09/07/2011 01:09 pm ET Updated Nov 07, 2011

Patent expert decodes U.S. reform bill

By Leigh Jones

NEW YORK (Reuters) - The patent reform bill the U.S. Senate will likely vote on later this week isn't exactly an overhaul. But the pending legislation is a step toward modernizing patent rules, according to John Mancini, co-leader of the intellectual property practice at Mayer Brown.

The America Invents Act has a two-fold mission: to curb patent litigation and to encourage the kind of innovation that makes today's Smartphone tomorrow's paperweight. It also moves from a first-to-invent to first-to-file system, which means patents will be awarded to whoever files the application first, rather than to whoever is able to prove he or she came up with the idea.

If passed, the America Invents Act will come at a time when patent litigation is on the rise, with about 2,800 cases filed in 2010, according to research the University of Houston Law Center.

Reuters talked to Mancini about what patent attorneys can expect from the proposed law. With 22 years of patent litigation experience, Mancini also shared some ideas about the future of patent law and litigation. Responses were edited for brevity and clarity.

Reuters: Why is the move from a first-to-invent to first-to-file system a big deal?

Mancini: The patent office is taking so long considering intervening prior art that it's hurting a lot of patents. First-to-file locks in the dates of the patent. It locks in the relevant prior art that can be reviewed as to the date of filing.

Reuters: Why does that make a difference?

Mancini: There's less chance of the patent process getting interrupted by intervening prior art. Going forward, it helps the patentee.

Reuters: Do you see the legislation affecting patent litigation?

Mancini: That remains to be seen. For the (would-be) patents that are affected by the changes, it's going to take them a couple of years to get through, and you'll probably have an onslaught of litigation afterwards. The litigation that is going on right now won't be effected.

Reuters: Why doesn't the bill do more to curtail patent disputes?

Mancini: The challenge in patent reform is that we have two competing interests at stake. One is to promote innovation. The other is to rein in non-practicing entities, or patent trolls, which own patents, but have no intention to manufacture the patented invention -- they simply seek to enforce patents by litigation.

Reuters: A provision that would have given judges the power to award damages instead of juries was cut out during the legislative process. Should it have remained in?

Mancini: It's unclear how those provisions would have worked in practice. But many companies hoped the provisions would be useful in defending against patent troll cases.

Reuters: There was also a provision that would have blocked plaintiffs from suing unrelated companies in the same lawsuit simply because they all allegedly infringed on the patent. That's gone, too.

Mancini: Suing unrelated defendants is an easy and inexpensive way to sue large numbers of defendants in a single case. The provision could have made it harder for patent trolls to pursue that strategy.

Reuters: If you could make it easier for smart ideas to go to market and for companies that have those rights to make money without being saddled with a bunch of lawsuits, what would you do?

Mancini: You could determine that for nonpracticing entities, or patent trolls, that unless they have real technology that they're using, they are not entitled to the same damage awards (as bona fide patent holders).

Reuters: You can't pass a law like that, can you? You can't single out a party like that, right?

Mancini: It would be very difficult.

Reuters: What else?

Mancini: You could have Congress step in and determine for certain technologies that there is a mandatory requirement that you pool your patents for the purpose of promoting a technology and for licensing.

Reuters: That's not such a bad idea.

Mancini: I know, but that's sort of antithetical to our system of capitalism.

(Reporting by Leigh Jones; Editing by Eileen Daspin)