By Scott Nyman

In my last article, I discussed how I intend to cover different aspects of the Patent Reform Act of 2011 over a series of articles. Presently in Congress, as Senate Bill 23, the Patent Reform Act of 2011 is aimed at reforming the way the U.S. examines, allows, and enforces patents.

Without any further introduction, the first area of change in the Patent Reform Act of 2011 deals with inventor priority. More specifically, the Patent Reform Act of 2011 is making a step closer to the “first-to-file” system, bearing a closer resemblance to the system used in Europe today.

With the U.S. patent system, as it presently exists, inventive priority is decided on the basis of which applicant invented first. This system is commonly referred to as the “first-to-invent” system. In most other areas of the world, such as used by the countries of Europe, the inventive priority is decided largely on which inventor filed his or her patent application first. This system, used by the majority of the world, is commonly referred to as the “first-to-file” system.

Under the present U.S. ‘first-to-invent” system, an inventor may claim priority after having satisfied two conditions: 1) conception and invention, and 2) reduction to practice. Once an inventor has diligently reduced his invention to practice, such as by building a prototype or filing a provisional application, the inventor may use the date on which the invention was conceived as his priority date. In a contest of priority, called an interference proceeding, an inventor that believes he or she should have priority may request an administrative hearing before a panel of judges on the Board of Patent Appeals and Interferences. In these proceedings, a second applicant must overcome the presumption that the first applicant to file was also the first to invent.  Due to the amount of evidence and time involved with swearing behind prior art in interference proceedings, or proving that they conceived the invention first, costs and legal fees can add up very quickly.

In non-U.S. “first-to-file” systems, the first applicant to file a patent applicant will have priority over all subsequent applicants, regardless of who conceived the invention first. That’s it.

As proposed in the Patent Reform Act of 2011, patent applicants will now be given an “effective filing date,” from which priority will be judged, with consideration to whether prior art was available before that date. This “effective filing date” will also be used to determine whether the invention would be obvious to those in the art through a combination of prior art references.

Also, under the Patent Reform Act of 2011, the U.S. patent system may do away with interference proceedings. In its place, the Act has created “derivation proceedings,” wherein the non-applicant would allege that an application was derived from another inventor’s work (which I would assume would be the alleging non-applicant).

While the proposed changes will likely eliminate some of the delays and expenses associated with the “first-to-invent” system, I am not totally convinced that the change will be a win for American inventors. The new rule may have the effect of favoring larger companies, or at least inventors with greater financial stability, which may fire off applications. The garage inventor that has to save up, just to afford the costs associated with acquiring a patent on his invention, may now be at a greater disadvantage than the well financed companies with intellectual property budgets in the millions of dollars.

What is your take on these proposed changes to U.S. patent system determination of priority? Sound off in the comments.