Prior User Rights Study Report to Congress - America Invents Act

drastic effects on American businesses and jobs. A representative from a small United States companycommented that the company’s use of trade secret protection enables it to provide services at a price levelthat its Chinese competitors admitted they cannot match. 258 Several representatives of “green” technologycompanies based in the United States noted that disclosure of new technologies via a patent applicationwould allow foreign competitors to copy the innovation, using cheaper labor and with the assistance offoreign government subsidies, to undercut their businesses, at the expense of “creating much-needed jobsfor American workers.” 259Thus, the USPTO finds that:Finding 8:Trade secret protection is of considerable value to United States businesses and theUnited States economy, and as such, there are compelling economic and policyjustifications for providing a prior user rights defense to patent infringement.On the basis of the above analysis and findings, the USPTO recommends as follows:Recommendation 4:United States patent law should provide for a prior user rights defense as anappropriate balance between trade secret protection and patent protection,which legally co-exist to provide competitive advantages for United Statesbusinesses.D. Analysis of Whether a First-to-File Patent System Creates a Need for Prior User RightsOne of the most fundamental changes under the AIA is in the way that entitlement to a patent isdetermined. The United States has historically awarded a patent to the first person to have invented thesubject matter, commonly referred to as the “first-to-invent” standard. According to this approach, if twoinventors file patent applications for the same invention, the patent is awarded to the first person to haveconceived of the invention and to have reduced it to practice. 260Since 1998, the United States has been the only country in the world to use the first-to-inventstandard. 261 Every other patent-granting country awards a patent to the first inventor to have filed anapplication for the subject matter. This approach, known as “first-to-file,” relies on application filing258 Comments of Space Exploration Techs. Corp., supra note 47, at 3-4.259 Comments of Greentech, supra note 47, at 1-2.260 35 U.S.C. § 102(g) (2006).261 The Philippines, the last country other than the United States to have a first-to-invent system, changed its law in1998.47