New Patent Proposal Good or Bad for the Little Guy?

Vitruvian Man by Leonardo da Vinci, Galleria d...
Image via Wikipedia

I came across this article in the Los Angeles Times which made me curious most of all because, lately, I've been hearing from our politicians that Patent reform is an important factor needed to spur economic growth in the United States: "Patent measure causing concern among independent inventors".  The article says that "Legislation headed to the Senate would alter the system to favor the person first to file instead of first to create. Some fear it could lead give big firms an advantage."

However, over the last few years, I have been told by many people involved in innovation, that the current patent laws are inadequate and actually are hindering new discoveries.  In fact, the threat of legal battles in the United States, makes buying existing patents more interesting to industry than investing in generating new ones.   One of the most recent exemplary cases is the one involving Google's interest in acquiring Motorola Mobility and its 20,000+ patents for $12.5 billion or $40/share, a premium of 63% of the closing market price on August 12.

The United States and the Philippines are the only two countries in the world to favor "first to create" vs. "first to file" and, on paper, this seems to be the fairest way to treat inventors.  However, being this one (the US not the Philippines) a VERY litigious society, filing by more than one inventor stimulates costly litigation to determine who first conceived the idea.  First to file is a much simpler approach: it recognizes that a patent is a contract between the inventor and the public which grants him/her a public franchise in exchange for the public disclosure of the invention.  This simple approach makes it easy to determine the rightful patent holder, since it is identified by the postmarked date of the patent application.  One argument against the First to file measure is that a race to the patent office may lead to poorer quality applications.  The other argument is listed in the above-mentioned Los Angeles Times article: patent filing may become more cumbersome and costly for small inventors and, in the context of a reform that seems to favor big companies overall, it may just make it harder for the Leonardo Da Vinci among us to profit from their inventions.

I would definitely like to see a reform that decreased litigation risks for any type of innovator: companies, universities, individual inventors, etc.  I am not sure if the Bill in Congress is the answer.  What do you think?