Inventor Challenges|New U.S. Patent Law

     TAMPA (CN) – An inventor claims in court that the America Invents Act of 2011 violates inventors’ rights, by replacing the “first to invent” patent system with a deficient “first to file” rule.
     Mark Stadnyk and his company MadStad Engineering sued the U.S. Patent and Trademark Office, its director, David Kappos, and the United States of America, in Federal Court.
     Stadnyk says the America Invents Act (AIA), which took effect last year, is “special interest legislation” that favors big corporations at the expense of small businesses and individual inventors.
     Under the new law, Stadnyk says, the first one to file a patent application gets exclusive rights to an invention, even if the applicant is not the original inventor.
     “The AIA, signed into law by the president on Sept. 16, 2011, is a radical change that threatens the U.S. economy and American jobs,” the complaint states. “It discards the ‘first-to-invent’ patent system crafted by the Constitution’s founders – a system that led the world in science, technology, and industry for more than two centuries – and substitutes a failed ‘first-to-file’ system.
     “Traditionally, the U.S. patent system has awarded patents to the first person to invent a new discovery. The AIA changes this long-settled approach. Although the AIA is labeled as a ‘first-inventor-to-file’ system, that label is a smokescreen. Under the AIA, the patent will be awarded to the person who is first to file a patent application, regardless of whether the applicant was the actual first inventor of the technology in question. In fact, the AIA removes from the ‘conditions of patentability’ of Section 102 of the Patent Act (and thereby from the conditions of patent validity) the requirement that the named inventor actually invented the claimed subject matter.” (Parentheses in complaint).
     Stadnyk claims the first-to-file system violates the Intellectual Property Clause of the Constitution, which states that patents can be awarded only to original inventors.
     The complaint states: “The Intellectual Property Clause prohibits Congress from vesting patents in anyone but actual ‘inventors’ of genuine ‘discoveries.’ Congress is not authorized to award patents to the winners of the race to file at the PTO [Patent and Trademark Office].
     “The new ‘first-to-file’ approach will discourage innovation. Countries using a first-to-file approach have experienced a relative decrease in the number of inventions. One reason is that individual inventors, start-ups, small businesses, and research organizations simply lack the resources to compete with big corporations in the race to file patent applications with the PTO. They will be unable to afford the expense of the multiple applications that are necessary to protect inventions, update a pending patent, and attract new sponsors and researchers.
     “The AIA is special-interest legislation, pure and simple. It favors large corporations and multinationals, while discriminating against the small inventors – individuals, start-ups, universities, and independent research institutes – that have always formed the backbone of U.S. innovation. If the Act had been law in the twentieth century, the Wright brothers would have been denied a patent for the airplane, and the founders of Hewlett-Packard would have been denied a patent for the variable frequency oscillator. Not surprisingly, the AIA was passed over the vehement objections of entrepreneurs, venture capitalists, and patent law experts.
     “The core issue facing the U.S. patent system is the mounting backlog of over 700,000 patent applications at the PTO and the inexcusable delay in processing them. It now takes three years, on average, for a patent application to be processed. This situation is intolerable, but the AIA does nothing to fix it. In fact, the new Act will only make the problem worse. It contains a host of additional administrative review procedures that will further burden the PTO. The Act will also trigger a flood of hastily drafted, poorly explained patent applications, which will only serve to increase the administrative backlog and foster additional patent litigation.”
     Stadnyk, an inventor and small business owner, says the first-to-file standard cancels a crucial condition of patentability: that the patent holder of a technology be its actual inventor.
     “The AIA contains a provision requiring an oath by a patent applicant to the effect that a person believes himself or herself to be an inventor,” the complaint states. “But this provision is not effective or sufficient to avoid the reality that the AIA authorizes granting the exclusive rights to non-inventors. Under the AIA, there is no effective statutory requirement that the applicant be an ‘inventor’ for a patent to be valid. The AIA awards patents not to the actual inventors of genuine discoveries but rather to the first filers to invoke the administrative process of the PTO.”
     Stadnyk claims the standard is unconstitutional and inconsistent with U.S. patent law tradition.
     He says the original Patent Acts, of 1790 and 1793, which set the standard for hundreds of years, rejected the first-to-file rule and granted exclusive rights to first inventors.
     “A first-to-file system thus violates the text and original understanding of the Constitution,” the complaint states. “It also violates one of the key purposes behind the Intellectual Property Clause, which was to avoid the abusive system of royally granted monopolies that had emerged under the English Crown. First-to-file would replicate the British scheme of making patent rights dependent on government-granted privileges, rather than on the ingenuity and hard work that the framers believed were the basis of patent rights. Allowing the government to redefine an ‘inventor’ to be the person officially designated as such, on the basis of a procedural filing with the PTO, is exactly the kind of system the framers rejected.”
     Stadnyk, who holds three patents and has inventions at different stages of development, says he faces increased expenses and burdens from having to protect his inventions under the new law.
     “Much of today’s intellectual property (‘IP’) is created on or stored on computers, virtually all of which are connected to the Internet for reasons of research, communication and collaboration,” Stadnyk says. “Since the AIA no longer concerns itself with who actually invented an invention prior to filing, the new law makes it attractive and profitable for computer hackers to steal IP and file it as their own (or to sell it to the highest bidder). That means that inventors must invest in greater protection and security for one’s computers and networks, placing increased financial and technical burdens on inventors, most of whom are not information technology (IT) specialists.” (Parentheses in complaint).
     Stadnyk says the law harms individual inventors and entrepreneurs the most.
     He claims that since the law took effect, he has spent more than $100,000 on computer security, equipment, facilities and engineering expertise, to develop and test his inventions in-house and protect them from competitors.
     And he says the law forces inventors to rush their patent applications, decreasing their chances of getting a patent, or to spend more money on various applications for the same invention at different stages of development.
     Stadnyk wants the defendants enjoined from enforcing the law.
     He is represented by Michele Leo Hintson with Shumaker, Loop & Kendrick.

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