Patent Reform proposals

Inventors are seeking to reform the patent system that has been mostly controlled by corporate interests in the US and congress. The push for reform has introduced a variety of legislation into consideration.

A new proposal from Congressman Thomas Massie of the 4th district of Kentucky seeks to revert our patent system from a ‘First to File’ system to a ‘First to Invent’ system. This would allow patent applicants to submit a sworn affidavit back-dating their patent priority date to the day they claim they actually invented. A patent priority date is important, as only the inventors with the earliest priority date are entitled to patent protection.

Below are the key issues that the proposal would address:

Restoring America’s Leadership in Innovation Act of 2021 (“RALIA”)

From First-to-File to First-to-Invent system

Our current system is a “First-to-File” system, generally meaning that the first applicant to file for a patent application receives the rights. An applicant’s filing date serves as their patent priority date – the date by which their application is compared to the state of the art during patent examination.  If their priority date pre-dates other patent filings and publications on relative subject matter, they cleared a major examination hurdle.  

There are draw-backs to a first-to-file system – it effectively creates a ‘race to the patent office’ scenario.  The first to file, typically, will be the only filer to be awarded patent rights. Those who could prove they invented before the first-filer, but applied for a patent after the first-filer, would be out of luck.  

The First-to-File system was enacted in 2012 with the passage of the America Invents Act (“AIA”).  When adopted, brought the US patent system in line with the majority of all patent systems worldwide.  Nevertheless, commentators at that time were concerned that the AIA was promoted and pushed through by lobbyists representing corporate interests.  Corporations could afford to be the first-to-file patents, it was alleged, while inventors and small businesses weren’t as well resourced to win the race to the patent office. 

There is a major mitigating factor, however, that abates these conferences.  The first-to-file system allows for provisional patent applications to be submitted for a micro-entity fee of $75 (as of today’s date). Provisional patent applications (“PPAs”), can be informal (handwritten, sketches, photographs, without any standardization or adherence to drafting rules) and easily filed by the layman.  With a PPA filed, an applicant establishes their patent priority date while keeping their invention confidential (not discoverable by the general public). This provisional patent-pending status only lasts for a year before it expires and, within that year, the applicant must submit a formal, non-provisional patent application to maintain the benefit of the early priority date. 

Massie’s proposal suggests reverting to a “First-to-Invent” system, the same system that was in place up until 2012, when the AIA was enacted.  In contrast to a FTF system, the FTI system is more lenient when establishing an applicant’s patent priority date.  In an FTI system, an inventor is allowed to submit a sworn affidavit back-dating their patent priority date to the day they claim they actually invented, so long as it’s within one year of their patent filing date. Unfortunately, this system would open the door to fraudulent affidavits of inventorship, as the affidavits are typically just accepted, not investigated or verified.

USPTO Funding Changes

Within the current system, when the USPTO appropriates funds, the funds can only be used for costs relating to trademarks and patents for that fiscal year. However, the USPTO usually does not receive any appropriations because they collect enough fees to offset their operation cost. 

The proposed changes would combine the funds appropriated to the USPTO with the funds collected by the Office into a United States Patent and Trademark Office Innovation Promotion Fund. The collection of funds would then be utilized at the Director’s discretion or for any expenses incurred by the Office.This fund would  enable the USPTO to receive government funding and use it as needed, without any fiscal year limitations. Therefore, these changes could allow the USPTO to use funds for broader innovation development rather than just patent and trademark-related expenses.

Clarifying Section 101

The proposal does a decent job of cleaning up the fallacies with 101 (subject matter eligibility) issues by forcibly excluding 102 (anticipation), 103 (obviousness), and 112 (specification) from the 101 analysis. Right now, the courts have commingled all of these issues and the patent bar is in need for a clearer standard.

Private Property Right Rather than a Personal Right

Additionally, this proposal establishes patents as private property rights rather than personal rights. This is a big move because private property rights allow you to obtain injunctions and stop infringers from infringing. 

In our present patent system, the courts have eroded these rights for patent holders in favor of big corporations. Big corporations have been able to infringe patent rights and then be forced to pay a royalty, making patent infringement “the cost of doing business.”  See efficient infringement.

The Big Picture

Overall, Massie’s proposal fails to address what I believe is the true issue with our patent system – the enforceable quality of granted patents. While, on the face of the proposal, it gives many independent inventors what they (think) they need, changing from a Right-to-File to a Right-to-Invent system could lead to a bigger headache of proving and disproving inventorship.

Yuri Eliezer
Partner, Head of Intellectual Property Practice

John Destefano
Technical Advisor

Yuri heads the Intellectual Property practice group at Founders Legal. A practice he co-founded at the Atlanta Tech Village – the nation’s fourth largest incubator. Yuri was one of the few attorneys invited by the USPTO to provide technical training and industry insight at the Patent Examiner Technical Training Program (PETTP), where he shared insight into technology company decision points and challenges within the US Patent System. By the nominations of colleagues that have worked with him over the past several years, Yuri was selected to the 2021 and 2020 Super “Patent” Lawyer Lists, an award that is given to just 2.5% of attorneys. His recognition relates to his work in securing multi-million dollar patents for his clients – patents that have been tested through USPTO examination, re-examination and litigation. Yuri also strives to use his first-hand knowledge of the legal industry to develop innovative methods to improve the practice of law, and has been recognized as a player in the law practice technology field.

Founders Legal (Bekiares Eliezer LLP) is a boutique Corporate & Intellectual Property Law Firm based in Atlanta, Georgia USA, and trusted by thousands of companies nationwide. Founders Legal focuses exclusively on complex matters in the areas of Intellectual Property, Corporate, Transactional, and Securities law.

The information on this website is provided for general informational purposes only. None of the information on this website is offered, nor should it be construed, as legal advice on any matter. Visit our Legal Notice to learn more.