President Obama has signed into law sweeping patent changes that proponents claim will create over 200,000 new jobs. Without addressing the merits of the claim, the new patent law will nonetheless affect all businesses. Known as the American Invents Act (or Leahy-Smith American Invents Act), these changes will affect both the enforcement and protection of patent rights.
First to File - The Act will move the U.S. closer to other countries' patent laws. The U.S. is but one of a small number of countries that awards patents based on the first to invent doctrine. Leading up until the new Act, the issue of patent ownership was determined by who conceived the invention first. This issue was often resolved by a Patent Office tribunal in an interference proceeding. Now, the Act will create a race to file an application with the Patent Office. A failure to file first will affect an applicant's patent rights. What does this mean to businesses? Businesses may want to consider filing provisional patent applications to preserve their patent rights. Although the preparation and filing of provisional applications may be less expensive, the provisional applications must still provide enough information about the inventions to satisfy the patent disclosure requirements.
Patent Litigation - One of the more sweeping changes affecting patent litigation is that the Act will essentially eliminate parties from suing others for false patent marking. A large number of false marking lawsuits have been recently filed due to the Federal Circuit's decision to award damages based on the number of products that included inaccurate patent information. As one could imagine, if a defendant sold thousands of pieces of items with inaccurate patent information, damages awarded were huge. Courts were awarding large monetary judgments if a defendant used (without deceptive intent) an expired patent number in its packaging. The new law provides that marking with an expired patent is not a violation of the statute. This means that virtually all pending false marking suits will need to be dismissed immediately.
The Act will also make it more difficult for patent holders to file infringement lawsuits in batches, joining multiple defendants with little in common in a single suit. Instead, patent plaintiffs will now have to file individual lawsuits against each defendant, unless the defendants' products share a great deal more in common than they often do today. This is expected to make the "business" of patent litigation more complex and costly for plaintiffs, particularly for "non-practicing entities" (sometimes called "patent trolls") -- but it may also make it harder for defendants, particularly small businesses, to coordinate joint defenses and other cost-saving steps in defending patent infringement claims. Over the last few weeks a number of non-practicing entities have filed patent lawsuits, hoping to get ahead of this significant change.
In addition, a failure to disclose an invention's best mode cannot be used as a ground to invalidate a patent. Furthermore, the Act will provide some relief to accused infringers who do not obtain an infringement opinion of counsel. A failure to obtain an opinion cannot be used to prove willful infringement (which subjects the infringer to treble damages) or intent to induce infringement.
Patent challenges - For recently issued and future patents, third parties may challenge in a Patent Office proceeding, the validity of a patent on any grounds. In the past, third party's challenges in the Patent Office were limited to prior art patents or printed publications. Now during a certain window of time after the grant of the patent, third parties may challenge (in the Patent Office) the patent on any grounds, such as prior uses or sales, or inequitable conduct in the prosecution of the patent. Rather than filing a lawsuit in federal courts to invalidate a patent, the Act allows third parties to challenge the validity of the patent in the Patent Office where costs to invalidate the patent would be considerably less than challenging the validity of the patent in a federal court. The burden of proof for the third party will be a preponderance of the evidence.
Patentable Subject Matter - No patents will be granted to "tax strategy patents" or to claims encompassing human organisms.
Fees, Fees, fees - All patent fees will increase by 15 percent.
The above merely provides a brief overview of the American Invents Act. Strasburger's intellectual property attorneys are available to answer questions about this article and are happy to discuss these momentous changes to the U.S. patent laws.
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