Knobbe/Martens: Intellectual Property Law

Derivation Proceedings

With the Leahy-Smith America Invents Act (AIA), the United States patent system has switched from a “first-to-invent” system, where the first inventor to invent is awarded a patent, to a “first-inventor-to-file” system, where the first inventor to file is awarded the patent. As part of this switch, the AIA has amended 35 U.S.C. § 135 to replace the old interference proceedings (used to determine which inventor invented first) with a new process called Derivation Proceedings.

What are Derivation Proceedings?

Derivation Proceedings are an opportunity for an applicant show that an earlier filing applicant “derived” his or her invention from the later filing applicant’s invention. Only a patent or application containing one or more claims having an effective filing date on or after March 16, 2013 is eligible for a Derivation Proceeding. 

How does one initiate a Derivation Proceeding?

The applicant files a petition within one year of the publication or grant, whichever comes first, of a claim that is the same or substantially the same as one of the first true inventor’s claims. Once the petition has been filed, the Patent Trial and Appeal Board decides if there is substantial evidence to support the allegation of derivation. If there is substantial evidence, the Board initiates a Derivation Proceeding. 

What happens next?

A three-judge panel of the Board adjudicates the dispute in a trial-like manner, similar to an inter partes review or post-grant review proceeding. In this “trial,” the petitioner must prove the earlier-filing inventor derived his or her invention from the petitioner. The Board then enters a decision, determining which inventor was the “first-inventor-to-file.” If either party disagrees with the Board’s decision, that party can appeal the Board’s decision either to a Federal District Court or the United States Court of Appeals for the Federal Circuit.

Is it possible to settle or arbitrate a Derivation Proceeding?

YesParties can settle a Derivation Proceeding by filling a written statement reflecting the agreement of the parties as to who is the correct inventor and a copy of the settlement agreement. The Board will take action consistent with this statement unless the statement contravenes the evidence in the record. The settlement agreement can be kept confidential by request. An arbitration award can be similarly filed and will be binding on the parties involved.

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