Under Wraps

Inventors and entrepreneurs may be close to winning an important battle in the patent war: being able to keep their applications a secret.

The tide took two important turns in April and May when first the House and then a Senate committee dealt big business a big blow: In House and Senate patent reform bills (H.R. 400 and S.507), legislators refused to allow publication of pending patents.

Strong small-business opposition to the provision that would have allowed publication 18 months after a patent was filed forced last-minute changes in the House bill. When the bill came to the floor, Rep. Marcy Kaptur (D-OH) proposed an amendment allowing small businesses, inventors and universities to keep their patent applications secret as long as they satisfy two criteria: They cannot publish the application in a foreign country, and they cannot use dilatory tactics to slow the application's consideration. Much to the surprise of many Fortune 500 firms, the House passed the amendment by a narrow margin (H.R. 400 had passed earlier).

The narrowness of the vote caused small-business groups to worry that it would be an uphill fight to persuade the Senate Judiciary Committee to include a Kaptur-type amendment in its bill. But when the committee voted on S.507, bill sponsor Sen. Orrin G. Hatch (R-UT) agreed to replace his 18-month language with wording even more favorable to small business. The bill then passed unanimously. It allows any company to keep its application secret as long as it is not filed outside the United States (most countries publish patents after 18 months).

This article was originally published in the August 1997 print edition of Entrepreneur with the headline: Under Wraps.