By Audrey Millemann

There has been a lot of media attention over the new patent laws (the “America Invents Act”) adopted by Congress and signed by the President in September 2011, six years after being introduced. Commentators have called the Act the most significant change in 60 years (since the 1952 amendments). One of the Acts purposes is to reduce the backlog of pending patent applications (estimated at over 700,000) by expediting the examination and issuance of the patents. Another goal of the Act is to make United States law more consistent with foreign patent laws. 

First to File

The most important change makes the United States a “first-to-file” system instead of a “first-to-invent” system. The new system is more accurately called a “first-inventor-to-file” because the applicant must still be the true inventor. If two inventors invent the same thing, however, the relevant question is not when the invention was conceived, but when the application was filed. The applicant’s date of invention is no longer determinative. Thus, inventors will now be engaged in a race to file an application in the Patent and Trademark Office (“PTO”). 

The purpose of this change is to bring the United States system closer to that used by almost all foreign countries, such that a more uniform approach exists. Another purpose is to create more certainty for inventors, as they will now be subject to an objective standard of who filed the application first rather than the more subjective standard of who invented the invention first. 

This provision will go into effect in March 2013. 

Prior Art

The scope of the prior art for purposes of determining novelty (35 U.S.C. §102) and nonobviousness (35 U.S.C. §103) has been expanded. Section 102 now includes anything “otherwise available to the public” before the filing date of the application. In addition, public use, offers to sell, and sales are prior art not only if they occur in the United States, but may be anywhere in the world. 

The one-year grace period unique to the United States’ patent system has been cut back. Under the new laws, the grace period does not apply to all of the activities previously covered, but an inventor who disclosed the invention still has a one-year grace period in which to file a patent application, as does a person who obtained the invention from the inventor. 

Interference Proceedings

Under existing law, an interference proceeding was used to determine the rights to a patent if two persons had invented the same invention, based on a determination of the first to invent. Under the new laws, that process is eliminated. 

The new proceeding is a “derivative” proceeding. This proceeding will be used to determine whether the inventor who filed the first application (and is therefore presumed to have the patent rights) derived from the invention from the inventor who filed the second application. If the dispute is between two applicants or one applicant and one patent, the petitioner may file a request with the PTO, but it must be filed within a one-year period. If the dispute is between two patents, then either party may file a civil action within one year after the first patent issues.

Post-Issuance Review

The new laws establish three new PTO procedures for challenging the validity of issued patents: post-grant review, inter-partes review, and supplemental examination. 

The post-grant review is similar to opposition proceedings that are available in most foreign countries for third parties to challenge a patent. Post-grant review can be requested by any party other than the patent owner. The patent can be challenged on any grounds, which expands the grounds permitted in the existing reexamination proceedings. The request must be filed within nine months of the patent’s issue date. The PTO will grant the petition if either: (1) it is more likely than not that at least one claim in the patent is unpatentable, or (2) there is a novel or unsettled legal question. 

There are two important limitations on post-grant review, unlike the existing reexamination procedures. A party to a civil lawsuit involving the patent’s validity cannot request post-grant review, and a petitioner in a post-grant review proceeding cannot later assert the same grounds of invalidity in a civil lawsuit. Thus, a challenger must choose in advance whether to litigate validity in court or address it in the PTO. 

The second proceeding, inter-partes review, replaces the existing inter partes reexamination. The standard for granting a request is whether there is a reasonable likelihood that the requestor will prevail, which is a higher standard than the existing standard for inter partes reexamination. Like post-grant review, the challenger must choose either to litigate validity in court or address it in the PTO. For both post-grant review and inter partes review, the PTO has been authorized to create new rules for obtaining discovery similar to those applicable in civil litigation. 

Supplemental examination is a process by which a patent owner can reopen examination of their own patent. This will be granted in order to address a substantial new question of patentability. 

Third Party Submissions

The new laws permit a third party to file prior art in a pending patent application within specific time limits. This procedure will allow companies who follow the prosecution of their competitors’ patents to make sure that the examiner is aware of all relevant prior art. 

False Marking

The lucrative type of false marking lawsuits has been eliminated. The new laws permit only the United States to sue for a penalty. A third party can file a lawsuit only if they have suffered actual economic injury caused by the false marking and is limited to that amount in damages. The new laws also change the effect of marking a product with an expired patent number; that no longer constitutes false marking. In addition, a product can now be labeled with a website address if the website lists the status of the patent.

Business Method Challenge

Issued business method patents are subject to challenge by a new PTO process what will terminate in eight years. The proceeding is similar to the new post-grant review. A requestor must have either been accused of infringement or sued by the patent owner. The scope of the prior art that can be used to challenge the patent is broader than that available in the existing reexamination procedures. 

Who Can File An Application

Like most foreign patent systems, the new laws permit the assignee of the rights to an invention to file a patent application in the PTO. This will make it easier for companies to file applications where inventors are obligated to assign their inventions but are no longer employed or are unwilling to sign the application. Patents will now be issued in the name of the assignee, the real party in interest, not the inventor.

Effect of New Laws

Most patent practitioners believe that the new patent laws are confusing and ambiguous. Thus, instead of providing certainty, it appears that there may well be uncertainty until the Court of Appeals for the Federal Circuit weighs in.