What Happens to Startups Now That the Senate Says Patents are Based on ‘First to File’ Instead of ‘First to Invent’?

patent georgelucas What Happens to Startups Now That the Senate Says Patents are Based on First to File Instead of First to Invent?

George Lucas's patent.

The Senate voted 89-to-9 yesterday to approve the America Invests Act, a sweeping bill that will rehaul the country’s broken patent system for the first time in decades. Patents will now be awarded on a “first to file” basis, ostensibly doing away with the expensive, drawn out legal battles to determine “first to invent.” Although the bill has been years in the making, “first to file” is already used as a barometer in Europe and Asia.

But as the Wall Street Journal and The New York Times report, some small companies allege that this isn’t exactly the kind of reform they were looking for, claiming that the bill favors corporations that can shell out for teams of patent lawyers as opposed to small businesses that are typically responsible for creating new jobs.

Valerie S. Gaydos, an early stage investor from Baltimore told the Times:

“This bill is unequivocally a job killer. It will create a rush to the patent office, with innovators seeking to file anything and everything. The applications will be less complete, less well written and it will create more of a backlog.”

As Betabeat has pointed recently, the existing backlog already means startups have to wait years to hear back about patents, which can facilitate the rise of copycats (200 versions of Groupon, anyone?) in the interim. Currently that wait is an average of two years, with an additional year for the final grant.

Behemoths like General Electric, Caterpillar and IBM all supported the bill. As one of the bill’s sponsors, Senator Patrick Leahy (D, Vt.) said on the floor of the Senate yesterday, “This is a product of years of work, and it’s the best we’re going to have.” Guess no one in D.C. heard of Paul Graham’s “Don’t Be Evil” patent pledge, whose motto goes something like: when it doubt, shame it out.