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Traps for the Unwary Regarding Patent Claim Drafting and Definition of Prior Art Under Leahy Smith

Written by Howard Skaist
Berkeley Law & Technology Group, LLP
Author, Strategic Patent Claim Drafting
Posted: September 21, 2011 @ 8:00 am
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As nearly everyone in the United States “Patent World” is likely aware of by now, on Friday, September 16, 2011, President Obama signed the patent reform legislation recently passed by Congress. The law, therefore, is legally in force, although different provisions have different effective dates. The overall bill is, of course, extremely complex and has many different of facets.

This post is focused on specific aspects of “new 102,” which legally has an effective date of March 16, 2013. Even with limiting the topic of this post to new 102, enough complexity is presented that it would not be possible to discuss in any meaningful way all the changes with which one should be familiar. In other words, there are many potential traps for the unwary; however, the two discussed below seem to me to be particularly pernicious.

My first point is that practitioners should be aware, if new 102 applies, some aspects of what qualifies as “prior art” will likely be opposite common sense expectations of inventors otherwise unfamiliar with nuances of the new provision.

For example, the new provision retains the existing notion of “public use” and “on sale” under current law; however, a key difference is that the one year grace period of current law will not be available under new 102 (Another key difference is that activities outside the United States may create a so-called public use or on sale bar under new 102). The new grace period under the America Invents Act is personal to the inventor and relates to “disclosure,” which many believe could be interpreted not to cover “public use” or “sale” as those terms are presently understood. Therefore, there is a possibility that your client’s invention may already be unpatentable in the United States by the time he or she contacts you (such as if a “public use” or “offer for sale” even took place the day before he or she consults you). Fact patterns of court decisions that may apply are generally known by skilled patent practitioners, but not the general population or even other types of attorneys. Therefore, many more inventions are likely to be forfeit under new 102.

Most inventors have a common sense expectation that if they do not actually disclose their invention and how it works, then it remains patentable. I am speculating somewhat, but perhaps this expectation is based on how trade secrets typically are understood to operate. Regardless of the basis for it, it is a view that, in my experience, is held widely despite not being entirely legally correct even under “current 102.” For example, under existing law, a secret commercial use will typically qualify as a “public use” and an offer for sale will put an invention “on sale” under the present statute, even if no information about the invention itself was conveyed with the sale offer. These well-established principles should continue to apply under new 102.

“Public use” and “on sale” are nonetheless well understood legal concepts for most patent practitioners. Some practitioners may, as a result, feel there is not a need for concern under new 102, since in the past they have managed to effectively address these same nuances under existing law. However, again, an important difference is that current law provides a one-year grace period so that, if the inventor has not delayed excessively in coming to see you (e.g., consults you within 3-6 months of a “public use” or “offer for sale,” although this was not appreciated by the inventor at the time of the “public use” or “offer for sale”), then under current law an opportunity remains for a patent application to be filed before the invention is forfeited. Not so with new 102, as previously discussed. (A separate concern in a first-to-file regime, of course, is that as a result of delay, someone else may have beaten the inventor in the “race to the patent office.)

If the situation above were not bad enough, in addition, an inventor’s common sense expectation that he or she should not disclose his or her invention publicly, as suggested above, may actually work to his or her detriment under new 102. For example, under new 102, despite being a first to file system, a first patent application or issued patent that was filed ahead of a second patent application or issued patent, will not be considered prior art under special circumstances. For example, this will occur if, before the effective filing date of the second filed patent or application, the subject matter disclosed by the first filed patent or application had been previously publicly disclosed by an inventor, joint inventor, or “another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.” Therefore, under new 102, there may be a legal benefit to the inventor for having made a public disclosure, in particular, within one year of filing the patent application.

The warning here, for the practitioner, is to be aware of these changes due to new 102 and immediately ask your client about possible events that could constitute a public use, an offer for sale or a public disclosure to get the facts and to educate your client so that actions supporting patent claims, such as the disclosure example above, may be separated from actions jeopardizing such patent claims, such as possible bars.

Nonetheless, due to an additional complexity, all might not be lost, even assuming an invention that would have been patentable under current 102 is unpatentable under new 102 and even assuming the patent application is filed on or after March 16, 2013. When new 102 technically goes into force on March 16, 2013, it will still not necessarily apply to every patent application filed on or after that date. More particularly, a provision defining the applications to which new 102 applies may provide an “out.” An important consideration relates to the “effective filing date” of the application, now a defined term in section 100 of the statute as enacted that also becomes effective on March 16, 2013.

The second point, then, is that it will become critically important for practitioners to immediately attempt to identify which law applies, current 102 or new 102, especially before drafting patent claims.

There are several reasons for doing so. As is typical, determining applicable law allows an evaluation of whether a patent application should be pursued, whether a patent might be expected to issue, once filed, and whether, once issued, such a patent might be expected to be legally enforceable. Additionally, the practitioner will want to identify applicable law so that, through artful patent claim drafting, he or she is able to increase the likelihood of success in all of these endeavors.

However, even more interesting, a practitioner will not want to miss an opportunity to choose the law that will apply, if such a choice is available. That is, one might view every application filed on or after March 16, 2013 as being subject to a sort of choice of law type provision. It might be possible to, in effect, “opt into” the current law under 102 and 103, even for a patent application filed on or after March 16, 2013. This is something to not be overlooked not only because of the expanded definition of “prior art” under new 102, but also the expanded definition of “prior art” under new 103. In particular, for new 102 and new 103, the meaning of “prior art” is the same; however, under current law, what qualifies as “prior art” under 103 is much narrower than what qualifies as “prior art” under 102. Therefore, under the new law, what qualifies as “prior art” has been significantly expanded for new 102 and for new 103.

One might consider, whether, as a matter of course, to include a priority claim to an application filed before March 16, 2013 if the requirements for making such a priority claim are arguably satisfied, and put off to a later time deciding whether to ultimately drop the priority claim.

There are several reasons for considering this strategy. PTO regulations provide a limited time for making a priority claim. See 37 CFR 1.78. In addition, under the new statute, the lack of a priority claim for an application filed on or after March 13, 2013 might be viewed as opting into new 102 and new 103.

In pursuing the above strategy, it would therefore be prudent for practitioners to draft some claims with current 102 in mind and some claims with new 102. However, it is also may be prudent to limit your claims to those with arguable written description support from the prior filed application and decide later whether to include claims based on any new matter that may have been added.


About the Author

In 2003, Mr. Skaist left Intel and founded Berkeley Law & Technology Group, (BLTG). Currently, BLTG has a total of twelve patent lawyers. BLTG handles all aspects of patent law practice, including: patent preparation and prosecution, patent strategy, portfolio building, and portfolio management, patent assertion and other patent license negotiation support , preparing patent opinion letters, and strategic oversight of patent litigation. Mr. Skaist is also an adjunct professor at Boalt Hall Law School in Berkeley, CA, and at Willamette School of Law in Salem, OR, and has also taught patent law, copyright law, and computer law at Lewis and Clark Law School and Albany Law School. In late 2012 (or early 2013) Oxford University Press will be publishing his book, Strategic Patent Claim Drafting, which will address drafting patent claims in light of changes resulting from the AIA.

18 comments
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  1. Thank for pointing out the apparent sun setting of the current “on-sale” one-year grace period as of the effective date of the new 102.

    The current on-sale one-year grace period is very important for start-ups and independent inventors. They often need to test the market waters before spending their own money on filing a patent application. That means offer for sale first, file later.

    It seems to me, though, that the on-sale one-year grace period would still be available under the new 102 if all of the novelty bars presented in 102(a)(1) counted as a “disclosure” under the exceptions to the novelty bars provided in 102(b)(1). If they do, then that would give the greatest continuity through the new 102 transition date of March 16, 2013. If an “offer for sale” is made on March 15, 2013, the inventor would still get a one year grace period for an application filed on or after March 16, 2013.

  2. This concern re public use/on sale grace periods under the new law seems a bit strained to me. For example, the grace period would apply for public uses and offers for sale that include actual public disclosure but not secret public use or uninformative offers for sale. How does this make any sense? This whole issue seems more like a law school class exercise than a realistic concern.

  3. “The current on-sale one-year grace period is very important for start-ups and independent inventors.”
    Agree with Mark. The elimination of the on-sale grace period is a terrible idea if the government wants to encourage innovation investment (i.e. “this bill will create jobs!”). Many inventive concepts don’t even make it to the application phase because of early-on “market testing.” An inventor would test out initial builds in the market and if well-received would apply for patent. If not market feasible, then the startup would abondon that idea and move on to others. The idea-to-pat. app. ratio is rather high. Or the concepts change radically from the original idea due to market feedback. Now, in order to get a synthetic “on-sale” grace period, the startup would have to file provisional apps for each idea before offering it up for sale which would be much more costly (since any improvements in the idea would also need provisionals). It would seem incongruent to have a grace period for disclosure but not have one for “on sale” or “public use”. I would expect a spike in the number of provisional apps when the new 102 takes effect. It will also make investment in technology startups less attractive as the burden of the “on sale” bar will make such investments riskier due to unknown/untested market viability. The expanded post-grant review also make technology investment riskier as the patent can never be accepted as ironclad and assailable for invalidation on whatever grounds valid or not.

  4. Too bad the bright bulbs of AIPLA did not insist on harmonization taking the form of the rest of the world adopting our convenentional grace period.

  5. Question about “secret on sale”:

    It appears to have not been discussed above, however, under the old law, even a secret offer to sell under NDA qualified as prior art if made more than 1 year before filing and satisfying the two prong test of Pffaf v. Wells.

    The new law (102) says “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention”

    I am assuming that the addition of “or otherwise available to the public” will take secret, under NDA offers out of the definition of what constitutes being “on sale”. Is that how others here see it or is there room to argue that even a secret offer to sell places the invention “on sale”?

  6. Corporate Refugee-

    I’ll take issue with you saying that the public use and on sale grace period question seems strained. Who knows whether you are right or not, which is the problem. When dealing with something as fundamental as the grace period I don’t think the law should allow for any questions. It should be certain and well defined otherwise it isn’t much of a meaningful grace period at all. I think patent attorneys and patent agents had better tread lightly and would do well to give conservative advice regarding the grace period until we get word from the CAFC what is actually covered.

    -Gene

  7. @CR:
    I echo on Gene’s point of caution.

    The new language that has been peppered throughout the AIA has never been interpreted by a court and much of it is open to different interpretations.

    At this stage, for sake of safety, inventors have to assume the worst.
    So the first piece of advice coming from lawyers might be, when in doubt; file and file again. File in the morning and file at supper time. Of course that is way too expensive and completely impractical for most inventors. The new law may have a chilling effect on disclosure and innovation –just as promised by them in Washington who know best as to what is good for the country (and good for their campaign donors).

  8. [...] 9. Traps for the Unwary Regarding Patent Claim Drafting and Definition of Prior Art Under Leahy Smith (IPWatchdog) [...]

  9. Step back: your interpretation — that offers for sale and public uses will not count as prior art under new 102 unless they make the invention “available to the public” — is how the sponsors interpreted the bill. Both Senator Leahy and Rep. Smith engaged in colloquies during the congressional debates that explained the bill this way. The Leahy colloquy is at 157 Cong. Rec. S1496-97 (March 9, 2011), and the Smith colloquy is at 157 Cong. Rec. H4429 (June 22, 2011). Smith’s statement notes, for example, that, “contrary to current precedent, in order to trigger the bar in new 102(a) in our legislation, an action must make the patented subject matter ‘available to the public’ before the effective filing date.”

  10. JDM,

    Thank you for the feedback.

    Would it be correct to also presume (although of course a court has not opined on this) that public “experimental use” is no longer possible?

    Let me give a concrete example: An inventor is not sure if a particular software implementation of his will scale well and respond robustly to virus attacks if released into the wild; in other words, given a live test run on the public internet. So he releases it for Beta testing and discovers through such public testing that the invention does indeed work for its intended purpose. However, he does not withdraw the Beta version at the instant of realization that it works and he lets it run a bit longer just “to make sure”. Under the Pfaff 2-prong test, the invention was ready for patenting at the instant it was realized it would work for its intended purposes and the offer price for the Beta version was $0. Hence it was publicly on sale and cannot be patented under the new AIA?

  11. Step back: any public testing that creates 102(a) prior art would also be protected by the grace period under 102(b) (assuming that the courts agree with the sponsors’ interpretation of 102(a)(1)) — the inventor could still file within a year.

  12. JDM:

    Thanks for the prompt reply.

    My concern is that the new 102(b)(1) provides an exceptions only for “disclosure” of the invention.
    However, use of the invention (i.e. offer to sell) does not inherently include “disclosure”. Just because I offer to let you “use” my secret software that is running on my hidden away server computer that does not mean I have disclosed that secret software to you. I merely let you try it out remotely as Beta user. So it was in use, but not “disclosed”.

  13. step,

    I believe that the abillity to reverse engineer, as it were, is not a requirement for use to be deemed disclosure.

    It does become a bit counter intuitive, but it is well established that the offer for sale is deemed a sale for legal effect (previously, plus “ready for patenting,” but that’s a bit more complicated), so we have through the wonderful sense of equivalencies, offer for sale = sale = use = disclosure. It is clear inthe new law that disclosure was meant to be a VERY broad term.

  14. Step back: that is true — allowing a limited, private use by one party probably would not be a “disclosure.” But it also does not make the invention “available to the public” (unlike, say, advertising and selling it to the public at large) — and thus would not create prior art in the first place.

  15. Speaking of what counts as “disclosure”, there was a decision by the CAFC on August 1 that held that a single paper copy of a report that was indexed solely by its title and author in a Swedish library was “available to the public” and therefore available under the current 102. (see In Re NTP http://bit.ly/inrentp)

    It seems to me that such a liberal definition of “available to the public” creates all kinds of interesting possibilities for qualifying under the new 102 exception for “public disclosure”.

  16. After watching the June 22nd House debate today, I came upon the above article. Everything that I understood from the 10-minute clip of c-span coverage was that there still is a grace period in 102(b) and it covers the inventor(s)’s disclosures. The colloquy was intended to settle the concept that these new 102(b) “disclosures” are meant to be along the same line as new 102(a). While we’d all prefer statutory language saying it precisely, I think courts will be ready to agree with the drafters and apply as much similar precedent as possible. Do we really see that grace period disappearing? Will the courts just assume the system is set up for full international harmonization and call this “taking” justified?

    If this grace period is still around in the way the House intended it to be, I think pre-filing disclosure (publishing, use, and even sale) could still be useful to inventors. While the disclosure no longer establishes a date in a paper-trail showing early inventorship, it does create prior art that could block competitors from claiming the exact invention or a derivation of the significant elements. In this way, a minimal disclosure could potentially reserve the invention’s “spot” at the PTO for the inventor to acquire by filing within a year. This presumably could be enforced through third-party preissuance submissions and derivation hearings.

    Personally, I am having difficulty seeing if any “grace period questions” will ever make it to the courts, and would request some gentle feedback. Everything I read on the PTO website indicates they will lean towards keeping the status quo on the disclosures–and I don’t foresee an appeal board speculating beyond precedent before the issue is ripe.

    When will it be ripe for a court? Perhaps if A sues B for infringement, B may discover A’s (secret) public use before the grace period for A’s patent in an effort to invalidate A’s claims–but will that really invalidate A’s patent under the AIA now? Prior public use is almost encouraged as a defense now for the alleged infringer, but it will not invalidate the patent, so why would the patent holder’s public use retroactively invalidate a patent? Prior art is prior art, right? I don’t necessarily agree with this, but it seems interesting to ponder

    Essentially I’m saying, “Maybe public use/sale is not part of the disclosure covered in the new 102(b)’s grace period . . . but who is gonna enforce it?”

  17. Elimination of the one-year “grace period” has always been one of my main points of contention with the new patent reform legislation. I hope that, as time passes and courts start to review these issues, they will equate disclosure and sale, at least under some circumstances. A grace period is vital to an inventor’s evaluation of his or her product’s potential performance in the marketplace.
    http://www.generalpatent.com/blog

  18. It doesn’t appear to me that your proposed strategy of filing an application after March 16, 2013, with a priority claim to an application filed before that date, and then deleting the priority claim to cause the application to be examined under the first-to-invent laws, would work. Specifically, the definition of the effective date for the first-to-file laws states that the new system is effective for any appplication “that contains or contained at any time” a priority claim to an application filed before March 16, 2013. Accordingly, if an application is filed after March 16, 2013, with a priority claim to an application filed before that date, it “contained at any time” such a priority claim defining the effective date of the first-to-file system, and thus would not be eligible for examination under the first-to-invent laws.