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What You Need to Know About the Changes to US Patent Law
What You Need to Know About the Changes to US Patent Law
By now, you have no doubt been bombarded by numerous notifications that the United States has passed a sweeping new patent law which changes many aspects of practice in the U.S. We suspect that, as you have read these notifications, you have asked yourselves the questions "how does this affect what I do daily," and "what do I need to know now"? In the weeks since the new law has passed, we at MWZB have been studying the new statute with the goal of providing to you a concise explanation of what we think you need to know about the changes, providing some insights that might not be apparent from the initial read and indicating how the changes may affect your practice and our practice. Two important things you should know are: 1) the most significant changes in the new law are not immediately effective (see noted effective dates); and, 2) the USPTO will have to pass many new rules in the coming months to provide the necessary structure to implement many of the changes. The USPTO Director has indicated that there will be about 10 notices of rulemaking coming out in the next 6 months on rules to implement the statute. Of course, we will keep you informed of these new rules. Further, the USPTO has encouraged comment on implementing the law. If you have any comments you would like us to provide, please let us know. The USPTO has established a specific webpage (AIA microsite) dedicated to the implementation of the new law, which will provide additional information on these rules as they are written: http://www.uspto.gov/aia_implementation/ We hope you find our summary to be readable and useful. Of course, we stand ready to answer any further questions you may have, or to provide more detailed explanation of any areas you desire. Most Significant Provisions EFFECTIVE DATE: March 16, 2013, i.e., applies to a claimed invention having an effective filing date on or after this date. After many years of resistance, the US has finally gone to a first to file system with regards to applications having an effective filing date after March 13, 2011. For purposes of the new law, the effective filing date of an application will be the earlier of (a) the actual filing date of the application, or (b) the earliest filing date the application is entitled to under §119, §365(a), §365(b) (Paris Convention, US Provisional, PCT), or (c) the earliest filing date the application is entitled to under §120, §121, §365(c) (prior US Application, PCT). Under the new 35 U.S.C. §102, prior art is defined as disclosures (patents, printed publications, in public use, on sale, or otherwise being publically available) before the effective filing date of the invention, without restriction on location, or (like the previous 102(e)) in a US patent (by another) or published US application (by another) having an "effective filing date" before the effective filing date of the inventor(s)' application. Regarding the latter, the common ownership exception will remain. The new law also eliminates the so-called Hilmer doctrine. Thus, a US patent or published US application that is entitled to claim priority of a foreign or international patent application, pursuant to §119 or §365 (Paris Convention, PCT), will have a prior art date as of the filing date of the foreign or international patent application. There is still a grace period under the law with respect to disclosures by the inventor(s). Disclosures made by the inventor or joint inventor (or others who obtained the subject matter from the inventor or joint inventor) within 1 year or less of the effective filing date will not constitute prior art. Notably, if the inventor or joint inventor (or others who obtained the subject matter from the inventor or joint inventor) makes such a disclosure within the 1 year period, a subsequent disclosure of the subject matter, even by another, before the effective filing date will not constitute prior art. The disclosure acts, in effect, like a priority date in the sense that references (even those by others) having dates between your disclosure date and your filing date (if within a year) cannot be used against you. There are exceptions related to disclosures derived from others. While interferences will eventually be eliminated, they still will be around for some time since pending applications filed before the effective date can still go into interference. Also, the USPTO will set up a new proceeding to make determinations where there are disputes about the derivation of the invention. Section 4 of AIA: Inventor's oath or declaration EFFECTIVE DATE: September 16, 2012, i.e., applying to applications filed on or after that date. Amendments are made to simplify allowing the assignee or person to whom there is an obligation to assign to file the application and to have the patent issued in the name of the assignee rather than the inventor. Also, there are technical amendments to the requirements for the oath/declaration which will require changes in the forms that are used. These mostly simplify the procedures for obtaining signatures (e.g., allowing the oath or declaration to be included in the assignment document, and thus not requiring separate signatures; eliminating the need for stating the citizenship of the inventors, and for apostille procedures for signatures executed in foreign countries). Also, the time for filing the oath/declaration has been moved to prior to issuance of a notice of allowance. Section 5 of AIA: Defense to infringement based on prior commercial use. EFFECTIVE DATE: On Enactment, September 16, 2011. The prior commercial use defense to infringement is no longer limited to business method patents. The commercial use has to occur in the US more than 1 year prior to the earlier of the effective filing date of the application or public disclosure. The scope of "commercial use" is very broad, including premarketing regulatory review and work in a non-profit research lab. The defense is not transferable to another and does not protect an expansion of the extent of prior use. Further, the defense cannot be used against a university. This may change the strategy regarding an invention which is difficult to reverse engineer, i.e., whether to patent it or attempt to maintain it as a trade secret. Section 6 of AIA: Post-Grant Review EFFECTIVE DATE: September 16, 2012, i.e., applies to any patent issued before, on, or after the effective date, by which date the Director will issue regulations to conduct the post-grant review procedure. A petition for post-grant review can be filed by any person, other than the patentee, not later than the date that is 9 months after the date of grant. In the post-grant review, the petitioner can request that one or more claims be canceled as unpatentable under any basis, i.e., under 35 U.S.C. §§101, 102 or 103 (not limited to patents/publications), 112, etc.. The patentee will have the opportunity to respond. The standard for the USPTO to initiate the review is raised from the previous reexamination standard which merely needed to "raise a substantial new question of patentability." The post-grant review procedure will be conducted by the newly formed Patent Trial and Appeal Board (in contrast to existing re-examination done by the Examining Corps). The procedure allows for some discovery, such as expert declarations and deposition of experts. The law requires completion of the review process within one year of the time the request for review is granted (but with a possible 6 month extension). Post-grant review has severe estoppel effects against the petitioner, both within the Patent Office and in civil actions. This includes estoppel for issues that could have been raised, which means estoppel against almost all issues because almost any issue can be raised in post-grant review. Based on comments by the USPTO Director, it is expected that the fees for the new post-grant and inter-partes review procedures may be quite high. Section 7 of AIA: Inter Partes Review EFFECTIVE DATE: September 16, 2012, i.e., applies to any patent issued before, on, or after the effective date, by which date the Director will issue regulations to conduct the post-grant review procedure. A petition for inter-partes review can be filed by any person, other than the patentee. The petition shall be filed by the latter of: (a) 9 months after the grant of the patent, or (b) if a post-grant review was initiated (by anyone), the date of the termination of the post-grant review. In the inter-partes review, validity may be challenged only under 35 U.S.C. §§102 or 103, and only on the basis of patents or printed publications. The patentee will have the opportunity to respond. As with the post-grant review, the standard for initiating review is whether it is more likely than not that at least one claim is unpatentable and the review will be conducted by the Patent Trial and Appeal Board. Once the review is initiated, the standard for a challenger to prevail is that it is "more likely than not that at least one claim is unpatentable." This contrasts to the standard in litigation for a challenger to provide clear and convincing evidence of invalidity. The procedure allows for some discovery, such as expert declarations and deposition of experts. The law requires completion of the review process within one year of the time the request for review is granted (but with a possible 6 month extension). The inter-partes review process will carry with it estoppel effects against the petitioner, both within the Patent Office and in civil actions. While the estoppel applies to issues that could have been raised, it is more limited than the estoppel for post-grant review because the issues that can be raised are more limited. Section 8 of AIA: Pre-Issuance Submissions EFFECTIVE DATE: September 16, 2012 Any third party may now submit for consideration in an application any issued patent, published application, or any other printed document of relevance (e.g., from Court proceedings). Submission must be before allowance, and before the later of (i) the first office action or (ii) 6 months from publication. In a change from previous law, it allows for (even requires) that the submission include a concise description of the relevance of the document. The submission need not identify real party in interest, so it can be submitted through another party to maintain anonymity. Section 12 of AIA: Supplemental Examination EFFECTIVE DATE: September 16, 2012, i.e., applies to all patents issued before, on or after that date. A patent holder can apply to the USPTO to "consider, reconsider or correct information believed to be relevant" to an issued patent. The specific requirements for entering Supplemental Examination (such as content of the Request and filing deadline) have not yet been established. Within three months of filing a Request for Supplemental Examination, the USPTO will examine the Request and issue a certificate that the information disclosed therein does or does not raise "a substantial new question of patentability." If it does, then the "Director" will order a Reexamination of the patent (although the patentee will not be allowed to file a statement under Section 304). The procedure provides a mechanism for patentees to correct deficiencies that might otherwise provide a basis for allegations of inequitable conduct. The procedure specifically provides that the patent shall not be held unenforceable with respect to information considered, reconsidered or corrected during a Supplemental Examination. Also, the law states that the mere filing of a Request for Supplemental Examination shall not be relevant to enforceability. The new law does impose certain limitations on the filing of a Request for Supplemental Examination. For example, the Request can not be filed based on allegations pled with particularity in a civil proceedings before the filing of the Request. Some commentators have noted that motivation for this provision was largely vitiated by the holding in Therasense, Inc. v. Becton, Dickenson & Co. (Fed. Cir. 2011). Commentators also have noted that the open ended subject matter of reexamination proceedings ordered pursuant to Supplemental Examination makes the procedure an avenue to ex parte reexamination to resolve issues pertaining to, for instance potential "on sale" or "public use" bars under 35 USC 102 or enablement, written description, best mode and definiteness issues under 35 USC 112, among others. Section 15 of AIA: Best Mode EFFECTIVE DATE: On enactment, September 16, 2011. Eliminates the "best mode" requirement, under 35 U.S.C. §112, first paragraph, as a defense under Section 282 of the Patent Act. The best mode requirement can no longer be a basis to cancel, invalidate or render unenforceable any claim. Likewise, eliminates the best mode requirement from the Patent Act in (a) Section 119(e)(1), which in turn incorporates a provisional application under Section 111(b) and an international application under Section 363, and (b) in Section 120 for claiming priority of an earlier-filed application. The Act does not eliminate the specific best mode requirement from 35 U.S.C. §112, but appears to limit the effect of that requirement in various Sections of Title 35. The effect of its retention in 35 U.S.C. §112 is not clear and will require monitoring. However, the USPTO Director has indicated that they do not expect to stress enforcement of the best mode by examiners either. Section 11 of AIA: Certain Fee Provisions Penalty for Not Filing Applications Electronically: Effective Nov. 15, 2011, a $400 penalty additional fee for applications not filed electronically via EFS (we file all applications via EFS). 15% Fee Increase: As indicated in our previous notice, effective Sept. 26, 2011, most patent fees increased by 15%.
Prioritized Examination: Effective Sept. 26, 2011, a $4,800 additional fee (i.e., in addition to the normal filing fees) can be paid for an application to prioritize examination of the application so it is fast-tracked for examination within a one year period (on average). Until the USPTO sets any further restrictions/requirements for such requests, such applications must have or be amended to have no more than 4 independent claims and 30 total claims. Further, the USPTO is limited to allowing 10,000 such applications per fiscal year; thus, it is possible this ability may run out towards the end of a fiscal year. The AIA microsite has a page showing the current number of prioritized filings: (http://www.uspto.gov/aia_implementation/patents.jsp#heading-5). Section 10 of AIA: USPTO Granted Fee Setting Authority EFFECTIVE DATE: On Enactment, September 16, 2011. PTO given authority to set patent and trademark fees (making it easier for USPTO to adjust fees, when needed) but fees can be set "only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (in the case of patent fees) and trademarks (in the case of trademark fees)." A review panel and procedure including public comment will be created to review new fees or fee changes. It is expected that the USPTO will use these fees to hire thousands of new examiners and to greatly expand the new Patent Trial and Appeal Board to handle the new post-grant review procedures and lower pendency. New "micro entity" status made in addition to small entity status. The fee reduction is 75% for micro entity and (as before) 50% for small entity. Effective date for smaller payment under micro entity status is not clear because USPTO has to use their authority first to actually set this fee. The USPTO Director has indicated this may not come into effect until Sept. 16, 2012. A micro entity must qualify as a small entity and additionally not include inventor(s) who: 1) are named inventors on 5 or more other patent applications, 2) have an income over a certain level (about $150k); or 3) have assigned the application to a company with income over that level. Alternatively, can qualify as micro entity if all inventors have the majority of their income from a certified institute of higher learning (university) or the application is assigned to such a university. Section 17 of AIA: Advice of Counsel EFFECTIVE DATE: On enactment, September 16, 2011. The statute now provides that failure to obtain or produce a non-infringement opinion can not be used to prove willful infringement. This is intended to eliminate the need to waive attorney client privileged communications (and the threat of expansion of the waiver to other communications) in defending against allegations of willful infringement. Section 20 of AIA: Technical Amendments EFFECTIVE DATE: September 16, 2012 Makes a number of grammatical, technical, and conforming amendments to title 35. Takes effect one year after enactment of AIA. Perhaps most significantly, these amendments remove the "without deceptive intent" language from sections 116 & 256 (correcting inventorship), 184-185 (foreign filing licenses), 251 (reissues), 253 (disclaimers) and 288 (suit for infringement); thus, apparently considering whether there was deceptive intent is not an issue when taking these actions. Other Provisions EFFECTIVE DATE: November 16, 2012
Venue for District Court actions appealing disciplinary matters, USPTO Board of Appeals decisions, USPTO Board of Interferences decisions, and PTA determinations shifted from the District Court for the District of Columbia to the District Court for the Eastern District of Virginia. Section 14 of AIA: Tax Strategy Patents Nullified EFFECTIVE DATE: On enactment, September 16, 2011. Effectively nullifies any patent directed to a tax strategy for reducing, avoiding or deferring a tax liability whether under any Federal, State, local or foreign law. This section, applies to any pending application or any patent issued on or thereafter. Such inventions will be assumed to be within the prior art. This section does not include an invention directed solely to preparing a tax or information return or solely to financial management to the extent it is severable from a tax strategy. Section 16 of AIA: Patent Marking and Qui Tam actions EFFECTIVE DATE: On enactment, September 16, 2011. Eliminates "qui tam" provision of the patent marking requirement (which allowed private individuals who assist in a prosecution to receive all or part of any penalty imposed). This is in response to the surge in lawsuits (over 130) brought by plaintiffs who were not harmed in any way. The statute is changed so that only the US or "a person who has suffered a competitive injury" has standing for a false marking claim. Further amended to provide flexibility in marking a patented article, i.e., allowing the product to be marked with a web address where the patents which cover the product are identified. Also, a section has been added to exclude from "false marking" violations those instances where a product is marked and covered with an expired patent. Section 18 of AIA: Transitional Program for Business Method Patents EFFECTIVE DATE: At least by September 16, 2012, once the USPTO provides rules for such proceedings. The program terminates 8 years after it starts. Being referred to by some as the Banking Bailout provision, section 18 establishes a transitional post-grant review proceeding for patents directed to business method patents for financial products or services. The proceeding can apply to patents issued prior to AIA enactment. But the proceeding can only be used by a defendant who is actually sued or charged with infringement of the business method patent. Section 19 of AIA: Jurisdication and Procedure EFFECTIVE DATE: On enactment, September 16, 2011 The CAFC has jurisdiction over appeals involving compulsory patent counterclaims. This section also limits joinder of accused infringers, for example, accused infringers may not be joined based solely on allegations they each infringed the patent. Section 22 of AIA: USPTO Funding EFFECTIVE DATE: On enactment, September 16, 2011 Makes the USPTO budget subject to the annual appropriations process and ensures that any excess fees collected are retained for USPTO use in a reserve fund at the U.S. Treasury. USPTO will keep all of the revenue it raises while still allowing Congressional appropriators to maintain oversight of the agency. Furthermore, authorizes the USPTO Director to adjust fees when needed but such authority would sunset after seven years. Sections 23 & 24 of AIA: Satellite Offices Requires the Director to establish three or more satellite offices within three years, including one in Detroit, Michigan. Section 25 of AIA: Priority examination for important technologies USPTO given authority to prioritize examination of applications for products, processes, or technologies that are important to the national economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization, notwithstanding any other provision of law. Section 28 of AIA: Patent Ombudsman Program for Small Entities PTO will set up ombudsman staff to provide support and services relating to patent filings by small business concerns and independent inventors. Sections 26-27 & 29-34 of AIA: USPTO Studies The statute mandates that the USPTO conduct or, in some cases, jointly conduct with others a number of studies related to patents, for example: regarding the impact of gene patents on genetic diagnostic test activity, diversity of patent applicants, patent protection internationally for small businesses, misconduct before the USPTO, pro bono activity, and the economic effect of patent litigation by non-practicing entities (patent trolls).
Section 3 of AIA: First Inventor to File
Section 9 of AIA: Venue