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Major changes in patent law are under way

OCEAN CITY — After five decades in which the patent process was left relatively untouched, an overhaul of the U.S. Patent and Trademark Office will make major procedural changes that will impact intellectual property lawyers over the next few years.

When the 2011 Leahy-Smith America Invents Act was signed last September, it put into effect a number of changes to the USPTO that will increase the cost to secure a patent while also having the agency play an increasingly active role before granting an application in an effort to weed out bad patents.

The changes headlined the discussion at the Maryland State Bar Association’s Intellectual Property Section’s educational session on Friday, which was part of the association’s annual meeting. The session outlined potential impact of the three-step process to implement the act, a bipartisan measure that was passed with the goal of encouraging innovation, job creation and economic growth.

Panelist John M. White, with Berenato & White LLC in Bethesda, said the act was the first update of the USPTO since the Patent Act of 1952. The act is being phased in using three steps, with full implementation slated for March 2013. The second phase kicks in this September.

Among the biggest changes is the creation of a “first-to-file” standard, as opposed to the “first-to-invent” standard that dates to the founding of the country.

“This is going to make our patent system more like everyone else’s. We’ve been pretty unique in our approach up to this point,” White said. “This is a philosophical change that’s going to make it a race to the patent office now to be the first to file or publish.”

Other big changes include a post-grant review system that is meant to get rid of bad patents as well as a procedure for third parties to give input on patents before and after they are issued. Before issuance, interested parties can submit patents, published patent applications or other relevant material into the examination material.

White said competing companies can thwart infringing patents before they get issued if they are vigilant.

“My advice is to start watching your rivals’ applications,” he said. “When you see something, file your patents as a third party.”

Of course, White told the audience all of those changes would not come without a cost – literally.

“It’s a rich man’s world,” he said.

In the past, White said, the highest fees from the patent office topped out at $8,000. Under the revision, some new fees start at $20,000, while high-end fees could go up to $60,000 or $70,000.

White said overall fees would be increased about 15 percent across the board. He said one change implemented immediately is a fast-track application fee where, for an extra $4,800, the application process will be completed within 12 months rather than a few years.

The increased fees stem from another fundamental change at the office — this one in how the agency is funded, White said.

Before the 2011 act, the office made its money on maintenance fees after the patent was issued and usually lost money up front since it cost more for the research than it charged. Now, he said, the USPTO has the ability to set its own fees, which it had not had before.

“In the past, [the patent office] might not have charged enough, but I think now they’re going to see if they can charge too much,” he said.