Alert July 12, 2011

U.S. House of Representatives Approves America Invents Act

With the recent passage of H.R. 1249 by the U.S. House of Representatives, Congress is poised to enact the most sweeping reform of the patent laws since the Patent Act of 1952.  A similar version of the “America Invents Act” was passed by the U.S. Senate earlier this year.  Once the House and Senate versions are reconciled and the final bill is signed into law, as is widely expected, the patent system will change dramatically.

First-Inventor-to-File

Under the proposed reform, the America Invents Act replaces the current “first-to-invent” patent regime with a “first-inventor-to-file” system.  Currently, if two inventors separately apply for patent protection on the same invention, the patent is awarded only to the one who was first to invent it.  In disputed cases, the U.S. Patent and Trademark Office (“USPTO”) runs complex “interference” proceedings to determine which inventor can establish an earlier date of invention.  In contrast, under the proposed first-inventor-to-file system, the patent would be awarded to the first inventor to file a patent application describing and enabling the practice of the invention.  Businesses and their investors will benefit from the greater clarity and certainty provided by the first-inventor-to-file system, and interferences will gradually become obsolete.

The first-inventor-to-file system will also simplify what documents and disclosures are available as “prior art” to preclude patent protection for an invention.  Under the current system, prior art to a patent application is determined both by the effective filing date of the patent application and by the date of invention.  Under H.R. 1249, the date of invention is irrelevant.  Prior art would include inventions that were:

  • Patented, published, publicly used, on sale or otherwise available to the public more than one year before the effective filing date of the patent application;
  • Patented, published, publicly used, on sale or otherwise available to the public one year or less before the effective filing date, unless the subject matter had already been publicly disclosed by, or had been derived from, one of the inventors; or
  • In a patent or published patent application naming another inventor, under limited circumstances, if that patent or published patent application had an effective filing date before the effective filing date of the patent application.

Although interference proceedings would eventually become unnecessary for patent applications governed by H.R. 1249, the bill does provide for “derivation proceedings” to be conducted by a Patent Trial and Appeal Board (“PTAB”), replacing the current Board of Patent Appeals and Interferences at the USPTO.  The purpose of a derivation proceeding is to determine whether an inventor named in one patent application did not actually invent the claimed invention, but instead learned of the claimed invention from an inventor named in a later application.

Post-Grant and Inter Partes Review Procedures

H.R. 1249 also changes the procedures available for challenging a granted patent.  “Post-grant review” is a new procedure available only during the first nine months after issuance of the patent.  A separate procedure, “inter partes review,” can be requested after nine months and after the completion of any post-grant review processes, if the petitioner had not already filed a suit challenging the validity of the claims of the patent in court.  The petition for post-grant or inter partes review must identify the grounds on which the claims are challenged, as well as all supporting evidence.  Each procedure is handled by the PTAB and provides an opportunity for the patent owner to amend the claims of the patent, either by cancelling challenged claims or by proposing a reasonable number of substitute claims.

Claim validity can be challenged by post-grant review on any basis (e.g., prior art of any sort, insufficient written description in the specification, lack of enablement or utility of the claimed subject matter, etc.).  The USPTO would grant the petition for post-grant review only if the information presented in the petition, if unrebutted, demonstrates that at least one of the claims challenged in the petition is probably unpatentable, or if the petition raises a novel or unsettled legal question of importance.

Unlike post-grant review, inter partes review can be used to challenge the validity of an issued claim only for anticipation or obviousness based on prior art patents or publications, and on no other ground.  To that extent, the new inter partes review resembles the current inter partes reexamination proceedings, which are similarly limited in scope.  The patent owner would have the right to file a preliminary response to the petition seeking inter partes review and review would be granted only if the USPTO determines that, based on the information in the petition and in any preliminary response, there is a reasonable likelihood that the petitioner would prevail with respect to at least one challenged claim.

Both the post-grant and inter partes review procedures allow submission of factual evidence and expert opinions, discovery, and an oral hearing at the request of either party.  Once the PTAB issues a written decision concluding the review, estoppel provisions limit the petitioner’s ability to challenge the claims in any other USPTO proceedings or in litigation.  Either party would have the right to appeal the PTAB decision to the Court of Appeals for the Federal Circuit.

Other Notable Provisions

  • Although a patent application is still required to disclose the “best mode” contemplated by an inventor of carrying out the invention, any deficiency in meeting this requirement would no longer provide a basis for holding a claim invalid or unenforceable.
  • A patent owner could request “supplemental examination” of an issued patent to consider information that had not been considered, was inadequately considered or was incorrect in a prior examination.  Supplemental examination prevents a third party from later relying on that information to allege for the first time that the patent was unenforceable due to inequitable conduct.
  • A person who made certain uses of an invention more than one year before the effective filing date of the patent application claiming the invention – or more than one year before the first public disclosure of the claimed invention, if sooner – would under special circumstances have a limited defense to patent infringement.
  • Lawsuits for “false marking” of articles with patent indicia would be sharply curtailed.
  • Third parties can submit publications for consideration during examination of a published patent application, within a specified time window.
  • Universities and narrowly defined “micro-entities” are entitled to a discount on certain USPTO fees.
  • The USPTO has the authority to set fees, subject to prior public notice and a comment period.

Conclusion

The America Invents Act is likely to become law soon.  Even though its final provisions remain somewhat uncertain, businesses and the interested public will have more opportunities to challenge patents in proceedings conducted by the USPTO, as an alternative to litigation.  At the same time, the first-inventor-to-file provision highlights the need for inventors to file robust patent applications promptly.