Wednesday, September 14, 2011

Does First Inventor To File REALLY favor Big Business?

Patent reform is now a reality.  The bill is in the hands of President Obama and it’s expected that it will be signed into law on Friday.  One of the significant and controversial changes in the America Invents Act is that patents will now be awarded to the first inventor to file, rather than the first inventor.  Every time first-to-file has been proposed for the U.S., many commentators would cry out that first-to-file is bad for small companies and individual inventors since large corporations have the resources needed to get applications on file fast.  Clearly, big corporations have financial resources, but does that really mean that they have an edge in a first-to-file system? 

In a race to the patent office, speed and agility will be at a premium.  Currently at many large companies, the large budget – those resources that the commentators all fear- comes with a price.   Layers of corporate bureaucracy make the process from invention to filing fairly long. Many months, sometimes years may pass before an application is filed.   For these large companies to succeed in a first-to-file paradigm, the process currently used to identify inventions, gather and evaluate invention disclosures from inventors, approve a disclosure for filing, prepare the application, and approve the application for filing need to be reviewed and streamlined.   These companies are currently built for power, not speed, and need to change their thinking or suffer a disadvantage in the first-to-file system. 

In contrast, small companies, should be able to move quickly to get applications for important inventions on file.  Budget will, of course, play a part in the decision to move forward, but its certainly not the only (or main) factor that will determine who has the advantage in the new first inventor to file paradigm.  The reduced patent office fees available for small entities, the strategic use of provisional patent applications, and a lower cost “Track 3” filing system that will  be rolled out by the patent office that will allow applicants to pay a lower fee to file while deferring examination for a later date, should provide small entities with the tools needed to insure that the first inventor to file system serves them well.

In short, I don’t believe that the first inventor to file system will inherently favor big entities over small.  It will ultimately favor those that adapt best to the new system.  Ladies and gentleman, start your engines – the race to the patent office is on.


  1. Great points, Paul. If you add your comments (on LinkedIn) about the costs of interference practice, the argument is even more convincing. I too am reluctant to describe the AIA changes overall as "good" or "bad" for anyone at this point, especially considering the total rewrite of 102. The ramifications of the new 102 are going to take a while to work out.

  2. Thanks, Allison. I agree, it will take time for us all to fully appreciate the impact of these changes and how best to take advantage of the new law for all clients, regardless of size.