Patent reform changes landscape for lawyers

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Intellectual property lawyers could get a lot more work if President Barack Obama follows through on his promise to create entrepreneurial jobs by overhauling the U.S. patent system.

But some patent lawyers worry the work will involve giving some tricky advice to clients. Among its major provisions, the America Invents Act passed by Congress and now awaiting Obama’s approval grants the patent to the inventor who files first, rather than the one who first conceives of the idea.

“It could cause the client who comes in second to lose some rights,” said Kenneth Solomon, of Gallop, Johnson & Neuman in St. Louis.

Creating a race to file will quash public disclosure of ideas that could evolve into inventions, said Kirk Deheck, of Boyle Fredrickson SC in Milwaukee. Once the first-to-file provision takes effect 18 months after the law is passed, Deheck said, he expects corporate clients will file provisional applications and then sit on an idea until it is worth developing.

“Lots of corporate clients will hedge their bets,” he said, “and file cheap and often and collect value from that later. I think the rush is going to hurt the complete development of a project.”

The changes proposed as part of the legislation are considered the biggest alteration to U.S. patent law since at least 1952.

While the measure still needs Obama’s signature, the president left little doubt as to his thoughts on it during his jobs address a week ago.

“You passed reform that will speed up the outdated patent process, so that entrepreneurs can turn a new idea into a new business as quickly as possible,” the president told Congress last Thursday.

“That’s the kind of action we need.”

The bill’s first-to-file provision brings U.S. patent law into line with many other countries. That eliminates the time-consuming process of determining who came up with an idea first.

But, Solomon said, a speedier process might force inventors to rush into the patent process. Inventors often prefer to thoroughly test an invention, he said, and think of all its potential variations to determine if it has a market before they go to the expense and trouble of getting a patent. Now, they won’t have that luxury.

In addition, Solomon said, the rules will not allow patent applications to be amended after they are submitted. If the inventor later discovers that his invention would work similarly or perhaps better with a minor tweak, he can’t go back and add that. What’s worse, he may have drawn a blueprint for his competitors to follow, he said.

“You can have a situation where having the patent is worse than not having it,” Solomon said.

But for institutional clients, Deheck said, those risks are worth the reward of protecting ideas that do pan out.

If there are inventions that are a couple years away from market, he said, there is little harm for companies under the new law to file a provisional application and wait to see how the market unfolds.

Provisional applications can cost as little as $100 or as much as $2,000, Deheck said, making it an oftentimes cost-effective gamble for companies.

“Engineers always come up with things they want to pursue that are nowhere near ready for production,” he said. “So companies will probably defer to filing provisional applications for things they don’t know the answer to right now.”

Provisional applications are good for only one year and still must contain all the elements of the final invention. But, they would prevent one company from skipping another in the patent line.

If the act is approved, Solomon said, he thinks intellectual property lawyers will need to be involved earlier in the process, with the needs of the patent application guiding the invention’s testing.

Solomon said he worries, however, what will happen if a lawyer advises caution during the application process and some other inventor winds up securing an earlier patent.

“If someone beats you to it,” he said, “is that malpractice?”

Dolan Newswires’ Scott Lauck also contributed to this report.