The Patent Reform Act of 2009

The Patent Reform Act of 2009 is a bill that has been causing lots of controversy ever since Senators Orrin Hatch and Patrick Leahy introduced a Senate bill on March 3, 2009 and Representative John Conyers introduced the House version of the bill on the very same day. This bill is very similar to the Patent Reform Acts of 2005 and 2007 and, although some of the controversial parts have been taken out, if this bill is passed, it will be disastrous for small and independent inventors. The good news is you can take part in the effort to stop this bill. We talked to retired patent examiner and registered patent agent, Albert W Davis Jr, Reg. No. 38773, to talk about why the patent office needs change, but how this bill is the wrong kind of change for inventors and what he suggests to do to stop it.

First, we will give you a very brief rundown of a few of the major aspects of the bill.

If the Act was passed, one of the major results would be a big change in the way patent infringement litigation works and the amount of damages an inventor can receive if his or her patent is infringed upon. The Act would do this in the following ways: only allowing the plaintiff to bring a suit in the states where the defendant has a physical place of business, broadening the use of appeals, creating stricter criteria for "willful infringement" and "reasonable royalty" and allows defendants to win with a "good faith" defense, in effect saying they didn't know they were infringing or they thought your patent was unenforceable or invalid. All of these changes greatly favor big businesses that infringe on inventors' patents and greatly limits inventors chance to be reimbursed when a company steals their idea.

Other important aspects of the bill are that it would allow any party to challenge a patent within 12 months of being issued and the system would switch from a first-to-invent system, to a first-to-file system. Both of these changes heavily favor large corporations, with lots of money to spend, and makes it harder for often under-financed small inventors.

One of the difficulties of this bill is that almost everyone is calling for reform of the Patent Office. As Davis says:

Right now the cost of attaining a patent has risen substantially. That is because the Agent or Attorney for the Applicant (Inventor) has to answer more rejections from the Patent Office. Each rejection costs more money to the Applicant in fees paid to argue the rejection. This situation has been brought about because, for the last 6 years at least, the Patent Office has not been functioning correctly. Examiners are afraid to issue or "allow" patents because of a review by the Quality Group of the Patent Office on applications that are issued into patents. Even the smallest mistake in the allowed or issued patent is treated as a critical error. Then, Quality Review goes back through the last 10 applications that the Examiner has issued or allowed. Again, it is easy to find a minor error in any application. These minor errors are then used to prevent advancement, demote or possibly fire the Examiner.

So, what the Examiners are doing is to reject most applications whether the rejections are good or not. Then, the Applicant can only re-file the application or appeal to the Board of Appeals. All of this costs the Individual Inventor a lot of money. Eventually, the Inventor may run out of money or just give up because the system does not make sense.

But, as Davis adds, "This bill does nothing to cure the current problems of the Patent Office and adds more expenses to getting a patent by subjecting the patent to more attacks by big companies." So instead of reforming the patent system, the Patent Reform Act is really just an attempt by big businesses to run over small inventors. So why don't more people speak out? "The issues are complex so it is not always obvious that they are bad for the Individual Inventor. But, the bill is bad. Call your congress persons local office and tell them to vote against the bill and save the Individual inventor," says Davis.

So who is supporting the bill? One of the big supporters of the bill is the Coalition for Patent Fairness. Over the period of 1996-2006, seven of the corporations who lead this coalition are responsible for paying out half of all awards given in patent infringement lawsuits! Simply said, this bill is supported by patent infringers who want to continue to steal patents, but not pay for them.

So what can we do to stop this bill? "Call your Congress person every day until they agree to help stop the current bill of Sen. Leahy, really misnamed the Patent Reform Act. It should be named the Patent Deform Act," says Davis. You can find your congress people at this website: http://www.congress.org.

So does the Patent Office have hope for the right kind of change? "I believe that the Patent Office will become functional in a little while," says Davis, "maybe this year but probably next year."

Davis continues:

While I worked there, the Patent Office changed several times. Currently, there is a money pressure on the Office because they are receiving a lot fewer Maintenance Fees and Allowance fees. Also, there is a big back-up at the Board of Appeals because Applicants have appealed all of the suspect rejections. The Board will not be able to keep up in a timely fashion with this new workload. Congress made the Patent Office guarantee that the average time to abandonment or allowance would not exceed 18 months. The Office is way over 18 months pendency now and has a 1,000,000 applications waiting for a first action. These pressures will eventually cause a change in the Office to a more rational approach to rejecting and a more rational approach to Quality.

Inventors should try to hang in until the change occurs. Inventors can re-file their applications for very little money and add a new set of claims to prevent a first action Final Rejection.

There hasn't been an overhaul of the patent system since 1952, but let's make sure we get the right change. Contact your Congress persons today.