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In 2011, the U.S. passed a law that changes the centuries-old way that the country hands out patents. Instead of a “first to invent” system, America will now give a patent to whoever files first. Here’s a quick summary of the law and what it means:

Why did the law change?

Congress decided to adopt the first-to-file system as part of a larger 2011 patent reform law known as the America Invents Act. The first-to-file system, which is used by every other country in the world, took effect on March 18.

What does it mean for inventors?

In the past, the Patent Office granted a patent to whoever invented it first. Now, the patent will go to whoever filed the application first.

Isn’t that unfair?

In the past, if someone stole your idea and obtained a patent for it, you could start an “interference proceeding” with the Patent Office. If you could show proof that you were the real inventor, the office would hand the patent to you. That won’t happen in the new system.

So, yes, in theory the old system was more fair. But in reality, interference proceedings were very rare — one report says that in 2007, they arose in fewer than one percent of all patent applications. And, of these, the patent was given to the second-to-file a grand total of 7 times. In addition to being rare, the proceedings were also expensive: a 2005 survey said the average cost was over $650,000.

Finally, America has a special rule that will help inventors in many cases. The rule says that if you disclose the invention at a conference or elsewhere, you have a one year grace period to file a patent for it. This means that your disclosure will prevent someone else from getting a patent on your invention (but it could also harm your chances to get patents in other countries).

What does first-to-file mean for small inventors?

One criticism of the U.S. patent system is that it favors big companies like Apple(s aapl) and Google(s goog) who have the budget and the lawyers to file patent applications all day long. The new system won’t change this and could benefit the big companies even more. But, ultimately, it’s unlikely to make things much different than they are right now.

The bigger problem with patents is that too many are being issued in the first place. This leads to companies abusing 20-year monopolies over basic technology — often with no net benefit to society.

Where can I learn more about the first-to-file rules?

PatentlyO has the relevant text of the statute and a detailed description of what it does here.

Thumbnail photo courtesy Flickr user opensourceway