Will Patent Reform Bill Help Or Hurt Inventors?

Guests

Terri Gillis, partner, intellectual property practice, Mayer Brown
Gary Griswold, chairman emeritus, Coalition for 21st Century Patent Reform
James Bessen, fellow, Harvard's Berkman Center for Internet and Society

Supporters of the America Invents Act say it will streamline the currently backlogged patenting process, spark innovation and create jobs. Critics are concerned the overhaul, if enacted, will unfairly advantage large companies over small inventors.

Copyright © 2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

NEAL CONAN, host: This is TALK OF THE NATION. I'm Neal Conan in Washington. Maybe we could find America's economic future in a garage where two college dropouts are tinkering, in a university engineering class, or in the research lab of a big corporation. Maybe we can invent new industries, new businesses and new jobs.

Right now, a major problem is at the patent office. The current law awards patent rights to whomever comes up with the idea first. Figuring that out can be a lengthy and sometimes expensive process, and for that and other reasons, there's an enormous backlog. It can take as long as three years before the patent office even evaluates an idea.

Last week, Congress approved a bill designed to curb patent litigation, clear the bottleneck and encourage innovation. So inventors, today we want to hear from you. Will the America Invents Act help you? Give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. Go to npr.org. Click on TALK OF THE NATION.

Later in the program, we'll talk with Atlantic contributing editor Hanna Rosin about the influence of a piece she wrote on this fall's new TV sitcoms. But first, patent reform. And we begin with Terri Gillis, a partner in the Mayer Brown Intellectual Property Practice. She joins us from our bureau in New York. Nice to have you with us today.

TERRI GILLIS: Nice to be here.

CONAN: And if this bill is signed, and President Obama is expected to sign it, what's it going to do? What's it going to change?

GILLIS: The biggest change will be in the first to file. Currently, if you are an inventor, you can take up to a year after you publish your invention to actually file your application and not risk losing it. And then you can, if there is somebody else who has also developed the invention, you end up in what's called an interference, where you debate which of you was first to invent.

The new law will streamline that process, and basically it will be the person who was first to file, and you will eliminate all of these issues about who was first to invent.

CONAN: And as I understand it, that's pretty much the way the rest of the world runs this.

GILLIS: That is correct. We are coming into line with where the rest of the world has been for many years.

CONAN: But some would say wait a minute, first to file, doesn't that give an advantage to larger corporations with a lot of people to help you file rather than the smaller guy?

GILLIS: I'm not sure that's the case. I think sometimes in corporations, getting your research projects funded and getting through the bureaucracy can be quite slow. I think everybody is going to just have to adjust to the change. I'm also not certain that the old process favored the little inventor. So I'm not sure, net-net, it will make a lot of difference for the little inventor.

CONAN: And is it going to clear that backlog?

GILLIS: That's going to take some time to figure out, partially because some provisions of the act don't go into place for another year to a year and a half. I do think some of the issues will be streamlined because the ways in which you can try to argue that you're entitled to a patent have been narrowed so that the patent office examiner should have a simpler time dealing with some of the issues right now that take up a lot of his time.

CONAN: And one of the issues that a lot of people say - every time - if you apply for a patent, there's a fee, and that's how the U.S. Patent and Trademark Office gets its budget, it doesn't get anything from the general funds of the United States. But sometimes Congress will take more money away from that. Some say what the patent office really needs is a big injection of money.

GILLIS: I'm not sure money is the answer to everything. I think the streamlining is going to help. I think eliminating some of these issues from the process. I do think we need to be careful that we are letting the money that is being spent on the patent system be used to make it effective. I do share concerns about the diversion of funds from the patent office.

The fees can be substantial, and one would hope for those fees you would get a good examination and a prompt examination, which the latter isn't the case right now.

CONAN: And diversion of funds, what does that mean?

GILLIS: Ah, with the Congress, funds that come into the patent office are used for something other than patent office processes.

CONAN: In other words, they're taken away to pay for, well, almost anything else?

GILLIS: Pretty much.

CONAN: And so...

(SOUNDBITE OF LAUGHTER)

CONAN: So how much is taken away?

GILLIS: I actually don't have those numbers. I do know that the former chief judge of the Patent Specialty Appeal Court has expressed great concern because it is a substantial percentage. I actually unfortunately don't know the number.

CONAN: What are the reactions to this bill? It's not yet a law, but again, President Obama is expected to sign it.

GILLIS: I think the reactions, by and large, are favorable. There are quite a number of things in it besides what we've just talked about. I - there is the concern, will it really remove the backlog, will it really help or hurt the small inventor.

I think in general people are pleased that some kind of reform has gone through. There are those who feel it isn't enough, that there were other things that were critical that should have been done. But I think in general there is a favorable view as reflected by the fact that our government seems to have relative agreement about it.

CONAN: One of the few things it's had relative agreement on in a while. First to file - does that suggest also that the amount of time that the patent would be held will be effectively reduced, start earlier?

GILLIS: It does, it does. There are two things I think as a practical effect. One, is it will shorten the time. It also means that you have to write your application a lot sooner and a lot faster, and that does raise some concern as to whether the quality of the applications will be the same as they are now, where you have a year, and you can do some more testing before you have to get something on file.

CONAN: And for the examiners at the patent office, well, they've had always a fair amount of power in these things. Does this give them more power or less?

GILLIS: I think probably - I guess I would say it's about the same because they're still going to have to review what you file. You'll still control what you put on file. What the examiner can use against the application to try to argue that it shouldn't be allowed is increased. But that's all part of the first to file and the fact that you can't delay the way you used to for a year.

CONAN: Because some people say one of the reasons for the backlog is that there's a whole bunch of - I should apologize for the term - junk applications in there.

GILLIS: I don't think that's - I don't see this statute changing that, because the examiner is still going to be able to cite the same sorts of things to argue that it's old for many of the same reasons. He doesn't have the authority to set a different standard for whether something is patentable.

CONAN: And is it going to change patent law and the way it's applied?

GILLIS: That is going to - for those us who have been practicing a long time, like I have, you're going to have to learn new rules about how patents can be challenged and can't be challenged. They've narrowed some of the challenges you can make to patents.

I think we need to wait and see how it all works out. I'm not sure that it's going to be a cure-all. It certainly has cured some of the problems.

CONAN: You have a degree in chemistry, as well as a degree in law. Putting on your other hat for a moment, do you like it or not?

GILLIS: Do I like the patent bill?

CONAN: Yeah.

GILLIS: I do like it. I think it's an improvement. There are things I might have done a little differently, but I like it.

CONAN: Terri Gillis, thanks very much for your time today.

GILLIS: You're welcome.

CONAN: Terri Gillis, a partner in the Mayer Brown Intellectual Property Practice. She joined us from our bureau in New York. And joining us now is Gary Griswold, who served as chief intellectual property counsel for 3M Innovative Properties. 3M, of course, the company that brought us, among many other products, the Post-It Note. He's now with the Coalition for 21st Century Patent Reform and joins us from Minnesota Public Radio. Nice to have you with us today.

GARY GRISWOLD: Thank you.

CONAN: And the coalition supports this bill, and as you look at the members of the coalition, a lot of very big companies, including GM, and you might say well, of course they do, it favors big companies.

GRISWOLD: No, the coalition is - we support the bill, yes, but many, many, many independent inventors support the bill, as well as universities, labor unions and a whole array, a vast array, a very diverse group of people support this bill. And that's the reason the bill is - will hopefully become law when President Obama signs it in the next few days.

CONAN: And is it going to create jobs?

GRISWOLD: I believe it will because we have 700,000 patent applications that are in the backlog. This bill is terrific in that it not only helps with funding that you mentioned, it provides assurances that the PTO will: A, be able to set its own fees; and then B, be able to keep them in the PTO and have them promptly available to help reduce that backlog.

CONAN: We just heard from Terri Gillis, the diversion part - and from some of the people who oppose that part of the bill, too. The diversion part is still in there. Congress could still raid those funds.

GRISWOLD: It is possible, but there has been a commitment by the Appropriations Committee and the speaker that that won't happen, and I know that the Senate will be watching this very carefully because they voted overwhelmingly to make sure diversion stopped.

You asked the question earlier how many - how much had been diverted over the years. It's about - somewhere between nine hundred million and a billion dollars over the last 15 years or so.

CONAN: Inventors, we want to hear from you. What do you think of the new America Invents Act? 800-989-8255. Email talk@npr.org. And we'll start with Mills(ph), Mills with us from Gaithersburg in Maryland.

MILLS (Caller): Yeah, hi, I'm with an independent inventors' group in the D.C. area, and I strongly disagree that the independent inventor community is in favor of this bill. I mean, the (technical difficulties) first, it's something that we are very much against. The whole independent inventor community across the nation is against it.

CONAN: And your phone is betraying you, Mills. The first to file is what you're objecting to?

MILLS: Right.

CONAN: Okay. Gary Griswold?

GRISWOLD: Yes, well, as I mentioned, there's a vast number of independent inventors that do support this bill; not every one of them, obviously, including the person that was just on the phone. There's a concern by independent inventors that the change to first to file will impact them negatively.

One point to be made there, in the last five years, there's only been one case where the second to file but the first to invent independent inventor won that case in the patent office. So it's a rare case where actually the first inventor by date actually wins if they're not the first to file.

So basically we're working on a first to file system today, and a majority of the applicants in the patent office today are - operate on the basis of first inventor to file.

CONAN: We're talking about the America Invents Act, the better way to patent. It's on its way to President Obama's desk. Inventors, is that bill going to actually help you? Give us a call, 800-989-8255. Email us, talk@npr.org. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.

(SOUNDBITE OF MUSIC)

CONAN: This is TALK OF THE NATION, from NPR News. I'm Neal Conan. All of three patents were issued for inventions in 1790. By last year, more than half a million applications were filed, resulting in just under 250,000 new patents.

Those ideas and inventions can spark innovation and help create jobs, but today's Patent and Trademark Office is overwhelmed. Help may be on the way in the form of the America Invents Act. Though some complain it doesn't go far enough, others feel it will hurt small inventors, while giving an edge to big corporations with big legal staffs.

Inventors, we want to hear from you. Will the America Invents Act help you? Give us a call: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our website. Go to npr.org. Click on TALK OF THE NATION.

Our guest is Gary Griswold, former intellectual property counsel at 3M Innovative Properties, now with the Coalition for 21st Century Patent Reform, a lobby group for 3M, General Electric, Johnson & Johnson and other companies. And let's see if we can get another caller in on the conversation. Doug is on the line from Sunnyvale in California.

DOUG (Caller): Hi. I hold like 20 patents, or 22 or something. I'm really against this. The problem has been poor examiners issuing patents for the same thing over and over again. And now it's going to become a race of corporate money to see how quickly they can file. That's the first problem.

The second problem is I do a lot of development work in the lab inside of my company, and now I'm afraid to share what I'm developing with any other employees because if they choose to leave, there are plenty of ideas that they can run off with and file a patent on that I choose to keep as a trade secret.

CONAN: So, in other words, under the first to invent system, you would have been - felt more protected.

DOUG: Yeah, I actually think that the American patent office examiners have done a very poor job because they're underfunded to actually pay the examiners what they need. And they're just taking this problem and amplifying it, just by calling it a different name. I would rather go back to the old system, where you actually have to show up at the office with a working prototype of your device. That'll really cut down on the amount of garbage patents that are filed.

CONAN: And when you talk about poor examiners issuing patents again and again for the same thing, what do you mean by that? Can you give us an example?

DOUG: Like I heard recently that there's probably 15 to 20 patents on toast, but they call it reheating bread to refresh it. It's a problem, and that's why you have these companies buying up entire portfolios of patent to get protection. You know, the recent acquisition by Google and by (technical difficulties) is to take care of that troll problem with patents. So that's what I mean by it.

CONAN: Okay. Gary Griswold, I wonder if we could get a reaction.

GRISWOLD: Yeah, I can react to that. Yes, the - there's some significant improvements in this bill that address the matters that were just raised. First, the examiner is going to be helped because the public can provide information to the examiners that the examiner may not have, to examine those patents, and that information then will help in reducing the number of patents that people may not think should have issued.

Secondly, the bill provides for a post-grant review nine months after the patent is granted, and that has to be completed in one year. And if there's a - if it's more likely than not that one of the claims of the patent aren't going to be held valid, then that patent can be either amended or deleted because of that process.

This will help deal with some of the issues with patents that are of questionable quality, and that's one of the very important improvements that was called for by the National Academy of Sciences when they studied the patent system. They suggested we have such a system, and that is in this bill. And that's one of the key - important tools that the PTO gets.

We talked about funding, but the PTO gets two things out of this. One is more certainty on their funding. They get to set the fees and assurance that they'll get to keep the fees, plus they have these great tools that are being provided with a more - with a first inventor to file, a strengthened grace period, objective patentability criteria and this post-grant review that I just mentioned.

So a lot of tools, plus funding, will equal, I believe, a speedier, higher quality, more efficient patent office and a better patent system.

CONAN: Doug, thanks very much for the call. Let's bring another voice into the conversation, James Bessen, a lecturer at Boston University's school of law. He co-wrote a report titled "Patent Failure" that's been cited by the Supreme Court, the Federal Trade Commission, among others, and he joins us on the phone from Portland, Maine. Nice to have you with us today.

JAMES BESSEN: Hello.

CONAN: And I wonder what's your reaction to the America Invents Act? Does it address the right problems, and does it solve them?

BESSEN: Well, it addresses some problems and solves them, but I don't think it nearly goes far enough. We're facing a devastating flood of patent litigation in this country. I think the speaker immediately before me was saying, well, this can weed out some of the garbage patents, and I think it will weed out some of them, but I don't think nearly enough.

CONAN: And what about - we had a caller, I'm not sure you heard him before, saying he's concerned that this first to file change will lead him to worry about people leaving his research lab and filing first.

BESSEN: Yeah, I don't think the first to file is going to have much - that much of an effect on things. I think people get very upset about it. I think it's got protections in there to prevent theft of ideas. I think more seriously it's, you know, it's - the bill is not addressing this problem that - of having, you know, patents with vague coverage, very unclear boundaries, patents on things - somebody mentioned toast being described in vague, lawyerly words.

We're seeing vague patents with unclear boundaries being applied to all sorts of technology, but very heavily in software, business methods. They're even patenting mental processes now. This does nothing to really fix that problem.

CONAN: Mental processes? I've had a few mental processes that were unique. I thought they were mini-strokes. I can invent them?

(SOUNDBITE OF LAUGHTER)

BESSEN: Yeah, well, they're now granting patents on - I saw one which the federal circuit, the appellate court recently upheld where the idea was that if you read the medical literature, if a doctor reads the medical literature where they talk about immunization schedules, and as a result of reading the literature, they change the immunization schedules of the infants they're caring for, they're violating the patent.

CONAN: And also, do you agree with Gary Griswold that the new provisions for funding mean that Congress will not divert any of the money that goes into the Patent and Trademark Office - assurances from Congress, well, they're not always ironclad.

BESSEN: Right. Anybody who trusts their wallet to Congress is an optimist. (Laughing) But I think there's another issue, an interesting issue about fee diversion. I think they've made some steps, which is to get the fee structure out of the hands of Congress and into the patent office, and it at least provides the possibility that fees can be set in a way that may be tailored more to optimize their role.

And what nobody has talked about in this whole debate, and which economists are very keen on, is this idea that if you change the fees, and particularly raise fees, and especially fees that are needed to keep patents in force for many years, that the garbage patents aren't going to be renewed. And you'll get rid of them, maybe not initially, but after four years, or maybe after eight years.

That, you know, any - everywhere else in the world, we know that if we raise fees, only people who really care a lot about something are going to spend the extra money. And it's a very simple idea. It's one which hasn't been applied to the patent system, and maybe we can - we're taking a little step in that direction.

CONAN: I'm a little uncomfortable with the idea that maybe 10 years from now, I will have to eat unpatented toast. But in any case, let's see if we can get another caller into the conversation. Jeffrey's on the line from Jacksonville.

JEFFREY (Caller): Yes, hi.

CONAN: Go ahead, please. Jeffrey? You're on the air, go ahead.

JEFFREY: Yeah, I was saying - one of your callers had mentioned - I think is true. I'm a small inventor. I have 25 patents. And out of those 25 patents, some of them are with major corporations that, seemingly, once they get the right of that patent by a small inventor, they seem to make up more frivolous patents to continue on - long after the agreement or licensing is there.

If you look at the amount of - as your caller said earlier, how many cross-examiners have issued patents of a similar nature and means of operation, in the case of a mechanical patent or electromechanical patent, you've got a plethora of that all over. So once you start this new act, how is that going to help all the dirty laundry that's been done on all the patents that have been, you know, made - and there are many of them - off of one patent or cited off other patents? So the first right to file, it's going to inundate them with people - such as myself - are going to make claims that, OK, if I have the right to file, then get rid of all these other ones now that had already been issued.

What I found out in the 25 patents - you can say you can become patent poor if you're an inventor, especially a small person not linked to funding of corporation with research and development funds that take your creative ideas. And I went off and I paid my patent attorneys to set it up exactly to the specifications that has to be made by the drawing and by the beans operation, all the legal technical terms, and then I take it back from my patent attorney. I don't give it to the patent office anymore. I go over and I copyright every page.

Copyrights have teeth. They've got federal enforcement agencies if someone violates your right, where the patent office doesn't have anywhere to go. There's no enforcement agency. People are abusing that system. And I'm hearing there's a 700,000-patent backlog. Now, you issue a new law into effect or a new (technical difficulties) just going to inundate more and more of the patent office's already undermanned and overbooked workloads.

CONAN: Jeffrey, thanks. James Bessen, we'll get a reaction from you, then go to Gary Griswold.

BESSEN: Yeah. I - well, the - I don't know that the new patent law, the first to file, is really going to change anything about that. This has been, I think, a problem since the 19th century, where the large companies have gotten very good at taking out what are sometimes called patent fences or patent thickets, where they'll patent every possible conceivable way of doing anything. They'll patent, you know, all sorts of variations. They'll do it with different kinds of wording, so there will be many, many patents around any one particular invention.

The small inventor has always been at a disadvantage, or has been since the 19th century, because the small inventor isn't going to go and accumulate a thousand patents all about their technology. They're going to patent what they, you know, the real invention. You know, and it's been a system stacked against the small inventor, and I think that basic inequity isn't solved.

CONAN: Gary Griswold.

GRISWOLD: I don't see it that way, actually. I don't see that it's stacked against the independent inventors. In fact, if the system was stacked against the independent inventors, I wouldn't be supporting this bill. I can tell you that. The - what my experience is, dealing with many independent inventors that licensed to 3M, that they were rapid in filing, and they brought it to 3M or other companies that might be in our coalition, and they wanted to have further development done on the - and investment in that invention. And when you do that kind of investment, you wind up making further inventions. And those inventions are only patentable if they're an obvious - have utility - and have utility and are novel. So you still have to have - they still have to be patentable inventions.

The new bill, what it does is it simplifies the law with first inventor to file and objective patentability criteria. There won't be secret prior art. There are a whole bunch of improvements that'll make it a lot simpler for both the public and the independent inventors to work with and the patent office. So I think a bunch of these concerns about proliferation of patents and patents that are unworthy being issued will be - are addressed in this bill, including the ones I mentioned, and that's submission of art, as well as oppositions right after patent is granted.

CONAN: Jeffrey, thanks very much for the call. We're talking about the America Invents Act, which President Obama is expected to sign shortly. It was passed by Congress last week. You're listening to TALK OF THE NATION, from NPR News.

And let me re-introduce our guests. You just heard from Gary Griswold, chairman emeritus of the Coalition for 21st Century Patent Reform, a lobby group for 3M, General Electric, Johnson & Johnson and others. And also with us is James Bessen, a lecturer at Boston University School of Law, a fellow at the Berkman Center for Internet and Society at Harvard, co-author of "Patent Failure: How Judges, Bureaucrats and Lawyers Put Innovators at Risk" with - also wrote that with Mike Meurer. Is that how it's pronounced?

BESSEN: Yes.

CONAN: OK. Let's see, we get another caller in on the project. Let's go to - this is Russell, Russell with us from Palo Alto.

RUSSELL (Caller): Yes, good morning.

CONAN: Go ahead, please.

RUSSELL: Yes. I'm an inventor, and 30 years ago, a large company fraudulently attempted to patent my idea. I was able to defeat that company in an interference proceeding at the patent office. I'd like to know how your guests propose that the new litigation would protect a person such as myself under those sorts of circumstances.

CONAN: James Bessen.

BESSEN: I'm, yeah, I'm not the - I believe the - there is no longer an interference proceeding. The - but there are - there is a separate - I believe it's called a derivation proceeding, which would address the situation where somebody's stolen an idea.

CONAN: Gary Griswold.

BESSEN: I don't think that's fundamentally different.

CONAN: Gary Griswold.

GRISWOLD: That's correct. There's a derivation proceeding, which would, in that circumstance, be applicable. And the proceeding can be brought forward to have - to take care of the issue and make sure the inventor of that was the rightful inventor to get the patent.

CONAN: Thanks for the call, Russell. Hope that answers it. This is from Emma in San Jose: It's my understanding that although we are moving to first to file, if the invention is publicly disclosed in a year or less before filing, the date that it's made public counts as the filing date. Am I wrong? Gary Griswold.

GRISWOLD: You're wrong, and that's not - it's not the filing date. But what it is, is a date that if anybody comes in after that date and tries to patent that same thing, they can't get the patent. You get the patent. So it's really not a filing date, but establishes your - it draws a line in the sand for you so that you can get the patent on that rather than a subsequent filer.

CONAN: Gary Griswold, thanks very much for your time today. We appreciate it. And James Bessen, thanks very much to you for joining us.

BESSEN: Thank you.

CONAN: James Bessen, a lecturer at Boston University School of Law, and, of course, Gary Griswold, as we mentioned, chairman emeritus of the Coalition for 21st Century Patent Reform. Again, President Obama is expected to sign the bill, with the idea that clearing the backlog and getting new ideas out there might help create new businesses, new industries and new jobs.

Coming up, Hanna Rosin looks at the new fall television lineup and sees the end of men. We'll talk with her about primetime's male identity crisis. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION, from NPR News.

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