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The Next Step in Patent Reform

Magazine article Information Today

The Next Step in Patent Reform

Article excerpt

* On Sept. 16, 2011, President Barack Obama signed the Leahy-Smith America Invents Act, the product of nearly 10 years of political and legal debate over reforming the U.S. patent system. Many have characterized the act as the most substantial overhaul of U.S. patent law and process in nearly 60 years.

At the signing ceremony, Obama described the act as necessary to "improve patent quality and help give entrepreneurs the protection and confidence they need to attract investment, to grow their businesses, and to hire more workers." As the dust settles and the new act takes effect, it's clear that the first statement is accurate, but whether the act will have a positive impact on patent quality, entrepreneurs, and new jobs is anything but certain.

The current patent law process was launched with the Patent Act of 1952, which set up the structure, standards, and proceedings for obtaining a patent on an invention in the U.S. The patent process can actually be quite complex, starting with the question of whether the idea or invention can be patented. In order to obtain a patent, the idea or invention must be a "new and useful process, machine, manufacture, or composition of matter" that is both "novel" and "non-obvious." Novelty essentially means that the idea or invention was previously unknown, something new, and different. "Non-obvious" means that a patent can't be issued to an invention or idea that would be "obvious at the time" to a person of ordinary skill. The patent for a particular idea or invention is very powerful because it gives the inventor the exclusive right to control how, or even if, that invention is used.

Patent 'Explosion'

Three initial drivers led to the need for patent reform: 1) the rise of new digital and internet technologies, 2) the increasingly global marketplace, and 3) court decisions that broadened the definition of a patentable "process." Digital, computer, and other electronic technologies were the leading sources of new patents in the latter 20th century by far, with patents frequently being issued for inventions that seemed to (at best) barely meet the "novel" and "non-obvious" standards. Given the control that patent owners have, this explosion created serious problems, particularly for complex electronic devices and processes that potentially use-and infringe upon- thousands of individual patents.

The rise of "business method" patents also contributed to the problem by creating an expansion of the definition of a "process" by various court decisions. A business method patent could be granted for a specific way of doing business, such as Amazon's 1-Click ordering method. Critics contended that many of these patents did not meet the "novel" or "non-obvious" standard.

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A 700,000 Patent Application Backlog

As technology spread and created a global information network and marketplace, U.S. patent law became increasingly important, but it also grew out of sync with patent laws around the world. Patents are territorial. A patent granted in the U.S. is not valid outside the U.S., and it might not protect U.S. products in the worldwide marketplace. A final problem was that all of these factors contributed to an overwhelmed U.S. Patent and Trademark Office (PTO), with a backlog of 700,000 patent applications and a 3-year wait between patent application and a decision.

The patent reform process was an effort to resolve these problems. However, political wrangling in Congress, which was primarily driven by the interests of different industries and large versus small companies, kept substantive patent reform from being enacted.

Climate Shift and Court Decisions

The climate changed when the courts addressed a couple of more controversial issues, however, and the political and economic climates shifted. ASupreme Court decision involving eBay allowed judges to consider the proportion of an infringed patent in a particular product in deciding whether to issue an injunction. …

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