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the world, these changes would increase the efficiency and predictability of the US system. Increased harmonization would aid US inventors who seek global protection for their inventions.

The only way to challenge a patent under the current system is by litigation. This has led to abuses, such as laying broad claims—sometimes without reason or merit—to patents in hopes of receiving a generous settlement from a competitor who wishes to avoid long and expulsive litigation. Often, competitors or other interested parties are the best available source of information about the state of the art. Inviting their input in a process of administrative review—the so-called opposition system—would allow for “peer review” of recently granted patents to serve as a second check or quality assurance of the initial examination by the patent office. Such opposition is much less expensive than litigation, open to anyone, and much faster—decisions can sometimes be made in 1 day. The 2004 National Academies report explains, in considerable detail, how such a system, which it calls “Open Review,” would work.19

The United States still uses a first-to-invent rather than a first-to-file patent system. This requires a complex, expensive, and time-consuming (5-10 years) process to sort out who has the patent rights. It also absorbs the time of some of the most experienced patent examiners. Ultimately, the amount of resources devoted to resolving the priority question (which is resolved in favor of the first filer over two-thirds of the time)20 outweighs the benefits, and the time and personnel required could be put to better use improving the quality of basic examinations.

Some might argue that the proposed changes would put smaller inventors at a disadvantage. However, resolving disputes through an opposition process is far less expensive than is litigation, and that alone would constitute a significant benefit to small companies and individual inventors with worthy claims. Periodic surveys by the American Intellectual Property Law Association indicate that patent litigation costs—now millions of dollars for each party in a case where the stakes are substantial—are increasing at double-digit annual rates. The relatively low cost of filing provisional applications to establish priority under a first-to-file system would not constitute a significant burden on small inventors.

The third recommended action is to preserve some existing research exemptions from infringement liability.21 Until recently, it was widely be-

19

Ibid., pp. 95-103.

20

See http://www.oblon.com/media/index.php?id=181.

21

The committee recognizes the interest of some reviewers in re-examining aspects of the technology transfer process governed by the Bayh–Dole Act and related legislation, but issues related to Bayh–Dole are controversial and have been under discussion for years. The committee believes that establishing a research exemption for infringement liability is a higher priority.



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