Why was the American Invents Act Introduced?

The Senate recently passed the America Invents Act, which corresponds to a major patent reform initiative. There are several people who are saying that this is the biggest patent reform measure since the 1950s.

The bill recommends changes and reforms in the United States patent law. The act is similar to the Patent Reform Act of 2009, which was proposed in the previous session. The proposal will represent the first important changes to the country’s patent system in almost 60 years. It will help to produce jobs; therefore, boosting the economy without increasing the nation’s debt.

The America Invents Act consists of a provision preventing patents on tax strategies, which will decrease the cost of conformity for taxpayers during tax season. The Act’s stipulation codifying an increase in judiciary standards for “willful infringement” was achieved during committee mark-up. The bill also consists of a provision that guarantees federal court jurisdiction over all patent topics even if the patent topic arises in the defendant’s counterclaim.

Reforming the patent system will speed up economic growth, create jobs, and increase the country’s capability to innovate. In fact, some people believe that because of this reform, millions of jobs could be created.

In addition, the America Invents Act produces a new “first-inventor-to-file” technique that will give people applying for patents in the United States with the effectiveness advantages of the first-to-file techniques used in all of the other countries around the globe. This will get rid of the necessity for interference proceedings; therefore, it will provide confidence for small businesses and individual inventors that their creations will be protected.

Under the America Invents Act, there is a “derivation” arranged to make sure that the first person to file the application is credited for the invention, so that no one can copy someone else's invention. This system gives American inventors and businesses larger global patent protection.

The Act also enhances patent quality by permitting third parties to present information connected to a pending application. A patent examiner will consider this information. The bill will help get rid of patents that should not have been granted.

The United States is the most inventive and industrial country in the world. If this country is to keep their world status, it is necessary to have an effective and updated patent system. This bill would drastically help change our patent laws. Therefore, the America Invents Act is a huge step forward in improving United States patent laws. Much of its stimulation will help in strengthening the patent system as a whole; thus, maintaining the nation’s worldwide competitive advantage.

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Why Can't Congress Pass Patent Reform?

There have been no significant legislative updates to Patent Laws in the United States in 60 years. Following government reports in 2003 by the Federal Trade Commission and in 2004 by the National Academy of Sciences, some congressional members have attempted to implement recommendations in these reports to update Patent Laws. The first such attempt occurred in 2005 during the 109th United States Congress.

Many of the proposed changes soon erupted into controversy among numerous interested parties. Under current law, the US operates under a “first-to-invent” system, where a patent is rightfully owned by the first individual or consortium to invent the patent rather than the first party to file with the United States Patent and Trademark Office (USPTO). The proposed change to a “first-to-file” system was opposed on grounds that inventors would file quick and sloppy patent applications without first finalizing their inventions and that “first-to-file” would disadvantage small and new firms who lack internal patent procedures and who cannot afford the in-house patent lawyers and experts who are ubiquitous among larger and more-established businesses. Many small business groups protested that they were not represented in the negotiations leading up to the bill’s writing.

Many other opponents protested that the United States was attempting to change their Patent Laws in order to more closely mirror those enforced in the European Union. They claim that the US has been a leader in technological and innovative advancement vis-à-vis the EU primarily due to US patent protections. They fear that the US will lose this innovative edge if the patent laws are changed significantly.

Together, challengers to the Patent Reform Acts believe that the acts will give more protections to potential patent violators and manipulators of the patent system than it will protect legitimate patent-holders. Another sticking point is that while the Patent Reform Acts attempt to shorten the waiting period from filing to receiving a patent, the acts actually crate more post-patent reviews and examinations. Opponents fear this will create ambiguity about the legitimacy of patents and lead to increased and expensive litigation and stifle the economic exploitation of the new inventions.

Failing to pass the Patent Reform Act of 2005, the act was reintroduced in the 110th Congress in 2007. By this time, the Democrats had taken control of the Senate where in 2005 the Republicans controlled both chambers. While there is broad bipartisan support and opposition to the measures, the fact of a divided Congress threw additional challenges into the process. One of the largest groups opposed to Patent Reform has been organized labor unions, a powerful force in politics especially in Democrat constituencies.

After both the 2005 and 2007 acts failed to make it to a vote in either house, supporters of the Patent Reform Acts reintroduced the Patent Reform Act of 2009. By this time, the sponsors of the bill had attempted to strip out many of the controversial parts and water down the bill in order to gain more supporters. However, this caused a backlash among the original supporters of the Reform Acts who began to oppose the current Act as ineffectual.

In 2011 both chambers of Congress introduced a Patent Reform Act as the renamed America Invents Act. The passage of this act is very uncertain and history indicates that there may be long odds against enactment. Some supporters of patent reform have begun talking about breaking up the act into smaller pieces of legislation which can more easily be debated and passed if the comprehensive Act once again stagnates.

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How did Goldman-Sachs qualify for Bank Bailouts even if it isn’t a bank?

In order to qualify for the Troubled Asset Relief Program (TARP), the entity must be a financial institution. Under the definition of financial institution, companies that can be considered to be banks may qualify, but the definition is much broader than this. A financial institution is not just a bank, which is how the firm, Goldman-Sachs, met the criteria for a TARP bank bailout.

Goldman-Sachs is an investment bank that manages securities. Securities are either debt securities such as bonds or they are equity securities such as stocks. They also offer other services in the financial sectors such as for acquisitions and mergers. They are a firm that conducts asset management services for their clients. They also were in the business of analyzing the data that loan applicants give in order to determine the applicant’s creditworthiness.

Under the definition of financial institution, the firm must be a United States regulated investment firm, which is exactly what Goldman-Sachs is. It was also considered to be one of the financial institutions that were “too big to fail.” The concept that a company is too large to allow to be defeated was one of the reasons that certain financial institutions were chosen to receive TARP funds. TARP was invented as a way to help stimulate the economy, which is why the government did not want to see large corporations fall under.

Goldman-Sachs is a company that had a global presence. In 2006, the number of their employees reached as high as 31,701 people around the world. The concern was that if Goldman-Sachs was allowed to fail, the jobs of 31,701 people would be in jeopardy and then lost. It is also a company that has headquarters located all over the world. Along with their American headquarters in New York, Goldman-Sachs also has headquarters in London and Hong Kong. They have branches in other countries around the world such as in Japan and India. Their other major office within the United States is located in Salt Lake City, Utah. With such a large presence around the world, this financial institution met the criteria for being too big to fail.

The financial institutions that qualify for TARP funds also must have troubled assets that include securities based in an industry that is contributing to the economy’s instability. As Goldman-Sachs is a firm that invested some of its funds in mortgage-backed securities, it met the criteria to qualify for TARP funds. The sub-prime mortgage industry was a big part of the reason that the economy began to deflate; this is what happened when the housing bubble burst. For this reason, the government purchased Goldman-Sachs’ troubled mortgage-related assets in exchange for the ability to purchase its stock at a low, fixed rate.

What is Inventor's Legislation?

For years, the United States of American has fathered some of the most amazing inventors and their respective inventions. This is all due in part to the patent system that allows inventors to retain the rights to their inventions. This has been one of the biggest boons to American society. During the Industrial Revolution, men and women from around the globe flocked to the United States because, here, they could be creative, create something new and then it would always belong to them. Inventor's Legislation today is centered around the 'America Invents Act,' which was formerly known as the 'Patent Reform Act.' This legislation has been attempting to break through Congress for several years. With President Obama's new agenda to create a "sputnik" generation, it seems as though it may pass for the first time.

Under the current patent system that resides within the United States, anybody who invents something - be it a soda can or a new design on a bow tie - has the right to patent that item. Why? Because they invented it first. This is sometimes known as the "first to invent" rule. If for some reason that inventor's idea is stolen and patented by another individual, then they have the right to challenge that person's claim and prove that they were the one who invented it first. This is in step with the Constitution, which outlines the grounds for an inventor's rights to his works in Article 1, Section 8, Clause 8. The rights of a writer or inventor's works revert to him.

The Inventor's Legislation of today changes this. It is a big overhaul of the patent system, an overhaul that appears very similar to the patent systems of most of Europe. It basically strips away the "first to invent," rule. It changes this to the "first to file" rule. For example, if somebody invents a new type of shoe, they can patent it. However, if somebody sees that shoe, steals the idea, and patents it first, it is therefore their patent. This is a "first to file," rule. Whoever files first gets the patent. The flaw lies within this rule, which violates what the Constitution states: "...to secure for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

In March of 2011, the Senate approved the 'America Invents Act,' with a large 95 to 5 margin. Last month, the House of Representatives passed a similar bill, which went through with a near-unanimous vote. There is, however, a large faction of people - small businessmen and middle class Americans, who oppose the implementation of the bill.

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How Can the Patent Reform Act of 2011 be unconstitutional?

How can the Patent Reform Act of 2011 be unconstitutional? This bill, now known as the 'America Invents Act,' is a clear and simple reform of the Patent system that now exists within the United States of America. There has been much heated debate on this topic, as the overhaul of this system is set to be extremely dramatic. First of all, the American patent system is different that any other country on the planet. An inventor or writer is granted the first and express rights to the work that they create. This is best pointed out in the Constitution, Article 1, Section 8, Clause 8. There are three main types of patents in the US; a Design Patent, a Utility Patent and a Plant Patent. Although different, they all operate under one main principle: the original inventor retains the right to that invention.

The 'America Invents Act,' formerly known as the 'Patent Reform Act of 2011,' is challenging this system is one major way. It takes away the first to invent rule and changes it to a "first to file," rule. For example, when a person invents a new form of paperclips, somebody might steal their idea and patent it first. All the original inventor has to do to retain his right to his invention is prove that he invented it first. With the 'America Invents Act,' that right is taken away. It doesn't matter who invented it first, it only matters who files for the patent first. This gives a grossly unfair advantage to corporations and other big companies who can simply scan the horizon for new ideas, file for a patent, and retain all the rights. This is awful news for American small businesses and the spirit of entrepreneurship. But is it unconstitutional? One might argue that, yes, it certainly is. Article 1, Section 8, Clause 8 of the Constitution states that the rights to any works by an inventor or writer is his alone. For another to be able to attain those rights just because they stole the idea, takes away the chance for the original creative thinker to claim the rights to his own work.

The question is, does Congress believe the bill to be unconstitutional? Small businessmen certainly hope so.
 

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