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Obama signs patent reform bill

US President Barack Obama [official website] signed the America Invents Act [text, PDF; HR 1249 materials] into law on Friday. The Senate [official website] approved the bill earlier this month [JURIST report], and the House of Representatives [official website] approved the bill in June [JURIST report]. The act represents the first change to the American patent system since 1952 [CNN report]. Major differences include changing the patent system from first-to-invent to first-to-file, allowing the US Patent & Trademark Office (USPTO) [official website] to keep all of the fees generated from patent filing rather than having them diverted by Congress, allowing third parties to introduce relevant material to patent examiners during the patent application review process and removing the "best mode" requirement from patents. The changes are intended to give the USPTO greater autonomy, increase funding so the USPTO can address the substantial patent application backlog [USPTO materials] and decrease the amount of patent litigation. The Coalition for Patent Fairness [advocacy website] stated [press release] that the America Invents Act "is an important step forward for the nation's patent system" and that it will "harmonize America's patent system and allow us to continue to compete in the international marketplace."

Patent holding firms, dubbed "patent trolls" [Filament backgrounder], have been a controversial [Patently-O report] subject for the US patent system to address. Noted patent holding companies include Intellectual Ventures and Asure Software [corporate websites]. Many patent holding companies generate their revenue solely by suing other companies for patent infringement and do not produce anything of their own. The America Invents Act attempts to address the "patent troll" problem by decreasing the number of "junk" patents that are issued via increasing funding to the USPTO and allowing third parties to submit relevant materials during the patent review process. Patent litigation by and against patent holding firms has been especially rampant in the mobile phone business. Last month Google purchased 1,023 patents from IBM [corporate websites] in order to defend itself against smartphone patent-infringement lawsuits [Bloomberg report]. Earlier that month Google also purchased Motorola [corporate website] for USD $12.5 billion, primarily for Motorola's patent library [GeekWire report]. Other recent patent reform includes separate rulings by the US Supreme Court [official website] in June that patents will only be invalidated if the challenging party meets the "clear and convincing evidence" standard [JURIST report] and that the Bayh-Doyle Act [35 USC §§ 200-212], which vests patent rights to universities for inventions from federally funded research, did not give Stanford University [academic website] superior rights to the invention of its employee [JURIST report].

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