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There is incredible upset in the land over current U.S. steps toward patent reform under the America Invents Act. In essence, the U.S. is proposing to move toward the rest of the world — harmonizing, as the policy sorts like to say — by embracing first-to-file for new patents, as opposed to the current first-to-invent standard.
Why change? Well, for starters because the U.S. stands alone in using the first-to-invent standard, largely for historical reasons. That context aside, the difference can be a source of confusion and unexpected risks and costs for companies that must deal with intellectual property conflicts related to U.S. operations, or competition with companies holding U.S. patents. Where in the rest of the world patent filers are reasonably assured of mechanical filing precedence dictating outcomes for quality patent application, that is not the case in the U.S., where the production of early notebook on materials for which patents were never filed can cause lengthy court costs, appeals, and expensive intellectual property settlements.
The arguments made against first-to-file by its critics are generally that it is seen to raise costs, forces early patent filings, and makes life easier for large companies. There is a more complex argument in some quarters that first-to-file is unconstitutional in the U.S., but let’s put that issue aside as it is beyond the scope of this brief discussion.
Does first-to-file raise costs? The mechanism by which it would raise costs, by this argument, is in forcing inventors to file early and repeatedly to protect themselves and their intellectual property. This, the theory goes, would make it much more expensive to be in the invention business, what with even mildly complex patent filings incurring costs of $25,000 and more. On the other hand, the experience in other countries, especially those, like Canada, that have gone from first-to-invent to first-to-file, is that there is little difference in patenting, whether measured by large vs small companies, or otherwise. The desirability of patents, combined with their relatively low costs seems to have made this a mostly moot point.
The other arguments don’t fare much better. Yes, first-to-file drives earlier applications, which can force inventors to disclose technologies before they otherwise might. But that is socially desirable, in that it would put information about innovation out sooner, which is useful to us as a country building on prior innovations for advancement. The more we know, sooner, about what is being invented, the better off we all are. At the margin this might mean some early inventions are enhanced by others, but prior art still applies in those case, even if the latter invention makes material changes.
Finally, and this most persistent, there is the argument that this all favors large companies over small ones — that it disfavors the “small inventor.” It is a lovely and romantic idea, and something that should be seriously considered given the inventing heritage in this country, but it is not at all clear it is true. Instead, you could easily argue that first-to-file, by preventing large organizations from pouncing on small inventors with myriad old notebooks makes patenting safer and a more productive exercise for small inventors.
None of this is to say that there are no arguments in favor of first-to-invent over first-to-file. The National Venture Capital Association is on the other side of this argument, for example (even if the American Intellectual Property Law Association favors the change). Fundamentally, first-to-invent just makes sense, in that patents are really about invention, not about who was first to show up with an application at the patent office.
But in the real world of invention establishing precedence has turned out to be a costly, time-consuming nightmare. First-to-file helps resolve many of the patenting issues that otherwise end up in endless litigation in the current system. In a country desperate for innovators to help us solve important problems in energy, disease, aging, and elsewhere, that’s not such a bad thing.
More reading:
- Novelty and disclosure in patent law, Rand Journal
- The end of the first-to-invent rule: A concise history of its origin, IDEA – The Intellectual Property Law Review
- From first-to-invent to first-to-file, the Canadian experience, American Intellectual Property Law Association
- U.S. inventors on their markets for race to patent office, New Scientist
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