America Invents Act
The America Invents Act is probably the biggest effort to modernize patent laws in over 50 years. While the original goals were even more lofty, the final law did nevertheless include many very significant changes.
The Leahy-Smith America Invents Act (AIA) is United States federal law passed by Congress and signed by the President on September 16, 2011. The law represents the most significant change to the U.S. patent system since 1952.
Changes to Patent Law
In most pertinent parts, the Act switches the U.S. patent system from a "first-to-invent" to a "first-inventor to file" system, consequently eliminating interference proceedings, and develops post-grant opposition, among others.
An individual was previously entitled a patent in the US under the long-standing "first-to-invent" system. Now, we switch to a "first inventor-to-file" system for all patent applications filed since March 16, 2013.
The notion of what is 'prior art' has also changed significantly. The Act expands the definition of 'prior art' which is used during patent examination to make a patentability determination. That which operates to bar patentability now includes most public use, sales, publications, and other disclosures available to the public anywhere in the world as of the filing date, other than publications by the inventor within one year of filing, whether or not a third party also files a patent application. The law also notably expands prior art to include foreign offers for sale and public uses - previously not considered part of the 'prior art'.
Previously a proceeding at the U.S. Patent Office was invoked to resolve priority among inventors who both file applications for the same invention. These procedings of course are no longer needed and are thus repealed. Priority is now determined based on filing date. An administrative proceeding—called a “derivation” proceeding, is executed to determine whether the first person to file the application is actually an original inventor. An application derived from another inventor is not considered valid and is not awarded priority.
The Act revises and expands procedures which may be invoked against patents having been granted - in particular with respect to challenges by third parties. The Act retains existing ex parte reexamination, adds preissue submissions, expands inter partes reexamination and renames it inter partes review, and adds post-grant review.
Other Patent Law Changes In American Invents Act
The America Invents Act additionally includes these changes:
Tax strategy inventions
Provides that any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art.
Eliminates false marking lawsuits except for ones filed by the U.S. government or filed by a competitor who can prove competitive injury. In addition, marking a product with a patent that formerly covered the product, but has since expired, is no longer a violation.
Filing by other than inventor
An entity can file an application on behalf of an inventor who assigned or is under an obligation to assign the invention rights to the entity (or if the entity otherwise has financial interest in the invention), without seeking the inventor's execution of the application. Any patent that issues belongs to the inventor absent a written assignment from the inventor or inventor's estate to the entity.
While an inventor is still required to “set forth” the best mode for accomplishing the invention, failure to disclose a best mode is not a basis for invalidating or rendering unenforceable an issued patent. While the law formally retains the best mode requirement, by making insufficient disclosure no longer an allowable defense against patent infringement, the law renders best mode unenforceable. This has left many patent lawyers wondering why the requirement was kept at all.
Prior user rights defense
If an individual/entity begins using an invention ('user') more than a year before a subsequent inventor files for a patent on the same invention, then the user will have the right to continue using the invention in the same way after the subsequent inventor is granted a patent as long as the user did not derive the invention from the subsequent inventor. These prior user rights are limited in scope and transferability, and they also have limited applicability to patents held by universities.
The AIA added a micro-entity status. A micro-entity includes an independent inventor with a previous calendar year gross income of less than 3 times the national median household income who has previously filed no more than four non-provisional patent applications, not including those the inventor was obligated to assign to an employer. A micro-entity also includes a university or an inventor under an obligation to assign the invention to a university. A micro-entity is entitled to a 75% reduction in many of the patent fees payable to the US Patent Office during prosecution of a US patent application. The patent office is expected to develop regulations to identify which fees will be eligible for the reduction and how joint inventors may qualify as a micro-entity.
Provides that confidential sales of products containing the patented technology will no longer mark the beginning of the 1 year period to file the patent.
Judicial review of reexamination decisions
Opponents note that the bill contains a provision that would deny the right of patent owners to obtain judicial review of adverse USPTO decisions in ex parte patent reexaminations by civil action in district court – a right that has existed under 35 U.S.C. § 306/ § 145 since the inception of reexamination in 1980. They contend that abolishing this right will leave direct appeal to the Federal Circuit as the only judicial recourse – an intolerable scenario for patent owners who need to rely on evidence that was unavailable during the administrative appeal stage. Opponents contend that this provision will exacerbate ex parte reexamination abuses by creating an unprecedented end-run around Federal District Courts in potentially all patent disputes. They warn that alleged infringers would simply file ex parte reexamination requests with USPTO, receive a final agency decision subject only to Federal Circuit review, essentially bypassing Federal courts. Opponents fear that given the deference the Federal Circuit must accord the agency (Zurko), large number of prospective/alleged infringers would choose this new favorable path to challenge a patent, overwhelming the USPTO, causing much lengthier delays in reexamination and holding up patentees' patent rights for years.
Advocates argue that allowing a challenge of a patent in the first year after the issuance or reissuance of a patent will improve patent quality by allowing third party inputs. Opponents note that: (a) inter partes review under the Bill allows a third party to challenge the validity of any claim(s) in a patent *after* the first year; (b) re-exams are in fact used, not as an alternative to litigation, but rather as a supplement to litigation. In FY2008, 62% of current inter partes re-exams and 30% of ex parte re-exams were simultaneously in litigation; (c) predatory corporations can and do file multiple post-grant oppositions against startup companies for the purpose of inflicting financial pain and through this practice have successfully extracted patent licensing and purchase agreements on favorable terms; (d) the existing inter partes process in a contested case now takes 34 to 53 months for an un-appealed reexam (assuming no “rework” by the patent office and no secondary appeals to the BPAI, the Federal Circuit, or the Supreme Court), and 5 to 8 years for appealed cases. When Congress created inter partes reexamination, it directed the USPTO to conduct these reexaminations with "special dispatch." The Bill expands the existing inter partes procedure, adding discovery and a hearing in the Patent Trial and Appeal Board. Consequently, under the Bill, pendency of the inter partes procedure will likely increase, despite the legislative fiat requiring 18 month disposition; and (e) the Bill all but requires a federal district court to stay a patent infringement suit copending with an inter partes review. Because of the enormous costs and long pendency of inter partes review, the grant of a stay in a copending infringement suit can effectively be "game over" for the patent owner.
Post Grant Review is available only if the challenger has not already initiated a civil action in District Court. Post Grant Review proceedings are to be conducted by the Patent Trial and Appeal Board, which will replace the Board of Patent Appeals and Interferences on September 16, 2012 for proceedings that commence on or after that date. Post Grant Review proceedings may be terminated either by settlement or by decision of the Board. There is also estoppel associated with the challenger at the USPTO, the District Courts and the International Trade Commission (ITC) in asserting invalidity on any ground that could have been reasonably raised during Post Grant Review.