Inching Toward A Borderless Patent

Bruce A. Lehman has a vision: a new era in which patents will be protected from global rip-offs. The tough-talking commissioner of the U.S. Patent & Trademark Office wants to tear down barriers to American inventors in the patent systems of Japan, Europe, and the U.S. He and other patent experts even imagine a future in which an application in one nation's patent office could garner an inventor worldwide protection. The result, he says, would be a big boost for U.S. competitiveness.

On Aug. 16, the world inched closer to that grand vision when the U.S. and Japan inked an agreement to make changes in their patent systems. If Congress approves, Lehman will bring the U.S. system in line with Japan's and Europe's by publishing patents 18 months after filing instead of keeping them secret until they are granted. He will also implement a General Agreement on Tariffs & Trade (GATT) provision to change the 17-year patent life after granting to a 20-year term from the filing date. Meanwhile, Japan will speed up patent examinations, eliminate challenges to pending patents, and allow companies to apply in English.

The agreement hasn't been universally hailed, of course. Japan's changes "aren't worthy of the concessions we've made," sniffs Jerome H. Lemelson, 71, a prolific inventor who holds 500-odd patents. Lemelson and other critics fret that a 20-year term in the U.S. means that approval delays would dramatically reduce the useful life of a patent. Moreover, they scoff, all that the Japanese offered in return is faster patent reviews--a goal they have espoused for years.

But business--which has complained loudly about obstacles in the Japanese system--in general applauds the accord. By challenging others' submissions and flooding their patent office with applications, for example, the Japanese have caused lengthy delays in patent approval. "For years, pre-grant opposition has been a thorn in our side, using up precious patent term," says John J. Klocko III, associate general counsel for DuPont Co. Japan's concessions, if enacted, "will make it more difficult for the competition to slow down an important patent," says Boston University law professor Robert P. Merges.

Still, most U.S. companies want a lot more. Japan's patents are far narrower than the American equivalents, says William S. Thompson, former general patent counsel for Caterpillar Inc. That has made it impossible for Caterpillar and other U.S. multinationals to protect key innovations because products very similar to theirs can be patented without causing infringements.

WIN-WIN SITUATION. Lehman and others argue that changes in the American system are long overdue. U.S. companies have been increasingly concerned about so-called submarine patents--applications for major innovations, such as the basic microprocessor, that linger in secret in the patent office for decades due to indecision about patent approval. For instance, when the microprocessor patent was finally awarded to inventor Gilbert P. Hyatt in 1990, after 20 years, companies such as the North American Philips Corp. had to scramble to license it.

Altering the patent term and publishing patent requests after 18 months will get these applications out into the open and limit their disruptive effect, experts say. And using the carrot of U.S. compromises to persuade Japan to make concessions was "a brilliant strategy," says patent lawyer and George Washington University law school professor Harold C. Wegner--although many experts say Japan's patent commissioner shrewdly realized that the changes were in Japan's interest as well.

The major import of the patent deal, however, may be that anything happened at all. Until now, more than 20 years of efforts to reconcile the world's patent systems have come up virtually empty. "This is a very big step toward harmonizing the entire world's patent system," says Yoichi Omori, a director with the Japanese Patent Office.

Still to come are some major issues. Among the most important ones: whether the U.S. will join the rest of the world in granting patents to those who file first, as opposed to those who can prove they came up with an invention first. And whether Japan will grant broader patents. But the world already is a step closer to reinventing the protection of inventions.

Before it's here, it's on the Bloomberg Terminal.