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.
The 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.