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Wednesday, December 9, 2009
Patent reform benefits high-tech companies
By By Reza Mollaaghababa and Michael Doyle
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The proposed Patent Reform Act of 2009, some form of which is likely to be enacted in the near future, constitutes the most significant overhaul of the U.S. patent system since the Patent Act of 1952. The act proposes substantive changes for examination, issuance and enforcement of patents, which would generally benefit high technology companies in protecting their intellectual property — one of their most valuable assets — and navigating a complex patent landscape when bringing their products to market.
The proposed reform act changes the present “first-to-invent” rule, which awards a patent to an inventor who is the first to invent, to a “first-to-file” rule, which awards a patent to an inventor who is first to file a patent application. This proposed change can benefit many high technology companies by eliminating disputes over which of two competing applicants invented a claimed subject matter first, thus avoiding the need for lengthy adjudication through the Patent Office or judicial resolution through the courts.
Although the shift to the “first-to-file” rule necessitates early and frequent filings of patent applications, it does not necessarily impose a greater burden on many companies. Even with the present “first-to-invent” rule, many companies that seek patent protection not only in the U.S. but also abroad follow a strategy of early patent filings because many foreign countries adhere to the “first-to-file” rule. Further, many start-up companies aggressively pursue patent protection for their core technology, which is crucial for obtaining financing and succeeding in the market place.
Further, the act includes provisions allowing the public to have a more active role in the examination of applications, for example by allowing a third party to submit prior art in a pending patent application.
The act also allows the public to more readily challenge granted patents via administrative procedures in the Patent Office. For example, it establishes a post-grant cancellation procedure, similar to the post-grant opposition currently employed in the European Union, which allows a third party to challenge the validity of a patent within one year of issuance. Additionally, the act revamps inter-partes reexamination, a procedure by which a third party can challenge the validity of a patent based on publicly available, published patent applications and other literature. The proposed Reform Act limits estoppel to those issues actually raised during the reexamination and also allows the challenger to present not only published patents and literature but also other potentially invalidating evidence, for example, prior sale.
These provisions for allowing the public to submit prior art during the patent examination process and to more readily challenge issued patents can also benefit high technology companies. High technology products can potentially be covered by numerous patents. For example, they can include a myriad of components, each of which might be protected by one or more patents. Consequently, high technology companies typically need to navigate a daunting maze of patents, including those of so-called patent trolls, when marketing their products.
A more robust patent examination process can limit the issuance of unworthy patents and the ability to challenge issued patents can winnow out weak ones. This can in turn simplify the third-party patent landscape that a company might need to consider when marketing its products.
While implementation of the Reform Act promises to result in stronger patents, it also is likely to considerably increase the workload on the Patent Office whose resources are already over-stretched. The Act does not adequately address this issue. Consideration should be given to the introduction of a provision similar to that employed in some countries by which applicants have the option of requesting examination within a period after filing (e.g., three years), rather than requiring that each application be examined. Such a provision could dramatically decrease the Patent Office’s workload while realizing the benefits of a stronger patent system contained in the Patent Reform Act.
Reza Mollaaghababa, Ph.D., is a partner in the Intellectual Property group of the Boston law firm of Nutter McClennen & Fish LLP. Michael Doyle is an attorney with Nutter.
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