It looks like The Patent Reform Act of 2011 (not to be confused with the the Patent Reform Act of 2010, 2009, 2008, 2007 …) will be on the Senate floor for an up-or-down vote in the next week or so.

So, is it good for American inventors or bad?  It depends on whose interest is at stake.  Some have argued that it is unfavorable to  small businesses, start-up entrepreneurs, independent inventors, and those companies’ employees in the U.S.

In a letter to Senate Majority Leader Harry Reid — signed by various groups including American Innovators for Patent Reform, IEEE-USA, IP Advocate, National Association of Patent Practitioners, National Congress of Inventor Organizations, National Small Business Association, Professional Inventors Alliance USA and the U.S. Business and Industry Council — the groups urge changes to the Act.

They argue that:

The “first inventor to file” section of the bill has unique adverse effects on small business, start­up entrepreneurs, independent inventors, and U.S.-based technical professionals. It disrupts the unique American start-up ecosystem that has led to America’s standing as the global innovation leader—the ecosystem that is vital to our businesses, but with which large firms have less expertise. Within the “first to file” section, the change to the filing grace period disadvantages small companies and independent inventors in favor of larger firms—the bill disadvantages companies that must seek outside financing and strategic partners, in favor of firms that can arrange all of their investment, testing, manufacturing, and marketing internally.

The bill favors multinational and foreign firms over start-up firms seeking an initial foothold in U.S. domestic markets, and favors market incumbents over new entrants with disruptive new technologies. Because S. 23 removes the option to delay patent expenses, the bill advantages established companies, and disadvantages start-ups that must seek and carefully shepherd their capital. S. 23 reduces current advantages for U.S. inventors and employees, and thus increases incentives for off-shoring jobs. S. 23 changes the rules to favor global companies, against the start-up business model that utilizes the American grace period.

They ask that you find your senators, and call them and ask for three things:

  1. support an amendment to strike the “first to file” provision, and
  2. replace the whole bill with one that ends fee diversion, and gives the PTO fee setting authority with strong checks and balances.
  3. if either amendment fails, oppose the bill—without these two amendments, the improvements are trivial, and the harms are substantial.

If you want your voice to be heard on this matter, call today.

See the whole letter to Sen. Harry Reid here.

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4 Comments

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  2. “It depends on who’s interest is at stake”

    No kidding. For large multinationals it’s a great way to kill your small and startup competition. Unfortunately for the public, it will also kill the primary source of new jobs.
    According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs.

    Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.

  3. Is it good for American inventors, you ask. Should you not instead be asking whether it better and further promotes American ascendence in the progress of the useful arts? Because it’s not the same question, is it?

  4. “It depends on who’s interest is at stake.”

    Who is who?
    A) The inventor/applicant or the entrepeneur/investor faced with uncertainty created by “the option to delay patent expenses” (= delay patent filing). This uncertainty is a big downside of each patent system and minimizing such uncertainty can only be welcomed.

    B) The use of the current system by individual inventors and large companies is summarized by Dennis D. Crouch as follows: “my findings suggest that individual inventors assert invention-date-based novelty rights relatively less often and less successfully than large, publicly traded companies”. The full article titled “Is Novelty Obsolete? Chronicling the Irrelevance of the Invention Date in U.S. Patent Law” may be found here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1576564

    My personal summary thus is that the current US system favors large, non-producing companies.