September 9, 2011

America Invents Act Signed Into Law

The America Invents Act of 2011 has been approved by the U.S. Senate and was signed into law on September 16. The Act dramatically changes current U.S. patent law and will likely affect patent portfolio planning and strategy as well as patent disputes and litigation, in both the near and far term.

Some of the patent law changes will be implemented immediately upon signing by the President, while other changes will be implemented over the next 18 months.  How and when these changes will affect current and future patent rights are highlighted below.  

Within 10 Days of Enactment

  • Availability of Prioritized Examination Procedure.  A prioritized examination of U.S. patent applications will be available 10 days after enactment.  A prioritized examination fee of $4,800 will be required in addition to regular fees.  No special examination support document is required, and any patent subject matter will qualify.  This procedure will accelerate prosecution and the possible issuance of a patent application.  Under prioritized examination, a final disposition (such as a notice of allowance or final office action) will be provided 12 months from the grant of prioritized status.  Patent applicants may wish to take advantage of this program where some certainty on obtaining patent rights is important in the near term.
  • Lack of Best Mode Cannot Invalidate a Patent.  For actions commenced on or after the date of enactment, failure to include the “best mode” of practicing the claimed invention in a patent application cannot be used as the basis for invalidating the patent.  Including the best mode is still a requirement for U.S. patent applications. 
  • Human Organisms Will Remain Unpatentable. Cloned humans, including human embryos, have not been historically patentable.  The Act codifies this upon enactment.  Man-made and novel human cells (including stem cells), tissue, organs, non-human organisms (e.g., genetically modified mice), isolated human genes, proteins and antibodies still generally remain patentable. 
  • Increased Fees.  A 15% increase in U.S. Patent Office fees will be effective 10 days after the date of enactment.
  • Modification of the Time Period to Apply for Patent Term Extension. Upon enactment, the 60-day time period to apply for patent term extension upon FDA approval of a product will begin on the next business day if the approval was transmitted after 4:30 pm ET.  This codifies the judicial decision in The Medicines Company v. Kappos, 731 F. Supp. 2d 470 (E.D. Va. 2010).
  • Marking of Products. Upon enactment, virtual marking of a product with a U.S. patent number will be possible by referring to an Internet posting.  Marking with an expired patent number will not subject a company to false marking liability.
  • Rights for Prior Use. Commercial use of a claimed invention one year or more prior to the patent filing date or public disclosure will be available as a defense against patents issued on or after the Act enactment date, with the exception of patents funded by the U.S. Government or to higher-education institutions.

Within 12 or 18 Months of Enactment

  • First-to-File System. Effective 18 months from enactment, the U.S. patent system will change from the current practice of awarding a patent to the first inventor to invent, to a system that awards a patent to the first inventor to file an application on an invention.  This first-to-file system will align U.S. law with the majority of worldwide patent offices.  The first-to-file system also broadens the amount of potential prior art that may be used to challenge patentability to include foreign applications filed before the filing date of an patent application.  However, the Act does provide for a personal grace period of one year for an applicant’s own disclosures, including publications. 

    Once the first-to-file system is implemented, patent applicants should consider filing earlier in the discovery process if possible.  A first-to-file system also underscores the importance of maintaining confidentiality and avoiding public disclosure of an invention before filing a patent application.  If possible, patent applicants should consider filing new discoveries before the implementation of the first-to-file system to avoid the broadened scope of prior art.
  • Third-Party Submissions in Pending Patent Applications.  Effective 12 months from enactment, third parties can submit materials to the U.S. Patent Office relevant to a pending application and a description of how the materials are relevant to the examination of the application, within six months of the patent application publication or before the date of first rejection.
  • Post-Grant Proceedings. Effective 12 months from enactment, several changes and new proceedings for reviewing the patentability of a granted patent will be available for both patent owners and third parties.  The new proceedings include:

  • A Post-Grant Review that may be requested by a third party, where all grounds of invalidity can be considered, including lack of written description, lack of enablement, or on the basis of prior art.  This post-grant review must be requested within nine months from issuance of a patent
  • An Inter Partes Review that can be requested nine months after the issuance of a patent with limited challenges based on prior art publications and patents
  • A Supplemental Examination Procedure that can be requested by a patent owner, which may provide correction of the patent and consideration of further relevant prior art by a patent examiner.  This procedure may avoid a later challenge based on a failure to cite prior art to the examiner during the initial examination of the patent application
  • Current Inter Partes Reexamination Procedure Abolished.  A transitional procedure will be effective upon enactment, for one year, which provides for a request for reexamination based on a reasonable likelihood that the requester will prevail on a challenged patent claim. 
  • Transitional Post-Grant Review of Business Method Patents Relating to Financial Products.  Effective 12 months from enactment, there will be a transitional post-grant review proceeding available for certain patents relating to data processing or other operations used in a financial product or service.