Patent Law Reform in the U.S. - The First-to-File Debate

1. Patent Law Reform in the U.S. - The First-to-File Debate Lindsay Heller November 8, 2005

2. Patent laws have been criticized in many ages, in many lands, and by many people. My friend, Eric (the Pepsi can man), reading part of Dickens’ “A Poor Man’s Tale of a Patent”

3. Overview • History 101 (and you thought this was patent law) • U.S. Constitution and The Patent Act of 2005 • Major Arguments of the Pro-First-to-File Crowd • Special Concerns of Universities • Major Arguments of the Anti-First-to-File Crowd • For or Against: Where do YOU stand?

4. A Little Bit of History • Patent Law starts in Europe • Most are First-to-File except common law countries • U.S. – First-to-Invent • Eventually everyone harmonizes but the U.S. • We stand alone • Lots of groups want us to change (WIPO, AIPLA, NAS, ABA, etc)

5. THE UNITED STATES CONSTITUTION ARTICLE I, SECTION 8: “[t]he Congress shall have Power…[t]o promote the Progress of Science and useful Arts, by securing for limited Times to …INVENTORS the exclusive Right to their respective…Discoveries.”

6. THE PATENT ACT OF 2005 § 102 - As Proposed (3) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY FILED.— A patent or application for patent is effectively filed under subsection (a)(2) with respect to any subject matter described in the patent or application— (A) as of the filing date of the patent or the application for patent; or (B) if the patent or application for patent is entitled to claim a right of priority . . . or to claim the benefit of an earlier filing date . . . based upon one or more prior filed applications for patent, [then it is] the filing date of the earliest such application that describes the subject matter • Introduced June 8, 2005 • Still in debate in the House • It’s going to be awhile before anything happens in the Senate • There are lots of changes, but we’re just worried about first-to-file • This section of the proposed act is a good example of the first-to-file changes

7. THE PATENT ACT OF 2005 § 102 - Currently In Force A person shall be entitled to a patent unless – (a) the invention was known or used by others in this country, or patented , or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent. (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country more than one year prior to the date of the application for patent in the United States. § 102 - As Proposed A patent for a claimed invention may not be obtained if— (1) the claimed invention was patented, described in a printed publication, or otherwise publicly known – (A) more than one year before the effective filing date of the claimed invention; or (B) one year or less before the effective filing date of the claimed invention, if the invention was patented or described in a printed publication or otherwise publicly known before the invention thereof by the applicant for a patent; or (2) the claimedinvention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application . . . names another inventor and was effectively filed before the effective filing date of the claimedinvention

8. THE PATENT ACT OF 2005 § 103(a){Showing proposed amendments using MPEP claim amendment conventions}: [A patent may not be obtained though the invention] A patent for a claimed invention may not be obtained though the claimed invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter [sought to be patented] of the claimed invention and the prior art are such that the subject matter as a whole would have been obvious [at the time the invention was made] before the effective filing date of the claimed invention to a person having ordinary skill in the art to which said subject matter pertains.

9. Pro First-to-File Common Arguments In Favor of FTF: • FTF will bring us into step with rest of world which will benefit everyone • Changing to FTF will have no real difference in who ultimately gets the patent since the patent usually goes to first inventor to file anyway • FTF will reduce transaction costs inventors face when filing in different countries • Getting rid of FTI and interferences will reduce costs to create and patent inventions and will result in greater predictability for inventors • There will be earlier and better disclosure of inventions which = good for progress • In FTI system, inventors keep inventions secret (no need to file earliest) which = obstacle to progress • If we all have FTF the international patent system will be more unified so there will be better and wider patent protection for inventors

10. The Influential Mossinghoff • “[Nothing] is more important…than the United States moving to a first-inventor-to-file system…” • A lot of people use his study in arguments for why we should be first-to-file • Contrary to popular belief, small entities hurt more by first-to-invent than helped

11. Mossinghoff’s Study on Small Entities • Interferences only occur 0.1% to 0.2% of the time • During 22 year period, 286 small entities advantaged, 289 disadvantaged Do you think his study is all that useful? Did he take into account the concerns of NAPP, about how small inventors won’t be able to afford attorneys and therefore move more slowly through the quagmire that is the patent system?

12. THE AIPLA • Data by Professors Lemley and Chien on interferences: • 94 initiating parties – 18% individuals or small businesses - 77% large entities • 145 respondents – 43% individuals or small businesses - 53% large entities • So interferences used by large entities against small entities more often than the reverse • The AIPLA mentions a cloud over important inventions that is present in a first-to-invent system • Cloud?? What exactly is the cloud they are talking about?

13. UK says that if US inventor wants foreign patents, he has to file first anyway But is this a big deal? Isaak showed us how expensive foreign filing is – how many inventors want to foreign file? Saving Provision for the First Inventor Who Chooses Not to Patent 35 U.S.C. 273 – prior user rights for certain method inventions 35 U.S.C. 252 – intervening rights for reexamined and reissued patents Provisional Applications I Blow My Nose at You - The French, er, I Mean English, Stick Their Nose In

14. VIEWS OF EDUCATIONAL ORGANIZATIONS • Most Educational Organizations Want to Move to First-to-File • Except They Want to Maintain 3 Aspects of the Current System: • Being able to file provisional applications • 12-month grace period • Inventor signing an oath that he/she is the inventor • Grace Period – • So inventors can publish articles • Helps maintain open and unfettered academic discourse • Could allow “scooping” – but benefits greater

15. Anti First-to-File Common Arguments in Favor of FTI: • It’s been working for a long time  - if it ain’t broke, don’t fix it (no reason to abandon known for unknown) • FTF unfair to true inventor because patent could be granted to someone else • FTF favors large entities over small independent inventors • FTF encourages filing of too many poorly drafted premature patent applications, which will increase the costs of the patent system; these costs will be borne disproportionately by small independent inventors • FTF will cause inventors to have to file before they can evaluate market for their invention • FTI deters theft of inventions (via interference proceedings) • FTF will encourage “paper inventions” (unworkable ideas that never reach form of actual inventions) • FTF will cause greater risk of malpractice • Patent litigators will lose valuable work when interference proceedings disappear

16. Anti First-to-File • Would hurt small entities • But would it? Mossinghoff’s data seems to say otherwise • Race to get applications filed

17. Wisconsin Alumni Research Foundation Disagrees With Educational Organizations Lower number of patented inventions come out of public research in Europe U.S. technological leader of the world because of First-to-Invent system and our Constitution The open environment of universities need the first-to-invent system

18. YES Hawkins Ko NO Yates Is FTI Why We Are the Technological Leader? Everyone else? What do you think?

19. NAPP Comments • Applicants could “trip” in the race to file • But is there real threat of race to PTO? There is tiny # of interferences -> 0.1-0.2% • Huge concern among attorneys at my firm – they are currently swamped, that think switch to FTF could cause huge problems • But is this a valid concern? • Professor Morris points out – unless FTF leads to more applications, there’ll be a transition • During the transition, they will deal with backlog, then it will get back to normal – the same stack on the desk like before • Besides, now they have a 102(b) deadline anyway

20. NAPP Comments Quality of Disclosure • FTF have adverse consequences on quality of patents • This will cause increased litigation expenses because AI’s will challenge patents on quality • Will that happen? • Or will the standards be lowered and claims be narrower?

21. Negative Impact On Practitioners Malpractice concerns What happens if attorney takes “too long” to file? Will this drive attorneys away from patent prosecution? Oops – wrong malpractice!  NAPP Comments

22. FTI Fans Hawkins (WARF) Frostick (WARF) Shui (NAPP) FTF Fans Ko (AIPLA and UK IPAC) Olin (Mossinghoff, AIPLA) Murshak (in 5 yrs) Yates (Educational Orgs) Cleary (Harmonization, Mossinghoff, AIPLA) (in 5 yrs) Cohen (with caution) (Educational Orgs) Kolb (WARF) So Should We Switch to FTF?Your Views FYI: Canada says their switch to FTF has been smooth and without all the problems commonly touted by the opposition

23. THANKS, EVERYONE!