US has another stab at patent reform

By Andrew Charlesworth
30 Aug 2011 View Comments
capitol hill

The US is to make another concerted effort to reform its patent system later this year when the America Invents Act (AIA) arrives on the desk of President Obama.

The AIA is the culmination of ten years work which has seen the US Patent and Trademark Office sink ever deeper in a backlog of patent applications. The logjam of patents is seen as a drag on the US economy; encouraging innovation as a way the US can successfully compete with emerging economies like China.

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Some of the AIA's reforms include granting patents on the basis of first to file, rather than first to invent, and upping fees to provide the USPTO with much-needed extra resources. But apart from the partisan vitriol which has marred US politics lately, there are also several voices saying that while the AIA is a step forward, it needs to be a lot bolder if it is to address the underlying issues.

One of these suggestions is a two-tier patent regime whereby technological inventions are granted shorter patents than areas which don't evolve at such rapid rate in return for lower fees. This, proponents say, would allow start-ups to exploit their inventions more readily than the current system.

Making it harder to win patents, especially for business ideas is also mooted, but not included in the AIA. This has long been blamed for the majority of the USPTO's backlog and the presence of patent trolls who are said to stifle innovation with nuisance acts that clog up the US courts.

Specialist courts to review patent cases were also put forward but excluded from the AIA.

The value of patents to US firms is illustrated by the $12.5 billion Google paid for Motorola's Mobility division which analysts say is based on the division's portfolio of 17,000 patents granted and 7,500 pending.

The battles being played out in Europe's courts between Apple and Samsung currently are evidence of the way in which patents have become a competitive weapon for technology companies.

However, currently patents are working for law firms and not for inventors. A study in 2008 discovered that the total profits US public companies (except pharmaceuticals firms) earned from patents in 1999 was $4 billion; but the associated legal costs were $14 billion.

The AIA, formerly known as the US Patent Reform Act 2011, was introduced to Congress in January and having cleared the Senate and Judiciary Committee, was passed by the House of Representatives in June and is now at reconciliation stage.

The president has said he will sign the bill into law as soon as it reaches him.

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