NEW YORK, NY -- In August 2007, the United States Patent Office published new rules regarding patent claim drafting and continuations that will go into effect on November 1, 2007. These new rules will substantially alter current patent practice, and are guaranteed to reduce the value of patent portfolios held by major U.S. corporations, perhaps to the point where the overall valuation of some companies will plummet, which means bad news for the U.S. stock market. According to Gene Quinn, a patent attorney, president of IPWatchdog, Inc. and a blogger for the Practising Law Institute Patent Practice Center, "the rules that the Patent Office will make effective in just over two weeks are going to make it virtually impossible for companies to adequately protect innovations." Quinn further explains that "these new rules are not limited to effecting corporate America. The impacts will be felt on Universities as well, and these effects will significantly undo the tremendous benefits of the Bayh-Dole Act."
The Bayh-Dole Act, enacted in 1980 and named after co-sponsored Senators Birch Bayh of Indiana and Robert Dole of Kansas, has been highly praised by all those who are engaged in patent law, technology transfer and University research and development. Essentially, Bayh-Dole gave Universities ownership of the inventions they create with federal funding, but requires Universities to seek patents and actively attempt to license the patents they obtain, with small businesses receiving preference. This guarantees technologies get into the public, and funds from licensing get reinvested into further research and development.
The reason that the new patent rules will so dramatically effect the value of patent portfolios and undermine the tremendous success of Bayh-Dole is due to the fact that the rules will prevent more than 3 patents from issuing from any particular invention disclosure. Quinn explains: "Under the new rules every invention will be entitled to receive only 3 patents, which is a tremendous reduction from current practice. It is not uncommon for tens of patents to be issued on any one invention disclosure, with hundreds of patents being issued on related inventions." The worst part of the new rules, however, does not lie in the fact that they will prevent more than 3 patents from issuing per invention disclosure, but rather "the worst part of these rules is that they tie together both an invention and any related invention as if they are one, thereby guaranteeing that only 3 patents can issue to any family of invention."
In his latest blog post, Quinn puts this into perspective, saying:
"A search of the United States Patent Office online search engine for the word "laser" in the title filed of granted U.S. patents returns no fewer than 22,775 issued patents. If you expand the search to find any issued patents that include the word "laser" the number of patents skyrockets to 296,328 issued patents. Even with what might be believed to be more simple inventions, there are a large number of issued patents, for example a search for the word "teflon" in the title filed of granted U.S. patents returns 31 issued patents, with the number jumping to 69,368 issued patents when the word "teflon" is searched for anywhere in the patent. Let's also not forget that but for the creation of teflon the tremendously popular Gore-Tex (R) products would never have been possible."
When asked about what may happen leading up to the effective date of the new rules Quinn said: "Hopefully in these final days either the Federal District Court for the Eastern District of Virginia will step up to the plate and issue an injunction, as requested by GlaxoSmithKline, or Congress will step in and not let Bayh-Dole go down in flames without a single public hearing."
For more information see:
PLI Patent Practice Center
http://www.pli.edu/patentcenter/
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