How the New Patent Act Will Affect the Way Counsel Practice and Advise Their Clients

The America Invents Act (“AIA”), passed by Congress on Sept. 9, 2011, and signed into law on Sept. 16, 2011, imposes sweeping changes to U.S. patent law. There have already been many articles attempting to summarize the 140-page bill, but it is difficult to do justice to every aspect of the Act in a single article. This article focuses on how the new patent laws will require patent practitioners to change the way they practice and advise their clients.

From 'First to Invent' to 'First to File'

The linchpin to a majority of the changes imposed by the AIA is the conversion of the U.S. patent system from a “first to invent” to a “first to file” system. The change to a first-to-file system will affect patent practitioners in several ways:

• Undue delay by the patent practitioner in preparing and filing an application can compromise the client's right to the invention.
• Prior art is defined under the new Act as of the filing date, not one year prior to the filing date or before the inventor made his invention.
• The transition to “first to file” will occur 18 months after the AIA becomes law. Within the next 18 months, there will be a rush to file applications so that they will be subject to the narrower laws governing prior art.

An inventor who made his invention second in time but is first to file a patent application will be entitled to a patent over the inventor who was first to make his invention but second to file a patent application. Because there is now a potential for a “rush to the Patent Office” to get the earliest possible filing date for an application, this revision will require patent practitioners to reconsider the manner in which they prepare patent applications. Under the prior law, a patent practitioner could take up to three months to prepare and file a patent application and still be considered “diligent” in establishing a constructive reduction to practice.
But under the AIA, the date of invention no longer matters for establishing priority of invention; only the filing date is important. The patent practitioner must file early to ensure that his client gets the best chance of priority for a patent.

Priority of invention is not the only concern that will dictate early filing. Once the “first to file” provisions take effect, prior art will be defined as of the filing date of the application, rather than one year before the application. Similarly, obviousness under ' 103 will also be determined as of the filing date of the application, rather than as of the date of invention. Further, invention without filing a patent application does not toll the date for establishing what constitutes prior art or what may have been obvious. So the scope of prior art, already expanded forward by one year, will give rise to another day's prior art with each additional day's delay in filing.

What does the patent practitioner need to consider, and how should he work with his clients, to achieve the earliest possible filing date? First, clients can no longer afford to wait to involve their patent attorney until after the invention has been completed or after a test period has proven the commercial viability of the product. The practitioner should confer with the client early in the process so he can understand the commercial motivation, the progress of development of the invention, and proximity of bringing the product to market. From these and other consultations the client and patent counsel can together decide on the best approach for disclosures and assess the urgency of filing an application immediately.

New Procedures for Challenging Patents and Pending Applications

The AIA makes it easier for third parties to challenge a patent, both before and after issuance. In addition to reissue and ex parte re-examination procedures, which have not changed, the AIA provides several new mechanisms for reassessing the patentability of patent claims. These new mechanisms will take effect one year after the AIA becomes law.

Pre-issuance Submissions ' 35 U.S.C. ' 122 permits a third party to submit prior art to the PTO for consideration by the examiner. Unlike the current law, however, the AIA also permits the third party to submit the prior art accompanied by a statement of relevance of the prior art. There is no requirement that the submitting party identify itself.

Post-Grant Review Proceeding ' Chapter 32 of the Act (U.S.C. ” 321-329) provides for any third party to seek post-grant review of a patent if filed within nine months of issuance. The validity of the claims can be challenged on the basis of any type of prior art, not just patents or printed publications. The validity of the patent can also be challenged based on noncompliance with ' 112 or any issue that can be addressed by a reissue.

Inter Partes Review Proceeding ' Chapter 31 of the AIA (35 U.S.C. ” 311-319) provides for a third party to file for an Inter Partes review of an issued patent, similar to the Inter Partes Re-examination procedure of the current law. The Inter Partes review can be filed at any time after the later of nine months after issuance of the patent or the conclusion of proceedings under Chapter 32, if any.

In combination, the Post-Grant Review Proceeding and the Inter Partes Review Proceeding of the AIA take the place of Inter Partes Re-examination under the current law. Also, the AIA has put some teeth into the requirement that these procedures be handled with “special dispatch.” Post-grant reviews and inter partes reviews will have to be concluded within one year of the commencement of the review, or within 18 months if the Director finds sufficient cause.

Supplemental Examination ' 35 U.S.C. ' 257 provides the patent owner with an opportunity to request a supplemental examination for the Patent Office to consider, reconsider, or correct information believed to be relevant to the patent. If the issues being considered raise a “substantial new question of patentability,” the Director shall order a re-examination.

Derivation Proceedings ' Interference proceedings under the current law, which are designed to determine the first inventor, will be made moot by the AIA because the filing date of the application, rather than the date of invention, controls priority. In its place, derivation proceedings are provided to determine whether an inventor derived his invention from the work of another.

Public Disclosures By an Inventor One Year or Less Before the Effective Filing Date

Certain types of disclosure of the invention by an inventor or joint inventor before the filing of an application will not destroy novelty and, in fact, could actually enhance the odds of success of the application. Section 102(b) of the AIA provides that a disclosure made by a first inventor one year or less before the effective filing date of the application will not be prior art against the later-filed patent application. Further, any subsequent disclosure by a second inventor that has already been disclosed by the first inventor will also not be prior art. However, if the second inventor subsequently files a patent application, the statements of the first inventor will be prior art against the second inventor's application. While the wording of ' 102(b) is somewhat confusing, this interpretation is supported by the legislative history. But no guidance is given as to what constitutes a sufficient “disclosure” to satisfy ' 102(b).

One may wonder what the advantage is of making a public disclosure, when the same effect of eliminating subsequent prior art can be achieved by filing a provisional application. Further, while there is some uncertainty at present as to what constitutes an adequate public disclosure, there is no uncertainty with a provisional application as to what constitutes an acceptable disclosure. It would therefore appear that the provisional application route could provide significant advantages. But consider that ' 102(b)(1) provides that a disclosure made by the inventor one year or less before the effective filing date of a claimed invention shall not be prior art under subsection (a)(1). If a provisional application is filed, that filing date becomes the effective filing date. Public disclosures can thus be made for up to a year prior to the filing date of a provisional application. In effect, by chaining a year of public disclosures to a provisional application, the inventor can pre-empt new prior art for up to two years prior to the actual filing date of a non-provisional application.

Until issues concerning the sufficiency of a public disclosure have been resolved by the courts, practitioners should take a cautious approach to relying on public disclosures of the inventor to preclude subsequent prior art. The use of provisional applications is advised in the meantime.

Changes in 'Prior Commercial Use' Defense

Under the current law, 35 U.S.C. ' 273 provides that it is a defense against a charge of patent infringement if: 1) the subject matter of the patent is a process, 2) the accused infringer reduced the process to practice more than a year prior to the filing date of the patent, 3) the accused infringer commercially used the patented process prior to the filing date of the patent, and 4) the commercial use took place within the United States.

The AIA has broadened the prior commercial use defense in some respects, but narrowed it in others. It is broader in the sense that the defense is no longer limited to processes but also includes machines, compositions of matter, and articles of manufacture. The commercial use also need not have occurred within the United States. On the other hand, rather than having to be commercially used only prior to the filing date of the patent, the provisions of the AIA require the subject matter to have been commercially used more than a year prior to the filing date of the patent. In addition, ' 273 on its face does not cover a situation where a company makes a major expenditure to prepare to commercialize a product, such as building a plant or production line, but does not commercialize until after the one-year date.

As clients may be tempted to rely on the prior commercial use defense, attorneys should stress the severe limitations of the exception.

Most of the foregoing procedures will not take effect for a year to 18 months after the AIA goes into effect. However, given the sweeping scope of changes effected by the AIA, it's never too early to begin planning.

Larry A. Roberts is a partner at Kilpatrick Townsend, where he focuses his practice on patent prosecution, patent litigation, re-examinations and reissues.

The America Invents Act (“AIA”), passed by Congress on Sept. 9, 2011, and signed into law on Sept. 16, 2011, imposes sweeping changes to U.S. patent law. There have already been many articles attempting to summarize the 140-page bill, but it is difficult to do justice to every aspect of the Act in a single article. This article focuses on how the new patent laws will require patent practitioners to change the way they practice and advise their clients.

From 'First to Invent' to 'First to File'

The linchpin to a majority of the changes imposed by the AIA is the conversion of the U.S. patent system from a “first to invent” to a “first to file” system. The change to a first-to-file system will affect patent practitioners in several ways:

• Undue delay by the patent practitioner in preparing and filing an application can compromise the client's right to the invention.
• Prior art is defined under the new Act as of the filing date, not one year prior to the filing date or before the inventor made his invention.
• The transition to “first to file” will occur 18 months after the AIA becomes law. Within the next 18 months, there will be a rush to file applications so that they will be subject to the narrower laws governing prior art.

An inventor who made his invention second in time but is first to file a patent application will be entitled to a patent over the inventor who was first to make his invention but second to file a patent application. Because there is now a potential for a “rush to the Patent Office” to get the earliest possible filing date for an application, this revision will require patent practitioners to reconsider the manner in which they prepare patent applications. Under the prior law, a patent practitioner could take up to three months to prepare and file a patent application and still be considered “diligent” in establishing a constructive reduction to practice.
But under the AIA, the date of invention no longer matters for establishing priority of invention; only the filing date is important. The patent practitioner must file early to ensure that his client gets the best chance of priority for a patent.

Priority of invention is not the only concern that will dictate early filing. Once the “first to file” provisions take effect, prior art will be defined as of the filing date of the application, rather than one year before the application. Similarly, obviousness under ' 103 will also be determined as of the filing date of the application, rather than as of the date of invention. Further, invention without filing a patent application does not toll the date for establishing what constitutes prior art or what may have been obvious. So the scope of prior art, already expanded forward by one year, will give rise to another day's prior art with each additional day's delay in filing.

What does the patent practitioner need to consider, and how should he work with his clients, to achieve the earliest possible filing date? First, clients can no longer afford to wait to involve their patent attorney until after the invention has been completed or after a test period has proven the commercial viability of the product. The practitioner should confer with the client early in the process so he can understand the commercial motivation, the progress of development of the invention, and proximity of bringing the product to market. From these and other consultations the client and patent counsel can together decide on the best approach for disclosures and assess the urgency of filing an application immediately.

New Procedures for Challenging Patents and Pending Applications

The AIA makes it easier for third parties to challenge a patent, both before and after issuance. In addition to reissue and ex parte re-examination procedures, which have not changed, the AIA provides several new mechanisms for reassessing the patentability of patent claims. These new mechanisms will take effect one year after the AIA becomes law.

Pre-issuance Submissions ' 35 U.S.C. ' 122 permits a third party to submit prior art to the PTO for consideration by the examiner. Unlike the current law, however, the AIA also permits the third party to submit the prior art accompanied by a statement of relevance of the prior art. There is no requirement that the submitting party identify itself.

Post-Grant Review Proceeding ' Chapter 32 of the Act (U.S.C. ” 321-329) provides for any third party to seek post-grant review of a patent if filed within nine months of issuance. The validity of the claims can be challenged on the basis of any type of prior art, not just patents or printed publications. The validity of the patent can also be challenged based on noncompliance with ' 112 or any issue that can be addressed by a reissue.

Inter Partes Review Proceeding ' Chapter 31 of the AIA (35 U.S.C. ” 311-319) provides for a third party to file for an Inter Partes review of an issued patent, similar to the Inter Partes Re-examination procedure of the current law. The Inter Partes review can be filed at any time after the later of nine months after issuance of the patent or the conclusion of proceedings under Chapter 32, if any.

In combination, the Post-Grant Review Proceeding and the Inter Partes Review Proceeding of the AIA take the place of Inter Partes Re-examination under the current law. Also, the AIA has put some teeth into the requirement that these procedures be handled with “special dispatch.” Post-grant reviews and inter partes reviews will have to be concluded within one year of the commencement of the review, or within 18 months if the Director finds sufficient cause.

Supplemental Examination ' 35 U.S.C. ' 257 provides the patent owner with an opportunity to request a supplemental examination for the Patent Office to consider, reconsider, or correct information believed to be relevant to the patent. If the issues being considered raise a “substantial new question of patentability,” the Director shall order a re-examination.

Derivation Proceedings ' Interference proceedings under the current law, which are designed to determine the first inventor, will be made moot by the AIA because the filing date of the application, rather than the date of invention, controls priority. In its place, derivation proceedings are provided to determine whether an inventor derived his invention from the work of another.

Public Disclosures By an Inventor One Year or Less Before the Effective Filing Date

Certain types of disclosure of the invention by an inventor or joint inventor before the filing of an application will not destroy novelty and, in fact, could actually enhance the odds of success of the application. Section 102(b) of the AIA provides that a disclosure made by a first inventor one year or less before the effective filing date of the application will not be prior art against the later-filed patent application. Further, any subsequent disclosure by a second inventor that has already been disclosed by the first inventor will also not be prior art. However, if the second inventor subsequently files a patent application, the statements of the first inventor will be prior art against the second inventor's application. While the wording of ' 102(b) is somewhat confusing, this interpretation is supported by the legislative history. But no guidance is given as to what constitutes a sufficient “disclosure” to satisfy ' 102(b).

One may wonder what the advantage is of making a public disclosure, when the same effect of eliminating subsequent prior art can be achieved by filing a provisional application. Further, while there is some uncertainty at present as to what constitutes an adequate public disclosure, there is no uncertainty with a provisional application as to what constitutes an acceptable disclosure. It would therefore appear that the provisional application route could provide significant advantages. But consider that ' 102(b)(1) provides that a disclosure made by the inventor one year or less before the effective filing date of a claimed invention shall not be prior art under subsection (a)(1). If a provisional application is filed, that filing date becomes the effective filing date. Public disclosures can thus be made for up to a year prior to the filing date of a provisional application. In effect, by chaining a year of public disclosures to a provisional application, the inventor can pre-empt new prior art for up to two years prior to the actual filing date of a non-provisional application.

Until issues concerning the sufficiency of a public disclosure have been resolved by the courts, practitioners should take a cautious approach to relying on public disclosures of the inventor to preclude subsequent prior art. The use of provisional applications is advised in the meantime.

Changes in 'Prior Commercial Use' Defense

Under the current law, 35 U.S.C. ' 273 provides that it is a defense against a charge of patent infringement if: 1) the subject matter of the patent is a process, 2) the accused infringer reduced the process to practice more than a year prior to the filing date of the patent, 3) the accused infringer commercially used the patented process prior to the filing date of the patent, and 4) the commercial use took place within the United States.

The AIA has broadened the prior commercial use defense in some respects, but narrowed it in others. It is broader in the sense that the defense is no longer limited to processes but also includes machines, compositions of matter, and articles of manufacture. The commercial use also need not have occurred within the United States. On the other hand, rather than having to be commercially used only prior to the filing date of the patent, the provisions of the AIA require the subject matter to have been commercially used more than a year prior to the filing date of the patent. In addition, ' 273 on its face does not cover a situation where a company makes a major expenditure to prepare to commercialize a product, such as building a plant or production line, but does not commercialize until after the one-year date.

As clients may be tempted to rely on the prior commercial use defense, attorneys should stress the severe limitations of the exception.

Most of the foregoing procedures will not take effect for a year to 18 months after the AIA goes into effect. However, given the sweeping scope of changes effected by the AIA, it's never too early to begin planning.

Larry A. Roberts is a partner at Kilpatrick Townsend, where he focuses his practice on patent prosecution, patent litigation, re-examinations and reissues.