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SPECIAL SUMMARY REPORT

THE GREAT DEBATE

FIRST-TO-INVENT vs. FIRST-TO-FILE

and the

INTERNATIONAL HARMONIZATION TREATY





TABLE OF CONTENTS

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Important
Instructions
for: Duplication,
Distribution, Use of
Information


Introduction

I.
Credits


II.
Foreword


III.
WSJ Article


IV.
Synopsis-Europe
Legislation


V.
Synopsis-U.S.
Legislation


VI.
Key Questions
#1 / #2 / #3 / #4
#5 / #6 / #7 / #8
#9 / #10 / #11 / #12 #13 / #14 / #15

VII.
Arguments & Rebuttals
At-A-Glance


VIII.
Closing Comments &
Recommendations


IX.
Notes



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  • IV. KEY QUESTIONS: #8
    WHO WILL THE PROPOSED U.S. CHANGE TO "FIRST-TO-FILE" AFFECT (ENCOURAGE OR DISCOURAGE) FROM DEVELOPING NEW PRODUCTS AND TECHNOLOGIES?

    A. WHO DOES FIRST-TO-FILE ENCOURAGE?
    Donald Banner, former U.S. Patent Commissioner states, there's a benefit if you're a big corporation with a multi-national filing program who already operates under a de facto first-to-file system, and by getting rid of the "first-to-invent" system in the U.S., some foreign countries will give you some additional benefits. So you can get those goodies without changing what you're doing now, and it doesn't you anything.

    B. WHO DOES FIRST-TO-FILE DISCOURAGE?
    Ned Conley states in his essay "First-to-Invent: A Superior System for the United States",
      "(With First-to-File) fewer patents would issue to entrepreneurs and the U.S. would lose a major factor affecting its lead in technological development.

      "The National patent Council told the Congressional Committee considering First-to-File in the 60's that such a change in the U.S. Patent laws: would load the dice against one of the most potent innovating forces in our economy: the initiative and drive of the independent inventor and small businessman."
    In a just-released study (April, 1992) entitled "Business Intellectual Property Protection" by MO-SCI Corporation, Missouri, under contract to the U.S. Small Business Administration, a random sample of firms in the Corporate Technology Directory revealed that: "Almost half (49) of the small enterprises agreed with the statement 'our enterprise has not generally filed for U.S. patents because the costs of the patent office and attorney fees combined discourage seeking patent protection where appropriate'. Twenty-seven percent of the small firms disagreed; among large enterprises, only 10 percent agreed and 76 percent disagreed."

    In describing the effects to the U.S. research community, Dr. Bruce Smackey, Assistant to the V.P. of Research and Graduate Studies, College of Business and Economics, Lehigh University states in Inventor-Assistance Program news, July 1990,:

      "It is reasonable to expect that any intervening factor that works against the conduct of good research practices will reduce the quality and quantity of ideas emanating from the research community. In many cases, the lack of exclusivity to intellectual property will preclude any investment being made to develop a promising research result...a first-to-file priority date would adversely affect the potential use of research conducted at American academic institutions as well as that of the large population of small private inventors patent filings.
    The proposed first-to-file system will place unnecessary financial and resource burdens on our country's entrepreneurs. It will:

      1. force premature patent filings on raw ideas, at a time when all available funds need to be spent on research and development. Undoubtedly, first-time inventors and entrepreneurs will be financially discouraged from beginning such a costly process of an untested concept.

      2. force continued patent filings on each improvement, on average 3-4, with the accompanying patent fees, attorney costs and maintenance fees throughout each patent's life. Of U.S. small businesses that currently experience difficulty affording one patent per idea, most will drop out of the race if they have to file multiple patents for each.

      3. insure piracy and competition, which will cause psychotic paranoia in contacting resources that can help them perfect the invention because:
      a. these experts could go file a patent first; b. or can establish "prior user rights" to compete without paying any licensing fees; and greatly diminish the profitability of the idea.

      4. make infringement litigation prohibitive because a foreign multinational corporation could require legal proceedings in different countries of the world.

      In summary, first-to-file can paralyze small businesses and independent inventors with limited resources from inventing and innovating, not only because of exorbitant patenting costs, but with the incentive of exclusivity stripped from the system, they're playing a game where the deck is stacked against them.

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