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How Sweeping Changes to the U.S. Patent System Will Impact Your Small Business

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How Sweeping Changes to the U.S. Patent System Will Impact Your Small Business

By Caron_Beesley, Contributor
Published: November 7, 2012

If you hold patents, have patents pending or are thinking of filing a patent, then it’s time for you to get to know the details of the most significant reform of the U.S. patent system in more than a century.

On September 16, 2012, the Leahy-Smith America Invents Act (AIA) of 2011 was signed into law, signaling an historic overhaul of the patent system. According to the U.S. Patent and Trademark Office (USPTO), the provisions of the AIA will “spur innovation and economic growth by streamlining the patent application process and introducing new procedures to ensure patent quality.”

So what does this mean for small business owners to whom patents are valuable assets? Here’s what you need to know:

You and Your Competitors Can Now Give Input on Pending Patent Applications

For the first time in the history of U.S. patent law, third parties can now come forward and challenge patent applications. For example, if you know of someone who is trying to file a patent on a product that would interfere with your business, you now have an opportunity to provide information to the patent examiner to help them determine whether the innovation in the application is patentable. 

By introducing third party input into the examination process for the first time since the inception of our nation’s intellectual property system, we’re able to expand the scope of access to prior art in key areas like software patents,” said Undersecretary of Commerce for Intellectual Property and Director of the USPTO David Kappos in this press release.

To support this change, in October 2012 the USPTO launched a crowdsourcing tool – AskPatents – to solicit input on patent applications. If you are concerned about a particular patent, you can post questions and challenge patent applications online. USPTO patent examiners will take these comments into consideration when reviewing applications. Inventors can also check the site to see if their idea is patentable.

Resolving Patent Disputes Just Got a Whole Lot Easier

In the past, if you were to contest a patent or a competitor filed a patent dispute against your business, you could expect the process to involve costly legal fees and drawn-out litigation in district courts. Under the provisions of the AIA, however, the USPTO offers a “timely, cost-effective alternative to district court litigation for challenging the patentability of a claimed invention in an issued patent.” Under this provision, the USPTO handles post-grant reviews (for a fee), resolving disputes more quickly and saving small business owners the hassles of dragging a patent dispute through the courts. 

In a nutshell, these provisions “…establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs,” said USPTO’s David Kappos.

More to Come

Look for additional provisions to come from the AIA in March 2013, when the U.S. patent system moves from a first-to-invent to a first-inventor-to-file system. This will bring the U.S. in line with other nations and make it more important than ever for small businesses to consider filing a provisional patent application and engage a patent lawyer as soon as possible.

Read more about the new and upcoming changes on the USPTO website: Historic Patent Reform Implemented by U.S. Patent and Trademark Office.

Related Resources

 

 

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

The covered business method (CBM) review provision appears to be working. 4 out of 4 patents have been invalidated so far. The latest patents to be invalidated by the PTAB were telematic rate making patents that Progressive was attempting to enforce against Liberty Mutual. Several other Progressive patents are also being challenged. We will have to see what the appeals court may do. One would think they would be hostile to these developments, but they were already reversed once by the Supreme Court this year and 3 or 4 more cases have been granted certiorari and will be heard in the next few months. Two new judges have also been added at the Federal Circuit. So perhaps they will moderate their response some.
The increased likelihood of third parties inquiring about patents may result in increased complications of the filing process. I can see a benefit in that businesses may ensure more quality and innovation in their patents. We may not see the full effects of this change until five years on.
I have not gone through the new law yet. The article is very informative. I hope the new law would make the process of patent simpler than before.
This is a great process. Hopefully, it will work to the benefit of business owners. We shall see.
I have a patent pending. I am not really sure how this all will affect me?
This will depend on the filing date of the patent. If your patent was filed prior to the AIA, you may need to check the pre-AIA rules and guidelines.
As mentioned on the USPTO website, the USPTO has created new means of contact for the public to access assistance or information about the new AIA provisions: via 1-855-HELP-AIA or HELPAIA@uspto.gov. I recommend you contact them to see how you will be affected.
This has been a work in progress. I haven't read the new law yet but I do know the patent process was cumbersome and complicated. Whether the new laws will actually work, we will see. The problem I see is the "challenge" provision can be abused, which would lead to more complication unless there are measures to sanction bad faith challenges.
Very interesting. Thank you for keeping small business owners up to date on these sort of happenings.

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