Photo: Peter Jackson via Flickr
Last week, Congress approved a major overhaul of the nation’s patent system that will soon be signed into law by President Obama. The Leahy-Smith America Invents Act updates the way patents are processed, reviewed, and even challenged.And at a time of sluggish job growth, it’s being touted as a streamlining measure that could help businesses create new jobs.
So what, exactly, does the new law do?
- The central piece of the new law will change the patent system from a “first to invent” to a “first to file” system, putting it in line with most other industrialized nations. With the change, the first inventor to file a patent application for a given invention — and not the first inventor to actually come up with the invention — will get dibs on the patent. This change has riled some small business advocates who argue that it could favour larger businesses that have more resources at their disposal, and can thus move more quickly toward filing new patent applications.
- The new “first to file” system does, however, come with a big caveat. The AIA also creates a one-year grace period in which inventors can file a preliminary disclosure about an invention before filing for the actual patent. As long as an inventor files the final patent application within one year of the initial disclosure, that inventor is entitled to the patent.
- The AIA decreases the percentage of invention-related royalties that must be given to the government, while upping the percentage that goes to small business firms.
- The new law also reduces the filing fees charged to small entities applying for patents, and allows the Director of the United States Patent and Trademark Office to set and adjust other fees.
- The AIA updates the supplemental examination process such that the patent office can, “consider, reconsider, or correct information believed to be relevant,” at the request of a patent holder. That examination can be used by a patent holder to bolster the strength of an their existing patent, thus protecting it in the event that a third party tries to have the patent declared unenforceable.
The changes will gradually go into effect over the next two years, with some of the most significant changes, such as the switch to a “first to file” system, kicking in 18 months after Obama signs the bill into law.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.