Wednesday, September 14, 2011
The America Invents Act, is a bill passed by both houses of the U.S. Congress and expected to become law soon, whereby America will move from ‘First to invent’ to ‘First to patent’ system. Most of the world has ‘First to patent’ as a law.
Below we try to look at the consequences to what it means for collaborative innovation (not just innovation), and we invite you to share your thoughts.
“US patent laws synchronizing with the rest of the world”
1) Reduced wasted efforts will help improve innovator’s focus: In the ‘first to invent’ scenario, inventor delays the filing of patent as much as possible, but continues to invest time and money, in turn, risking re-inventing something which is already invented. This issue gets addressed to some extent in the ‘First to Patent’ scenario.
Effects on Collaborative innovation / Open innovation > Less time will be spent on fighting disputes because innovator validates the IP before spending too much time on it and hence will have less probability of heart burn for the effort spent . Additionally ‘First to patent’ will provide more IP confidence to the inventor than a guesswork that he probably is the first to invent.
2) Bigger market place, better innovation ecosystem: A typical inventor will have similar shortage of money to spend on filing for a patent, like he had earlier, but now he also needs to be the ‘First to patent’. The news that the filing of provisional patent is now made simpler, and the fact that innovator is still needed to shell out money for it, in my opinion, will increase genuine patent applications.
Effects on Collaborative innovation / Open innovation > Once inventors invest money, he would like to benefit from it, either by staring up a business, by approaching VCs or putting it up in a marketplace for licensing it, all of these will benefit open innovation.
3) Leveled playfield will increase innovation affordability: If “First to invent” law has played any role in American innovation dominance, which we think it has, with this change might see some decline, primarily because it affects the investors – an innovation support system. It may not be good for America, but we see that as paving a way for levelled ground, and this levelled ground will benefit the world as a whole. World is currently used to being at the receiving end of innovations happening in America, it’s not that the world cannot invent, but mostly they did not invent as fast as America did.
Effects on Collaborative innovation / Open innovation > Currently innovations are cost heavy as it primarily comes from a developed country, in near further you will see revolution in terms of cost and affordability of innovations.
“Race to patent office or race to invent”
1) Hoarding of Patents by big companies will increase bullying: Biggies would afford to file at will and in volumes. Yes, but can they really afford to file all they invent, we don’t think so, they might rush to file at the beginning, but we feel that they will go back to the same numbers and pace once the fatigue sets in, in a year or so?
Effects on Collaborative innovation / Open innovation > Big companies can misuse their muscle power in specific scenarios by running to the patent office faster than a genuine inventor. This is a bad news for collaborative innovation. Big companies might gain in short term, but they might end up killing SME innovators in medium term, which are one of the channels for corporate innovations. The US corporations which support open innovation ideally should not support this bill. Their international open innovation experience will come handy in aligning themselves to the new laws at home front.
2) Anti - SMEs, Innovators & Start ups: They will constantly feel insecure about their inventions until they apply for the patent, which is extremely counterproductive. You would rather spend time, effort and money on making your idea big, now you have something else to worry about. VCs and Angeles would move away from early stage ventures in short term, America pioneered and became world leader in start up industry because of the superior protection for start up innovation. So far investors invested in the IP even if it is not patented; now they won’t have that option and have to look for far more established companies to reduce their risk.
Effects on Collaborative innovation / Open innovation > A new industry around collaborative patenting might emerge.
3) Too big a change, done too fast: We need to wait and see if someone questions the new law in light of the US constitution. The current patent law refers to the ‘inventor’ which as per the US constitution means the person who invented it first and not the person who filed it first.
Effects on Collaborative innovation / Open innovation > You might think that if we can’t protect the inventor, then there is no reason to look forward to collaborative innovation. For collaboration, first thing the inventor expects is protection. Collaborative innovation will also need to evolve to accommodate this change, and most probably it will soon.
What do you think ?