Business, Finance & Economics

Obama signs major patent reform bill

President Barack Obama has signed legislation that overhauls the U.S. patent system for the first time in nearly 60 years. He said it was a move to help entrepreneurs bring inventions to market faster and create jobs.

“We should be making it easier to turn new ideas into new jobs and into new businesses,” Obama said before signing the bill at Thomas Jefferson High School for Science and Technology in Alexandria, Va., on Friday.

After six years of negotiations and lobbying by every industry, Bloomberg Businessweek reports, the House passed the legislation in June and the Senate approved it, 89-9, on Sept. 9.

According to CNN:

Among other things, the measure, dubbed the America Invents Act, will transition the country to a "first-to-file" system, instead of the current "first-to-invent" approach. Issuing patents to the first person or company to file will help provide clarity in the patent-granting process, the U.S. Patent and Trademark Office says. It will also prevent inventors from coming out of the woodwork to challenge pending patents.

The first-to-file system is the predominant method used by the vast majority of industrialized countries throughout the world.

The reforms will also permit the patent office, which is self-funded, to set and keep its own fees. Currently, the patent office is required to send all patent-filing fees to Congress, which awards the office a budgeted amount each year, regardless of how many patent applications come in.

This has slowed down the number of applications the patent office can review each year, leading to a 700,000-patent backlog and a three-year waiting period for the average patent to receive final approval, CNN reports.

With more money on the table, the office plans to hire as many as 2,000 more patent examiners in the coming fiscal year, Bloomberg Businessweek reports.

“Pace is really critical here,” Ellen Kullman, DuPont CEO and a member of the President's Council on Jobs and Competitiveness, told Bloomberg Businessweek. “If you can get the pace of the patents going, you can accelerate the pilot launch; you can accelerate the production.”

"I don’t think this means a lot of jobs next year, but it may mean a meaningful number of jobs over the next decade or two," Mark Zandi, an economist who has advised the White House, told the Los Angeles Times.