Download “What Innovators Need to Know – and Need to Do – under the America Invents Act,” a white paper developed by AIPR and sponsored by General Patent Corporation.

The America Invents Act (S. 23) was passed by the U.S. Senate in March of 2011. It was initially introduced as the Patent Reform Act of 2011 in January. It was essentially a re-introduction of the Patent Reform Act of 2010, which was first introduced as the Patent Reform Act of 2009 and was not enacted into law. The Patent Reform Act of 2009 was a re-introduction of the Patent Reform Act of 2007 which also failed to be enacted into law.

The House version of the America Invents Act (H.R. 1249) – which differs significantly from the Senate version of the bill – was passed by the House of Representatives in June. The Senate version of the bill provided for full funding of the U.S. Patent and Trademark Office (that is, the agency keeps and uses all the fees it collects from patent applicants and patentees), while the House version requires that Congress approve an annual budget for the agency.

Since the Senate and House versions of the America Invents Act differed, the two bills had to either be resolved through a Senate-House Conference Committee or the Senate had to pass the House version of the bill. The Senate passed the House version of the America Invents Act in September and it was signed into law by President Obama. So this ill-conceived legislation is now the law of the land!

The Failings of the America Invents Act
While the America Invents Act includes many anti-innovation provisions, it makes two significant changes to U.S. patent law, and it fails to make the most important and needed change to the U.S. patent system.

• Change to First-to-File:The America Invents Act changes the U.S. from its traditional first-to-invent patent system (the original inventor is assigned the patent) to a European-style first-to-file regime (the first filer receives the patent, not necessarily the actual inventor). A first-to-file system favors large corporations that can afford to file multiple – and sometimes frivolous – patent applications. Besides being unfair to independent inventors, small businesses and universities, the change will result in a flood of new patent applications that will exacerbate the backlog of almost 700,000 patent applications currently in examination.
  
• Establishment of Post-Grant Review: The America Invents Act gives large corporations – often the most flagrant infringers of patents – an unfair advantage by establishing a third method by which an infringer can challenge a patent’s validity. There are already two forms of patent review – ex parte and inter partes reexamination – so adding yet a third system only serves to make patents more difficult to defend, especially for smaller businesses and individuals. Under post-grant review, an infringer could force the patent owner that does not have the resources to defend its patent to abandon it by essentially assassinating the patent it is infringing before the patent owner has the opportunity to enforce it!
  
• NO Full Funding of the Patent Office: The U.S. Patent and Trademark Office uses no taxpayer dollars, but is self-funded from the fees it collects from patent applicants and assignees. Under the new law, Congress still gives the Patent Office an annual budget each year, and if the agency collects (as it always does) more than its budget in fees, the overage goes into the general treasure. At his testimony at a public hearing at the U.S. Patent and Trademark Office last year, AIPR Executive Director Alec Schibanoff promoted an end to fee diversion and full funding for the Patent Office.

White Paper
American Innovators for Patent Reform is currently developing a White Paper, What Innovators Need to Know – and Need to Do – under the America Invents Act. We hope to have it ready for distribution in November 2011.