The Leahy-Smith America Invents Act (AIA), which introduces significant changes to the U.S. patent system, was passed by the Senate last night and is now waiting for President Obama’s signature. The AIA contains 37 sections that vary in significance. The most significant of the changes are the change to a “first to file” system and the introduction of a more comprehensive system for post-issuance reconsideration of a patent by the U.S. Patent and Trademark Office (USPTO). The date the provisions go into effect vary as well – some provisions will go into effect immediately, while most substantive provisions will go into effect in 12 to 18 months.
First to File
The change to a “first to file” system will comprehensively restructure the classification of prior art and the resolution of who is entitled to a patent among two or more parties claiming the same invention. Under the present “first to invent” system, the ability to obtain a patent is primarily based on who conceived and reduced to practice the invention first, and the requirement to timely file a patent application to avoid prior art is insulated by a broadly inclusive 12-month grace period. Under the AIA, the ability to obtain a patent will be primarily based on the filing date of the patent application, and the scope of prior art avoidable under the new 12-month grace period will be narrowed.
Specifically, the first party to file a patent application will be entitled to pursue that patent application, and the first party’s patent application will serve as prior art against any later filed patent application. This “first to file” system will effectively prevent any subsequent filer from pursuing the same invention. However, if a patent application is filed within the next 18 months (or can claim priority to an earlier patent or application that was filed before the commencement date of the “first to file” system), then the present “first to invent” standard will continue to apply. In addition, the AIA institutes a new “Derivation Proceeding” before the Patent Trial and Appeal Board (formerly the Board of Patent Appeals and Interferences) to determine whether an inventor named in the earlier application derived the claimed invention from another inventor.
These changes will increase the importance of promptly filing patent applications once an invention is developed. Going forward, aggressive filers will be rewarded by securing rights ahead of their competitors and by potentially avoiding more prior art. The changes also bring the U.S. law into closer alignment with the laws of most other countries in the world.
This provision will go into effect 18 months after signed into law and will only apply to patent applications filed after the date the provision goes into effect, with an exception that the new provision will not apply to patent applications claiming only priority back to applications filed prior to the date the provision goes into effect.
Post-Issuance Reconsideration of Patents
The AIA leaves current ex parte reexaminations in place, but a year after enactment will replace inter partes reexaminations with a process termed “Inter Partes Review”, to be adjudicated by the Patent Trial and Appeal Board. Inter Partes Review will permit third parties to challenge a patent at any time during the life of the patent. However, the bases for those challenges will be limited to lack of novelty or obviousness, and the asserted prior art will be limited to only patents or printed publications.
The USPTO will also implement a new procedure, similar to the post-grant opposition procedure in Europe, for reconsidering patents after issuance. Within the first nine months from the date of patent issuance, third parties will be able to challenge a patent based on nearly any ground of patentability under a process termed “Post-Grant Review.” This procedure will permit third parties to challenge patents as being directed to non-patentable subject matter, overly broad and not supported by the specification, indefinite, lacking novelty or being obvious. In addition, the scope of the prior art is not limited to patents and printed publications, and can include prior use or sales. Like Inter Partes Review proceedings, Post-Grant Review proceedings will be conducted by the Patent Trial and Appeal Board.
Also provided is a provision for a patent owner to initiate post-issuance reconsideration of the patent under a process termed “Supplemental Examination.” A key benefit under supplemental examination is that information presented during Supplemental Examination cannot serve as the basis for a charge of inequitable conduct.
These new procedures for post-issuance review should provide broader bases for challenging patents outside of the courtroom and since the procedures will be conducted by the Patent Trial and Appeal Board, the quality of the review should be improved. Also, supplemental examination will now be available to patentees as a means to reduce vulnerability of their patents to charges of inequitable conduct.
These provisions will go into effect 12 months after AIA is signed into law and Inter Partes Review and Supplemental Examination will apply to all patents, regardless of issue date, whereas Post-Grant Review will apply only to patents for which the first-to-file provisions apply.
Other Provisions
The AIA contains a variety of other provisions. The more noteworthy of these other provisions includes (i) an introduction of a defense to a charge of infringement by asserting prior commercial use, (ii) permitting third parties to submit to the USPTO information relevant to a patent application prior to the issuance of the patent, (iii) elimination of the defense of invalidity for failing to disclose the best mode, (iv) limiting the scope of civil actions based on false patent marking of products, and (v) the opening of satellite offices of the USPTO. Each of these provisions is briefly described.
Prior commercial use – A defendant in a civil action can assert non-infringement of a patent if the defendant’s alleged infringing activities were practiced a year prior to the earlier of filing of the patent application or disclosure of the invention. This provision will be effective immediately for any patent issuing from this date forward.
Third party submissions – A third party can submit to the USPTO a patent or printed publication any time up to the date of the later of the first substantive action by the USPTO or six months after the publication of the patent application. This provision will be effective in 12 months and applies to any patent application filed after the effective date.
Elimination of best mode defense – Defendants in a patent litigation can no longer assert invalidity based on the patentee’s failure to disclose the best mode of practicing the invention. This provision will be effective immediately for any civil action commenced after the date the bill is signed into law.
Limiting false marking cases – Charges of falsely marking a product with a patent can only be filed by parties who have suffered a competitive injury by the false marking and cannot be asserted for expired patents. This provision will be effective immediately for all currently pending and subsequently filed civil actions. This change in the law should significantly reduce the number of false marking suits filed in recent years against manufacturers.
Satellite offices – An interesting final provision is the requirement for the USPTO to open three satellite offices over the next three years. This provision may afford some of the most significant practical benefits since it may permit the USPTO to recruit qualified examiners more easily, and it may facilitate the ability of applicants to visit the USPTO to meet with their examiners.
Conclusion
The AIA introduces numerous changes to the current U.S. patent system, some of which will result in significant modifications to patenting strategies and challenging your competitors’ patents. It will be important for you and your business to understand the nature of these changes and the dates these changes go into effect so that you can be prepared for their impact on the patent landscape and in the competitive marketplace.
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