.

81 thoughts on “Some Hope for the Patent Reforms

  1. 81

    This blog really does have some of the dxmbest trolls ever.

    As witnessed by the post of the troll at Sep 08, 2011 at 06:34 PM.

    That’s what happens when you chase those who want to engage in gentlemanly debates away with the profanity, inanity and plain deceptions.

  2. 80

    Very interesting. Can you provide more information on this “Over the past 20 years, almost $1 billion in USPTO user fees have been spent on other non-patent-related government programs”.

  3. 79

    THANK YOU!! I live in China so I am 12 hours ahead and my mind could not think of that at 6AM. Yes, in some technologies it is “flash of genius” standard. It is so funny because, over the course of my career, the patents that I thought were real technological winners were duds while some of the “undeserving” inventions went on to build companies and make millions. AND I WROTE THEM and worked at the companies, knew the tech and the inventors. Only about 4 years after most patents issue do you get to see if they are going to be put to use or not.

    I am glad there is an old-timer out there.

  4. 77

    Flippy Nobody will read PatentlyO after Congress destroyes the last vestiges of true innovation in the world if they pass AIA.

    I’m sure you’ll manage to comment here regardless.

    This blog really does have some of the dxmbest trolls ever.

  5. 76

    No wonder so many people of my vintage get out of prosecution…

    Because other than those bad old Examiners, spending every day prosecuting pure shxxt “invented” by some fataxx keyboard pecker is teh greatest job ever.

  6. 75

    Let me know when this is a Bank blog or a wasteful illegal was blog instead of a patent law blog.

    Let me know how many US job losses constitutes a “wholesale slaughter” of US jobs.


  7. 74

    “For many, the greatest problem with the major reform measure is that it does nothing to directly assist the US Patent Office (USPTO) with issuing patents (2) FOR ONLY DESERVING INVENTIONS”

    Wow, I can’t believe I read that. I hope that “deserving” means “new and non-obvious” and not Examiners judging if my clients’ inventions are “worthy” or “enough of a contribution to the art.” Because I get the latter- explicitly stated- in interviews all the tine. That is is not “inventive” enough or doesn’t have unexpected results (just got a reversal on the Examiner who insisted everything was obvious in the absence of unexpected results).

    Back in the ancient times (Ronald Reagan was present) we just issued patents for “new, nonobvious, and having utility.” We were blissfully unburdened with the heavy weight that many Examiners seem to take on themselves deciding whether there is a sufficient contribution so that I “DESERVE” a patent. The rule is I GET A PATENT UNLESS YOU PROVE IT IS NOT NOVEL OR IS OBVIOUS. I don’t care if you think my invention is “deserving” or not. The market will decide and the future of the technology will decide.

    No wonder so many people of my vintage get out of prosecution…

  8. 73

    Max – nice to see u take off the gloves a bit. I think the Americans are making too much of this. About 150+ countries (including the little one where I live) are getting along well with a first to file system. I am hopeful 102 will be simplified. You’d think it was 31 December 1999 when … oh, yeah, nothing happened to the world’s computers (Hey, if Malcom can throw in bank legislation …). I don’t see the big rush to file as much dif than the big rush to invent 1st. Long overdue; and I’m proud of the U.S. legislators.

  9. 71

    You know, Stan, if we really wanted a “world patent,” we should simply change the PCT from an application process into a patent granting process. That would be very, very simple to do, IMHO.

  10. 70

    It was interesting to read the referral to the paper by Laurence Higgins on Ethics in the IP Profession and the publication by The British Standards Association into ethics since I had also quoted this Standard in a submission to the joint Australian and New Zealand proposal (now approved) for a single Trans-tasman regulatory Framework for Patent Attorneys. It is further interesting since some years ago the UK deregulated their IP Profession enabling anyone to prepare Patent Applications for a fee regardless of being a registered patent attorney or otherwise. Deregulation followed a speech by a senior UK patent attorney which in essence asserted that it was not ‘Rocket-Science.’ – see the 7th to 9th paragraphs below. Other comments might equally apply to patenting in many jurisdictions.

    Whilst I agreed with the objectives – the proposal for a single Patent Attorney authority for Australia and New Zealand or for that matter other / all co-operating countries -the Discussion Paper was disappointing since apart from brief mention concerning providing the public with guidelines – perhaps with ‘other objectives and effects’) – regarding the skills of persons entering the patent attorney profession, endeavouring to imbue public confidence in their service, delivery and ethics / discipline, the proposal paper seemed to primarily focus upon convenience and economic benefits for the profession and administration rather than those it should exist to assist > innovator / clients.

    Whilst success would breed success, innovators world wide, particularly non-corporates, are constantly disappointed in both the results of their efforts and the expenditure involved – virtually always far beyond their anticipation. Many would agree that these difficulties have to an extent shrouded patents with a dissuasive cloud and reputation not only for those concerned, who are disinclined to repeat the process but also those to whom they may convey the ‘news,’ thereby somewhat leading to a disincentive to innovate and patent – totally contra the original objective of IP – few are satisfied. We should seek to repudiate and expunge that situation.

    Sadly, in an area replete with abundant misunderstandings, the profession has not assisted as far as it might.

    While the objective of educating the public (rather than having the basics minimised or glossed over ad initium) as mentioned above, has always been available to the administration this doesn’t seem to have been well addressed in either literature or websites currently provided from IP offices. While clients naturally tend to leave the efficacy of the documentation in the hands of their IP professionals (especially where they are ‘unaccustomed’ to the generally lengthy and ‘intricate or confusing’ presentation), rather than studying the requirements or overseeing the production themselves, it seems unclear how such education may be achieved or catered for unless IP offices communicate with patentees / applicants directly, including at least minimal outlines of essential requirements concerning searching, inventive or innovative steps / novelty, combination inventions, description, drawing and claims etc. That would greatly enhance client’s independent ability and or likelihood in ascertaining patentability (and hopefully commercial viability / success if this aspect was also addressed).

    However addressing applicants post-filing (and their expenditure) is to an extent akin to bolting the door afterwards etc – so obviously greater effort is also needed to get the message out first in the simplest basic form.

    While in a business situation if someone needs to be remunerated for preparing a patent application it should (or may as well) be a person experienced in that area rather than the inventor who might be left to concentrate otherwise, though granted the wording of claims is critical, it is arguable whether a specification, particularly a provisional specification, is as difficult as it is often made out to be, despite highlighting “skills.”

    Some years ago a senior UK Patent Agent, in a published address stated “I have often said to brethren in my profession that when we get a letter from a sensible client with some sketches, telling us what his invention is and asking us to file an application with a provisional specification and we draft the specification then I have sometimes thought the specification is really no better than the letter and we might just as well have made a copy of the letter and pinned it to our patent application (forms) and we would have done the client well.” Indeed in recognition of that and other factors, in the UK the profession has been partially deregulated, the relevant Act permitting anyone to file patent applications on behalf of others for gain, these others / advisors, generally charging substantially less fees and they may not describe themselves as patent agents or attorneys – but then again the majority of those describing themselves as Patent Attorneys in the UK, Australia and NZ would not be permitted to do so in the US.

    While the provisions mentioned above have not been well known even in the UK and there has been some IP deregulation in Australia, it is time this avenue was scrutinised again – commencing on a trans-Tasman and then perhaps a world basis.

    The British experience with deregulation has not been negative and in fact to the contrary, in reflecting that situation, earlier this year the UKIPO, endeavouring to more widely disseminate information concerning the availability of alternate IP advisors, commenced specifically advising of this aspect in replies to unrepresented applicants and also published a booklet > link to – this being in addition to the new British Standard covering service providers and ethics as cited by Laurence Higgins (Google it for several reviews). The cost of lodging the equivalent of a Provisional Specification in the UK – ZERO – also warrants local consideration.

    If the UK can provide filing of Provisional Specifications free so can the US and other countries – it may encourage innovation at a time when it is needed more than ever.

    Despite some International IP law ‘Harmonisation’ – albeit little – one need not speculate why (see * below) – and after 40 years of the International Patent Co-operation Treaty, which adds another layer of costs, the world is still, despite numerous overseas conferences, some distance from the ideal (well at least from an applicants point of view) of a ‘World Patent’ i.e. putting the inventor first contra numerous countries duplicating efforts + squandering expertise and resources – so regardless or along with a trans-Tasman agreement, the US, New Zealand and Australia as early adopters in many fields should address another challenge – urging forward that holy grail of IP – a true innovator / client desire!

    Indeed as Dennis Crouch says “The world wide perception is that the US is joining the world with a first-to-file regime that will now allow for greater co-operation,” – hopefully another step closer to a world patent, regardless of those in favour or otherwise.

    While innovators are yet to publically demonstrate as a reaction to beaurocracy, neglect, apathy and inaction + their frustrations, they certainly have in the past been driven to great ‘distraction’ – sometimes tragically so.

    Given the benefits of efficacious innovation for both economies and standard of living generally, if we are sincerely dedicated to that goal, while progressing the interests of the profession and administration we would do well in also seriously looking closer at combining / adopting the best features of various countries IP systems (e.g the automatically granted 8 year Australian Innovation Patent) and then the members of ‘A Lucky Profession?’ (the title of the history of the IP profession in Australia) might be credited with contributing even more to the ‘Lucky Countries’ and world.

    Stan Simpson

    * A Lucky Profession – ISBN 0 949873 60 8 – Judy Wing – 1996 – Page 130 – esp. lines 33- 34 concerning the disinclination to adopt the PCT as it may reduce income for IP practitioners.

  11. 69

    anony —

    There are no such procedures. Look at 35 USC 23 and 24. That’s where there would have to be amendments to make this work, to grant the PTO the authority to issue rules for the procedures you “recall.” What you recall is my comments taht the bill lacks the procedural piece to make the substantive law work!

  12. 68

    Max, I think the drafters intended that disclosure could include a private disclosure.  But how a private disclosure becomes prior art at all under the new statute is a question, isn't it?

    Just how can anything which is not in the public domain be prior art?  I know the Supreme Court forced us to consider patent applications to be prior art as of the filing date.  But even though they did, even today, many think that the policy reasons behind that decision were wrong.  Then the CCPA and the Federal Circuit further extended the concept of secret prior art to include both prior invention and private disclosures under 102 (f).

    But prior invention and private disclosures are not prior art under the new statute.  So why
    does the statute exclude private disclosures from being prior art to the applicant?  It is a mystery.  It implies that private disclosures are prior art.  But there's nothing in the new statute indicate just how this could be.

    A puzzle!

  13. 67

    You’re not “missing something” and this character is definitely “clueless,” Anonymous. The exact opposite will happen under the first to file regime of the AIA: the intervening prior art problem caused by third parties will increase (potentially exponentially) up to the point of patent filing. And it’s even worse under the AIA than in, for example, Europe, where it’s only an issue for novelty purposes but not for “lack of invention” purposes (as I understand it0. Under the first to file regime of the AIA, intervening third party prior art is a problem for both novelty AND obviousness purposes.

  14. 66

    I certainly agree that, under the AIA, “move quickly” should be the message (or as I said in an article I posted on IPWatchdog, “David’s of Innovation, Start Your Engines”). I’m also not disagreeing that hesitation in filing under the current regime doesn’t have potential consequences the longer the inventor waits to file. But at least under the current first to invent regime, the inventor has some control over the potential prior date and could thus at least “breath,” and make some reasoned, realistic judgments on where to spend scarce resources. The first to file regime of the AIA is going to cause those Davids to run “out of breath,” and make potentially very costly/bad decisions before they’ve even had the chance to assess realistically the situation on the prior art/viability/patent front. That’s what David Boundy, among others, has correctly observed is the huge problem with first to file under the AIA.

  15. 65

    Ned, one supposes not. Different words = different meaning. So, I guess “public disclosure” is a sub-set of “disclosure”.

    In England, court reform has expunged the word “discovery” from the terminology of litigation. What used to be “discovery” must now be called “disclosure”. That’s an example of “disclosure” which is not “public disclosure”.

    It is also an example of the rule that words shorn of their context mean nothing. Context is all.

    The UK parliamentary draftsman re-wrote the 1973 EPC in “English” style for the UK Patents Act 1977, and then decreed in that Act that the English wording was to have “as nearly as possible” the same meaning as the Euro wording. Since then, the English courts have been struggling to interpret the UK Statute in the light of the supra-national European law, and routinely castigating that parliamentary draftsperson. Sign of things to come, in the USA?

  16. 64

    The message is simple: move quickly!

    Or if you are a big giant, document interanally quickly and keep the Trade Secret. Then, let the other guy foot the bill for the patent work and ride on his coattails, even decimating his market after the fact by stealing all his customers on terms that he cannot hope to match. That way, a valid patent blocks all other competitors and not you. The only competitor will be little guy who just went through the new gauntlet and will be in no shape to dispute your free ride.

    Yes indeedy, life for Big Corp will be really sweet with this change. A heck of a lot cheaper than buying patents on the market.

  17. 63

    Well, to be sure, I write at least half of what I do because I feel the need to sass off, but in this case I said it moreso because I am unconvinced that China is totally srs about making their patent system worth a whole lot. If they really wanted to then they should be able to crack down on it literally over night.

  18. 61

    Yet small entities create the lion’s share of new jobs.

    The percentage of those small entities who use or require patents for their businesses is very very small.

    This bill is a wholesale slaughter of US jobs.

    The repeal of Glass-Steagall slaughtered many orders of magnitute more jobs than this bill ever will. But I am guessing you didn’t complain about that, nor about the massive, wasteful illegal war conducted in the aftermath of that act’s repeal. Actual humans were slaughtered then. Did you march?

    I did.

  19. 60

    take the most conservative position

    Don’t you mean, “Take the most aggressive position”?

  20. 59

    “we discussed some details of the proposal and ultimately concluded that patent law will be roughly the same under the new law”

    Heaven help your students.

    The agents of banks, huge multinationals, and China are at it again trying to brain wash America.

    “patent reform”

    Just because they call it “reform” doesn’t mean it is.

    The patent bill is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Who are the supporters of this bill working for??

    Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. The bill will make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Yet Congress has almost completely ignored the testimony of inventors. Congress tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

    Please see link to for a different/opposing view on patent reform.
    link to

  21. 57

    Grace, since we need courts to tell us what all this means, it is absolutely essential that the PTO take the most conservative position on the topic as possible to force an early appeal. They should not decide to take the most applicant-friendly position possible so as to avoid the issue ever being raised on appeal from the PTO.

    I don’t know the exact parameters for this, but that is the guidance we should give the PTO.

  22. 56

    ….and I would like to know how “disclosure” of X differs from the EPC definition of disclosure of X, namely a “making available” to at least one member of “the public” anywhere in the world by “written or oral description, by use or in any other way” something from which a PHOSITA can “directly and unambiguously derive” X.

    That is, your X is still novel if you haven’t yet made it available to a member of the public. That would be in tune with the notion of a patent system that grants exclusive rights in X as the price of an early enabling disclosure of X.

    But lots of undefined terms in the EPC definition of disclosure, aren’t there? When will the definition game ever end?

  23. 55

    IBP, if what I have read of Wegner’s views on 101 and of Dyk’s view, they are in polar opposite camps.

    That said, I really think Dyk doing a fine job on the court.

  24. 54

    I’m curious to know others’ thoughts on the changes to the one-year grace period. The text of both the Senate and House bills expressly exclude pre-filing “disclosures” from prior art under the new Section 102(a) filing-date prior art provision, so long as such “disclosures” occur within the one-year grace period. However, neither bill defines “disclosures.” When the House debated its bill, Reps. Bass (NH) and Smith (TX) staged a colloquy to establish legislative history that clarifies that Congress intended the grace period in the new Section 102(b) to cover the same type of actions by an inventor that otherwise might be a bar under the new Section 102(a) — e.g., to also include on sale activities such as offers for sale.

    The USPTO is requesting informal public comments on its proposed implementation documents for patent reform, which will form the basis upon which its rulemaking will be written. The patent implementation document says the following re the one-year grace period: “b. the 1 yr grace period exceptions in 35 U.S.C. 102(b) (to 35 U.S.C. 102(a)) limited to disclosures by an inventor or another who obtained it from the inventor.”

  25. 53

    Article entitled: Patent expert decodes reform bill

    link to

    According to this supposed expert – John Mancini – “first to file” will streamline prosecution for patent applicants by removing/minimizing “intervening prior art” related issues.

    Am I missing something or am I right that this guy is clueless?

  26. 52

    “this may be the biggest change since 1836”

    Ladies and gentlemen the genius of Harold Wegner.

    Harold Wegner should be put out to pasture with Timothy Dyk.

    They’re probably not aware of it, but they’re becoming increasingly embarrassing.

  27. 51

    True. But I did also ask Flippy if he was suggesting that these filers were paying for a patent portfolio in no other country but the USA. I haven’t seen his answer yet.

  28. 50

    Hal is right, but he is wrong as well. Nothing in our history compares with what Congress is doing here.

  29. 48

    He says tell me all about it = USPTO+ L.L.O.. Wenzel loses his right to work at the USPTO after tells me to sign the OATH, I do, then he claims it is foreign insurance. I signed it. If he tore it up or put his name on it before sending it to Canada. that has absolutely nothing to do with me not signing it as I was supposed to and did. But earlier he signs the one I wouldn’t with a Signature you can see was whited out with white out. He switches the drawings. That to has nothing to do with me. I did what I was supposed to. so now the DOD takes it. 4,000.00 for a 100.00 Application that is anything like what I paid for. FTF sends it to Canada.
    The next one works for Kaplan. He then switches the drawings again. I am told to pay the Fees to Issue.
    So now there is an even bigger mess. Imagine I am paying for them to employ me Fraudulently. And they are making me pay their extortion fees by billing me.
    And I guess that must be ME THE COW in the middle of the Border. Being pulled by the Drunk and the other. Which one is the Drunk LOLOL.
    And no one sees the Crimes because they are to busy protecting their interests.

  30. 47

    In an email today, Hal Wegner mentioned that he thought this may be the biggest change since 1836.


  31. 45

    In an email today, Hal Wegner mentioned that he thought this may be the biggest change since 1836. I think “roughly the same” grossly underestimates the scope of the change.

    Have any of the entities behind reform influenced this writer’s point of view? How would one determine that?

    The biggest thing that irks me about this reform is that, for years, these reforms were deemed bad for the US. Now they suddenly are good for the US. Why? I have seen few comparative studies. I have not seen economic studies.

  32. 43

    “Notice that China is becoming laser focused on how to set up a patent system.”

    Yeah they might even have one that’s worth a dam within my lifetime huh?

  33. 42

    It is odd that 102(f) was taken out. This could have been solved by having the new Section 102 read “An inventor shall be entitled …” instead of “A person shall be entitled …” as it still does.

    However, I’m not sure that this is much of a concern. Under Section 115, “each individual who is the inventor or a joint inventor of a claimed invention in an application for patent shall execute an oath or declaration in connection with the application.”

    But maybe you are right — can you invalidate a patent where the oath or declaration was wrong? Although if I recall, there are proceedings for derivation and possibly still ways to attack inventorship.

  34. 40

    EG, it’s always been a hazardous practice for an inventor to put significant time between invention and filing. An earlier filer is at a huge practical advantage under current first-to-invent law. This later critical date only makes delay more hazardous. The message is simple: move quickly!

  35. 38

    will definitely be better off under this system

    That depends on the definition of “better off.”

    If you define better off as having weaker patent rights, more uncertainty for longer periods of time with post grant review, greater uncertainty of the actual “exclusive” right and no certainty as to possible market coverage due to the ability of prior user rights expanding and covering all customers of Trade Secret holders, more fees, more wait, and the “settling” of the law (ten years give or take a few), then I think most would not want to be “better off.”

  36. 37

    Re: “patent law will be roughly the same under the new law.”
    BINGO! There will be relatively few differences in either requirements or outcomes, contrary to all the “sky is falling” retoric here and elsewhere.
    “..the inventor’s pre-filing activity” is rarely controlling even now for obtaining an enforceable patent, and “third-party [filing or public] activity prior to the filing date is already a dangerous threat to delayed application filing, except for the relatively few patents obtained by a VALID Rule 131 declaration Not that many “innovative companies will need to rethink filing strategies,” because of that, and also because so many are already acting the same way so not risk or throw away all their foreign patent rights, especially at a time when the U.S. share of the world’s total market is rapidly decreasing.
    As to the new post-grant oppositions, they will be so time-limited [ending long before most patents are ever asserted], costly, and total-estoppel dangerous [eliminating any possible subsequent defense whether raised in the opposition or not] as to be rarely used.
    “Increasing the number of patent technologies that are now subject to prior user rights” would be increasing them from zero – the number of successful uses of the present statute, which alrady covers all business method patents. Both the old and new prior user rights statutes are very limited and demanding as to their proofs, and mostly far less useful than the prsent 102(g) litigation defense, which is being eliminated, and it does not affect patent validity, as 102(g) does. Only a relatively small percentage of patentable technologies are even possible to alternatively protect by trade secrets while practicing them commercially as prior users. No product that can be “reverse engineered” for example, which includes most of the items patented by private inventors. There will remain all the secrecy security maintenance requirements and dangers in relying on the limited legal protections and sanctions that trade secrecy laws provide, which strongly encourage obtaining patents where possible.

  37. 36

    My eyes didn’t roll, but I did find myself wondering who are these Davids who we must do all we can to help, so that they can “compete” with the big banks.

    Are not the patent Davids in fact NPE’s who are trying their darndest to extort as much of our money out of the big banks as the US patent litigation system will let them get away with.

  38. 35

    That U.S. law first granted prior user rights in 35 USC 273 was a bad idea then (and I said so then), and it’s still a very bad idea now, basically encouraging certain large corporate Goliaths (e.g., financial institutions) to “sit on their trade secrets” without worry that the Davids of innovation who use the U.S. patent system (as they must to survive) to secure patent rights so they can compete with these Goliaths. Expanding prior user rights simply gives these Goliaths carte blanche to use their size and power to crush these Davids almost with impunity.

    [eye roll]

  39. 34

    Just to let you know about Korea. They made this cute little knick knack. It was of two little Farm Boys dressed in farmer jeans. Soon after the Home Interior company came up with a set of twins called Deb and Dan, dressed the same way. even one of the Boys looks like Dan. They were such big hits they now retail for about 25.00 to 50.00 range. We are talking knick knacks… Sadly when you look at the former made by Korea, you understand the words knock off. They are everywhere. and pretty soon owning our Country.

  40. 33

    It is readily apparent to me that many posters on this site have never worked with startups.

    That isn’t surprising, but please don’t opine on whether or not “small inventors” will be better off.

  41. 32

    In Flippy’s defense, he was saying that the only patents that matter to the ROW are US patents. Pointing out that the majority of filers are non-US does not support your assertion.

  42. 31

    Thanks David,

    Contrary to the Chicken Littles on this site, what is or is not patentable is hardly going to chnage under this system, only we’ll have more certainty with respect to a priority date and small inventors will definitely be better off under this system.

  43. 28

    Granted, it is corporations of US, Japanese and German nationality that file a lot. In that league, 20 years ago Korea was nowhere but look at the top 10 filers at the USPTO today for signs of Korea “caring” about patents. Today, China is not yet very visible on that list, except for Huawei, but it will be, 10 years from now.

    Where I wonder are the inventions being made, that are being protected by all those supra-national corporations. Where the engineers and the scientists now are, I suppose.

  44. 27

    My list was meant to be non-exclusive. Sure, the EPC Member States care and should be included on the list.

    But, let’s also be realistic that there are just several countries that account for almost all the patent activity right now. U.S., S. Korea, Japan, and Germany. I think those four account for more than 80% of the activity in patents.

  45. 26

    Well I agree there aren’t too many folks in, say, Somalia or Libya who “care about patents”. At the moment they have more pressing needs.

    But I think the list of countries other than the USA that do “care about patents” runs to more than Germany, Japan and China. Just to start the ball rolling, 40 EPC Member States have over the last 30 years come voluntarily to surrender to the tender mercies of the judgements of the EPO.

    But perhaps you would assert that as evidence that the 40 do NOT care about patents?

  46. 25

    Shouldn’t that say, in the rest of thw world only the countries that are innovative and have done well economically care about patents–Germany, Japan, and the U.S.A.

    Notice that China is becoming laser focused on how to set up a patent system. India recognizes that they need a better patent system.

  47. 24

    And I had thought that equity was a creature of English law, still worshipped in large parts of the world outside the USA. Is there not plenty of inequitable conduct going on in India, for example. How do you suppose patent disputes get resolved in Asia?

  48. 23

    Most of the top filers at the USPTO are not US corporations. These days they are Asian and European, Japanese, Chinese, Korean and even Dutch. Are you saying they do not bother to file anywhere else except at the USPTO? Americans are world champions alright. Champions at self-delusion.

  49. 22

    Your reference to “lab notebooks” (aka, U.S. patent interference practice) shows you’ve missed the point being made by me and David Boundy above about the U.S. going from first to invent to first to file, Max. It’s the change in the effective prior art date that matters most, not removing the ability to “contest” in an interference who should get the patent (there are now so few interferences versus the past to make that point moot).

    Some of the proponents even had the audacity to argue for support of the AIA based on “harmonization” with ROW; the funny thing is that those proponents “neglected” to point out that, unlike ROW, the U.S. will still keep “inequitable conduct” in play after the AIA is passed. So much for “harmonization.”

  50. 21

    And, as I point out below, that 102(f) has been removed, theoretically allowing patenting by non-inventors.

  51. 20

    I remain unconvinced that a non-inventor could not end up with an enforceable patent under the new law, even enforceable against the inventor from whom he derived his application.

    How else do you explain the removal of 102(f)? The weakening of the oath requirements under 115? The short time fuse on derivation proceedings? Or, that such can be avoided by non-publication or accelerated examination?

    I think though that the removal of 102(f), which specifically requires inventorship, is the most telling. That is why Leahy-Smith is “first-to-file” and not “first-inventor-to-file”. It would have been fairly straight forward to implement “first-inventor-to-file”, if the drafters had so desired. They obviously did not.

  52. 18

    A shark and a minnow are “roughly the same” in that they both have fins and gills and live in the water…

  53. 16

    So I’m not doing any billable today, but instead am re-working my NDA and Confidentiality templates to account for AIA.

    In particular, I will be working on drafting provisions aimed at creating an enforceable agreement to assign rights in any application or patent that is filed or granted and that includes certain parts of the disclosure.

    I know, difficult to not only draft well, but to get by potential signatories. It might end up as an agreed-upon damages remedy, in part.

  54. 15

    I also forgot to point out that the AIA is laced with problematicial “language mines” that Ron Katznelson (sorry for the misspelling of Ron’s name in my prior post) said in comments to my article were likely put there deliberately at the the prompting of the Goliaths such as Microsoft, Cisco, Intel, etc. Section 3 of the AIA with regard to “effective filing dates” is a glaring example of such “language mines.” I’m not into conspiracy theories, but Ron puts forth a compelling case that these “language mines” (which use “weird wording” never seen before in the patent statutes so courts may well invoke the statute construction canon that Congress intended a change in meaning) were intended by the proponents of the AIA to give them the potential ability to spring those “language mines” during litigation to their advantage. That’s just another reason why the AIA is an utter sham, corrupt and tainted beyond measure or belief

  55. 13

    We’re going to have to “agree to disagree” on the “degree” of change that will be caused by the AIA, especially in terms of the reality. In particular, the change from first to invent to first to file is going to have more than a “marginal impact” on patentability in “real terms” because, in the U.S., it changes the date when prior art becomes irrevocably prior art. Under the current first to invent regime, the critical “prior art date” (i.e., prior art caused by third parties, not the patent applicant) for U.S. patent filing purposes under a “first to invent” regime is the invention date. But under the first to file AIA regime, the effective prior art date is what prior art exists before the U.S. patent filing date. That completely changes the dynamic of when the critical “prior art” date occurs for patentability purposes in the U.S. See my article on this at: link to . If you don’t believe me, go ask David Boundy or Ron Katzelson who will tell you the same thing.

    As for prior user rights, the fact that other countries permit those rights doesn’t necessarily make it a good idea, especially for the U.S. In fact, what prior user rights encourage is the very anti-thesis of what is a primary objective of the U.S. patent system, namely not keeping technology as a trade secret (and if you do, you may be out of luck if someone else chooses to patent that technology). That U.S. law first granted prior user rights in 35 USC 273 was a bad idea then (and I said so then), and it’s still a very bad idea now, basically encouraging certain large corporate Goliaths (e.g., financial institutions) to “sit on their trade secrets” without worry that the Davids of innovation who use the U.S. patent system (as they must to survive) to secure patent rights so they can compete with these Goliaths. Expanding prior user rights simply gives these Goliaths carte blanche to use their size and power to crush these Davids almost with impunity.

  56. 12

    How come? What’s old is still old. What’s obvious is still obvious. There will be some cases on the margin, but hey, what’s new about that? it is not as if anybody already knows today what’s old, or what’s obvious, is it?

    You can handle the new 102 with aplomb, I’m sure.

  57. 11

    Nobody in ultra-prosperous Munich cares about patents? Really. Do you include GE’s World Research Centre for medical devices, on the northern edge of town? Do you include all the litigators at the extremely busy German Federal Patents Court? How about the thousands of people busy processing a quarter million patent applications each year at the EPO? With a European Patent you have a patent in up to 42 countries and 600 million consumer market. Not all of them are poor Greeks.

  58. 10

    “In my patent law course yesterday, we discussed some details of the proposal and ultimately concluded that patent law will be roughly the same under the new law.”

    Well, what about the wholesale replacement of 35 USC 102 with all new statutory language? I suspect it might take a while to sort out how much of the 100+ years of case law regarding prior art will translate to the new statutory provisions.

  59. 9

    Of course, every David has to make disclosures, in order to get funding. So every David (except in the USA) files first, then seeks funding. Courts (other than those of the USA) know no other way to assess validity of filing dates than on the basis of such terse application texts.

    Which is why the leisurely filings in the USA strike those outside the USA as absurdly over-blown (and outrageously costly for those funding the drafting process).

    From now on, it will be texts open to public inspection (on the files of the USPTO) which will decide priority, between rival petitioners for the right to exclude the public for 20 years, rather than pages of lab notebooks available only to their owners.

  60. 8

    Dennis —

    Your conclusion is wrong becasue in your survey last year, you looked only at ex post statistics from a statistical sample taht is a very poor proxy for the actual ensemble of economic actors — you looked at decisons at the PTO, when the relevant factor is what companies and investors actually do.

    The big change will be in ex ante costs and behavior. Projects are abandoned before they show up in your statistical sample. As you noted, the defensive effect of pre-filing activities by the inventor are essentially abolished, and the offensive effect of pre-filing activities by others is increased. Becasue projects stop dead at this point, they totally escape your statistical method

    There have been a couple genuine data-based studies (mine, Ron Katxnand a couple economists at McGill University), and all conclude that this bill will decrease innovation and startup formation, and increase overall costs of the patent system.

    David Boundy

  61. 7

    In the rest of the world, nobody really cares about patents – unless they’re US patents. AIA will kill this last glimmer of hope in the patent landscape.

    I dont understand why PatentlyO is gushing like a schoolgirl over reform… Nobody will read PatentlyO after Congress destroyes the last vestiges of true innovation in the world if they pass AIA.

  62. 6

    EG – I certainly agree that the details are changing and there will be folks who lose rights in the new system. I also personally prefer rights keyed to the invention rather than simply the filing date. However, the reality is that the first-to-file change is only going to have a marginal impact on patentability. Most inventions that are now patentable will be patentable under the new system and those that are now unpatentable will largely remain unpatentable.

    Regarding post-grant opposition. We already have this in the form of third-party requested ex parte reexamination and inter partes reexamination. The proposal shifts the administrative rules and also expands the scope of those.

    On prior-user rights. Most countries have prior user rights, and there is very little evidence that they are ever exerted. Most of the time secret prior usage is never detected and non-secret prior usage creates prior art.

  63. 5

    “Innovative companies will need to rethink filing strategies to fit the new rules, but this will not normally be CEO level strategic rethinking – but instead general counsel and chief patent counsel planning.”

    Because every start-up, every individual or small group of individuals who must make disclosures in order to partner with others or even get funding, has a CEO, General Counsel, and Chief Patent Counsel.

    Tell that to the group of guys renting out a small unit in an industrial park where they can spend their pennies in a desperate effort to provide proof-of-concept.

  64. 4


    Yours was exactly my reaction upon reading that sentence.

    And then I considered the source.

  65. 3

    Already we see PTO Examiners in the US Chinese and European Patent Offices watching progress in the other two jurisdictions. Up till now, however, this has mainly been to identify the best art. Substantive patentability is so wildly different, as between the US and the ROW, as to render any further work-sharing futile.

    But think: when a PCT case enters the EPO, the FAOM is almost invariably a computer-generated one-liner that in effect says: Applicant, please address the paragraphs of the WO-ISA.

    I suspect that Mr Kappos now dreams of something similar for his USPTO.

  66. 2


    I forgot to note that what will be “roughly the same under the new law” is fee diversion. The inane amendment to Section 22 of the H.R. 1249 pushed by Rogers/Ryan has insured that embezzlement by Congress of user fees from the USPTO will continue unabated.

  67. 1

    “In my patent law course yesterday, we discussed some details of the proposal and ultimately concluded that patent law will be roughly the same under the new law.”


    You’ve got to be kidding. Going from first to invent to first to file is “roughly the same”? Instituting for the first time post-grant oppositions is “roughly the same”? Increasing the number of patent technologies that are now subject to prior user rights is “roughly the same”?

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