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TRANSCRIPT
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America Invents Act (AIA): Continuing
Patent Reform
Keith Grzelak
Co-Chair IEEE IP Professionals Initiative
VP Government Relations, IEEE-USA
Past Chair IEEE-USA Intellectual Property Committee
Director, Wells St. John PS
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AGENDA
AIA Overview
First Inventor To File (FITF)
Diminished grace period
Patent Reform on the Legislative Agenda
Financing of emerging technologies
Impact of AIA on venture capital funding
Company perspectives & procedures
Best practices
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AMERICA INVENTS ACT (AIA)
Introduced in 112th Congress on March 30, 2011
Ordered reported from the House Committee on the Judiciary
on April 14, 2011
Passed by the House on June 23, 2011
Cloture vote on September 6, 2011
Passed by the Senate without amendment on September 8,
2011
Signed into law by President on September 16, 2011
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AMERICA INVENTS ACT (AIA)
Section 1 – Short Title; Table of Contents.
Section 2 – Definitions.
Section 3 – First Inventor to File.
Section 4 – Inventor’s Oath or Declaration.
Section 5 – Defense to Infringement Based on Prior
Commercial Use.
Section 6 – Post-Grant Review Proceedings.
Section 7 – Patent Trial and Appeal Board.
Section 8 – Preissuance Submissions by Third
Parties. 4
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AMERICA INVENTS ACT (AIA)
Section 9 – Venue.
Section 10 – Fee Setting Authority.
Section 11 – Fees for Patent Services.
Section 12 – Supplemental Examination.
Section 13 – Funding Agreements.
Section 14 – Tax Strategies Deemed Within the Prior
Art.
Section 15 – Best Mode Requirement.
Section 16 – Marking.
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AMERICA INVENTS ACT (AIA)
Section 17 – Advice of Counsel.
Section 18 – Transitional Program for Covered
Business Method Patents.
Section 19 – Jurisdiction and Procedural Matters.
Section 20 – Technical Amendments.
Section 21 – Travel Expenses and Payment of
Administrative Judges.
Section 22 – Patent and Trademark Office Funding.
Section 23 – Satellite Offices.
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AMERICA INVENTS ACT (AIA)
Section 24 – Designation of Detroit Satellite Office.
Section 25 – Priority Examination for Important
Technologies.
Section 26 – Study on Implementation.
Section 27 – Study on Genetic Testing.
Section 28 – Patent Ombudsman Program for Small
Business Concerns.
Section 29 – Establishment of Methods for Studying
the Diversity of Applicants.
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AMERICA INVENTS ACT (AIA)
Section 30 – Sense of Congress.
Section 31 – USPTO Study on International Patent
Protections for Small Businesses.
Section 32 – Pro Bono Program.
Section 33 – Limitation on Issuance of Patents.
Section 34 – Study of Patent Litigation.
Section 35 – Effective Date.
Section 36 – Budgetary Effects.
Section 37 – Calculation of 60-Day Period for
Application of Patent Term Extension.
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AMERICA INVENTS ACT (AIA)
Transitional business method program (§ 18)
Post-grant review (§ 6)
False marking (§ 16)
Oath/Assignee filing (§ 4)
Best mode (§ 15)
Fee setting authority (§ 10)
Tax strategy inventions (§ 14)
First-inventor-to-file (§ 3)
Prior user rights (§ 5)
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AMERICA INVENTS ACT – CURRENTLY EFFECTIVE
Small business study (§ 3(l))
Prior user rights defense (§ 5)
Inter partes review threshold revised (§ 6(c))
Ex parte reexam - no District Ct. review (§ 6(h)(2))
PGR/IRP appeals to CAFC (§ 7)
E.D. VA replaces Dist. DC (§ 9)
Fee setting authority for USPTO (§ 10)
USPTO fee increases (§ 11)
Tax strategies deemed w/in prior art (§ 14)
Best mode not basis for invalidity/unenforceability
(§ 15)
False marking/virtual marking (§ 16)
Limitations on joinder (§ 19)
USPTO reserve fund established (§ 22)
Pro bono program for small/ind inventors (§ 32)
Claims covering human organisms barred (§ 33)
Patent term extension calculation 60 day (§ 37)
Electonic filing incentive (§ 10)
Inventor's oath or declaration (§ 4)
PGR and IPR (§ 6)
PTAB (§ 7)
Third party submissions of prior art (§ 8)
Supplemental Examination (§ 12)
Advice of counsel (§ 17)
Transitional business method patents (§ 18)
Priority examination for important technologies (§ 25)
Patent ombudsman program for small business
concerns (§ 28)
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AMERICA INVENTS ACT – EFFECTIVE MARCH 16,
2013
First inventor to file (FITF) (§ 3) Is there a grace period?
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AMERICA INVENTS ACT (§6)
Post-grant review - Reexamination procedure is revised to
provide three ways for a third party to challenge a patent:
1) Pre-issuance third party submissions;
2) Third-party requested post-grant review; and
3) Inter partes post grant review.
* In some proceedings where USPTO upholds a patent,
petitioner is estopped from seeking reexamination or
asserting invalidity as defense.
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AMERICA INVENTS ACT
Current ways to test a patent:
1) Ex-Parte Re-exam
2) Inter Parties Review
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AMERICA INVENTS ACT
Future ways to test a patent:
1)Ex-Parte Re-exam
2)Inter-Parties Review
3)Pre-issue submission (§8)
4)Post-Grant Review (Chapter 31 – Inter Parties)
5)Post-Grant Review (Chapter 32 - Supplemental)
6)Supplemental Examination (§12)
7)Transitional Business Method Program (§18)
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AMERICA INVENTS ACT §16
False marking – Eliminates false marking
lawsuits, except for those filed by a competitor
that can prove “competitive injury” or by the U.S.
Government.
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AMERICA INVENTS ACT (§4)
Oath – Makes it easier for a corporation to file a
substitute inventor’s oath when an inventor
cannot be reached or is not cooperative.
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AMERICA INVENTS ACT (§15)
Best Mode:
Amends the statute to exclude failure to
disclose “best mode” from being used to
invalidate an issued patent.
USPTO has a duty to only issue patents that
satisfy “best mode” requirement.
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AMERICA INVENTS ACT (§10)
Fee setting authority – USPTO is given authority
to adjust fees “in the aggregate” so as to recover
estimated costs of activities.
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AMERICA INVENTS ACT (§14)
Tax strategy inventions – Strategy for reducing,
avoiding, or deferring tax liability (known or
unknown) shall be deemed insufficient to
differentiate a claimed invention from prior art.
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AMERICA INVENTS ACT (§3)
First-inventor-to-file (FITF) – Changes U.S. patent
priority from “first-to-invent” system to a “first-to-
file” system.
1) Conception no longer matters
2) Prioritized exam – not REALLY first to file
3) Prior art redefined (worldwide “public
use” and “on sale”)
4) Watch out for “AIA poor provisional apps” 20
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AMERICA INVENTS ACT (§3)
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Notable changes under AIA:
1) FITF and prior art redefinition
2) Eroded grace period
3) Broad expansion of prior user rights
4) Post-grant review
5) Supplemental examination
6) Fee-setting authority/micro-entity
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AMERICA INVENTS ACT (§3)
“First-inventor-to-file” provision generates two unrelated results:
1)“Tie-breaker” rule for two near-simultaneous patent applicants
claiming same invention is changed to “first-inventor-to-file” (only
0.015% of applications).
2)“Grace period” (no tie-breaker) rules for vast majority of
applications is changed – requiring an affirmative act (pre-filing
activity) to obtain grace period, and resulting in an “inventor’s
publication grace period”.
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AIA’S RISK OF “FALSE PATENTS”
B did not derive from A. Under the AIA, B’s patent is enforceable and cannot be invalidated until A’s application is available as prior art.
Under current law, the examiner (or A later) may provoke interference without A’s publication
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A Prosecution
B Prosecution
A Published or issued
B issued
A
First to file B
may be on expedited
examination track
Duration of false patent B
(Courtesy: Ron Katznelson)
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AMERICA INVENTS ACT (§3)
Current 35 USC 102 provides in part:
“public use" and "on sale" bar under current law in 35 USC
102(b) is as follows:
“A person shall be entitled to a patent unless — (b) the invention
was patented or described in a printed publication in this or a
foreign country or in public
use or on sale in this country, more than one year prior to the
date of the application for patent in the United States.
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AMERICA INVENTS ACT (§3)
AIA provides in part:
“102 (a) NOVELTY; PRIOR ART.—A person shall be
entitled to a patent unless— “(1) the claimed invention
was patented, described in a printed publication, or in
public use, on sale, or otherwise available to the public
before the effective filing date of the claimed invention;”
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AMERICA INVENTS ACT (§3)
Under AIA, 35 USC 102(b) provides:
102(b) Exceptions-(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE
OF THE CLAIMED INVENTION- A disclosure made 1 year or less before the effective filing date of a
claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if-- (A) the
disclosure was made by the inventor or joint inventor or by another who obtained the subject matter
disclosed directly or indirectly from the inventor or a joint inventor; or (B) the subject matter
disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or
another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint
inventor. (2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS- A disclosure shall not be
prior art to a claimed invention under subsection (a)(2) if-- (A) the subject matter disclosed was
obtained directly or indirectly from the inventor or a joint inventor; (B) the subject matter disclosed
had, before such subject matter was effectively filed under subsection (a)(2), been publicly
disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed
directly or indirectly from the inventor or a joint inventor; or (C) the subject matter disclosed and the
claimed invention, not later than the effective filing date of the claimed invention, were owned by
the same person or subject to an obligation of assignment to the same person.
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AMERICA INVENTS ACT (§3)
Current U.S. law provides an unconditional one-year grace period:
Although under AIA there are exceptions in proposed subsection
102(b) that excuse public disclosures by the inventor if made less
than a year before filing, they are irrelevant here, as no disclosure
is involved in mere public use or sale.
A “disclosure” must enable those skilled in the art to practice
the invention.
Public use or sale, per se, are clearly not “disclosures” and
therefore do not trigger AIA’s exceptions which provide grace.
AIA eliminates the 102(a) part of grace period.
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AMERICA INVENTS ACT (§3)
Current U.S. law provides an unconditional one-year grace period:
AIA eliminates the 102(a) part of grace period.
• Entrepreneurs and investors can no longer speak freely – conversations
are too risky.
• Inventors will have to file patent applications before they talk to investors
and potential partners.
• Investors will soon figure out that inventors MUST FILE patent
applications before opening discussions (let alone investing).
• Inventor must have investment in hand in order to file patent
applications.
• Poor provisional patent applications create a problem.
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AMERICA INVENTS ACT (§3)
For these events, there is no grace period:
This provision will kill startups’ ability to launch their commercial existence.
It upsets two centuries of expertise in founding, marketing, financing and
building new technology companies.
Often, it is impossible to file an application that describes a workable
invention early before its public use or offer for sale.
In many cases, the public-use is necessarily the very first event that tests and
validates an inventive solution worth protecting in a patent application.
In these cases, public-use is an integral part of the development process and
the business practice that facilitates development.
In these cases, a patent would be barred under AIA. But not so in the rest of
the world!
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AMERICA INVENTS ACT (§3)
It is not required to file an application before such events in other countries:
The rest of the world does not bar a patent based on “public use” or “on sale” where no public
disclosure of the invention is involved. But AIA does.
Why do we want to impose here a constraint which no one experienced around the world?
Do we even know what the consequences will be?
Currently, American patent law encourages invention and development to remain in America
because our “public use” or “on sale” bar are subject to the one-year grace.
The rest of the world, in a perverse way, has an indefinite grace period for filing an application
after such public use or sale events, so long as there is no public disclosure involved.
Do we want patent protection under such circumstances to exist only abroad but not in America?
This would create a tilted playing field, where inventors find that they are more likely to lose patent
protection in the U.S. than elsewhere.
It appears that AIA’s drafters have concocted an orphan which resembles none of the existing
patent systems - a system that would singularly disadvantage inventors attempting to obtain
patents in this country.
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AMERICA INVENTS ACT (§3)
How do we change our behavior?
Prepare and file provisional patent applications with 112 first
paragraph care.
Seek out venture capitalists willing to sign NDAs during the
“dance”.
Carefully mark and document disclosures under NDA.
Educated VC community to the problems created by AIA – their
very investments are put at risk if THEY do not change their
behavior.
Seek new balance between trade secrets and patents.
Consider defensive practices and offensive practices.
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WILL INVENTOR BEHAVIOR CHANGE WITH
ADOPTION OF “FIRST TO FILE”?
A. Chilling effects on strategic partnerships and
investments – probably “OK” if everything
done in-house.
B. Increased costs to applicants.
C. Loss of rights if 102(b) exception is not
triggered.
D. Accelerate technology development and file
family tree inventions on or before March 15,
2013
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91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
YEAR
Ameritech Motorola Scientific-Atlanta MotorolaAcquisition
2 2C 2C1
2CIP 2CIP1
2CIP2
3 3C 3C1
5 5CIP 5DIV
6 6C
7 8
910 10C 10CIP
11
1212C
12C1
13 14
15
15DIV
1616-1
17
2124
Core Product - Broadband Decoder (CPE)
SupportingTechnologies
Core Products - Head-End RF TX
Strategic Investments
SecondaryProducts
Continuations
HYPOTHETICAL SCENARIO: MANY MORE APPLICATIONS WOULD HAVE
BEEN FILED BY BI UNDER A ‘FIRST-TO-FILE’ PATENT SYSTEM
33 Courtesy: Ron Katznelson
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24 Initial Ideas Refinements
Rethinking Practical
Refinements
Adjunct Invention
Adjunct Invention
Key Insight
Success!
Invention
Dead End
Path to Success
: Invention Path
5 Years of R&D
Complete
Practical
System
Courtesy: Steve Perlman 34
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CONTINUING PATENT REFORM
1) AIA Technical Amendments (Senate proposal) – broader Prior User Rights
2) ITC Reform: Section 337 - ITC empowered to make finding on exclusion
order
3) Patent Law Treaties Implementation Act of 2012 (S. 3486) – co-joined
draft legislation between PLT and Hague Designs Treaty
4) SHIELD Act (H.R. 6245 – “One-way, (inventor) loser pays”
5) PARTS Act (H.R. 3889) – restrict automakers from patenting design of
repair parts
6) Manufacturing American Innovation Act (H.R. 6353) – reduces business
taxes by over 50% (10% rate) if patented products manufactured in US
7) Innovation Design Protection Act of 2012 (S. 3523) – protects fashion
designs
8) Trans Pacific Partnership (TPP) Agreement
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FITF PRACTICE TIPS
Seek out NDAs from venture capitalists, investors, and potential partners.
High quality provisional application (§112, ¶1 care) or “disclosure” needed sufficient to support claims (probably not captured for $125/$250 filing fee).
Implement regular (weekly or monthly) inventor project reviews, identify ideas, force
disclosures, and create employee incentives.
Conduct rigorous exit interviews with employees that trigger “rush” disclosure and
patentability decisions.
Due diligence – reps and warranties for §273 defense.
Alleviate tensions with outside counsel for pre-filing time delays.
Educate client about increased filings for more conceptual applications.
Consider using prioritized examination.
Consider using prior user rights (trade secrets).
Do not retain “best mode” as a trade secret, if asked by a client
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The end.
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