Will the America Invents Act let America invent generously?

So, what is so special about the America Invents Act to a country that tops the world charts in the number of patent filings? Will this legislation be instrumental in increasing the quantity of applications or controlling the quality of patents issued?

Key features or effects of the legislation include the following:

• A move from a “first-to-invent” to a “first-to-file” system—Under the former, the original inventor receives patenting rights, while under the latter, the first person to file for a patent will be awarded it. This may increase the influence third parties can have on the patent application and examination processes.
• Introduces a post-grant review system to weed out “bad” patents granted by the Patent Office—With this system, a third party can petition to review a patent after its issuance. The party filing the petition would have to show that "it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable" or that "the petition raises a novel or unsettled legal question that is important to other patents or patent applications." Although this is similar in some ways to the inter partes re-examination procedures already available, the new post-grant review will move much more quickly, with petitions being decided within one year of a patent's issuance.
• Helps the Patent Office address the backlog of patent applications by dealing with the problem of “deficit examining”—A big question remains, however, of whether the legislation will aid or impair the efforts to reduce the backlog.
• Brings an end to frivolous multi-defendant patent suits by providing that joinder of multiple defendants is proper only if the plaintiff's claims arise out of the same set of transactions or occurrences—This feature of the act responds especially to the recent trend in patent litigation wherein nonpracticing patentees file massive infringement actions against multiple, even hundreds, of unrelated defendants.
• Eliminates the practice of false patent marking claims—This provision was included in the act because, in the past few years, following some significant legal developments, a cottage industry has developed in which several false patent marking cases have been filed by dozens of small entities formed for the sole purpose of asserting such claims. The patent laws earlier prohibited marking a product with the number of a patent that did not actually cover the product and allowed for qui tam suits by members of the general public to enforce this prohibition. The legislation now does away with this phenomenon by allowing such suits to be filed only by the federal government or by a third party that has actually suffered some competitive injury.

What was expected but did not happen

The Patent Office has not kept control of the fees generated by applicants for patents or trademarks. Although the bill originally provided for this, the version finally passed by the Senate omits this provision. The proposal was such that the Patent Office could fix, collect and apply the fees for its purposes, as opposed to the current system wherein Congress sets and collects the fees and allocates a set amount of funding to the office. The current system has come under fire many times, as the Patent Office always felt grossly underfunded. Many people opine that the current system is responsible for the declining patent quality and the increasing backlog of applications.

American Innovators for Patent Reform and eight other organizations oppose the legislation, explaining why it “will increase the cost of securing a patent, reduce access to the patent system for inventors and small businesses, increase the current 700,000 patent application backlog at the Patent Office and decrease the ability of patent holders with limited resources to enforce their patents.” They argue that a “weakening of the grace period granted to inventors under the current law—during which they can refine and improve their inventions, build working prototypes, or secure financing or manufacturing for inventors—would put inventors and small businesses at a distinct disadvantage as they might not be prepared to bear the costs of filing a patent application while large corporations can file their patent applications sooner and more frequently.”[1]

True effects of the legislation can be seen only once it is set into practice. Until then and thereafter, may America invent well.