Los Angeles – Last week, President Obama signed a new patent reform bill called the America Invents Act into legislation which passed in the Senate by a large bipartisan majority vote, 89-9.  The rare occasion that both political parties agree on anything would be reason to celebrate, however, in this case, individual inventors and entrepreneurs did anything but that.

Those opposing the new law argue that it will undermine the very things that have given America its economic power and uniqueness: technology and entrepreneurship.  By far the biggest threat to small businesses is the change from the First to Invent System to the First to File System (FTF).  Under the FTF system, the rights to a patent for a given invention belong to the first person to file a patent application, regardless of the date of actual invention.  This major change was adopted under the new law in order for the U.S. to be in line with the patent laws of other countries.

The problem with the FTF system, its opponents claim, is that it will create a race to the finish line, with those companies that have the deepest pockets getting there first.  Typically, in order for an entrepreneur or inventor to pursue an invention, they first must get investors to believe in their idea.  Under the FTF system, these ideas can easily be stolen by larger companies that have the funds to file for patent protection immediately. 

Opponents have also been quick to bring up the fact that although Canada and Europe have been operating under the FTF rules, it doesn’t mean that it has been wildly successful.  In 2009, a European research organization published a study titled “Lost Property: The European patent system and why it doesn’t work,” which highlighted the fact that the European nations are falling far behind in innovation due to their patent laws.

Only time will tell how the America Invents Act will affect small businesses and independent inventors.  One possibility that could lessen the blow of the FTF system is a tiered fee system based on the size of a business to make filing fees more affordable for entrepreneurs.  Regardless, it has been and will continue to be extremely important for entreprenuers to file for patent protection as soon as possible.