SEMA eNews Vol. 14, No. 10, March 10, 2011

U.S. Senate Passes Major Changes to Patent Law

The U.S. Senate has approved legislation to overhaul the federal patent system. The legislation has been debated and refined over the past six years. The bill has now been sent to the House of Representatives for consideration.  

Under current U.S. law, patents are granted to individuals who can prove that they were the “first to invent.” The Senate bill would switch the United States to a “first-inventor-to-file” (FITF) system, a method used by most other nations. One major drawback to the current system is that it provides an incentive for individuals to claim credit for a patent and demand royalties and damage awards years after a product has been on the market. On the other hand, it has been considered advantageous to small businesses without the resources to get to the patent office first.  

The bill includes changes intended to improve patent quality. It would allow third parties to submit prior art for consideration and inclusion in the patent application record after it has been published but before the patent examiner has made a decision on patentability. The Senate bill would also create a new “post-grant review” (PGR) procedure, allowing third parties to lodge objections on any grounds during the first nine months after a patent has been issued. The U.S. Patent and Trademark Office (PTO) would resolve these disputes, potentially reducing litigation costs associated with court challenges.

The bill would make a number of administrative changes as well. For example, it would make it easier for an assignee to file a patent application instead of the individual inventor. The bill would also allow the PTO to set patent fees and provide discounts to solo inventors and small companies. 

For more information, contact Stuart Gosswein at stuartg@sema.org.

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