New Patent Reform Gaining Ground


The House recently passed legislation that would lead to new reforms in determining ownership of patents. The legislation is intended to reduce patent litigation, which often turns on the identity of the innovator. Lawmakers are attempting to change the method via which courts determine the owner of a patent. Presently, the "true owner" of a patent is determined by identifying the first to invent. Proving the first to invent is often difficult and costly, particularly in litigation.


The proposed legislation relies on a "first to file" model. That is, the first person to register the innovation as their own would be the presumptive owner of the intellectual property.


This idea is not new. Many states use a similar method of defining ownership when it comes to determining the true owner of real property. Common law required that an individual attempting to determine ownership of property would have to follow "chain of title," often hundreds of years of documents, to determine the true owner. Many states now use a system that resolves conflicts by simply checking the state-maintained records. If there is a conflict about ownership the records on file with the state are the "tiebreaker" between the parties. Such laws are in place for two main reasons: (a) States want to encourage property owners to register their properties for tracking, tax, and realted purposes, and (b) having a simple-to-understand "tiebreaker" between conflicting parties helps to avoid litigations before they begin. Any potential litigant would immediately know whether he or she had a chance of prevailing in a matter with a simple check of the state or county records.

Bottom Line: While this legislation has not gone further than House approval, it is a proposal that has the potential to become law. Particularly given past successes with real property, there is little reason to doubt that the same principles could not be effectively applied to intellectual property matters as well.

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