Signed, sealed and delivered

WASHINGTON, D.C.—Wasting no time after Senate's approval ofthe Leahy-Smith America Invents Act on Sept. 8, President Barack Obama signedthe legislation Sept. 16, paving the way for the first overhaul of the U.S.patent system since 1952.

Now, the path toward full implementation begins withstaggered implementation of some provisions, up to and including newpost-review grant proceedings that won't take effect in most cases until March2013.

The cumbersome process of rulemaking begins now in earnest.Those interested in commenting can find information on that process on the U.S.Patent and Trademark Office (USPTO) website.

Minor changes took effect immediately or almost so,including a new 15-percent surcharge on most USPTO fees and the availability offee-based expedited examination.

The USPTO is dealing with an estimated 1.2million-application backlog; the hope is that a new fee structure will allowthe office to operate more efficiently, and operate as a self-funded entity.

Currently, patents are awarded on a first-to-invent system,but the legislation changes it to a first-to-file system. The act also createsa review process for challenging patents and changes the grace period betweenwhen an inventor files for a patent and when they disclose that patentapplication. It also allows the USPTO to set and collect fees from new patentfilers entering the system.

In a prepared statement, PhRMA Deputy Vice President KarlUhlendorf statement said his organization was glad to see the transition from afirst-to-invent to a first-inventor-to-file system.

"This would bring us in line with the patent systems ofother developed nations, creating efficiencies for inventors seeking patentprotection in the U.S. and other markets," he said. "It would also provide amore-objective measure of determining patentability, thereby providinginventors with more certainty and potentially limiting costly and time-consuminglitigation over who was the first to invent.

"In addition, we applaud the inclusion of asupplemental examination procedure," Uhlendorf continued. "We believe that asupplemental examination that encourages patent holders to approach the USPTOfor confirmatory review of their patents would help provide for qualitypatents. It would allow affirmation of valid patents, establishing greatercertainty for the research-based patent holders who rely on them, whileallowing for clarification of potentially questionable patents. This procedurehas the potential to greatly limit frivolous litigation, all while spurring theinnovation that is stimulated by strong patent protection."

Many issues are still up for debate. For example, genetictechnologies and the ethics of whether or not to patent human genes leave manyarguments yet unheard. Part of the new law directs the USPTO to study"effective ways to provide independent, confirming genetic diagnostic testactivity where gene patents and exclusive licensing for primary geneticdiagnostic tests exist." It must also report back to legislators on theimpact that exclusivity of licensing and patents have on the medical field. Theoffice must also investigate how medical insurance impacts access to and provisionof genetic diagnostic tests.

The USPTO is directed to complete this report by early nextsummer.

Also waiting in the wings are two key U.S. Supreme Courtcases that may be the bellwethers for the future of patenting in the field ofgenomics. Waiting in the wings are Association for Molecular Pathology v.U.S. Patent and Trademark Office, betterknown as the "Myriad Case," and Mayo Collaborative Servicesvs. Prometheus Laboratories. By this timenext year, both cases could be before the high court.

The president chose to highlight the importance of one facetof this bill by signing the legislation while promoting his administration'sjobs initiative. To be sure, many industry observers underscore that thepatenting of inventions has long been the basis of a strong economy—an economybuilt on small businesses. Enhancing patent quality and the efficiency,objectivity, predictability and transparency of the U.S. patent system are seenas important fuel for the country's economic engine.

"Small biotechnology companies rely heavily on their patentsto attract investment to fund the lengthy and expensive research anddevelopment process necessary to bring breakthrough medical therapies and otherproducts to patients and consumers," said BIO President and CEO Jim Greenwoodin a prepared statement. "Strong intellectual property protection is criticalfor these companies, and they will benefit from the improvements to ournation's patent system made by this legislation."

The generic pharmaceutical camp is not so certain that arestructuring of the patent-granting machinery would not do it harm. Theirconcerns rest on the supplemental examinations facet of the law, which theyfear might delay the patent process and therefore those companies' eventualability to produce generic versions of drugs.

Streamlining the patent process will require many sets ofhands. As a result of the newly enacted law, the PTO will soon hire between1,000 and 2,000 patent examiners and 50 new administrative law judges.

Vermont Democrat Patrick Leahy introduced the bill in theU.S. Senate on Jan. 25 with the support of seven Judiciary committeeco-sponsors: Senators Coons (D-Del.), Grassley (R-Iowa), Hatch (R-Utah),Klobuchar (D-Minn.), Kyl (R-Ariz.), Lieberman (I-Conn.) and Sessions (R-Ala.).The full Judiciary Committee unanimously approved the bill, which was thenpassed in the full Senate by vote of 95-5 on March 8. The legislation wasintroduced on the U.S. House of Representatives side as H.R. 1249, which waspassed on April 14 by the House Judiciary Committee by a vote of 32-3.