by Philip Nelson
This article was originally published in the Orange County Business Journal.
Congress and the President recently found something to agree on: the most sweeping overhaul of U.S. patent law since 1952. Following a decade of debate about what, if anything, needed “reform” in U.S. patent law, the America Invents Act passed both the House (304-117) and the Senate (89-9) before becoming law on September 16, 2011.
Obtaining Patents from the Federal Government
Before, U.S. patents were awarded to the first inventor, but determining who was actually first could be difficult. The new law attempts to simplify by awarding a patent to the first person to file a patent application on a given invention. This creates a greater incentive to file sooner—to “race” to the patent office.
The new law also encourages inventors to publish their research by providing a limited one-year grace period after publication for an inventor to file for patent protection on the published invention. But premature publication of some research could result, leading to embarrassments such as that suffered recently by European scientists who falsely claimed their neutrinos had travelled faster than the speed of light.
The new law continues the controversial practice of “fee diversion”—use of some patent application fees for government programs unrelated to the patent office. The law also raises patent filing fees by 15%, but gives universities and new, low-income inventors a 75% discount. Patent applicants are also allowed to pay a $5,000 surcharge for faster, “prioritized” examination.
Patent Litigation in the Courts
The law has a less-significant effect on how patents are enforced in the courts, but one interesting change expands the “prior user” defense, allowing companies to shield some relevant prior activities and sales from infringement liability. The law also gives patent holders the option of publicizing their patents by simply marking relevant products with a website for patent information.
Attacking Patents at the Patent Office
Perhaps most significant, the new law invites those who wish to attack a patent to do so in the U.S. patent office, as opposed to federal district court, using one of three new types of proceedings: (1) Post Grant Review; (2) Inter Partes Review; and (3) Derivation. Over time, the statistical results of these proceedings will help companies determine whether such challenges will be treated adequately and fairly, despite potential patent office resource constraints. In the near term, these hybrid litigation/administrative proceedings could prove very useful to prepared patent challengers.
Will the new law streamline government patent processing overall? Likely not, given the new proceedings and the potential for continued fee diversion. But will the new law spur innovation? Possibly, since on balance it makes the patent process more flexible and incentivizes more invention disclosure. Even so, it introduces legal ambiguities that will take years to resolve. In the mean time, businesses should proceed with caution, seeking specialized counsel from patent attorneys with experience in their specific technology, the federal courts, and, more than ever, familiarity with the administrative jungle of the U.S. patent office.
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