Opinion: AIA Does Not Discriminate

The America Invents Act (AIA) was a step in the right direction for US competitiveness and open innovation.

By | August 21, 2013

The National Portrait Gallery, located in the Old Patent Office Building in Washington, D.C.WIKIMEDIA, AUDEOver the past year there have been a number of articles written about the ever greater importance bestowed by the programmatic and policy endeavors of the US Patent and Trademark Office (USPTO) and the overall US intellectual property ecosystem. In particular, there has been much criticism of the changes imposed by the Leahy-Smith America Invents Act (AIA) passed in September 2011—including a recent opinion article in The Scientist by George Lewis, who argued that the new law “discriminates against academics and small biotechs.” Unfortunately most of the time, the issues presented to the public—and the basis of many of Lewis’s arguments—are either incorrect or missing key pieces of information to explain why the law operates in a particular fashion.

First, the passing of AIA did not result in a “first to file” system, as Lewis and others argue. Rather, the USPTO now adopts a modified “first inventor to file” system, which preserves some of the protocol matters of the former “first to invent” system, including the 1-year filing grace period and the need for the inventor to file the patent application with a fully “reduced to practice” invention—in other words, the proof of concept or a prototype has been developed. Thus, it is not possible for a non-inventor with a disposable income to swoop in and “steal” a patent from a true inventor who may need a little extra time to secure the necessary application funding while they go public with their initial conceptual idea. The true inventor can further secure their place in line for coming up with the inventive concept by making better use of the already existing provisional patent application protocols (basically a quiet public disclosure filing to the US Government, which costs around $100), while being given a grace period of 1 year to work out the kinks of their invention.

The AIA also makes allowance for those innovators who are cash-strapped through the creation of a micro-entity discount. The discount allows for a 75 percent reduction of the filing fees for the first four patent applications filed. That is a lot of money saved, which can be better used elsewhere in building one’s company or ramping up technology development.

In addition, the new policy has other added benefits for biotech, such as the implementation of three levels of examination procedures: accelerated, regular, or decelerated. Given the rapid changes in technology development for the IT-world, a rapid acceleration patent examination track—which boasts a start-to-finish time of less than 1 year from the initial filing—makes sense for inventors who need patent protection sooner. In the biotech and cleantech space, on the other hand, more stringent market regulations make a slower patent examination process more appropriate, such that your patent protection kicks in closer to the time the product actually hits the market, maximizing its protection following regulatory approval.

The AIA also has stipulations that now make it simpler for third party intervention in the patent application review process, which was severely limited in the past. Given the massive amounts of information a patent examiner must review and the limited time they have to render a decision on a patent application, it always helps to have additional input from known experts in the field. As a result of AIA, submitting pertinent prior art for consideration by third parties is much easier, helping the patent examiner do their job much more effectively and efficiently. Furthermore, the new policy incentivizes inventors to publicly disclose the information contained in the patent, and the public is now allowed to weigh in on what they may consider to be controversially issued patents. Furthermore AIA allows for more efficient streamlining and a higher quality of review for questionable patents by the Patent Trials and Appeals Board via revamping of the appeals process. These are important steps towards the enabling of further transparency between all parties involved in the intellectual property system.

In conclusion, no legislation emanating from a democracy is going to be perfect given the various stakeholders in play, but the passing of AIA was a step in the right direction for keeping the United States’ competitive edge in a globalized economy. In addition to the benefits highlighted above, the AIA has empowered the USPTO to expand from its sole office in the Washington, DC, to metro-area to satellite offices in Detroit, San Jose, Denver, and Dallas, where the agency will undoubtedly recruit new talent and resources to ensure a high-quality and efficient US Patent system for the 21st century.

G. Nagesh Rao is a former patent examiner and senior policy advisor for the Department of Commerce’s US Patent & Trademark Office and the Office of Innovation and Entrepreneurship, and the cofounder of the public-private partnership, Made in America. He is also the cocreator of a free Patents Webinar series in conjunction with the National Council of Entrepreneurial Tech Transfer (NCET2) and the US Federal Government’s Working Group on Technology Transfer.

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Avatar of: Eric J. Murphy

Eric J. Murphy

Posts: 20

August 21, 2013

From what I have seen, I cannot agree more with what Mr. Rao has noted.  The modified "first to file" aligns us more with the rest of the world, while still having the unique ability to file a provisional.  This provisional patent permits someone to the their "stake" in the ground prior to have the complete invention reduced to practice.  In other words, it gives critical lead time and this element of U.S. Patent Law as been maintained.

The reduction in costs is substantial based upon the payment guidelines I have seen and may actually encourage small business and folks just starting out the needed break to move forward.

I really don't see anything in the new law the prevents or hampers university and biotech from filing patents.  If anything, people will not be stuck in the USPTO black hole waiting for a patent to be examined.  This has happened to me and 8 years later you get the patent awarded.  So how good was that process? 



Avatar of: JToeppen


Posts: 37

August 21, 2013

There was certainly room for improvement.  Heaven knows that many of us grew weary of the old system.  International patents remain a separate hurdle for those who file in the US first. 

It is difficult enough to reduce ideas to practice, most due to funding issues.  Making things requires investment, and inventors don't get funded until they have patents, that also require investment, and still doesn't necessarily provide real protection.  There is nothing like a publically disclosed well referenced rejected patent to blow future business opportunities for the inventor.

Perhaps open sourcing and crowd funding may serve the interests of individuals inventors better today.  US Patents have been a black hole for time and and money for some time now.  Any improvements would be great and should postively impact small businesses and maybe even the inventors themselves.

Avatar of: Rick H

Rick H

Posts: 1

August 21, 2013

I find it hard to be civil in disagreeing with the author. Before the "first to file" provisions of the law came into effect, the U.S. economy created more jobs, and more innovation, than Japan and the European Union combined. The U.S. was the world leader in innovation, and for some reason we felt the need to "harmonize" our standards with the rest of the world in a manner that most benefits big business. 

One-year grace period not withstanding, the "first to file" provisions have made it extremely difficult for the individual inventor to find investment funds to pursue developing a prototype and receiving a patent. A well-heeled potential investor can indeed misappropriate key elements of  IP with impunity, knowing that after sinking much of their self-worth into development, most inventors can't afford the expense of pursuing the potential investor in court for violations of a non-disclosure agreement. The horror stories are out there, if one bothers to make inquiries beyond Fortune 500 firms.

And I would humbly suggest that whoever decided that a one-year grace period was adequate has little experience developing technology on a shoestring. Or perhaps we should accept that useful inventions only come from firms with substantial backing.

in my opinion, this law does for small inventors what Sarbanes-Oxley did for small companies going public and Dodd-Frank did for small community banks competing with large banks - it increases the expenses of small firms so they are at a further disadvantage when compteing with large businesses. I would appreciate the author's insight as to why patent fees aren't an order of magnitude higher for large businesses that have a long history of creating or purchasing technologies and burying them, such as our automotive industry has done. I would imagine this approach  would have provided significant fiscal benefits as well. 


Rick H. 

Avatar of: BobD


Posts: 20

Replied to a comment from Rick H made on August 21, 2013

August 22, 2013

Rick H., I don't understand your position.  Your first paragraph appears to defend the old patent system, but the second paragraph goes on to describe the disadvantages of being underfunded and taken advantage of by wealthy investors who can afford legal proceedings.  It's always a disadvantage to be poor and out-lawyered - the "horror stories" you reference all occured under the old system.  It seems to me that inventors often do not take advantage of the inexpensive priovisional patent route before seeking investors - it is a cheap way to get some legal protection that is easier to apply  than lawsuits.

Avatar of: staff


Posts: 1

September 10, 2013

Just because they call it patent "reform" doesn't mean it is.

These are mere dissemblings by China, huge multinational thieves and their paid puppets -some masquerading as reporters, some in Congress, the White House  and elsewhere in the federal government. They have already damaged the American patent system so that property rights are teetering on lawlessness. Simply put, their intent is to legalize theft -to twist and weaken the patent system so it can only be used by them and no one else. Then they can steal at will and destroy their small competitors AND WITH THEM THE JOBS THEY WOULD HAVE CREATED. Meanwhile, the huge multinationals ship more and more American jobs to China and elsewhere overseas.

Do you know how to make a Stradivarius violin? Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of or weaken patent rights? Think again.

Most important for America is what the patent system does for America’s economy. Our founders: Jefferson, Franklin, Madison and others felt so strongly about the rights of inventors that they included inventors rights to their creations and discoveries in the Constitution. They understood the trade off. Inventors are given a limited monopoly and in turn society gets the benefits of their inventions (telephone, computer, airplane, automobile, lighting, etc) into perpetuity and the jobs the commercialization of those inventions bring. For 200 years the patent system has not only fueled the American economy, but the world’s. If we weaken the patent system we force inventors underground like Stradivarius and in turn weaken our economy and job creation. For a robust economy America depends on a strong patent system accessible to all -large and small, not the watered down weak system the large multinationals and China are foisting on America.

For the truth, please see http://www.truereform.piausa.org/

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