The Leahy-Smith America Invents Act (2011) was introduced as a jobs-creation bill. The bill introduced significant changes to the US patent law. CNET reports that among the changes was a shift in application policy from first-to-invent (FTI) to first-to-file (FTF). FTI was the policy of issuing patents to those parties responsible for the inception of products. FTF issues the patent to the first party that files for patent ownership of a product. Microsoft, Google, and Apple were the proponents of this policy shift. The reasoning was to increase the ability of large US firms that produce intellectual-property to compete with foreign firms.
Other changes were implemented through the bill. The US Patent and Trademark Office (PTO) received permission to set its own fee schedule for new patents. The review process for challenging granted patents was revised. The grace period changed for inventors to file new patents after disclosing the invention. Patent holders were given the opportunity to voluntarily disclose information that corrects or clarifies existing information about their product. The disclosures are a way to strengthen their patents and to address charges for fraud.
Bloomberg reported the Leahy-Smith America Invents Act gave more control over its budgets and more funding in order to expedite the backlog of 700,000 patient applications. The assumption is the issuance of these patents should increase manufacturing and stimulate the economy. The Obama Administration suggests the additional funding should reduce the current 34-month waiting period for the issuance of new patents.
The Leahy-Smith bill was not without opposition. One source of opposition was from small business interests. Representatives from small technology firms argued the FTF policy would put them at a great disadvantage with large firms. FTF gave larger firms the ability to flood the PTO with new patent applications and clog the system again so that small companies cannot obtain patents. Patients can be filed to claim similar products to existing patents and restrict the products produced by smaller firms.
A second source of opposition was from Republicans in Congress. The bill did not guarantee that the PTO would receive all of the funds promised. Senator Tom Coburn attempted to address this concern by introducing language that gave the PTO full control over its fees. Otherwise, Congress could redirect funds in future budgets. Coburn’s attempt did not pass.
The Leahy-Smith America Invents Act was marketed as an economic stimulant. The bill contains several good features such as providing additional funding to process backlogged patent filings. However, the bill has it weaknesses that could hinder the ability of the bill to stimulate the economy. Our economy relies on small business. Though this bill ideally hoped to give US firms a greater global competitive advantage, the bill has the potential to stifle small business product innovation. The ability of large firms to clog the PTO again is a valid concern for small businesses filing for patents. Will the legislation produce the desired outcomes? Only time will tell.