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Bar News - June 15, 2012

Intellectual Property Law: America Invents Act: An Overview


The Leahy-Smith America Invents Act (AIA) was signed into law on September 16, 2011 by President Obama, making it the first major change to the United States Patent Laws since 1952. Public Law 112-29-Sept. 16, 2011. The first group of provisions in the AIA became effective when the AIA was signed into law on September 16, 2011. Over the eighteen months following enactment of the AIA additional provisions become effective. What follows is a summary of some of the provisions affected by the AIA.

Some of the provisions that became effective on September 16, 2011 include best mode, false marking, defense of prior commercial use, and micro-entity. The best mode requirement under pre-AIA required disclosure of the preferred embodiment for practicing an invention in exchange for the right to exclude others from practicing that invention. Under pre-AIA if an inventor failed to disclose the best mode of practicing an invention the claims could be found invalid or unenforceable. The signing of the AIA removed the ability to find an invention invalid or unenforceable for failure to disclose the best mode, however disclosure of the best mode is still required under 35 U.S.C. 112.

Under pre-AIA US patent law a false marking lawsuit could be filed by anyone seeking damages for a product having a patent number affixed to the product which had already expired or where the product was not covered by the listed patent. 35 U.S.C. 292. After enactment of the AIA only the United States may sue under 35 U.S.C. 292(a) for a civil penalty or a person/entity that has suffered competitive injury due to the incorrect marking of a product may file a civil action to recover damages due to the competitive injury. In addition, under the AIA failure to remove an expired patent number from a product covered by the expired patent is no longer a violation of 35 U.S.C. 292.

Prior to enactment of the AIA prior commercial use by a third party was only available as a defense to patent litigation against business method patents. Under Section 5 of the AIA the prior commercial use defense has been expanded. Now the prior commercial use defense applies to all inventions except those owned or required to be assigned to an institution of higher education or a technology transfer organization for an institution of higher education. The prior commercial use defense may be asserted if (1) a person, acting in good faith, commercially used the subject matter in the US, and (2) the commercial use occurred at least one year before the earlier of either (A) the effective filing date of the claimed invention; or (B) the date on which the claimed invention was disclosed to the public. 35 U.S.C. 273.

Before September 16, 2011 there were two entity types with the USPTO (1) a large entity or (2) a small entity. After enactment of the AIA, a new entity type was created called a micro entity. A micro entity is an entity that (1) qualifies as a small entity, (2) has not been named as an inventor on more than four previously filed US patent applications, (3) has an income less than three times the median household income in the calendar year prior to the application filing, and (4) has not assigned or otherwise transferred ownership in the application to an entity with an income greater than three times the median household income in the calendar year prior to the application filing. 35 U.S.C. 123. An entity that qualifies as a micro entity will be entitled to a 75 percent reduction of certain fees at the Patent Office, such as filing fees, searching fees, examining fees, issuing fees, appealing fees, and maintenance fees. However discounted fees under the micro entity status will not be available until the USPTO sets or adjusts the fees. On May 31, the proposed rules for implementing the micro entity provision of the AIA were published in the Federal Register opening a 60-day public comment period.

Additional provisions will go into effect on September 16, 2012 and these provisions include changes to preissuance submissions by third parties and supplemental examination. The AIA amended 35 U.S.C. 122 to enable any third party to submit a patent, published patent application, or other printed publication that is potentially relevant to examination of the application. Before the amendment to 35 U.S.C. 122, prior art could only be submitted within two months of application publication. Now prior art may be submitted by third parties up until the earliest of (A) the date a notice of allowance is mailed, (B) the later of six months after the date of first publication of the patent application or the date of the first rejection by the examiner of any claim during examination of the application.

Supplemental examination is a new provision to the US patent law which does not have a comparable provision in the pre-AIA Act. The AIA adds 257 to title 35 creating a supplemental examination procedure which allows a patent owner to request that the USPTO consider, reconsider, or correct information believed to be relevant to the patent via re-examination. The supplemental examination allows patent owners to cure potential inequitable conduct problems that are discovered by the patent owner after issuance but before litigation.

On March 16, 2013 the final set of provisions go into effect including the change from a first-to-invent system to a first-to-file system as well as implementation of derivation proceedings. The US first-to-file system is really a first-inventor-to-file system and is different than other first-to-file systems internationally. Unlike other first-to-file systems, the US system only issues patents to actual inventors and includes a one year grace period for the inventor. The one year grace period is a personal grace period that gives an inventor one year from the date of disclosure to file a patent application without their own disclosure or a disclosure derived from that inventor being used as prior art against their patent filing. However, during that one-year grace period any disclosure of an independently created invention by a third party will become prior art against the first inventor. So even though the inventors own disclosure cannot be used against the inventor, any independent invention by a third party may result in an inventor losing the right to a patent. Derivation proceedings will also go into effect on March 16, 2013 and will replace interference proceedings. While the interference proceedings were used to determine who was the first to invent, after March 16, 2013 the derivation proceedings will be used to determine whether an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioners application.

Jacquelyn A. Graff

Jacquelyn A. Graff is a registered patent attorney and an associate at Heslin Rothenberg Farley & Mesiti P.C., Albany, New York.

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