Obama Signs Patent Overhaul Bill

Hoping it will spur innovation, President Obama signed a bill Friday overhauling the nation's patent laws. The law switches to a "first to file" rule for granting patents. It also allows new challenges to existing patents. But critics say it will not help individual inventors get their ideas to market. Melissa Block talks to NPR's Laura Sydell for more.

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MICHELE NORRIS, host: From NPR News, this is ALL THINGS CONSIDERED.

MELISSA BLOCK, host: And I'm Melissa Block.

Here's one thing at least we can chalk up to bipartisanship in Washington: America has a new patent law. President Obama signed the America Invents Act today.

President BARACK OBAMA: If we want startups here and if we want established companies, like a DuPont or a Eli Lily to continue to make products here and hire here, then we're going to have to be able to compete with any other country around the world. So this patent bill will encourage that innovation.

BLOCK: The president signed the bill after he toured the Thomas Jefferson High School for Science and Technology in Alexandria, Virginia. The new law is intended to clear up the serious paperwork backlog on hundreds of thousands of patents applications. And the president says it will help create jobs.

NPR's Laura Sydell joins me now to talk about the bill. And, Laura, what does this bill do?

LAURA SYDELL: Well, among the things it does is it changes our system to a first to file. So the first person to file a patent application gets the patent, not the first person to invent it, and that is the standard in most of the world. It will let the U.S. PTO hire more patent inspectors.

It will allow third parties to challenge a patent within the first nine months of somebody filing an application. So if you look and you see a patent application and you think there's something wrong with it, you can challenge it.

And supposedly it will speed up the process of filing for patents, which right now, there is something like 700,000 applications that are backlogged in the Patent Office.

BLOCK: So when they're talking about creating jobs, well, they're hiring some more patent inspectors, so that's some jobs right there.

(SOUNDBITE OF LAUGHTER)

BLOCK: What is the broader goal in terms of job creation here?

SYDELL: Well, this is what they say. What they say is if we speed things up and we get that backlog cleared up, then there are all these startups that are just waiting to move to the next phase of financing and get their products to market. And they'll be able to do that and they'll hire people in the process. So that's what they're saying.

BLOCK: And what about those businesses, Laura, or inventors, entrepreneurs - do they think that the law will, in fact, encourage hiring, make them hire more people?

SYDELL: No, I'm not hearing that largely at all. I'm hearing a lot of skepticism about the bill. I think one of the problems that entrepreneurs and startups face is that there are a lot of bad patents that are out there, particularly in the realm of software and business method. And the bill doesn't really do anything to address that.

So one of the problems that you have is you have a lot of these, they call them patent trolls. They're companies that buy up patents, particularly broad patents. They buy them up and they go out and they sue startups and they demand licensing fees. And this has put a lot of startups out of business. And this bill doesn't really do anything to address that problem.

The Patent Office has granted, for example, in 2000, they granted a patent for a method of making toast. Really, seriously.

BLOCK: Laura, what other solutions would there be to this problem of bad patents that you're talking about that wouldn't involve Congress?

SYDELL: The courts could step in. And, in fact, it is the courts who initially pushed to have, for example, software patents and business method patents granted. So they could pull back and there is some evidence they are. But I think it could be a long time before they address it directly. And people are concerned about that.

I think a lot of people wish Congress would revisit this soon. And they're worried that because they just granted and created this new act it'll be a long time before Congress steps in again, which really would be the fastest and most efficient way to address the problem.

BLOCK: NPR's Laura Sydell. We were talking about the new U.S. patent bill that was signed into law by President Obama today.

Laura, thanks very much.

SYDELL: You're welcome.

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