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Physics Today / Volume 65 / Issue 1 / Articles

Recent developments in US patent law
Patrick M. Boucher

January 2012, page 27
Permalink
http://dx.doi.org/10.1063/PT.3.1397
Legislation making the US the last country to abandon the
first-to-invent patent system should have a significant effect on the
way scientists approach patenting.

PUBLICATION DATA
ISSN:
0031-9228 (print)
Publisher:
$abstract.society.value is a Member of CrossRef American Institute of Physics

Despite its innocuous title of "Improvement in Telegraphy," US Patent
174,465 has often been described as "the single most valuable patent
in history."1 It was also the focal point of one of the most sordid
dramas in patent history. Despite determinations by the US Supreme
Court in the Telephone Cases of 1888 that Alexander Graham Bell
deserved credit for invention of the telephone,2 allegations of
conspiratorial fraud, bribery, and intellectual theft surrounding the
granting of his patent still cloud that credit today.
There is no question that on Valentine's Day in 1876 Bell and Elisha
Gray, both pictured in figure 1, filed documents with the US Patent
Office. Bell filed a full patent application while Gray filed a
"patent caveat," similar to a provisional patent application under
modern law. Both were assigned to the same examiner, Zenas Fisk
Wilber. A known alcoholic, Wilber asserted years later that in
exchange for a bribe of $100, he improperly revealed the content of
Gray's caveat to Bell's attorneys and allowed material drawn from it
to be added to Bell's disclosure.3In any event, Bell prevailed.
Figure
View first occurrence of Fig. 1a in article.
Figure
View first occurrence of Fig. 1b in article.
An apocryphal anecdote has Bell's attorney beating Gray's to the
patent office by a mere hour or two, but whether he did was ultimately
irrelevant: Since its early history, the US has operated under a
"first-to-invent" patent system in which the question of who wins the
race to the patent office is less important than who invented
something first (see the article by James Richardson and Craig Wood in
PHYSICS TODAY, April 1997, page 32 ). That system will change on 16
March 2013.
The change implemented by the Leahy–Smith America Invents Act that has
attracted the most attention is often informally described as a move
from the first-to-invent system to a "first-to-file" system.
Characterized that way, the concept is deceptively simple: The first
person to file a patent application for an invention is the one
entitled to the patent. The reality, though, is considerably more
complex.
First, the act does not implement a pure first-to-file system, but
rather implements a variation referred to as a
"first-inventor-to-file" system. The distinction is important,
particularly for scientists, because a major difference from a pure
first-to-file system is that it permits, and even encourages,
publication of the invention before it is filed with the patent
office—provided the applicant adheres to certain critical provisos.
Second, even pure first-to-file systems must account for inventors who
not only come from widely varied technology areas but also develop
their inventions under a varied array of circumstances. They develop
and implement concepts that may be similar rather than identical, and,
like Isaac Newton standing on the shoulders of giants, their
inspiration routinely relies on an existing body of knowledge. They
work in environments ranging from R&D departments of large
multinational corporations to university laboratories to the perhaps
romanticized garage of the individual inventor. Their research is
financially supported by both private and public interests, which
often reflect divergent views on such things as the role of profit and
competition. And it is increasingly rare that the value of inventions
is seen through a parochial lens; inventors are now routinely
confronted with the complex reality of global commercialization of
their ideas.
Perhaps most notable of all, the Leahy–Smith Act does much more than
change the US to a first-to-file system; it is the latest step in an
effort that began some 130 years ago to harmonize the patent laws of
different nations. The most comprehensive revision of US patent law in
more than 50 years, the act was introduced against the backdrop of an
acute need to address inefficiencies in the system. Some of its more
important other provisions include the introduction of new defenses
against patent infringement, new ways for third parties to oppose the
granting of patents, and procedural mechanisms evidently designed to
curtail the activities of entities sometimes pejoratively called
patent trolls. That term usually describes an entity that seeks to
exploit patents for licensing revenue without making its own products
and was adopted as a substitute for "patent extortionist" after a 2001
libel suit against Intel.4 Undoubtedly, the various provisions reflect
the perspectives and objectives of different classes of
inventors—including scientists—but it is overly idealistic to suppose
that those provisions flawlessly balance the various tensions among
those perspectives.
Publication and other disclosures
For hundreds of years, patent systems have encouraged inventors to
disclose their inventions to the public through the incentive of a
time-limited, government-backed monopoly to control use of their
inventions by others. The bargain was well expressed by Galileo
Galilei in December 1593 when he petitioned the doge of Venice for a
patent on a machine "for raising water and irrigating land with small
expense and great convenience. . . . It is not . . . fit that this
invention, which is my own, discovered by me with great labor and much
expense, be made the common property of everybody." If he were granted
a temporary monopoly over its use, he said, "I shall the more
attentively apply myself to new inventions for universal benefit."5
The Leahy–Smith Act fundamentally recalibrates the interaction of
patent laws with the timing and form of publications. At its most
basic level, the move to any form of first-to-file system encourages
inventors to file patent applications at earlier stages of an
invention's development. Applications that are more conceptual and
more incremental are likely to be filed, as inventors—particularly
those working in competitive areas—seek the benefit of obtaining the
first filing date. Ironically, physicists who have been repeatedly
discouraged by research journals from engaging in serial publication
of incremental results will find considerably more acceptance and
advantage to serial patenting.
Interestingly, a shift in focus to filing applications on technologies
earlier in development is likely to work better for physicists than
for some other scientists. The US Patent and Trademark Office has not
routinely required a working model of an invention in many years, and
physics is generally considered to be a predictable art because the
developed laws of mechanics, electromagnetics, acoustics, and so forth
enable reliable extrapolation of results. The requirements for
demonstrating functionality of an invention are accordingly far more
easily satisfied—and are therefore more amenable to earlier
filings—than in the unpredictable arts that mostly encompass chemistry
and biology.
The change to a first-inventor-to-file system may also have
consequences on the approach physicists take to publication of their
results because of the most significant deviation from a pure
first-to-file system provided by the Leahy–Smith Act: the retention in
US law of a form of grace period for nonpatent disclosures (such as
journal or other publications) by the inventor. An invention is
patentable when it is both novel and not obvious over a body of
knowledge referred to as prior art, as outlined in figure 2. Under a
first-to-invent system, the definition of prior art is complex because
it must account for the often difficult-to-determine date when
something was invented. Under a pure first-to-file system like that
used in most of the world, the definition of prior art is simple: It
is everything that was publicly known before the filing date of an
application. But in choosing to retain a grace period for disclosures,
the US has introduced a critical wrinkle. Under its
first-inventor-to-file system, prior art is everything publicly known
before the filing date of an application, except for disclosures made
by or derived from the inventor within the preceding year.
Figure
Fig 2.
Figure 2. The Leahy–Smith Act implements a "first-inventor-to-file"
patent system, which is a modified form of a "first-to-file" system.
Disclosures made within a grace period of one year prior to filing a
patent application are considered in determining who is entitled to
the patent. To be granted a patent on an invention, an inventor must
file an application with the US Patent and Trademark Office and must
be either the first to have so filed or the first to have disclosed
the invention during the grace period. Whether a reference is "prior
art" defines whether it may be used in evaluating an invention's
novelty and nonobviousness.
View first occurrence of Fig. 2 in article.
It is important to recognize that the body of knowledge that forms the
prior art is not limited by the language in which it may be known nor
by the fact that portions of it may be obscure. It does not even
matter whether any portion of a particular reference was ever read, as
long as it was publicly accessible. One recent example that strikingly
illustrates the point is the patent dispute involving Blackberry
services. With hundreds of millions of dollars at stake, a
little-known publication discovered in the Norwegian University of
Science and Technology Library in Trondheim, Norway, proved to be
critically important. Other examples of material considered as prior
art are eprints, doctoral theses deposited and indexed in libraries,
and poster papers displayed at scientific conferences.
The retention of a grace period is of particular importance to
scientists because they frequently place a stronger emphasis on
journal publication than do nonscientist inventors. At least in the
US, prior publication will not preclude the ability to obtain a
patent, provided the patent application follows publication by no more
than a year. In that respect, too, physicists may find the system more
conducive to their practices than will other scientists. Most journals
of interest to physicists do not impose publication embargoes of the
sort that are common among journals in other fields, notably medical
journals. Publication of an invention as an eprint, as part of a
doctoral thesis, or even on a private webpage will not immediately
jeopardize the ability to obtain a US patent.
More widely, the act of publishing an invention may even be
advantageous. As long as a patent application is filed and the time
constraints are satisfied, the first-inventor-to-file system grants
the patent to the first person who discloses the invention to the
public through either a publication or the patent filing. For
inventors who are unconcerned about patent rights outside the US,
early publication of an invention is sound strategy. It is the most
effective way of preserving the right to the patent in the US, is less
costly than filing a patent application, and provides a year to fully
consider whether a patent is even desirable.
Such a publication strategy is limited to the US and the small number
of other countries that afford a grace period. While early forms of
patent-reform bills conditioned the US's adoption of a first-to-file
system on acceptance of grace periods by Europe and Japan, such
conditioning is absent from the enacted version and requires a
modification of the strategy when foreign patent rights are of
concern. For example, a provisional patent application may be filed
just before publication. Provisional patent applications are cheaper,
easier, and quicker to file; and although they will not themselves
ever be examined or mature into a patent, they provide a one-year
placeholder that preserves the right to file foreign applications even
with an intervening publication.
Trade secrets
While the grace period promotes the early disclosure of inventions,
other provisions of the Leahy–Smith Act do the opposite. One eternal
question inventors face is whether to seek a patent on their invention
or to maintain it as a trade secret. Secrecy can be attractive,
especially in those instances where disclosure of an invention's
details makes it relatively easy to design alternatives. The risk of
maintaining an invention as a trade secret has been that someone else
might independently develop and patent it, which would suddenly make
its continued use an infringement. The Leahy–Smith Act fundamentally
changes the calculus in making that determination.
Expanding a provision that was introduced a decade ago to address the
perceived special case of business-method patents, the Leahy–Smith Act
immediately affords a prior-user defense to patent infringement in all
technology areas. Provided that the invention was in generally
continuous use for at least a year prior to the filing date of a
patent that covers it, such use may continue. While the use needs to
have been commercial, that term is defined broadly: It covers internal
uses by companies, sales between independent agents, premarketing
regulatory review, and—rather counterintuitively—use by nonprofit
laboratories.
The consequences of that defense are significant. One principal
motivation that encouraged filing a patent rather than maintaining an
invention as a trade secret has been removed. The risks of maintaining
it in secrecy no longer include the possibility that its use can later
be prevented through independent invention by someone else. Other
considerations for the decision accordingly take on more immediate
importance. How easy is it for a competitor to discover the invention?
How likely is independent invention of the same thing? How important
is publicity to one's strategic goals? Because the change in law makes
secrecy a more valuable protection strategy, the expectation is that
the number of inventions that are kept secret will increase.
Although the prior-user defense is intentionally broad, institutions
of higher learning are immune to it: An exception prohibits the
defense from being applied against inventions developed by university
researchers with federal funding. The exemption is specifically
structured with the academic-publication concerns of university
researchers in mind and provides an incentive for them to continue
their traditional approach to publication. Patents originally filed by
universities are now stronger than patents owned by others because
they may be applied against anyone, even someone who may previously
have used the invention in secret.
Government funding
The favoring of university researchers who use government funds is
consistent with a general effort that has been under way for three
decades to increase the involvement of universities in the patent
system. When former commissioner of patents and trademarks C. Marshall
Dann wrote for PHYSICS TODAY in March 1978 (page 23), he adopted an
almost cajoling tone in encouraging physicists to see the patent
system as an alternative to journal publishing. Although he recognized
that the way of thinking about patents on federally funded inventions
was evolving, it was still two years before greater control over such
patents would be extended to universities and other nonprofits through
the Bayh–Dole Act. Considerable changes have occurred since he
observed that "some scientists, including physicists, think that there
is something crassly materialistic about being interested in patents,
and that patents are usually given for clever trivialities."
Before the Bayh–Dole Act, the government took the view that allowing
an inventor to retain ownership of a patent on an invention developed
with federal funds was contrary to public policy, and it required the
public to pay twice: first to support the initial research and second
in higher costs for technology subject to a private-ownership
interest. There is a logic to such a view, but the demonstrable fact
is that without the incentive of private ownership, little publicly
supported research was effectively commercialized. Allowing federally
supported inventors to retain patent ownership has resulted in
markedly increased commercialization of some technologies to the
direct benefit of the public.6 Technology-transfer offices of
universities have consequently become much more aware of the financial
value of patenting, to the benefit of both the universities and
university researchers. The Leahy–Smith Act continues that trend
beyond the university by increasing the share of patent-licensing
royalties that may be retained by government contractors who are
nonprofit operators of government-owned facilities.
Other provisions
In addition to the first-inventor-to-file system with a grace period
and the broadening of the prior-user defense, the Leahy–Smith Act
includes other provisions intended to address specific recent
criticisms of the patent system. For example, the large backlog of
unexamined applications, plotted in figure 3, has increasingly been a
source of frustration for inventors and has prompted concerns that
delays are straining the system's ability to spur technological
innovation. Much of the backlog is attributable to a congressional
practice of taking patent fees paid by inventors and diverting them to
other government programs. The Leahy–Smith Act increases fee levels
and gives the patent office greater financial control over their use,
so that the office can examine applications more effectively and
expeditiously.
Figure
Fig 3.
Figure 3. The backlog of patent applications awaiting examination by
the patent office has risen sharply over the past 15 years. The
average interval is now about 36 months between the time of filing and
the time a patent is granted. The patent office hopes the Leahy–Smith
Act, which gives the office greater control over its own finances,
will aid in addressing the backlog.
View first occurrence of Fig. 3 in article.
Some critics go further and assert that the patent system not only
fails to spur innovation but actually stifles it. Litigation by patent
trolls is frequently identified as an exploitation of the system that
abuses the limited monopoly granted to inventors in exchange for their
disclosure. The Leahy–Smith Act sharply curtails one of the primary
strategies used in that type of litigation, namely the practice of
joining many defendants—there exist instances of more than 100
defendants spread across the US and otherwise unrelated—in a single
infringement action. The expectation is that removal of that strategy
will allow legitimate infringement actions to proceed while greatly
reducing the ability to engage in exploitive behavior.
Others contend that some patents are obvious and trivial; they
question the quality of examination. In addition to improving funding
for the patent office to address examination quality, the act greatly
expands the ability of third parties to submit relevant prior art for
consideration by the examiner and to initiate proceedings to oppose
the granting of specific patents. Generally modeled after similar
opposition proceedings in other countries, that additional level of
review may dovetail with investigations into the use of peer review in
the evaluation of patent applications (see the box ).
Paradigm shift
The Leahy–Smith Act is not merely a tweaking of the US patent system.
It alters many of the most basic precepts of the system and will
dramatically affect many basic patenting strategies developed over the
past decades as the intricacies of the former system were refined and
understood. Much remains unclear about the full scope of the changes
that will occur as a result of the system's overhaul. Many terms in
the legislation are ambiguous and will ultimately require judicial
decisions to resolve.
The only US president to have been granted a patent is Abraham
Lincoln. The idea for his patent came from a mishap in which Lincoln
found his boat stranded on a sandbar, and the boat's hands used
planks, crates, and barrels to buoy it enough to free it. His
invention, illustrated in figure 4, was never actually used with any
vessel, but it is easy to imagine his excitement at the process and at
the promise of being granted a patent. His poetic expression of that
excitement, that the "patent system . . . added the fuel of interest
to the fire of genius,"7 is one that still captures the system's
ultimate goal.
Figure
Fig 4.
Figure 4. Abraham Lincoln, inspired by a mishap in which he found
himself stranded on a sandbar, became the only US president to be
granted a patent. Illustrated by the two figures shown here, the text
of US Patent 6,469 begins: "Be it known that I, Abraham Lincoln, of
Springfield, in the County of Sangamon, in the State of Illinois, have
invented a new and improved manner of combining adjustable buoyant air
chambers with a steamboat or other vessel for the purpose of enabling
their draught of water to be readily lessened to enable them to pass
over bars, or through shallow water, without discharging their
cargoes."
View first occurrence of Fig. 4 in article.
Patents and peer review
People who manage peer-review systems love to quote Winston Churchill:
"No one pretends that [it] is perfect or all-wise. Indeed, it has been
said that [it] is the worst form . . . except for all those other
forms that have been tried from time to time." Churchill was, of
course, applying his characteristic wit in describing democracy as a
form of government. But the analogy with peer review resonates
strongly with the editors of scholarly journals, who recognize the
central role of peer review and yet are all too aware of its
weaknesses.8 (See also the letter by Steven Rothman in PHYSICS TODAY,
September 1995, page 124.)
Still, peer review has not traditionally been used for evaluating
patent applications, even though they can be as technical as journal
articles and patent examiners have at least as many limitations on the
breadth of their personal expertise as journal editors. One
justification for the difference in approach has been a concern that
technical experts consulted as referees are insufficiently
knowledgeable of the legal considerations that govern decisions for
patent applications. The justification is a weak one, and nations
around the world, including the US, are beginning to experiment with
peer-review systems for patents. The Peer to Patent pilot program in
the US, which concluded at the end of 2011, is limited to small,
defined technology areas and differs in important respects from
tightly controlled, anonymous journal peer review. It more closely
resembles online social forums. Any member of the public can
participate as a referee and can provide comments through a Web
interface that has no specific structure for participants to maintain
anonymity, although they are permitted to use pseudonyms. The
information gained from such pilot programs will ideally be informed
by the extensive experiences of journals and funding agencies in
determining whether and how to implement more widespread peer review
of patent applications.
The anonymous peer-review procedure used by journals has sometimes
also been the target of patent disputes. A 1988 case involving
Physical Review Letters is instructive.9 A paper the journal rejected
became a point of focus when one party to patent litigation sought to
compel disclosure of the identity of one of the referees; the party
argued that transmittal of an otherwise unpublished paper to a referee
might result in circulation sufficient to qualify as disclosure that
would bar the granting of a patent. The court, refusing to compel the
journal to identify the referee, noted that "even if the referee
consulted a few colleagues about the merits of the manuscript (as the
[journal] procedures . . . permit), this would not, as a matter of
law, suffice to constitute a 'printed publication.' " Two points are
noteworthy. First, submission of a paper to a journal, even when
referees are consulted, is generally insufficient to count as a
disclosure that would affect patent rights, at least until the journal
formally publishes the paper. Second, journals' confidentiality
policies regarding the identity of referees will generally be
respected and enforced by the courts.
Patrick Boucher is currently a patent attorney at the firm of Marsh
Fischmann and Breyfogle, and was previously an associate editor of
Physical Review B. He regularly comments on issues involving law and
science at JuriScientia, http://juriscientia.com.
References

   J. W. Wright et al., eds., The New York Times Guide to Essential
Knowledge: A Desk Reference for the Curious Mind, 3rd ed., St.
Martin's Press, New York (2011), p. 1233.
   Telephone Cases, 126 US 1 (1888).
   A. E. Evenson, The Telephone Patent Conspiracy of 1876: The Elisha
Gray–Alexander Bell Controversy and Its Many Players, McFarland & Co,
Jefferson, NC (2000).
   P. Groves, A Dictionary of Intellectual Property Law, Edward
Elgar, Northampton, MA (2011), p. 314., An exhaustive discussion of
the etymology of "patent troll" can be found in R. P. Niro, J.
Marshall Rev. Intell. Prop. L. 6, 185 (2007).
   B. W. Bugbee, Genesis of American Patent and Copyright Law, Public
Affairs Press, Washington, DC (1967), p. 24.
   D. C. Mowery et al., Ivory Tower and Industrial Innovation:
University–Industry Technology Transfer Before and After the Bayh–Dole
Act Stanford Business Books, Stanford, CA (2004).
   A. Lincoln, Speeches and Presidential Addresses: 1859–1865 The
Current Literature, New York (1907), p. 13.
   E. D. Robin, C. M. Burke, Chest 91, 252 (1987)
   D. Rennie, J. Am. Med. Assoc. 270, 2856 (1993)
   S. Wessely, Psychol. Med. 26, 883 (1996).
   Solarex Corp v. Arco Solar Inc, 121 FRD 163 (EDNY 1988).