New England Biz Law Update
On Sept. 16, the America Invents Act of 2011 was signed into law, ushering in one of the most dramatic changes to U.S. patent law in recent memory.
In particular, the act brings the patent system into closer alignment with the laws of most other countries by allowing the grant of a patent to the first person to file an application on an invention.
That is a significant change from the current U.S. standard of awarding a patent to the first inventor to invent the subject matter, even if the first inventor was not the first to file a patent application.
The new “first-to-file” system, which does not take effect until March 16, 2013, also provides a broadened scope of prior art that can be used to challenge patent claims during U.S. patent application examination.
Available prior art will include third-party patent applications filed in other countries and on-sale and public disclosure activities both in this country and in foreign jurisdictions before the filing date of an application.
However, the act does provide for a personal grace period of one year for the applicant’s own disclosures. The broadened scope of prior art will apply only to applications filed, or that have a priority date of filing, after March 16, 2013.
To address concerns that patent applicants may file applications claiming inventions derived from the true inventor, the act also provides for a derivation proceeding whereby an inventor can challenge the patent filing of another if he can show the invention was derived from his own work.
Impact for companies, inventors
Other aspects of the act have an immediate impact on patent strategy for companies and inventors.
Under the new laws, a prioritized examination procedure is now available for U.S. applications. Unlike a standard patent application filing in U.S. Patent Office, which typically entails a delay of two to three years or more before an examiner reviews the application for patentability, the new prioritized examination procedure will accelerate the patent office review.
Under the prioritized examination, a final disposition (such as a notice of allowance or final office action) would be provided 12 months from the grant of prioritized status.
The prioritized examination requires a fee of $2,400 (in addition to regular filing fees, for a total of $3,785) for a company qualifying as a small entity at the U.S. Patent Office (typically a company with fewer than 500 employees). For a larger company, the total fee for filing an application with a prioritized examination request is $5,300.
No special examination support document is required for the procedure, and any patent subject matter will qualify.
Applicants may wish to take advantage of the program where some certainty on obtaining patent rights is important in the near term, for example, when a product that is the subject of a patent application is about to be commercially launched, or when issued patents on a pivotal technology would reduce risk to an investor.
The act also provides for new “post-grant” proceedings at the U.S. Patent Office, which offer additional opportunities to attack issued U.S. patents with potentially less cost than litigation in federal court.
The new proceedings include:
1) a post-grant review that will consider all grounds of invalidity and which is not limited to prior art patents or printed publications, and which must be requested within nine months from issuance of a patent;
2) an inter partes review, requested nine months after the issuance of a patent with limited challenge based on prior art publications and patents, and similar to the current inter partes reexamination procedure; and
3) a supplemental examination procedure that may provide a patent owner with the opportunity to have an examiner consider, reconsider or correct information relevant to an issued patent, including additional prior art.
The post-grant review proceeding effective will be only for patents issued under the first-to-file system — i.e., those patents with effective first filing dates on or after March 16, 2013.
However, both supplemental examination and inter partes review will be available as of Sept. 16, 2012; and any patent issued before or after that date will be eligible for such post-grant proceedings. There is a transitional inter partes re-examination procedure available now, until Sept. 16, 2012.
Relevant to processes, machines and products related to manufacturing, which are often protected as trade secrets, the act now provides for avoiding patent infringement liability on a third-party patent if the use of the process, or use of the machine or product in manufacturing, began at least one year before the effective filing date of the third-party patent.
That new aspect of the act is effective now and applies to any patent issued on or after Sept. 16 of this year.
Another significant change in patent law under the act relates to marking of patented products with a patent number.
Patentees should mark their patented products with the patent number(s) that claim the product to potentially obtain past damages for patent infringement.
The act now allows a patented product or associated packaging to be marked with the word “Patent” or “Pat.” That is followed by an address of a posting on the Internet that is accessible to the public without charge and that lists the patent number(s).
Effective immediately, there are no consequences for marking with an expired patent number, as provided for in the act. False marking is still prohibited.
As part of the act’s intention to reduce litigation, disclosure of the best mode of practicing the invention at the time of patent filing is still required in a patent application, but there is no longer a penalty for not including such disclosure.
The failure to disclose the best mode is no longer available as grounds to invalidate an issued claim or otherwise hold it unenforceable. That portion of the act is effective now.
Of potential interest to life science companies and scientists, the act codifies previous U.S. Patent Office policy banning the patenting of cloned humans and embryos.
However, the act is silent on the patentability of man-made, isolated genetic material, such as DNA. It is important to note that the Court of Appeals for the Federal Circuit has recently rejected a lower court holding that such genetic material is non-patentable. Assoc. Mol. Pathology v. Myriad Genetics (Fed. Cir. 2011).
Get ready
Although the first-to-file system under the act will not take effect immediately, companies and inventors considering patent development strategy should begin to prepare for the changes over the next months so that patent rights are maximized.
For those inventors and companies that already have patent policies that consider international rights, the first-to-file system will not significantly change overall filing strategy since those policies already should be aligned with the non-U.S. patent standard.
A company with new, unpatented discoveries, however, may wish to file a patent application on those before March 16, 2013, to avoid the expanded scope of prior art and to avoid the possibility of a later validity challenge by a third party via the new post-grant review.
Once the post-grant review proceeding is available, companies and inventors should also consider heightened monitoring of a competitor’s newly issued patents in order to potentially take advantage of the easier route to challenge a third-party patent.
The first-to-file system also heightens the emphasis on maintaining the secrecy and limiting any public disclosure of new inventions prior to filing a patent application. Companies and inventors should be particularly careful of disclosures at conferences and trade shows since such disclosures will have a larger role as potentially qualifying prior art under the first-to-file system.
There likely will be less reliance on internal company documents such as laboratory notebooks to protect or claim patent rights, although all companies should consider additionally documenting invention disclosures as they prepare for the new patent filing system.
