Wednesday, March 23, 2011

Why "first to file" is wrong

In a piece titled Patent system reforms could squeeze out start-ups , the Milwaukee Journal Sentinel says this about "first inventor to file":

One of its most controversial provisions is a "first to file" rule, which would grant patent rights to whoever gets to the Patent Office first - terminating the existing "first to invent" practice, which honors applicants who can document that they were first to conceive an idea or technology.

A related provision imposes new risks for entrepreneurs who explore business partners, prototypes and investors during the 12 months that precede an application, a "grace period" during which current law offers some protection that would not exist under the reform proposal. The proposal could force start-ups to race to the U.S. Patent and Trademark Office with a flood of premature and poor-quality applications - even as patent examiners remain heavily overburdened, with a backlog of more than 1.2 million patent applications awaiting resolution at the start of this year.

"Patent reform is going to drive the PTO's backlog through the roof," predicts David Boundy, a Boston-based patent attorney who has worked with start-ups and venture capitalists.

An argument has been made, most recently by David Kappos, that we are already effectively a "first to file" country, because there are few patent interferences taking place. This ignores Rule 131, wherein a piece of art published BEFORE the filing date can be eliminated from consideration by "swearing behind" to the invention date. In a first to file regime, this cannot be done.

Dennis Crouch wrote an article giving some statistics on Rule 131 usage [IS NOVELTY OBSOLETE? CHRONICLING THE IRRELEVANCE OF THE INVENTION DATE IN U.S. PATENT LAW, 16 Mich. Telecomm. Tech. L. Rev. 53 (2009)]

Relevant to Rule 131, Dennis gathered data from the file histories of 21,000+ utility patent applications filed between 2000 and 2007. One thing that immediately caught my eye was the text: Among the completed cases, n82 76% of applications with a Rule 131 declaration resulted in an issued patent as compared with 70% of all completed cases in the data set. [Query: what was the patent grant rate between 2000 and 2007?]

Dennis found a low frequency of use of Rule 131:

Of the 21,000+ file histories in the data set, only 0.7% (138) included a Rule 131 affidavit asserting invention-date-based novelty rights. n75 Typically, applicants filed these affidavits years after filing the initial patent application. Both the average time and median time for filing a Rule 131 affidavit were 33 months after filing the initial application. n76 Table 1 reports the rate of Rule 131 affidavit filing by the USPTO Technology Center n77 for applications filed between 2000 and [p. 71] 2005. n78 Applications in Technology Center 1600 - inventions related to biotechnology and organic chemistry - had the highest likelihood of containing a Rule 131 affidavit in the file history at 1.43%, while applications in Technology Center 2800 - inventions relating to semiconductors, electrical, and optical systems and components - had the lowest likelihood at 0.41%. n79

Of the text:

To put this in perspective, a steadily prolific patent prosecutor may draft and prosecute 800 or so patent applications in a twenty-year career. During her entire career, we would expect her to file fewer than one Rule 131 declaration that directly leads to an issued patent.

I myself have filed more than one Rule 131 declaration. The most recent did NOT cause the application to be granted BUT the application was granted for other reasons. Keep in mind, to be successful with a 131 declaration, one has to have well-documented evidence, early in time, showing the presence of all claim elements, as written later in time. In a situation with an evolving invention, this can be difficult. Further, there is an interesting time trap involved when one tries to overcome an obviousness rejection, involving art published at different times.

As a general observation, I find that arguments suggesting patent policy decisions be made based on the "low frequency" of certain events to be less than persuasive. Yes, small entity inventors usually lose interferences, and yes most patent prosecutions don't involve declarations under Rule 131. If you change to "first to file," they will lose 100% of the time. Do we abandon the patent system because 90%+ of issued patents never make money and never change the world?

In the past, the US has granted priority to the person who comes up with an idea, and who diligently pursues it. Chester Carlson advanced xerography because of his persistence, and the reality that no one else believed in it. In some alternative universe, with published applications and first to file, he might have been buried. Wilbur Wright literally was buried by the patent litigations. Further, imagine an alternative universe wherein the Wrights hadn't filed their application early in 1903 (before the flight in Dec. 1903), and Curtiss persuaded the court that Langley's Aerodrome had flown. The currently proposed rules would produce the "wrong" outcome.

**As an aside, some of the "ex post" patent arguments evoke current discussion of Charles Barkley.

**See also

What Are the Provisions of the Proposed "First-Inventor-to-File" System in S. 23?


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