 | |
| |
TechnologyDaily Mobile
Patent Bill Relieves Inventors, Businesses
Technology-related businesses and independent inventors both breathed a sigh of relief when the House passed a patent reform measure last week — but for very different reasons.
Business groups, which have long been seeking changes in the patent system to facilitate international competition, were happy to see a once controversial bill pass by a decisive 376-43 margin. Inventors and their advocates in Congress — or at least a majority of them — were pleased with several last-minute inclusions that they said were necessary to ward off corporate harassment of small-time inventors.
The changes to the bill, the American Invents Protection Act, H.R. 1907, sponsored by House Judiciary Subcommittee Chairman Howard Coble, R-NC, were worked out in painstaking detail behind closed doors. They involved the intervention of House Judiciary Committee Chairman Henry Hyde, R-IL, House Government and Oversight Committee Chairman Dan Burton, R-IN, and several Congressional advocates for inventors.
While many independent inventors paint the contest as a battle between David and Goliath, players in information technology-rich industries say that recent court decisions affirming that software and business methods can be patented makes changes in the system necessary. Even the U.S. Patent and Trademark Office — while officially neutral on most of the bill's provisions — has weighed in. Together with the commercial exploitation of the Internet, the Supreme Court's February affirmation of State Street Bank vs. Signature Financial Group — in which Signature patented a mutual fund administration system that State Street was already using — have "opened the floodgates" to patent applications that have stretched the resources of the patent office, PTO Commissioner Q. Todd Dickinson said recently.
But at least for now, a painstaking balance among most of the parties exists on all four controversial questions raised by patent reform, and any re-jiggling could lead to legislative defeat.
"This bill is being watched with a microscope, no, with the most sophisticated satellite observation technology you can imagine," said Rep. Dana Rohrabacher, R-CA, an early opponent of patent reform who was won over the bill's protections for independent inventors earlier this year. "We are scanning every inch of this bill every second to make sure that no special interest group puts its fingerprints on it. And if we find them, we will declare war."
Prior User Rights
Perhaps the issue of greatest passion is the subject of prior user rights, a question raised when an individual or business seeks to retain the right to inventions they kept secret, rather than patenting, once someone else subsequently patents the same thing. Small inventors detest the idea as an affront to the Constitution, where patents are enshrined.
"When you disclose a technology, the government grants you a limited monopoly called a patent," explains Joanne Haynes-Rines, editor of Inventor's Digest. "If someone has a manufacturing process and they elected to keep it secret," they run the risk that someone else will get the patent. Without that tradeoff, she said, "why would anyone get a patent? That is why we have these incredible inventions, because disclosure guarantees that the next person can build on it and improve it."
But with so many possible innovations — from physical inventions to manufacturing processes to business methods — businesses argue that they can't always afford to patent every piece of their intellectual property. "There are a number of reasons why our members have elected not to get a patent," said Herbert Wamsley, executive director of the Intellectual Property Owners Association (IPO). "People assumed that you couldn't get a patent on internal financial procedures. The inequity of saying that someone else could obtain a patent on a procedure that you developed is so obvious that it doesn't need to be discussed."
Coble, who had originally proposed prior user rights for all inventions, narrowed the scope to business methods and manufacturing processes as part of a compromise guaranteeing the support of Rohrabacher and Rep. Tom Campbell, R-CA, another patent reform opponent last year. That wasn't enough for Haynes-Rines and her husband Bob Rines, a noted inventor, patent attorney, and MIT professor. At the invitation of Rep. Donald Manzullo, R-IL, Rines flew to Washington last Monday to do battle with Coble — and Hyde — to further narrow the scope to business methods covered by the State Street decision.
Re-examination Of Grants
The other last-minute change involved re-examination of previously granted patents, an area in which independent inventors fear the resources of corporate lawyers will lead to harassment in court, force confidential documents into the public, and drive inventors "into the poor house," in the words of one inventor lobbyist.
The patent office has been encouraging its own arbitration system as a speedier means of resolving patent disputes than the courthouse. A measure that would have offered greater rights of re-examination under the patent office system in Coble's bill was narrowed so that challengers of patents must to choose between the two procedures. That avoids appeal from a PTO hearing to federal courthouse, a compromise that appeared to satisfy both Rines and members of Coble's staff — although officials at the Alliance for American Innovation continue to oppose the bill and will work to defeat it in the Senate.
Pre-publication Requirements
The American Inventors Protection Act also makes major changes in the way in which U.S. patent information is published, a key gripe of the pro-patent reform forces, which include the Association of Intellectual Property Lawyers, the National Association of Manufacturers, the 21st Century Patent Coalition, and the IPO. Instead of having to wait to see U.S. patent applications until they are issued — generally at least three years from the time they were filed — businesses will be able to see applications 18 months from the date of filing if the inventors have also applied for foreign patents. This provision would bring U.S. publication laws in harmony with those of Europe and Japan.
"What this means is that U.S. inventors will now see foreign-origin technology approximately a year early than they do today," said Michael Kirk of AIPLA. "The most important element is that it permits individuals to examine the record without wasting resources going down dead-end streets. This would allow U.S. competitors to see what [foreign businesses that file for U.S. patents] are doing in this country without having to go abroad," he said.
Coble's earliest version had required pre-publication of all patents after 18 months, a measure that Rohrabacher had referred to as the "Steal American Technologies Act." In the compromise the representatives worked out earlier this year, the bill requires pre-publication only when the inventor has also filed for a patent overseas. The exception is of little concern to Kirk, who said that he expects market forces will drive almost all investors to publish their applications while still pending.
Patent Terms
Restoring the length of patent term to 17 years from date of grant was one of Rohrabacher's key priorities for his own version of patent reform — and the achievement of his 11 years in Congress for which he declares himself most proud. In 1995, Congress had changed the patent term to 20 years from date of filing to guard against the practice of "submarining," which happens when applicants deliberately delay the processing of their patents until an unsuspecting party begins using the invention, when the patent holder "surfaces" and demands royalties. H.R. 1907 guarantees 17 years from date of grant, so long as applicants are not tardy in meeting patent office deadlines during the patent examination process.
"It is an excellent provision because it ensures the diligent applicant that they will get a fair term," said Wamsley — a concern also shared by independent inventors.
Senate Is Next Stop
Now that the battle turns toward the Senate, the prospects for patent reform are uncertain. Even as proponents argue that the wide margin of passage in the House sends a signal to Majority Leader Trent Lott, R-MS, opponents insist that individual Senators will step up to block again. And while Republican High-Tech Task Force Chairman Robert Bennett, R-UT, has declared patent reform to be one his priorities, staffers for Senate Judiciary Committee Chairman Orrin Hatch, R-UT, expressed ambivalence about re-introducing a measure that brought them so much grief last session.
"I wouldn't be surprised if the opponents haven't gotten in to see some Senator and convinced him or her that they should put a hold on it," conceded Kirk. But he said that Coble deserved more credit that he has received in getting Rohrabacher, Campbell, and others in the independent inventor community to join hands with the intellectual property community.
That's no mean feat, as even Rohrabacher seemed to concede on the day negotiations were most heated last week. On the same day that the bill was pulled from the House floor Rohrabacher had introduced a measure decrying a strengthening of America's relations with Viet Nam. Before heading back to the House floor, he declared, "It's harder to negotiate with American inventors than it is with the Vietnamese."