Law & Legal & Attorney Intellectual property Law

What does the America Invents Act really mean?

What does the America Invents Act really mean? The bulk of it is going into effect in September 2012, but it doesn't seem as if we are any surer of the effect that it is going to have on intellectual property and patent litigation than we were when it was signed in September 2011.

On the surface, the changes that it makes are broad. Ever since the late 1990s the courts have been struggling with an influx of companies that own patents, not in order to create items or protect their own manufacturing, but seemingly solely to sue other legitimate companies. Often times these non-practicing entities, or "patent trolls" make money off of coming up with broad ideas for patents that aren't actually applicable to anything that they are actually doing. In fact, given the prior structure of the patent office, these NPEs were able to sue large numbers of corporate infringers with a single complaint, as long as each defendant's product related to the patent in question. Even though these patents were often frivolous many companies settled with these NPEs to avoid the costs of a lengthy court battle. One part of the American Invents Act is language intended to decrease the number of these lawsuits by requiring that, at least, all defendants involved have to have conduct in common.

According to Yar Chaikovsky McDermott Will & Emery lawyer, a big part of the Act is focused on getting the patent office into shape. There are improvements built in for the USPO on everything from initial examination and the way that fees and funding are handled, to the way that patents can be challenged - allowing appropriate opportunities to challenge the patent through the administrative procedures of the patent office as opposed to expensive cost of litigation in a courtroom. And, of course, the change from a first-to-invent to a first-inventor-to-file system is quite a difference.

But how much of a difference will these changes make? Chaikovsky explains that why there's hope that the bill will end up stemming some of the influx of patents that have no value in themselves except for being used in litigation in order to try to extract damages or other value, but the biggest change, is that this bill is going to make it easier for larger corporations. Most of them are already dealing with international systems where first-to-file is already in position and are also better funded with money to spend on patents that might not pan out.

While, on the other hand a small inventor or smaller venture-backed companies might have waited to file under the old system until they were sure that their idea had enough value to attract funding. By moving to a first-to-file system these small companies are going to have to rethink their priorities with respect to where they invest, and will probably have to spend more money on the patent process because they can't afford to lose their ideas to a larger corporation, let's say the IBMs of the world, who may file first even though they invented 5, 6, 8 months after the inventor.

Either way, there will likely be increased filings as companies rush to the patent office. But the real changes? We'll just have to wait and see.

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