The Journal of The DuPage County Bar Association

Back Issues > Vol. 24 (2011-12)

Patent Law Change: A First Look At The “America Invents Act”
By Jefferson Perkins

On September 16, 2011, President Obama signed into law the Leahy - Smith America Invents Act, the most important revision of the patent statute since its enactment in 1952.[1]  This article provides a summary of some of the important provisions. 

First inventor to file, not first to invent.  The first inventor who files a patent application in the United States Patent and Trademark Office (USPTO) will be entitled to a patent, rather than the person who first invents the subject matter in question.[2]  There will no longer be any first-to-invent contest between two inventors who independently conceived of, and reduced to practice, an invention.  The first of those two inventors to file a patent application will win. 

A right of priority will still be accorded to an earlier foreign-filed patent application or an earlier International or US patent application (which could possibly be a provisional patent application), in which the filing date of such an earlier patent application will be the effective filing date of the current one.[3]  Conditions concerning timing and content of the prior application will still have to be met.  Signing and dating a technical disclosure, or creating and storing other evidence of an inventor’s conception and reduction to practice, won’t be relevant any longer, except to establish the fact that the inventor independently invented the subject matter and didn’t derive it from someone else.  Such record-keeping won’t save the inventor a place in line.  The little-used “Statutory Invention Registration,” by which a disclosure became an official USPTO public record, is now repealed.[4]

Derivation proceedings.  It will not be possible for a mere copyist to obtain patent protection on someone else’s invention just by beating the real inventor to the patent office.  While first-to-invent contests are going to go away, the new law establishes two kinds of derivation proceedings by which a copyist can be challenged. [5] This is why the new priority is more properly called “first inventor to file” rather than “first to file.”[6]  Such a challenge must be filed within one year of the issuance of a patent to the accused copyist, or alternatively within one year of the publication of the patent application containing the derived claim.[7]

 Grace period.  Also surviving, in greatly modified form, is a grace period in which time is afforded an inventor, or his assignee, in order to file a patent application.  The applicant has one year from the time that a first disclosure of the invention is made by the applicant to get a patent application on file.[8]  This disclosure can be a public use, a printed publication, a public offer for sale or any other way in which an invention becomes available to the public.[9]  It no longer matters in which country the disclosure is made.[10]

Technical disclosures of others.  Normally, all public disclosures of others (public uses, patents or other printed publications) made anywhere in the world, and before the effective filing date, constitute prior art to the patent application and may be asserted against the claimed subject matter to demonstrate lack of novelty[11] or to demonstrate obviousness.[12]  There is one exception to this:  if, in less than a year prior to the application filing date, an inventor discloses an invention, anyone else’s disclosure junior to the inventor’s disclosure will not count as prior art.[13]  U.S. patent applications of others are treated as prior art if they were effectively filed prior to the inventor’s public disclosure of the invention.[14]    

“On sale” and the abolition of “secret prior art.”  The old law also had a separate condition for patentability:  the invention could not have been placed on sale or put in public use (by the applicant or anyone else) more than one year prior to the application filing date.  These “statutory bars”, which create a patent forfeiture because the inventor delayed filing for more than a year, will be entirely replaced by a one-year grace period from the date on which prior art becomes truly publicly available.[15] 

According to prior case law, an invention could be placed “on sale” even in circumstances where the offer for sale was not public, or even where a complete disclosure of the invention had not even been created.[16]  But according to remarks of the bill’s congressional supporters,[17] “on sale” is now to be interpreted as an action by the patent owner or another that is sufficient to make the invention accessible to the public, that is, persons interested in and skilled in the subject matter.  If an offer for sale makes the invention available to the public at large, it will count.  However, if an offer for sale is private, it won’t count. 

Likewise, “public use” must be a use that results in a true disclosure of the invention to the public rather than (e.g.) a limited disclosure that does not result in public accessibility.[18]  The Act, at least as interpreted by its authors, overrules more than a century of Supreme Court and other decisional authority.  Because the abolition of “secret prior art” is based not on the express text but on a congressional interpretation of it, it is expected that this new language will be the subject of litigation in the foreseeable future. 

This change and all of the above changes take effect March 16, 2013, with respect to patents and patent applications claiming effective filing dates on or after that date.[19] What this means is that we will have a very slow, 20-year+ sunset during which the old statute will apply to old patents and patent applications, and the new statute will apply only to those new ones that do not claim an effective filing date before March 16, 2013.  Around that date, it is expected that applicants will consciously choose either the old or the new statutory regimes for novelty based on selection of the effective filing date.

Oath or Declaration.  The new statute still requires an oath or declaration of the inventor(s), but relaxes the requirements of when and how this document needs to be filed.[20]  The assignee can file a substitute statement if an inventor refuses to sign,[21] the oath or declaration can be folded into an assignment,[22] the document does not have to be filed right away, and its filing can even wait until the Examiner is ready to allow the claims.[23]  It does not appear that a new oath or declaration will be required any longer in the filing of a continuation-in-part patent application.[24]  These changes to oath/declaration practice apply to any patent application filed on or after September 16, 2012.[25]

Best mode.  The old law required that the specification contain a description of the best mode known to the inventor for carrying out the invention.  This requirement continues[26] – but, curiously, a defendant will no longer be able to attack an issued patent on the ground that the “best mode” is not disclosed.[27]  The practical result of this is that as long as the USPTO (which almost never inquires into this) is satisfied that the specification discloses the best mode for carrying out the invention- whether or not the application actually states such- won’t matter to a patent’s later enforceability.  The specification will still have to contain sufficient information to enable a person skilled in the art to ascertain what the invention is, and how to make and use it.[28]  The changes to “best mode” took effect September 16, 2011.[29]

Defense:  Prior internal commercial use.  The old statute had in it a “prior commercial use” defense, but it was limited to assertions of so-called “business method” patents.[30]  In the new law, a defendant may interpose this defense for any kind of invention.[31]  The prior internal commercial use must have happened at least one year prior to the earlier of the inventor’s public disclosure of the invention, or the inventor’s effective filing date.[32]  In combination with the new conditions for patentability, this means that in order to be successfully interposed as a defense, the prior internal commercial use might have to be as old as two years prior to the effective filing date of the application on which the patent in question issued.  The defense is personal,[33] does not invalidate the patent,[34] is transferable only in limited circumstances,[35] must be proven by clear and convincing evidence[36] and will result in the assessment of attorneys’ fees if the assertion of the defense is made without a “reasonable basis.”[37] 

Curiously, this defense may not be used against any invention owned, at the time the invention was made, by an “institution of higher education” or the IP licensing arm of same.[38]  But there is an “exception to the exception”:   The exception won’t apply in those instances where the federal government is affirmatively prohibited, by statute, regulation or executive order, from funding research in the activities in question.[39]  The prior internal commercial use defense applies to any patent issued on or after September 16, 2011.[40]

Re-work of the reexamination process.  The present statute allows for two kinds of reexamination by the USPTO of already issued patents, one (called “inter partes”) in which the requester substantially participates in the proceeding,[41] and one (called “ex parte”) in which the requester (if other than the patent owner) doesn’t participate.[42]  Going forward, eventually there will be four: ex parte reexamination, inter partes review, post-grant review and supplemental examination.  Ex parte reexamination survives with little change. 

Effective September 16, 2012 (and applicable to all patents issued before, on or after this date), inter partes review replaces inter partes reexamination.[43]  Also on this date, “supplemental examination”[44] becomes available to the patent owner only.    Effective March 16, 2013, and applicable only to patents having effective filing dates on or after this date, “post-grant review” is instituted.[45]

Inter partes review and post-grant review can be used only by a person other than the patent owner.[46]  “Post grant review” permits review based on any allegation of invalidity which may be interposed as a defense to the assertion of an issued patent, including prior public uses;[47] “inter partes review” is based on prior art patents and printed publications only.[48]  A supplemental examination may be carried out on the basis of “information” and the prior art which may be considered does not appear to be limited to patents and printed publications, as both current kinds of reexamination now expressly require.[49] 

The standards for initiating these proceedings are different from one another.  For “post grant review,” a proceeding will be initiated if the Director believes that “it is more likely than not that at least 1 of the claims challenged by the claims is unpatentable.”[50]  For “inter partes review,” the Director must conclude that after considering both the petition and the patent owner’s response, there is a reasonable likelihood that the petitioner would prevail with respect to at least one claim of the claims challenged in the petition.[51] 

Both of these have been tightened up from the present, relatively low standard, by which the Director of the USPTO will initiate a reexamination proceeding if he or she finds a “substantial new question of patentability.”[52]  This low threshold is retained for the patent owner-initiated “supplemental examination.”[53]  If a patent owner is contemplating asserting a patent against an infringer, but there is discovered in the prelitigation investigation one or more grounds upon which the infringer could rely in defending on the ground of inequitable conduct before the USPTO (typically a failure to disclose a material prior art reference or public use), the patent owner may request Supplemental Examination to cure the problem. 

The Supplemental Examination must, however, be concluded before any patent infringement action is brought, and must be requested prior to the filing of a declaratory judgment action by the accused infringer.[54]   But if the Director becomes aware of a “material fraud” on the USPTO, it must refer the matter to the Attorney General for possible criminal prosecution.[55]  If a non-patent owner initiates “post grant review” or “inter partes review,” in certain circumstances it will be precluded from asserting patent invalidity in federal district court, and vice versa.[56] 

Curtailment of “False Marking” actions.  The old patent statute[57]  permitted a qui tam action against anyone who intentionally mismarked a product with a patent number.  The section provided that a fine of “not more than” $500 could be assessed for each offense, with one-half going to the plaintiff and one-half going to the US Government.  Recent case law[58] had held that this fine is assessed per article.  Thus sprang up a cottage industry seeking compensation from companies which had not changed their patent number markings on their products to remove expired patents.[59] 

The new Act abolishes the qui tam action.[60]  A party may recover for false marking only if it can prove “competitive injury.”[61]  Continuing to carry expired patent numbers on a product won’t be actionable at all.[62]  

There is also offered a method of “virtual marking” by referring to an address of an Internet posting[63] (the contents of which then can be changed from time to time), but we have doubts about whether changing up, e.g., an injection molding tool to insert a URL of a web site is at all practical, or whether the result would be understood; the notice literally required by the statute would take the general form, “Pat. [or patent] www.website.com.”  This change is effective as of September 16, 2011.[64]

Noninfringement Opinion Letters.  The failure to obtain one cannot be considered as evidence of willful infringement.[65]  The Act is silent as to what treatment should be accorded to the issuance of such an opinion letter, however.  This change is effective as of September 16, 2012.[66] 

Reissue and correction of inventorship.  Effective September 16, 2012,[67] to do either, the petitioner need no longer show a lack of “deceptive intent.”[68]

Prioritized Examination.  Historically, the USPTO made certain applications “special,” meaning that they were examined out of order of their filing date.  A “petition to make special” could be filed on any of a number of grounds.  The most popular of these was an “accelerated examination” ground in which the applicant performed and characterized a prior art search.  More recently, applicants have had to submit an “Accelerated Examination Support Document” in which the applicant made numerous admissions against interest in characterizing the prior art search results;[69] but the acceptance of even these vastly augmented petitions to make special became uncommon. 

The statute and the Patent Rules now provide for a “prioritized (Track I) examination”[70] upon the payment of a “prioritized examination fee” of $4,800, or $2,400 if the applicant is a “small entity” (including independent inventors and small businesses having fewer than 500 employees).[71]   A request for prioritized examination has to be electronically filed with a complete application and applies to national nonprovisional utility patent applications only.  The application must present no more than four independent claims and 30 claims in all.  The new Rule[72] does not, however, require an “accelerated examination support document” and therefore it is our expectation that prioritized examination will be frequently used for economically important inventions for which the obtainment of patent protection is a matter of urgency.

Fees.  Most USPTO filing fees went up 15%, effective September 26, 2011.[73]

There are numerous other provisions, e.g. relating to conduct of litigation,[74] how the USPTO is funded,[75] and special provisions for colleges and universities,[76] business method patents[77] and even automated teller machines.[78]  

Practitioners will have to keep both the old patent law and the new patent law at their fingertips for most of a generation.  The Act makes a sheaf of radical changes to the U.S. patent law.  What used to be settled will now have to be relitigated.  Perhaps after many years of experience under the new law and in light of its future judicial interpretation, we will be able to truly say what these changes really mean, and what effects they will really have.

[1]Leahy – Smith America Invents Act, H.R. 1249,  P. L. 112-29  (September 16, 2011).

[2]P. L. 112-29, § 3(b); 35 U.S.C. §102(a)(2).  Cites to 35 U.S.C. herein are to the statute as now amended, unless otherwise noted.

[3]P. L. 112-29, § 3(a); 35 U.S.C. § 100(i).

[4]P. L. 112-29, § 3(e), repealing 37 U.S.C. § 157.

[5]P. L. 112-29, § 3(h), (i); 35 U.S.C. §§ 291, 135.  

[6]P. L. 112-29, § 3

[7]P. L. 112-29, § 3(h),(i); 35 USC § 291(b), 35 USC § 135.

[8]P. L. 112-29, § 3(b); 35 U.S.C. § 102(b)(1).

[9]P. L. 112-29, § 3(b); 35 U.S.C. § 102(a)(1).

[10]Id.

[11]P. L. 112-29, § 3(b); 35 U.S.C. § 102(a)(1).

[12]P. L. 112-29, § 3(b); 35 U.S.C. § 103.

[13]P. L. 112-29, § 3(b); 35 U.S.C. § 102(a)(2),(b)(1).

[14]P. L. 112-29, § 3(b); 35 U.S.C. § 102(b)(2).

[15]P. L. 112-29, § 3(b); 35 U.S.C. § 102(a)(1).

[16]Pfaff v. Wells Electronics Inc., 525 U.S. 55, 119 S. Ct. 304, 48 USPQ2d 1641 (1998); August Technology Corp. v. Camtek Ltd., No.  2010-1458, 2011 WL 3659357, 99 USPQ2d 1766, 1774-1775  (Fed. Cir. August 22, 2011) (in this last case, a complete technical disclosure didn’t even exist at the time that the commercial offer for sale was made).

[17]E.g., Legislative Notice of the Republican Policy Committee, 157 Cong. Rec. S1360-02( March 8, 2011), 2011 WL 797877.

[18]Id.  The new America Invents Act is thought to legislatively abrogate cases such as Beachcombers International, Inc. v. Wildewood Creative Products, Inc., 31 F. 3d 1154, 1159-60 (Fed. Cir. 1994)(device demonstrated to guests at a party in the inventor’s home ruled a public use); JumpSport, Inc. v. Jumpking, Inc., 2006 WL 2034498 (Fed. Cir. July 21, 2006) (public use results from neighbors being allowed to use inventive trampoline in inventor’s back yard); Egbert v. Lippman, 104 U.S. 333, 336 (1881) (use of a corset steel by a woman underneath her clothing deemed “public”).  It is unclear whether this legislative abrogation extends to Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5, 19 – 20 (1939) (ordinary use of a machine or process in the usual course of producing articles in a factory for commercial purposes is a “public” use, at least absent evidence of active steps of concealment).

[19]P. L. 112-29, § 3(n).

[20]P. L. 112-29, § 4; 35 U.S.C. § 115.

[21]P. L. 112-29, § 4(a),(b); 35 U.S.C. §§ 115 (d)(2)(B),  118.

[22]P. L. 112-29, § 4(a); 35 U.S.C. § 115(e).

[23]P. L. 112-29, § 4(a); 35 U.S.C. § 115(f).

[24]P. L. 112-29, § 4; 35 U.S.C. § 115(g), (h)(2).

[25]P. L. 112-29, § 4(e).

[26]P. L. 112-29, § 4(c); 35 U.S.C. § 112.

[27]P. L. 112-29, § 15(a); 35 U.S.C. § 282.

[28]35 U.S.C. §§ 112, 282.

[29]P. L. 112-29, § 15(c).

[30]35 U.S.C. § 273 (a)(3) (1999).

[31]P. L. 112-29, § 5(a); 35 U.S.C. § 273(a).

[32]P. L. 112-29, § 5(a); 35 U.S.C. § 273(a)(2).

[33]P. L. 112-29, § 5(a); 35 U.S.C. § 273(e)(1).

[34]P. L. 112-29, § 5(a); 35 U.S.C. § 273(g).

[35]P. L. 112-29, § 5(a); 35 U.S.C. § 273(e)(1)(B).

[36]P. L. 112-29, § 5(a); 35 U.S.C. § 273(b).

[37]P. L. 112-29, § 5(a); 35 U.S.C. § 273(f).

[38]P. L. 112-29, § 5(a); 35 U.S.C. § 273(e)(5).

[39]157 Cong. Rec. S5402-02 , September 8, 2011 (Remarks of Senator Kyl).

[40]P. L. 112-29, § 5(c).

[41]35 U.S.C. §§ 311 – 318 (Nov. 2, 2002).

[42]35 U.S.C. §§ 301 – 307 (Dec. 8, 1994).

[43]P. L. 112-29, § 6(c), 35 U.S.C. §§ 311-319; Effective date, P. L. 112-29, § 6(c)(2)(A).

[44]P. L. 112-29, § 12(a), 35 U.S.C. § 257; Effective date, P. L. 112-29, § 12(c).

[45]P. L. 112-29, § 6(c), 35 U.S.C. §§ 321 – 329; Effective date, P. L. 112-29, § 6(c)(2).

[46]P. L. 112-29, § 6(a),(d); 35 U.S.C. §§ 311(a), 321(a).

[47]P. L. 112-29, § 6(d); 35 U.S.C. § 321(b).

[48]P. L. 112-29, § 6(a); 35 U.S.C. § 311(b).

[49]P. L. 112-29, § 12(b); 35 U.S.C.

[50]P. L. 112-29, § 6(d); 35U.S.C. § 324(a).

[51]P. L. 112-29, § 6(a); 35 U.S.C. § 314(a).

[52]35 U.S.C. §§ 303, 312(a) (November 2, 2002).

[53]P. L. 112-29, § 12(a); 35 U.S.C. § 257(a).

[54]P. L. 112-29, § 12(a); 35 U.S.C. § 257(c).

[55]P. L. 112-29, § 12(a); 35 U.S.C. § 257(e).

[56]P. L. 112-29, § 6(a),(d); 35 U.S.C. § 315, 325.

[57]35 U.S.C. § 292(b) (December 8, 1994).

[58]Forest Group v. Bon Tool Co., 590 F.3d 1295, 93 USPQ 2d 1097 (Fed. Cir. 2009).

[59]See Pequignot v. Solo Cup Co., 608 F.3d 1356, 95 USPQ 2d 1501 (Fed. Cir. 2010).

[60]P. L. 112-29, § 16(b)(1); 35 U.S.C. § 292(a).

[61]P. L. 112-29, § 16(b)(2); 35 U.S.C. § 292 (b).

[62]P. L. 112-29, § 16(b)(3); 35 U.S.C. § 292(c).

[63]P. L. 112-29, § 16(a); 35 U.S.C. § 287(a).

[64]P. L. 112-29, § 16(b)(4).

[65]P. L. 112-29, § 17(a); 35 U.S.C. § 298; legislatively abrogates Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683, 699 (Fed. Cir. 2008).

[66]P. L. 112-29, § 35.

[67]P. L. 112-29, § 20(l).

[68]P. L. 112-29, § 20(d),(f); 35 U.S.C. §§ 251(a), 256(a).

[69]“Changes To Practice For Petitions in Patent Applications To Make Special and for Accelerated Examination”, 71 FR 36323 (June 26, 2006).

[70]P. L. 112-29, § 11(h)(1)(A); 35 U.S.C. § 2(b)(2)(G); 37CFR § 1.102(e) (September 23, 2011).

[71]37 CFR § 1.17 (September 23, 2011).

[72]37 CFR § 1.102(e).

[73]P. L. 112-29, §11 in general for schedule of fees. 35 U.S.C. § 41(a), (b),(d)(1); 15% surcharge, P. L. 112-29, § 11(i)(1)(A), FR76 Fed. Reg. 59050, 59052-54 (Sept. 23, 2011) (to be codified at 37 CFR Part 1). (September 26, 2011).

[74]P. L. 112-29, § 19, 28 U.S.C. §§ 1338(a), 1295(a)(1), 1454; 35 U.S.C. § 299.

[75]P. L. 112-29, §§ 10(a), 22; 35 U.S.C. §42(c).

[76]P. L. 112-29, §§ 5(a), 10(g); 35 U.S.C. 123(d), 273(c).

[77]P. L. 112-29, §§ 14, 18.

[78]P. L. 112-29, § 18(c); 35 U.S.C. § 281, 28 U.S.C. § 1400(b).

Jefferson Perkins heads the Intellectual Property Department of Momkus McCluskey, LLC.  He has had 28 years of experience with patents, trademarks, copyrights and trade secrets, including their acquisition, registration, licensing, assertion and defense. Jeff currently is Chair of the DCBA Intellectual Property Committee.

 
 
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