Patent law overhaul expected to limit litigation, spur filings

| Friday, Sept. 16, 2011

The most significant changes to patent law in 60 years go into effect today -- and experts say they will limit litigation, spur more filings to protect inventors and put the United States on the same footing as patent systems overseas.

Plus, patent filing fees will be slashed to $300 for little guys such as Logan Powell.

The recent graduate of Carnegie Mellon University Tepper School of Business has high hopes for the business he co-founded,, in the South Side. The e-commerce website not only would match buyers with sellers but take bids for delivery of the goods.

"We wanted to stake our claim first to mark our place in time so that if anyone files after us, we'll have the rights," said Powell, whose young company awaits its first patent.

Called the America Invents Act, the legislation will be signed into law by President Obama today during a ceremony in Alexandria, Va., the White House announced on Thursday.

"It will give a boost to American companies and inventors who have suffered costly delays and unnecessary litigation, and let them focus instead on innovation and job creation," a White House statement said. It called the bill the "most significant reform" of patent law since 1952.

The federal Patent and Trademark Office has a backlog of 1.2 million pending patents, including about 700,000 that have yet to be reviewed.

The Small Business & Entrepreneurship Council, an Oakton, Va.-based trade group, called the bill "long overdue."

"Patent reform is needed to clarify and simplify the system, to properly protect legitimate patents and to reduce costs in the system, including when it comes to litigation and the international marketplace," the council said. "All of this would aid small businesses and the overall economy."

Experts say the reforms should curtail excessive patent infringement lawsuits, including "false marking" complaints. Those are filed by disinterested parties against makers of products who haven't removed their patent marks from products with a protection that expired.

The new law states that expired, or incorrectly labeled, patent markings may be grounds for lawsuits only from parties who suffered injury, usually competitors, attorneys said.

"It's going to reduce patent litigation," said Carol Marmo, an intellectual property group partner at Eckert Seamans Cherin & Mellott, Downtown.

The most fundamental change in patent law, patent attorneys say, is the basis on which they are awarded. Namely, no longer will the patent go to the inventor or company that invented the product or business method, but rather to the first to file for a patent on the invention.

"This will encourage patent filing to be done much more diligently than in the past," said attorney James Singer, a partner in Pepper Hamilton's intellectual property group, Downtown.

Changing to a "first-to-file" basis conforms to patent systems in the majority of countries, which is important for global commerce and foreign relations, Singer said.

"As companies become global, they will know their intellectual property will be protected in a consistent manner across the world," Singer said. "Plus, countries that enter treaties with the United States will know the laws are virtually the same."

Filing sooner could squeeze small, early-stage companies more than large, established companies with more resources, noted Audrey Russo, president of the Pittsburgh Technology Council.

"We suspect our members will react differently to this legislation, based upon where they are in their business life cycle," she said, "because this bill will necessitate the involvement of professional legal services at a much earlier stage of their business planning process."

Steve Bollinger, CEO of Intimate Bridge to Conception 2 Inc., South Side, who has 10 patents to his name, said large companies might enjoy some advantage under the new law, "but it's probably not that simple."

For one thing, the law slashes application fees for the individual inventor -- one with no more than five patent applications -- to $300 from the current $1,200.

"That definitely benefits the sole inventor," Singer said.

Additional Information:

Law's highlights

Here are the main features of the America Invents Act:

• Changes basis for a patent grant to the first inventor to file for it, instead of the applicant who first came up with the invention.

• Creates a post-grant review system to weed out wrongfully granted patents.

• Cuts filing fees for those with five or fewer applications to $300 from about $1,200, while increasing larger filers' fees by 15 percent.

• Limits who may file 'false marking' lawsuits against a patent holder to competitors actually injured by that patent.

Source: Tribune-Review research

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