United States: Lifting The Veil Of Secrecy: 18-Month Publication Of Patent Applications In The U.S. Under The AIPA And Patent Risk Management

On November 29, 2000, the Domestic Publication of Foreign Filed Patent Applications Act of 1999 went into effect. This act is Subtitle E of the American Inventors Protection Act (AIPA), which was enacted as Public Law 106-113 on November 29, 1999. The AIPA including Subtitle E provides a number of new patent rules that include publication of U.S. patent applications after eighteen months. Publication of patents after eighteen months significantly affects patent procurement, management and enforcement practices in the U.S.

Before November 29, 2000, all patent applications and related papers filed in the U.S. were routinely held in secret until a patent issued. All patent applications filed in the U.S. on and after November 29, 2000, will be routinely published after eighteen months. Detailed information on the AIPA can be found on the United States Patent and Trademark (USPTO) web-set at (www.uspto.gov/web/offices/dcom/olia/aipa). The eighteen-month publication rule under the AIPA makes the U.S. patent system similar to the patent systems in most foreign countries, which have always routinely published patent applications eighteen months after filing.

Under the new rules, new utility patent applications, continuations, continuations-in-part and divisional applications filed under 37 C.F.R. 1.53(b), continuing applications filed under 37 C.F.R. 1.53(d), and foreign national stage applications filed under 37 U.S.C. 371 on or after November 29, 2000, will be published eighteen months after filing.

The cost of publication is recovered by charging a publication fee that is currently $300.00 after a notice of allowance is mailed for the patent application. If a patent application is abandoned, no application fee will be paid.

The new rules also allow for republication of published patent applications, voluntary publication of patent applications pending before November 29, 2000, and publication of a patent application earlier than eighteen months. The republication, voluntary, early or publication fee is currently $130.00. However, the USPTO will not honor requests that any publication occur on a specific date, two or more applications be published on the same day, or that only a subpart of an application be published.

If an applicant wants a patent application publication to reflect the application as amended during examination or with preliminary amendments, the applicant can submit a copy of the application as amended for republication. If the claims are amended multiple times during the examination of the application, the application may be republished multiple times.

The published patent applications will be eventually be available for electronic searching on USPTO search systems such as the USPTO web-site (www.uspto.gov). The USPTO search system will provide full text and image searching. However, the USPTO has indicated that it may not maintain paper copy collections of published applications for manual searching.

A published patent application will include a publication document that is similar in format and content to an issued patent. The publication document will include a front page with a title, bibliographic data, abstract, drawing figures and patent classification information. The publication document will also include a specification and claims in a two columnar arrangement.

However, there are certain types of patent applications that will not be routinely published after eighteen months. Patent applications that will not be routinely published include provisional applications under 37 C.F.R. 1.53(c), design patent applications under 37 C.F.R. 1.51, applications under secrecy order of whose disclosure would be detrimental to national security, applications that are no longer pending (e.g., abandoned applications), and applications including a request not to publish.

A patent applicant may request that a patent application not be published if the invention has not and will not be the subject of an application filed in another country or under an international agreement or treaty that requires eighteen month publication. However, the patent applicant must: (1) make the request not to publish the patent application when the application is filed; and (2) include a conspicuous signed certification of a request not to publish.

The request not to publish may be rescinded at any time. However, if a patent application is subsequently filed in another country or under international agreement of treaty that requires eighteen-month publication, the applicant must notify the USPTO within forty-five days, or the patent application will become abandoned in the U.S.

Under the old rules, issued U.S. patents and foreign patent documents were the predominant prior art documents searched by patent examiners under 35 U.S.C. 102(e) as well as for 102(a) and 102(b). After reading the specification and claims, patent examiners searched prior art databases comprising issued U.S. and foreign patents and other printed publications.

Under the AIPA, published patent applications become the predominant prior art documents. The published patent applications become prior art documents as of the date of filing the patent application. Published patent applications searched are now under 35 U.S.C. 102(e)(1). Issued U.S. patents and foreign patent documents will now be searched only after published patent applications are searched under 35 U.S.C. 102(e)(2).

Since published patent applications will become the predominant prior art documents used in the U.S., patent applications may be voluntarily published or published early for strategic reasons. For example, an organization may desire to create a prior art document to limit a competitor by voluntary or early publication of a patent application, put a competitor on notice of an invention, or attempt to invoke the AIPA provisional patent infringement rights discussed below.

As might be expected, published patent applications are likely to be reviewed on a regular basis by adverse parties. Eighteen-month publication of patent applications is likely to lead to protests and oppositions when a published patent application includes an invention that an adverse party thinks is anticipated, obvious, or includes an invention the adverse party believes he/she can make a legitimate inventive claim to. Procedures are provided under the AIPA to ensure that there is no protest or pre-issuance opposition to a published patent application without express consent of the applicant.

However, the new rule defined in 37 C.F.R. 1.99 will permit patents and other printed publications to be submitted to the USPTO by third parties for use during the examination process for a published patent application. However, any patents or printed publications used for this purpose must: (1) be submitted no later than two months after publication of a patent application or mailing of a notice of allowance for the patent application (2) include no more than ten references; (3) include no discussion of the references; and (4) formally serve notice of the references on the applicant.

Under the old rules, patent rights attached only when a U.S. patent is granted on a patent application. A patentee could then prevent others from making, using, selling, or importing the patented invention during the term of the issued patent. Upon a finding of infringement, a court could award a patentee a reasonably royalty as damages to compensate for the period the issued patent was infringed. A court could also award treble damages for special cases including willful infringement of a patent under 35 U.S.C. 284.

Under the AIPA, provisional patent rights are available under 35 U.S.C. 154(d) to use against alleged infringers. If a patent application is published, the applicant is entitled to a reasonable royalty for damages for infringement for a period between the date of publication of the application and the date the patent is granted. These new provisional patent rights apply provided that: (1) actual notice of the published patent application is given to an alleged infringer; and (2) the claims in the published application are "substantially identical" to the claims in issued patent. However, treble damages are not available for these provisional patent rights.

The AIPA significantly changes patent practice in the U.S. If a patentability search is conducted, the search should now include published patent applications. Since an application may be republished multiple times, the search must be conducted to include the potential for multiple republications with multiple set of claims.

The AIPA also involves making a number of strategic patent practice decisions such as deciding to publish at all, deciding to voluntarily publishing or publishing early, deciding on the range of claims to initially publish and decisions relating to republishing applications with amended or canceled claims. The need to maintain secrecy or to file continuation applications at a later time must also be balanced against the possible desire to create prior art documents to use against a competitor or to take advantage of the new provisional rights to use against potential infringers.

The news rules under the AIPA make risk evaluation and management for licensing and litigation more difficult. An organization may be approached by a competitor and asked to take a license at a lower royalty rate based on claims in a published patent application before it issues into a patent. However, the organization may have a hard time evaluating the risk involved with licensing request, since the number and scope of claims in the issued patent may be totally different (e.g., canceled or narrowed claims) than and not substantially identical to the claims in the published patent application.

An organization may also be approached by a competitor with a notice of a published application and a claim of alleged infringement to invoke the AIPA provisional patent rights. The organization may have a hard time evaluating the litigation risk associated with provisional patent rights based on the claims in the published patent application. For example, what does the term "substantially identical" mean now, and what will it come to mean after a few patent cases are litigation? Are the claims in a published patent application substantially identical to the claims in the issued patent if they differ by a few words? How about if they differ by one or two claim elements or one or two claims features? Years of arguments over these issues are sure to follow.

Coincidentally, on November 29, 2000, the U.S. Court of Appeals for the Federal Circuit also handed down a decision in, Festo Corp. v Shoketsu Kinzoku Kogyo Kabsuhiki Co., 2000 U.S. App. Lexis 29979, 234 F.3d 558 (Fed. Cir. 2000) (hereinafter Festo). The Court of Appeals took the case en banc to resolve specific issues related to the Doctrine of Equivalents that remained unanswered by the Supreme Court Decision in the patent case Warner Jenkins Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 137 Ed. 2d 146, 117 S. Ct. 1040 (1997).

In general, Festo held that if a patent claim is narrowed for any reason that relates to the statutory requirement of a patent (e.g., 35 U.S.C. §§ 101, 102, 103 and most likely including § 112), prosecution history estoppel arises. There is no range of equivalents for the narrowed claim element and application of the Doctrine of Equivalents for any narrowed claim element is completely barred. Festo at *25 (Lexis Star pagination). Virtually every issued patent includes one or more narrowed claim elements that could be affected by the Festo decision, since normal patent practice has always included an iterative process of narrowing claims during the examination process. Most narrowing claim amendments were made for the patentability reasons discussed in Festo.

The dissent in the Festo decision has argued that Festo holding also provides a road-map for potential patent infringers. Anyone seeking to lawfully copy a patented technology need only: (1) read the prosecution history to identify narrowing claim amendments made for patentability reasons; and (2) copy every other claim element exactly, and substitute any known interchangeable structure, matter or step for any claim element that has been narrowed. Any minor change, to even one narrowed element, should be sufficient to avoid liability for infringement Festo at *180.

The Festo decision, since it was applied retrospectively and not prospectively by the Court of Appeals, immediately impacts virtually every issued patent, every patent license, all pending patent litigation cases and all pending patent applications in which any claim elements have been narrowed. Festo at *189. Thus, the Festo decision also impacts how strategic issues including potential publication and provisional patent rights under the AIPA should be handled.

The AIPA includes a number of new rules that affect patent practice in the U.S. A thorough study of the patent rules changes under the AIPA in light of the Festo decision should be undertaken to evaluate and update an organization’s patent procurement, management and enforcement practices and well as its patent risk management procedures.

Copyright © 2001 by Stephen Lesavich, PhD. All rights reserved.