President Obama Signs The America Invents Act - Patent

Today, after years of contentious debate over what should constitute "patent reform," President Obama signed into law the America Invents Act, regarded by some to be the most significant change to the U.S. patent system since the Patent Act of 1952. The new law significantly changes many facets of U.S. patent law, chief among them being the adoption of a first-to-file scheme to replace the centuries-old first-to-invent system and the implementation of an opposition-like post-grant review. These and other changes are highlighted below.

First inventor to file

The move from a first-to-invent to a first-to-file system is intended to promote harmonization of the U.S. patent system with patent systems used by the rest of the world.
New patent applications are given an "effective filing date," and patentability will now be judged on whether any prior art was available before this date. The new law defines effective filing date as either the filing date of the earliest application to which the current application can claim a priority benefit or the actual date of filing of the application.
An applicant can no longer rely upon an earlier date of conception when prior art has an earlier effective filing or publication date, unless the prior art is the inventor's own disclosure (i.e., swearing back cannot be used to overcome another's prior art).
The current one-year grace period remains in effect, but only for the inventor's own disclosures (and disclosures derived from the inventor). For patents and publications, a public disclosure within one year of filing is not prior art if the information was obtained directly or indirectly from the inventor.
The first-to-file system will take effect 18 months from enactment of the new law.
The current patent interference proceeding will be abolished and replaced by a new "derivation proceeding."

Derivation proceedings

A new derivation proceeding allows the U.S. Patent and Trademark Office ("USPTO") to ensure that the inventor(s) of a first-filed patent application did not derive the invention from the inventor(s) of a later-filed application. The applicant or inventor of the later filed application must petition the USPTO to initiate the proceeding.
The petition must be filed within one year from the first publication date of a claim to an invention that is the same or substantially the same as a claim in the first-filed application.
For issued patents, the owner of a later-filed patent may file a civil action against the owner of the first-filed patent that claims the same invention if that invention was derived from the inventor(s) of the later-filed application. The civil action must be filed within one year of the issue date of the issuance of the first-filed patent.
The derivation proceeding provision takes effect 18 months from enactment of the new law.

Post-grant review

Further attempting to harmonize U.S. patent law with patent laws found in other jurisdictions, the new law allows for post-grant review proceedings, where a third party may file a petition for post-grant review of an issued patent, provided certain conditions are met. The patent owner is not allowed to file such a petition.
The deadline for a third party to file a petition for post-grant review is nine months after a patent issues.
The standard under which the USPTO considers a petition for post-grant review is that the unrebutted information presented in the petition demonstrates that it is more likely than not that at least one of the claims challenged is unpatentable.
The USPTO also may institute a post-grant review if the petition "raises a novel or unsettled legal question that is important to other patents or patent applications."
The USPTO's determination of whether to institute a post-grant review is final and nonappealable.
During a post-grant review, the patentee may file one motion to amend the patent by canceling any challenged patent claim or, for each challenged claim, propose a reasonable number of substitute claims, so long as the amendment does not enlarge the scope of the claims of the patent or introduce new matter. Subsequent motions may be entered upon joint request of the parties or for good cause.
A party filing a petition for post-grant review cannot subsequently assert in a civil action that a claim "is invalid on any ground that the petitioner raised or reasonably could have raised" during the post-grant review. As such, the estoppel risks must be taken into account before petitioning for a post-grant review.
A post-grant review cannot be instituted if the third-party petitioner has already filed a civil action challenging the validity of the patent.

Supplemental examination

Supplemental examination is a new USPTO proceeding that will coexist with the existing ex parte reexamination process and provides an additional procedure for a patent owner to reopen examination of a granted patent.
Only the patent owner may request supplemental examination of a granted patent.
The patent owner may submit any information that raises a substantial new question of patentability and the submitted information is not limited to published patent documents and printed publications.
The patent owner can use the supplemental examination process to inoculate a patent against a potential charge of inequitable conduct. With certain exceptions such as material fraud, the new law provides that a patent shall not be held unenforceable based on information considered, reconsidered or corrected in a supplemental examination.
The procedures for supplemental examination are similar to those of ex parte reexamination.

Inter partes review

Inter partes review essentially replaces the existing inter partes reexamination. Similar to the existing inter partes reexamination and different from the new post-grant review, inter partes review is limited to invalidity based on published patent documents and printed publications only.
Inter partes review can only be requested after nine months from grant of a patent or after the period for post-grant review.
Inter partes review will occur on a faster track than the existing inter partes reexamination and ordinarily will be completed within one year from institution with an extension of up to six months for good cause. The USPTO is permitted to limit the number of inter partes reviews in the first four years following enactment of the law.
Inter partes review will take effect one year from enactment of the new law. The existing inter partes reexamination will be abolished at the same time.

Best mode requirement

Prior to the new law, failure to disclose the "best mode" for practicing an invention was an affirmative defense to alleged patent infringement. The best mode requirement focuses specifically on the best mode known to the inventor at the time the application is filed. The inventor is required to fully share his/her state of knowledge on the issue as of the filing date.
The best mode defense will no longer be available in proceedings commenced on or after the date of enactment of the law.
The requirement for a patentee to disclose the best mode remains in 35 U.S.C. § 112, however. It is unclear if there is any penalty for not disclosing the best mode, for example whether disclosing the best mode is a requirement for obtaining priority of invention.

Preissuance submissions by third parties

The new law allows third parties to submit printed publications that are potentially relevant to examination of a patent application. The submission must be made before the earlier of (a) a notice of allowance or (b) the later of six months after publication of the application or the date of first rejection.
The submission must include a concise statement explaining why each submitted document is relevant, a fee and statement of compliance.
Third-party submissions become part of the official file and, therefore, will likely require rebuttal by the applicant.
This provision will take effect one year after enactment of the new law.

Advice of counsel, willfulness and inducement

Failure to obtain the advice of counsel with respect to any allegedly infringed patent, or failure to present such advice, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.
This provision takes effect upon enactment of the new law.

Patent marking

Only the United States or a person who has suffered "competitive injury" may bring suit under the new law. The new law essentially eliminates qui tam actions for false marking suits.
Products marked with expired (yet applicable) patents will no longer be subject to suit under 35 U.S.C. 292.
The new law allows "virtual patent marking" on a website. Until now, to take advantage of the benefits of the patent marking clause, a patentee was required to place a notice of the patent number on the product itself, or in some cases the product packaging. Changes to 35 U.S.C. 287(a) now allow patent holders to substitute the patent number with a website address, if the website contains a list of patents covering the article.

Banning patents directed to human organisms

The new law states that "no patent may issue on a claim directed to or encompassing a human organism." This change will not affect patents that have already issued, but rather will only affect patent applications that are pending or filed after the new law takes effect.
The language leaves open the question of how to decide if a claim is "directed to" a human organism since this phrase is left undefined (or whether it could cover methods or other claims that do not expressly include the human organism as a claim element).

Prior user defense

Previously, the prior user defense was limited to "business method" patents covering situations where the accused infringer used the invention more than one year prior to the filing date of the patent.
The new law expands the prior user defense to also cover nonpublic commercial use of any invention, certain nonprofit use, and premarketing regulatory review of certain drugs and medical devices.
The prior user defense is subject to the following:
- Prior use must be proved by clear and convincing evidence.
- The defense may only be asserted by the person or company that directed the performance of the use.
- The right to assert the defense may only be assigned to another entity as part of a transfer of a line of business or the entire enterprise.
- The prior use must be more than one year before the effective filing date of the patent.

Other changes:

Filing on behalf of an employee by assignee

Under the new law, a company can file an application on behalf of an employee/inventor who is under an obligation to assign the invention to the company but has refused to sign the required oath or declaration [or is otherwise unavailable]. The uncooperative or unavailable inventor is removed from the patent application filing equation, thus allowing a more efficient filing process.

Micro-entity

The new law also creates a new "micro-entity" category of applicants. Certain individuals and small businesses that file few applications and earn less than a certain threshold are now defined as micro-entities. Such applicants will be entitled to a 75% reduction on most patent fees.

Tax strategies

The new law states that any strategy for reducing, avoiding or deferring tax liability "shall be deemed insufficient to differentiate a claimed invention from the prior art." In other words, the new law effectively precludes patents on tax planning strategies.

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United States: President Obama Signs The America Invents Act