There has always been a huge hole in US patent law, in that it awards patents to the company that can show which date it first discovered an invention. This is one of the key reasons for much patent legislation in the US, the other reasons being that patents are often awarded for software, business models and extensions to obvious ideas and because prior art is rarely searched thoroughly, especially prior art outside of the US.
But by allowing companies to claim they invented a technology earlier than the date they filed for a patent, this has always left the way open for unscrupulous companies to keep an eye on patents and then file for an invention with an earlier discovery date.
The rest of the world more or less agrees that the date of the filing of a patent is the key date, and the US is now considering a change to this formula as the basis for its issuing of patent rights.
The name of the bill by which this is going to be reformed is the Patent Reform Act 2007 now being considered in both Congress and the US Senate.
The bill also institutes a post-grant review process so that third parties can challenge suspect or obvious patents or those with prior art elsewhere, with the review happening throughout the administrative process, rather than through costly litigation after a patent is set in concrete.
And the bill also includes an ‘anti-harassment’ provision to stop companies ganging up on one company to stop it getting any of its patents successfully filed.
The filing date approach is being adopted not just because it is the standard elsewhere in the world, but because the filing date of an application can very rarely be challenged.
Legislators on both sides of US politics have worked on the bill and it is a bipartisan act backed by both sides an at a cursory glance it genuinely looks like the kind of legislation that might be copied elsewhere in the world because it has other improvements too.
It is hoped that the Act it will eliminate the need for interference proceedings and make it easier to file a patent, so that it is not just a big company activity. The aim is also to changes damages awarded in successful legal complaints be based on the difference between existing prior art and the economic improvement conveyed by the new invention.
Under US law those damages may be trebled where there is willfulness and the breach is seen as deliberate and the new Act will try to limit the criteria under which this can be applied.
Assuming this makes it into law, and we think it will, although there may be amendments ‘en route,’ US litigation should be far more straightforward around patents. But while it is being designed to decrease the number of legal actions, there is some possibility that corporations will find it less threatening to ignore patents, and use the courts as a form of post facto negotiation, thereby increasing the number of active cases. The rest of the world will have to see it in practice for a few years before blindly adopting it as a blueprint for legislation in their own country. Europe is especially in need of guidance in this area, having rejected a European Directive at the parliamentary level for more or less all the problems that this Act is set to address.