If two inventors working independently create the same invention, which one is entitled to a patent?  Is it the person who invents first or the person who files a patent application first?

Under current U.S. law, the person who is “first to invent” is entitled to the patent.  In the rest of the world, the person who is “first to file” the patent application is entitled to the patent.  The “Patent Reform Act of 2009,” , pending before Congress, would move the U.S. from ‘first to invent’ to ‘first to file.’

Why should we care? The existing U.S. ‘first to invent’ system provides a benefit to U.S. inventors, particularly inventors with limited resources such as individual inventors, small businesses and academic institutions.  The U.S. inventor can conceive of an invention and diligently develop the invention for up to one year without undergoing the expense of filing a patent application and without risk that an intervening publication will usurp the inventor’s right to a patent.   This is known as the ‘one-year grace period.’

The proposed ‘first to file’ system largely eliminates the one-year grace period for filing a patent application.  In the proposed ‘first to file’ system, an intervening publication by a third party will be prior art for the invention and can destroy the inventor’s right to a patent.

The move to a ‘first to file’ system benefits companies that are frequent patent infringement defendants, such as Google, by making patents harder to obtain and easier to attack.  In short, a ‘first to file’ system means fewer issued and enforceable patents.

The loss of the one-year grace period will have other consequences for the inventor.  In the ‘first to file’ system, the inventor is under pressure to evaluate the invention and decide whether to file a patent application as soon as possible after conception.  The inventor has only limited information at this early stage in development.  The inventor may guess wrong as to whether to file and as to which embodiments of the invention to pursue.  If the inventor guesses wrong and files patent applications for embodiments that turn out to have little value, the inventor has wasted money and time. If the inventor guesses wrong and fails to file an application for an invention that proves valuable, the inventor risks the loss of the invention to a later inventor or to subsequent prior art.The ‘first to file’ system has the benefit of eliminating the transactional costs of priority fights by creating a hard-and-fast rule for priority between competing inventors.For more information, see Margo Bagley, The Need for Speed (and Grace): Issues in a First-Inventor-to-File World, Berkley Technology Law Journal, Vol. 23, p. 1035 (2008) and Dennis Crouch’s discussion of that article.

— Robert J. Yarbrough, Esq.