The long awaited patent reform legislation has been slowly making its way through Congress. The Senate is expected to reconcile the version that it passed back in March with the version that passed the House of Representatives on June 23, 2011. Although it should not be too difficult for the two bills to be reconciled and then sent to the President, the issue of the debt ceiling has been taking up all of Congress’s time and may push the reconciliation of the bills over to the next session of Congress.

Known as the “America Invents Act”, the proposed legislation changes several important things about patent law in the United States. Most significantly it would change the U.S. to a “first to file” system, rather than a “first to invent” system. Currently, the rightful owner of the invention is the first person to create the subject of the patent. Understandably, this can cause problems of proof and sometimes leads to litigation between competitors who file very similar patent applications. The “first to file” system theoretically removes this problem because it should be easy to determine who filed their application with the Patent and Trade Office first. Several large companies are supporting the change to “first to file”, and this is more consistent with most patent systems in the rest of the world, but small businesses and individual inventors are arguing that patent filing can be expensive and time consuming, and without the resources to file immediately and often they will be left at a disadvantage compared to larger corporations.

Another change proposed in the American Invents Act would affect who can file lawsuits under the false marking statute. Although the false marking statute has enjoyed over 100 years without substantive change, several recent court decisions have greatly increased the awards for successful plaintiffs, which has in turn caused a dramatic rise in the number of lawsuits filed. False marking is nearly unique in the United States, in that anyone can file a claim, regardless of actual injury. The new bill would limit the right to file false marking claims to individuals and businesses who have suffered an actual competitive injury.

Many other issues are set to be changed with the passage of the bill, including the allocation of Patent and Trademark Office fees, and the denial of state court jurisdiction over claims that involve patents, plant variety protection, and copyrights.

Image (c): United States Patent and Trademark Office