New US Patent Law Could Help Business with China

It's a debate stretching back over 100 years. Who has the right to claim ownership of a new technology? In America, this goes to whoever can prove they're the inventor. But this may be about to change - and it could be good news for business in China. Dominic Swire has the report.

A promotional video from smartphone maker Motorola Mobility. The company's about to be snapped up by Google for a cool 12 and a half billion dollars. But many say the deal's less to do with fancy phones and more about Google getting its hands on thousands of patents.

Paul Budde is Managing Director of Paul Budde Communication, an independent telecommunication think tank based in Australia.

"With this huge new portfolio of patents, Google is now in a much better position to claim that they can come up with these innovations without breaching anybody else's patents. And that is the great value of this portfolio."

The move is seen as a way for Google to protect new technology. Current US patent law uses what's known as a 'first to invent' system. This means ownership goes to whoever can prove they invented it.

But soon the country may move to a system called 'first to file'. This gives ownership to whoever's first to legally register a technology. Steve Dickenson is a Chinese-based American lawyer specialising in intellectual property.

"We're in a world now where people have a lot of patents these days. And when you use a first to invent system it just clogs up the whole process because no one's really sure who's – you could have registered, but you don't know, even if you've registered, that you're the holder of the patent because someone else may be first. And it also tremendously delays the process because the patent office has to make its own independent investigations. In a first to file system everything's mechanical and simple and quick."

America, along with Britain and a few other countries, use the first to invent patent system. Steve Dickenson says changing this can be good for business with China.

"A problem we have all the time in China is that American and British companies don't understand this first to file system and therefore they refuse to operate in a way that works in this system. Because they say our system is so much better, we want to do it the American way. But the American way isn't the way they do it here. So harmonization, whichever way the harmonization goes it doesn't make any difference, harmonisation is good because everybody will know the system and they'll be able to do their worldwide patent operation following one set of rules. That can't hurt anybody."

Reform of America's patent law is expected to be passed later this year. If this happens it would be the first major overhaul of the US patent system in over 50 years.

For CRI, I'm Dominic Swire.