Institutions React to the Leahy-Smith America Invents Act

Following passage of the patent reform bill, the debate continues regarding the impact that this will have on technology transfer at US academic and other non-profit institutions.  A significant part of that discussion concerns the transition from a “first to invent” to “first to file” rule when determining entitlement.

Proponents of the change point out that institutions around the world already operate under a “first to file” rule, and that adoption within the US should reduce ambiguity with respect to establishment of prior art.  The expectation is that increased confidence in patent entitlement would allow institutions to exercise their rights uniformly on a global basis, encouraging more robust licensing arrangements or venture capital for startup companies.

Other institutions are concerned that the “first to file” rule would accelerate their current schedule for patent application, where many had relied on the opportunity to develop technology without public disclosure, yielding a patent with the strongest claims and the most viable commercial relevance.  Larger institutions, with more extensive portfolios and less volatile revenue streams, would be better positioned to file earlier, having both the resources to actually file the application as well as the finances to absorb the upfront cost of filing a larger number of patents that individually may have a lower commercial value.

An interesting point, which makes it difficult to predict the impact of “first to file” in the US despite the experience of other institutions around the world, is the fact that public disclosure is still not considered prior art when evaluating an application for US patent as long as disclosure is by the named inventor, and within 1 year of application.  In contrast, any public disclosure under the European Patent Convention is considered prior art and therefore an immediate bar to application.

Until a case history is developed, either argument is speculative, and that uncertainty is itself perhaps the greatest short term impact in US academic and other non-profit institutions.  As institutions evaluate their workflow over the next several months in anticipation of the new rule, there are a couple of things to consider:

  • The transition to a “first to file” rule does not necessarily accelerate the patent application process across the board.  The decision to file will depend significantly on the field of research, where technologies in highly competitive and emerging fields will likely face greater pressure, at an earlier stage.
  • Each institution needs to evaluate not only the potential of these technologies, but their financial position and relationship with their researchers.  As noted in previous comments, the mandate for each office is not necessarily the same, therefore the reaction to these changes will not necessarily be the same either.

Fortunately, the “first to file” rule does not go into effect for 18 months, which gives institutions opportunity to consider changes before implementation.

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