On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act, which dramatically changes the patent system in the United States. The various sections of the Act contain a wide variety of effective dates that result in some provisions being effective immediately while others will not be effective for as long as 18 months. We have been going over the bill and its effects on the patent system and provide the following discussion of certain important sections of the bill and recommendations in light of the changes —
- First Inventor to File System
- Prior Commercial Use Doctrine
- Inter Partes and Post Grant Review
- Third Party Submissions
- Fee Increases
- Supplemental Examination
- Best Mode Requirement
- Virtual and False Marking
- Advice of Counsel
- Miscellaneous Provisions
Because of these changes, we recommend that our clients begin to immediately clear their back log of invention disclosures. Any patent applications filed within the next 18 months will be reviewed under the old system and will not be subject to the new provisions. Because of the removal of the one-year grace period, we also recommend that our clients consider, where appropriate, filing provisional applications and publishing their disclosures early. This is especially important for any inventions within an industry where there is considerable simultaneous invention, because for applications filed on or after March 16, 2013,the patent will go to the first inventor to file without concern for the date of invention.
To take advantage of this defense, we recommend that our clients maintain adequate internal records to document their business processes including the dates on which such processes were first used. Because the burden of proving this defense is by clear and convincing evidence, these records are critical to proving the applicability of the defense.
Post grant review provides a third party an opportunity to raise grounds of invalidity against recently-issued patents. The request for a post grant review must be filed within nine months of issuance of a patent, and the Patent Office will grant the request if it is "more likely than not" that the patent is invalid. The details of the post grant review procedures will be set by Patent Office regulations to be developed in the coming year. The post grant review provisions have an effective date of one year from date of enactment. However, absent very specific exceptions, only patents that have been issued pursuant to the new "first inventor to file" patent system are subject to post grant review.
Also effective one year from enactment, inter partes reexaminations will become inter partes reviews. An inter partes review can be filed after nine months from the issue date of the patent or after termination of a post grant review. Inter partes review differs from inter partes reexamination in that the process is significantly faster - it has a statutorily-imposed one year time limit. There is also the availability of discovery as well as the opportunity for a statement from the patent owner. The specifics of the new procedure will be set out in a set of regulations that the Director of the Patent Office is required to issue before the effective date in one year. Inter partes reexaminations and inter partes reviews will both use a new standard - "reasonable likelihood that the petitioner will prevail" on at least one claim. This standard is higher than the current "substantial question of patentability" standard. The new standard is effective immediately for all inter partes reexaminations.
Our clients will need to carefully consider participating in these new procedures, because an unsuccessful review could prevent the party who instigated the review from raising related arguments in future proceedings, such as infringement lawsuits.
The bill also restricts recovery in a civil suit for false marking only to those who suffer a competitive injury, and limit recovery to compensate for the injury. This provision, in addition to becoming effective immediately, also applies to pending litigation. Therefore, it will effectively eliminate both existing and future civil suits for false marking except for limited circumstances.
- Section 18 of the Act provides for a 8-year transitional period for parties charged with infringing certain business methods to challenge the validity of those patents in the Patent Office. Only patents that claim a method or corresponding apparatus for performing data processing or other operations used in the financial services industry are subject to this provision.
- Section 14 of the Act which deems any patent directed to a strategy for reducing, avoiding or deferring tax liability that issues on or after September 16, 2011 within the prior art and not entitled to patent protection.
- Section 33 of the Act prohibits the issuance of a patent directed to a human organism.
In the coming weeks and months, the Patent Office will be issuing a number of regulations and rulemakings on how the America Invents Act will be implemented and answering questions left unanswered in the Act. We are closely monitoring the Act's progress and will be looking into every regulation and rulemaking issued by the Patent Office.
If you have any questions do not hesitate to let us know and we will work with you to ensure a smooth transition into the new patent system provided by the Leahy-Smith America Invents Act.