the u.s. patent system is changing – a summary of the new patent reform law

The U.S. Patent System is Changing –The U.S. Patent System is Changing –A Summary of theA Summary of the

New Patent Reform LawNew Patent Reform Law

The U.S. Patent System is Changing –The U.S. Patent System is Changing –A Summary of theA Summary of the

New Patent Reform LawNew Patent Reform Law

Nelson Mullins Riley & Scarborough LLP

The ACC, Wine, and U.S. Patent Law Reform


U.S. Patent Des. 127,007"Design for a Wine Bottle"


U.S. Patent No. 8,061,538"Wine Rack"


“Patent Reform” is Here

The America Invents Act was passed by Congress late summer. It was signed by the President (and therefore enacted) on September 16, 2011.

So, the biggest change in our patent system since 1952 is now going to happen. (In fact, some parts of the law are already in effect.)

When signing the law, the President said:

“I am pleased to sign the America Invents Act. This much-needed reform will speed up the patent process so that innovators and entrepreneurs can turn a new invention into a business as quickly as possible.”


Key Provisions Changes U.S. to a First-to-File System

Effective March 16, 2013

Changes what is Prior Art

Effective March 16, 2013

Now for Prior User Defense

More Review Procedures in the Patent Office to Challenge Validity

Effective Sep. 16, 2012

Other Provisions of Interest

Effective now (Marking and Prioritized Examination)

Effective Sep. 16, 2012 (Assignee filing)


FIRST-TO-FILE SYSTEM


First-to-File The First-to-File System comes into effect 18 months after

enactment (March 16, 2013). Until then, the current system remains in effect.

“Race to the Patent Office”

Eliminates interference proceedings (no longer litigate "first to invent" issues)

Changes definition of “prior art” to eliminate the ability to "swear behind" prior art cited against patent application

First-to-File system will not apply to any applications with a proper claim of priority earlier than March 16, 2013.


PRIOR ART


Prior Art

Changes go into effect with First-to-File

The “prior art” against which patentability is judged has been expanded.

Anywhere (scope expansion) in the world before the filing date (time expansion):

Patented

Described in a printed publication

In public use

On sale

Otherwise available to the public (new-scope expansion- expect litigation on this point)


Prior Art

“Prior art” also includes U.S. patent applications (or PCT applications designating the U.S.) that are later patented or published

These are prior art as of their earliest effective filing date, which can be a foreign application

Prior law limited this to the earliest actual U.S. filing date

Cannot “swear behind” as allowed under prior law


Prior Art

Obviousness

Judged as of effective filing date (rather than “at the time the invention was made”)

Patent applications, even if "secret," considered as of filing and before published (most other countries base on publication except for novelty)

Reform: Obviousness includes secret prior art.

Effective Filing Date


Prior User Defense

The Prior User Defense has been expanded.

Previously limited to methods of doing or conducting business

Now covers any “invention”

Effective now (i.e., applies to all patents issued after September

16, 2011)

Provides a defense to infringement if --

Accused infringer made commercial use of the invention in the

U.S, and

The commercial use occurred more than 1 year before effective

filing date


Prior User Defense

This is a “personal” defense

Cannot be licensed or assigned by itself (or expanded by acquisition)

Must show continuous use

Not a general license for the entire patent (only extends to the thing that was used)

Interplay with Trade Secrets

May increase the value and desirability of maintaining trade secrets

If successful, allows continued commercial use of anything later patented by a third party


VALIDITY CHALLENGES


Validity Challenges and Reexamination


Challenges

Pre-Issuance Submissions

(before earlier NOA or later of first rejection/publication + 6 mths ) Ex Parte Reexam

(continues as normal)

Post-Grant Review(only by a third party

and up 9 months after patent issues)

Inter Partes Review(after the later of 9 months

after issuance orafter post-grant review)

Patent Grant


Pre-Issuance Submissions

Any third party can file (can be a “straw man”)

Patent applications, patents, or other printed publication of potential relevance

Time limit -- earlier of (i) allowance or (ii) later of 6 months after publication or first rejection

Must include description of each document's relevance

Filer cannot otherwise communicate with the patent examiner

Applies to all applications pending on or after September 16, 2012


Post-Grant Review

Post-Grant Review Inter Parties Review Standard

"more likely than not" that at least 1 of the challenged claims is unpatentable

Grounds

Any section 102/103 prior art

Section 112 (enablement and definiteness)

Some discovery available

Standard Substantial new question of

patentability Grounds

Prior art patents and printed publications

Anticipation or obviousness Some discovery available

Any third party can file -- do not need to be threatened. But, there is a preclusion against using the same defenses later in litigation.The fee to file one of these may be very steep, such as $40,000 or more. But, cheaper (and faster) than litigation.


Supplemental Examination

By Patent Owner

Consider, reconsider, or correct information believed to be

relevant to patent

Patent Office has 3 months to determine if substantial new

question of patentability

If initiated, addresses all identified substantial new questions

(without limitation to patents and printed publications). So

broader than current ex parte reexamination.

Would typically be used to “fix” a patent about to be enforced


PATENT OFFICE PROCEDURES


Patent Office Procedures

Prioritized Examination

Patent Office Funding


Prioritized Examination

Can request “prioritized examination” of an application for a fee of $4800

Request must be filed at the time the application is filed

No need to give a reason

Moves to the top of the Examiner’s queue

In effect now, but currently limited to 10,000 per year


Patent Office Funding

PTO has authority to set its own fees

The fees to approx. actual PTO costs

Immediate 15% surcharge

Proposed Fee Increases

Suppl. Exam- $5,180 + $16,120= $21,300

Reexams – Ex parte Reexam increased from $2,520 to $17,750

Inter Partes Review - $48,000?


PATENT MARKING


Patent Marking

False Marking and Virtual Marking.

False marking penalties reformed.

Can “mark” products via reference to a website.

Effective now.


CONCLUSIONS


Observations

First to File makes the U.S. patent system more similar to other countries

March 16, 2013 (critical date)

Expect companies may file more provisional applications

Even with First to File, detailed inventor records remain important.

Because of the Post-Grant Review time limit, early notice of competitor patents is even more critical— consider Monthly patent watch and assessment.

Virtual Marking – consider for patent marking

Supplemental Examination – consider before litigating


Discussion

the u.s. patent system is changing – a summary of the new patent reform law

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