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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: #10

    WHAT COUNTRIES, GROUPS, OR ENTITIES ARE LOBBYING OR PROPOSING THE "FIRST-TO-FILE" CHANGE IN THE U.S. PATENT SYSTEM? AND HOW WILL THEY BENEFIT?

    Donald Banner, former U.S. Patent Commissioner states in his article "Fleecing the Golden Fleece",

      "Indeed, the representatives of Japan and the European Economic Community have insisted that the United States adopt the foreign first-to-file system because it would give their nationals great strength in the U.S. market.

      "The Japanese and Europeans insist that we adopt their patent system. Their large multinational companies, like those in this country, have extensive patent staffs equipped to file multitudes of patent applications on very short order." (patent factories)
    The total number of foreign applicants (for U.S. patents) has increased. In the past few years, approximately 50% of all the applications filed are by aliens, with Japan leading the filing countries by filing more than 30%...it is for this reason that Japan has subsidized its inventors and industry in order to assure that they will receive patents from the U.S., and continue to do so.

    According to 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 "large enterprises have more foreign than domestic patents:.

    Harmonization of international patent laws, therefore benefits U.S. multinational corporations which conduct most of their business in foreign countries, and is therefore a part of the globalization program of many U.S. multinational companies.

    It is important to note that harmonization of the world's patent laws in and of itself has many merits. The problem, however, stems from the fact that Japan and Europe insist that the U.S. sacrifice its unique "First-to-Invent" system in trade for concessions in these foreign country's patent laws that would be beneficial to U.S. companies.

    The system is being changed so multinationals can get enhanced protection of patents in foreign countries, although more than 70% of U.S. origin applications are filed only in the U.S. by small businesses and independent inventors which file 45% of all U.S. origin patents. Large multinational companies, unlike small companies, have little or no need to test their products in public, get financial backing from outside sources, or little need to stretch limited resources.

    This group, large multinationals which represents less than 1 percent of all U.S. firms according to an SBA study, are willing to make the "First-to-File" change for gaining additional advantages - without any additional burden, without changing what they are doing - all this at the expense of the other 99+ percent of U.S. firms which are small businesses responsible for 50% of all innovation, and which employ between 50-70% of the U.S. labor force (small businesses with less than 500 employees).

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