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Patent ‘reform,’ like most ‘reforms,’ in the end benefits the biggest guys with the best lobbyists

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Politics,Beltway Confidential,Timothy P. Carney

A few years back, Congress set to work trying to modernize the patent system. Understandably, a bunch of companies, led by financial firms and tech-related companies, hired a bunch of lobbyists and lobbied very hard to steer this updating of the patent system.

The final product — which goes into effect this weekend — tilts the playing field in the direction of the big guys, at least according to the head of the National Small Business Association.

Who should get a patent if two different organizations come up with the same idea? The America Invents Act, which takes effect on March 15, will replace the current “First to Invent” standard with a “First to File” standard. This favors the big guys for a few reasons, argues Todd McCracken of the NSBA at Reuters:

Moving to a first-to-file system favors large businesses, foreign corporations and well-financed multinational market incumbents over small-business innovators.  In patent parlance, this transition is more accurately described as moving from a “first to conceive” system to the “first to reduce to practice” system.

For a patent application to be effective in protecting a new invention, it can only be written after the invention has been fully vetted, reduced to practice and tested.

Unlike the American first-to-conceive system, a first-to-file system awards patents to those who are better equipped with resources to achieve the latter reduction to practice steps after conception, or to those who can afford to file many applications at every stage of development.  Hence, favored under this first-to-file system are entities having financial and staffing resources that are generally not available to startups, individual inventors or small-business innovators.

Presumably, in order to make up for this slanted playing field, the USPTO is taking all sorts of steps to help small businesses, reports the Raleigh News-Observer:

The program pairs financially under-resourced small businesses with volunteer patent attorneys.

The patent office is also working on expanding its existing ombudsman services to help small-business owners understand the patent procedure and move their applications through the process.

The office will continue to offer a 50 percent discount on patent fees for small businesses with 500 employees or less. Starting March 19, micro entities will receive a 75 percent discount on related fees.

[Link via James McPherson on Twitter]

Whenever an agency needs to make special carveouts from its rules, that’s a sign there’s a flaw in the rules.

The lesson I take away from this: Any time you open a legislative battle, the guys with the best lobbyists will probably win — and that’s never Mom & Pop. In other words, government is a home game for big business.

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