US Patent Reform Act of 2011 to Enact “First-to-File” System

Ivy Tsui is a JD candidate at Osgoode Hall Law School.

With a backlog of more than one million patent applications at the USPTO, the U.S. Congress has been pushing to reform the patent system since 2005. On February 3rd, 2011, the Senate Judiciary Committee unanimously approved the Patent Reform Act of 2011 by a 15-0 vote.

The Act implements a “first-to-file” system, revises damage awards calculations, allows third parties to challenge patent validity, and provides certainty in damage awards and standards for identifying wilful infringement. All measures are implemented with the goals of improving the quality of granted patents, enhancing the efficiency of the USPTO, increasing certainty among parties in patent litigation, and setting parameters for damage awards.

“A balanced and efficient intellectual property system that rewards invention and promotes innovation through high quality patents is crucial to our nation’s economic prosperity and job growth,” Senator Leahy, the chairman of the Senate Judiciary Committee, said in a press release.

One of the substantial makeover of U.S. patent system is replacing the U.S.’s “first-to-invent” standard with a “first-to-file” system. The inventor who files the application with the USPTO first (or through public disclosure of the claimed invention up to a year prior) would be granted patents instead of the person who claims he or she invented the invention first. This change will bring U.S. patent law in line with that of most other patent systems in the world, including Canada’s patent law.

While many industry leaders support the legislation, it is not without its critics. Arguably, the “first-to-file” system will favour large companies that have the resources necessary to file patents as fast as possible. Thus, this reform may dishearten the individual inventor who cannot afford the cost or time for filing patent.  The American Innovators for Patent Reform, led by General Patent Organization’s Alexander Poltorak, said that such a change would “create a race to the patent office and put small inventors at a disadvantage…It is going to create very immature, raw patent applications because people are going to be in a rush to file them without due experimentation and working prototypes.”

Note that the bill must still be passed in the House of Representatives before it can be enacted.  If approved by U.S. Congress, the Patent Reform Act of 2011 will be the first significant changes to the US patent system in nearly 60 years. Given that the U.S. is an innovation powerhouse, the number of patent applications will continue to rise. Thus, it is critical for the U.S. Congress to act accordingly in order to provide the resources and guidance needed for the USPTO to issue quality patents efficiently while encouraging innovations and protecting innovators.

  1. It is indeed telling that most smaller companies and independent innovators appear to oppose the pending patent reform bill, while many large corporations seem to welcome it with open arms. I suggest that our legislators listen to former CAFC Chief Judge Michel, who recently urged the new IP Subcommittee to pay more heed to start-ups, rather than continuing Congress’s inordinate focus on the needs of large corporations. Since some of our legislators are probably shareholders in some of those large corporations, however, I don’t know how likely they are to change their ways.

  2. Yes, it appears that the new “first to file” system would favour big business. Recently, US Senator Dianne Feinstein from California recognized this burden on small companies and advocated for the “first to invent” system of awarding patents. However, her challenge did not survive. It still remains whether the new provision will survive the House.

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