U.S. Patent System Overhaul
This week, after a six year effort, the U.S. Senate passed legislation to overhaul the country’s patent system. As reported by the Wall Street Journal, the bill shifts the patent process to a first-to-file system from a first-to-invent system. It also allows the patent office to set its own funding, allowing entrepreneurs to pay an extra fee to fast-track the process. An effort to narrow damages for patent infringement was dropped prior to the vote.
The changes are aimed at reducing a growing backlog of some 700,000 patent applications at the U.S. Patent and Trademark Office, by encouraging filers to prioritize the innovations they need to get to market first by choosing the ones worth the extra fee. However, many fear it may punish smaller firms and independent investors who lack the resources to compete under the new system.
“If we’re going to win the global competition by out-innovating the rest of the world we need a patent system that works in the 21st century,” said Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.), who shepherded the legislation through the Senate.
This doesn’t appear to be the end of changes to the U.S. patent system. The Federal Trade Commission recently released a 300-page report assessing the system’s benefits and challenges in light of a shift to open innovation and reliance on technology transfers to adopt inventions created outside a company’s own R&D efforts.
The report, Evolving IP Marketplace: Aligning Patent Notice And Remedies With Competition, recommends improvements to two areas of patent law policies, primarily how well a patent gives notice to the public regarding what technology is protected, and the remedies available for patent infringement, according to report highlights published by the Practising Law Institute.
The Wall Street Journal reports that the FTC report focuses on “patent assertion entities” – or so-called “patent trolls” as they’re known in the information technology sector – for raising costs and risks in the patent system without contributing to innovation.
“When the patent system incorporates the principles of competition policy, the patent and antitrust laws work together to achieve their common goal. The recommended changes would benefit consumers by encouraging investments in innovation and promoting competition among patented technologies,” said FTC Commissioner Edith Ramirez.
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