America Invents: The Unintended Consequences of Patent Reform

By Gene Quinn
October 24, 2011

It is virtually impossible to in any intellectually honest way truthfully determine what the legislative intent of Congress was for any particular piece of legislation.  Justice Antonin Scalia has railed against the use of legislative history for decades, saying “legislative history is irrelevant when the statutory text is clear,” and referring to the “legal fiction” that legislative history, including Committee Reports, actually reflect the intent of the Congress.  This is, of course, because it is exceptionally easy to get something into the legislative history, so anything that appears in the legislative history may only be the view of one particular Member of Congress, or worse the view of a lobbyist paying for access.  There is also the problem associated with Members of Congress saying things they simply don’t understand, and the reality that the legislative history cannot be cross examined.  Even Committee Reports are at best the view of a majority of a group that makes up a small fraction of the overall Congress.  It seems a fools errand to rely on legislative history in all but the rarest case, and Scalia’s view seems to be the prevailing view of this Supreme Court.

Notwithstanding the inherent unreliability of legislative history and the truly scary prospect of trying to get inside the head of Members of Congress, it seems fairly clear to me that the America Invents Act, which was signed into law by President Obama on September 16, 2011, contains at least a handful of things that can only be characterized as unintended consequences.  Among them are: (1) U.S. patents issued from foreign filings will be prior art as of the foreign filing date; (2) commonly owned patent applications cannot be used against each other for novelty purposes; and (3) the creation of an post grant challenge limbo because of the delay in initiating post-grant review procedures.

1. Foreign and international filings as prior art of of filing date

There seems to be a change to existing 102(e) law relative to foreign and international filings.  Today foreign filed applications are not prior art as of their filing date abroad, but will be prior art as of their filing date starting March 16, 2013 if the foreign filing matures into an issued U.S. patent. Similarly, under the current law applicable to international patent applications filed under the Patent Cooperation Treaty (PCT) a filing is only prior art as of the international filing date if the U.S. is designated and the patent application ultimately publishes in English.  Under the new law international filings will become prior art as of the filing date regardless of whether the application publishes in English, provided a U.S. patent is issued.

Under the new 102(a)(2), which becomes effective March 16, 2013, says:

A person is entitled to a patent unless — the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective date of the claimed invention.

(emphasis added).

The definition of “effectively filed” is provided in 100(a)(i)(2)(B) as:

[T]he filing date of the earliest application for which the patent or application is entield, as to such invention, to a right of priority under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date under section 120, 121 or 365(c).

Thus, if a U.S. patent is issued under section 151 it will be deemed prior art under the new 102(a)(2) as of its filing date, including if that filing date is an international or foreign filing date.

2. Double patenting is no longer an obviousness issue

There also is a change with respect to double patenting. Today your own patents (i.e., commonly owned or having at least one inventor in common) cannot be used against you to support a double patent rejection under Section 103, provided of course you must be willing to file a terminal disclaimer.  Under new 102(b)(2)(C), however, commonly owned subject matter cannot be used as prior art under 102(a)(2) to support a novelty rejection.

The new 102(b)(2)(C), which becomes effective March 16, 2013, says:

A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if — 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.

Thus, a commonly owned issued patent under 151 or a commonly owned published application under 122(b) cannot be prior art for novelty purposes. That means that
certain inventions not having 102(a)(1) prior art could be re-patented to extend the life of the patent.  Moreover, under current law the critical moment to determine common ownership is the time of invention.  The new 102(b)(2)(C) alters the critical moment to the filing date.  So there no longer needs to be common ownership at the time of invention, but rather common ownership by the time the application is filed.

Where will this matter?  This will be a potentially big opportunity for pharmaceutical companies who will now be able, at least in some cases, to re-patent blockbuster drugs.   In order to re-patent the subsequently filed identical application would need to be re-filed prior to the publication or patent issuing so that the publication/patent of the first filed application will not be prior art under 102(a).

Will a strategy of re-patenting work? There will be some who say that it won’t work for one reason or another, but given the billions of dollars that could be at stake in the right circumstance it seems virtually certain that it will be attempted.  Furthermore, if you don’t try to pursue such a path would you as the patent attorney or patent agent be committing malpractice or some breach of ethical standards by not zealously representing the interests of your client?  I think you have to at least try to exploit this 102(b)(2)(C) loophole and let the Federal Circuit ultimately determine whether references that do not qualify as prior art thanks to 102(b)(2)(C) can still nevertheless be combined to support an obviousness rejection or double patenting rejection pursuant to 103.  I could see it going both ways, but I think the superior argument is that you cannot combine references that do not qualify as prior art under 102, which has always been the law.

Regardless of the ultimate efficacy of re-patenting, I suspect the insertion of 102(b)(2)(C)  is not accidental.  If it was deliberately placed with knowledge as to its meaning it wouldn’t strictly qualify as an “unintended consequence.”  Notwithstanding, I find it difficult to believe that Congress appreciated the possibility of allowing for an 18 month patent extension through re-patenting even if certain lobbyists and companies were fully well aware of the mischief that could be forthcoming.

3. Inter partes review litigation limbo

Earlier today the Patent Practice Center published an article titled Post Grant Dead Zone Coming Soon, which discusses the possibility that there once Inter Partes Review procedures go into effect it might be difficult to obtain a stay in a patent litigation. See also Unwary Litigants to Lose USPTO Review.

The new post-grant review and inter partes review procedures come on line 12 months after enactment of the America Invents Act, which will be September 16, 2012.  In the new 35 U.S.C. 311(c) the filing time for an inter partes review is defined:

A petition for inter partes review shall be filed after the later of either — (1) the date that is 9 months after the grant of a patent or issuance of a reissue of a patent; or

(2) if the post grant review is instituted under chapter 32, the date of the termination of such post-grant review.

The intent seems to clearly be to allow for inter partes review only after the conclusion of any post-grant review.  Aside from the obvious language in Subsection (2) saying that inter partes cannot begin until after the termination of a post-grant review proceeding, the intent to have inter partes begin only after post-grant review is accomplished by Subsection (1) have a 9 month timeline because according to 35 U.S.C. 321(c) a post-grant review must be filed within “9 months after the date of the grant of the patent or of the issuance of  reissue patent…”

The trouble with this timeline is that it creates a dead zone or valley.  You see, like inter partes review, post-grant review does not come online until September 16, 2012.  That means that no inter partes proceedings could start before June 16, 2013.  Complicating matters is the fact that according to 35 U.S.C. 315(b), inter partes review must be initiated no more than 1 year after the date on which the petitioner is served with a complaint alleging patent infringement.

Further complicating matters is that post-grant review is only available to challenge patents that have issued under a first to file regime.  That means that post-grant review won’t be in effect really for at least several years because first to file does not come on line until March 16, 2013.  Therefore, it won’t likely be until at least the Spring of 2015 that we will see the first post-grant review proceedings, which will make inter partes review and traditional ex parte reexamination the only option for challenging patents post grant until approximately 2015.

Let’s talk about an example to try and make this real.   Patent is issued on September 17, 2012 and a patent infringement action is brought on September 18, 2012.  There will be no opportunity to seek post-grant review because this patent application was filed under the old, first to invent regime.  The time period to file an inter partes review runs from June 17, 2012 to September 18, 2012.  Thus, no inter partes review could have been initiated for the first 9 months of the pending patent litigation.

So why is a 9 month delay in seeking inter partes review significant? The longer you take to initiate a post grant challenge to a patent after litigation commences the harder it is to obtain a stay of the litigation pending the outcome of said post grant challenge.  Of course, ex parte reexamination could be filed rather than pursuing inter partes review, but the odds of achieving the desired outcome is much greater in an inter partes challenge than it is in an ex parte challenge.  For instance, with respect to ex parte reexamination, from 1981 to June 30, 2011, 23% of cases have all claims confirmed, 11% have all claims canceled and 66% have at least some claims amended.  For inter partes reexamination, from 1999 to June 30, 2011, 13% of cases have all claims confirmed, 44% have all claims canceled and 43% have at least some claims amended.  See USPTO Reexamination Statistics. Thus, not being able to seek inter partes review and instead having to rely on ex parte reexamination to attempt to stay a litigation is less than idea.

Conclusion

There are undoubtedly other unintended consequences and peculiarities that will come to light as more and more patent attorneys review the America Invents Act.  But who could expect that the largest re-write of U.S. patent laws ever would be smooth?  While the legislation isn’t a jobs bill in the way most would like to believe, one thing is for certain — the America Invents Act will be a full employment act for patent attorneys!

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 18 Comments comments.

  1. Confused SCOTUS October 24, 2011 9:32 pm

    Actually, I thought eliminating In re Hilmer was one of the intended consequences of AIA. Congress could have carried over present 102(e) if its intention was not to permit a U.S. patent or U.S. patent application publication from having a prior art date effective as of its foreign priority date, because present 102(e) accomplishes just that.

    Apart from legislative intent, what about the language issue? If an examiner makes a rejection based on a U.S. patent’s foreign priority date, and the foreign priority is to Taiwan for example, then how does the examiner or applicant know for certain that the text upon which the examiner relies upon in the U.S. patent in making the rejection is one-to-one with the text disclosed in the foreign priority document? I know many foreign applicants that, when filing in the U.S., add several embodiments on top of what was filed in their native jurisdiction. Therefore, the examiner’s prior art may not have support going all the way back to the foreign priority date. It seems a bit much to require an applicant to obtain a translation of a cited reference’s foreign priority document for every single rejection in which the examiner relies on a cited reference’s foreign priority date. I am thinking perhaps the PTO will address this by requiring in the rules that an applicant desiring its U.S. application, or an patent issuing thereon, to be citable as a reference as of its foreign priority date must include a one-to-one (literal) translation along with the patent application. If no such translation is provided, the PTO will give prior art effect only to the U.S. filing date. What do you think?

  2. Anon October 25, 2011 11:02 am

    It has been suggested that for all the rhetric about eliminating In re Hilmer, that such “elimination” has not actually taken place.

    The changes in AIA merely place the application of the In re Hilmer doctrine as having no substantial effect. The Supremecy of the US law in the US still stands.

    Just a thought.

    Meanwhile, to the question of “How does the examiner or applicant know for certain that the text upon which the examiner relies upon in the U.S. patent in making the rejection is one-to-one with the text disclosed in the foreign priority document?

    The answer is simple – the examiner must make a prima facia case. I will submit that unless the examiner provides a certified translation on which the rejection has been made, the examiner has failed to make that prima facia case. The prime purpose of the examiner’s examination is to provide sufficient notice upon which an applicant can make an informed decision. Without any such certified translation, the examiner has failed in his duty. Guessing, or potentially worse (depending on the technical field), depending on a machine translation simply does not meet the examiner’s duty. As to the idea of charging an applicant for a certified copy for the appliant makiing the priority claim, this will not cover the many instances that the Office will wish to use the earliest art to defeat someone else’s filing date – the entire “prior art” defeating aspect is left untouched by the suggestion (which I think is a good, but obviously insufficient remedy to the new law’s problem creation).

    This is a great example of an unforseen side effect of th legisaltion and a new cost (and delay) introduced into the process, a process that was to simplified and expedited as was the stated aim of the America Invents Act.

  3. Aaron October 25, 2011 3:37 pm

    Gene,

    I’m a bit puzzled by your conclusion regarding double patenting. Obviousness-type double patenting rejections are not based on section 102; they are based on judge-made law. Nothing in the statute or the legislative history or notes suggests a clear intent to reverse this judicial doctrine.

  4. Gene Quinn October 25, 2011 9:51 pm

    Aaron-

    That is right. Obviousness-type double patenting is based on a judicial extension of 103. It would be a straight 103 rejection but for the common ownership or the common inventor, so it is a flavor of 103.

    102 defines prior art. The cases talk about how you can only combine for 103 purposes analogous art, which is a subset of 102 prior art. So in order for references to be combined for an obviousness rejection it must qualify as prior art under 102. With this change commonly owned inventions will not be prior art under 102 and, thus, cannot be used to support a 103 rejection.

    -Gene

  5. The Big Lebowski October 26, 2011 3:05 am

    35 U.S.C. 101: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

    I don’t think that 101 was changed. It says “a” patent, not “patents”. That means one and one only. That’s the current basis for the statutory prohibition on double patenting, and it will continue to be the basis in the future. The PTO is not going to let Pfizer get two bites at the apple on the same claim – such a situation is precluded by 101, regardless of the changes made to 102 and 103.

  6. American Cowboy October 26, 2011 1:26 pm

    Gene, I agree with Aaron, and your response does not convince me otherwise.

    Double patenting rejections are not based on prior art, so it doesn’t matter whether you find any section 102 basis for the primary reference. The policy is you can’t get two patents for one invention. If you file the same application two times on the same day, neither is prior to the other, but you don’t get two patents.

    Same facts bu one has claims that vary from the claims of the other in a way that would have been obvious based upon X reference predating your two applications’ common filing date: the examiner can reject one as a double patenting under the judge-made doctrine. If X reference has a filing date after the common filing date and is the only reference that supports the obviousness argument, then you get two patents.

  7. Aaron October 26, 2011 2:12 pm

    Gene,

    I get that you’re not a fan of repealing the Hilmer Doctrine. But that doesn’t make it an *unintended* consequence. This has been a common feature to all patent reform bills that have been considered by Congress beginning in at least 2005. It was presumably driven by a disire to move toward international harmonization. At least for those who were responsible for drafting these provisions, it is clearly an *intended* consequence.

  8. Gene Quinn October 26, 2011 10:45 pm

    The Big Lebowski-

    I don’t think 101 was changed either, but we both know that 101 deals with patent eligible subject matter and utility, not novelty. So you can play word games if you like, but the reality is that without a prior patent being considered prior art under 102 there will be no valid rejection that can be issued by an examiner.

    You may be right about the PTO not re-issuing patents, but for them to fail to re-issue a patent they would have to ignore the law. There is quite a lot of precedent of the PTO doing just that over the years, but I choose not to pretend that 101 will all of the sudden be capable of supporting a novelty rejection. There is absolutely no support for that whatsoever.

    -Gene

  9. American Cowboy October 27, 2011 9:17 am

    Gene said “101 will all of the sudden be capable of supporting a novelty rejection” I agree with you on that point, Gene.

    But what 101 has historically said is you can get “a patent” on an invention, and my recollection of the creation of the double patenting doctrine is that the Courst said when Congress said an inventor can get “a patent” they did not authorize “a plurality of patents.” So trying to get more than one patent on the same invention runs into the double patenting rejection since the second patent on the same invention is not authorized by the statute. Yes, the courts and PTO can get into extraordinary navel-gazing as to what constitutes “same invention,” but the premise is you only get one patent on an invention They do not need to find that one of your applications is not novel because of prior art of the other application.

    I am too lazy to look up what new 101 says about the topic, but I bet they did not change this doctrine.

  10. Aaron October 27, 2011 9:30 am

    Gene,

    While non-statutory obviousness-type double patenting is analogous to 103, it is NOT based on 103 and
    the patent principally underlying the double patenting rejection is NOT considered prior art. This was established over 40 years ago in In re Braithwaite, 379 F.2d 594, 154 USPQ 29 (CCPA 1967) and remains good law.

  11. Blind Dogma October 27, 2011 11:14 am

    Aaron,

    From In re Braithwaite:

    …holding the terminal disclaimer ineffective to avoid the double patenting rejection. He said the claims here on appeal were not of the type involved in Robeson and Kaye but were mere “colorable variations” of the patent claims and cited in support of his rejection In re Siu, 222 F.2d 267, 42 CCPA 864. The board sustained the examiner’s position. We reverse.

    The application on appeal is a continuation-in-part and adds a great amount of detail

    The question before us, then, is whether, by taking out the patent, Braithwaite has estopped himself from obtaining these added and narrower claims to specific aspects of his electrolytic process for making organic lead compounds and electrolytes used therein, on the basis of a greatly amplified disclosure of something merely foreshadowed by general observations in his patent disclosure.

    The question has been narrowed by the filing of the terminal disclaimer to inquiry into whether he can have these claims in a patent which would expire at the same time as his already issued patent.

    but:

    We therefore proceed on the basis that the appealed claims are to processes and electrolytes not differing from what is claimed in the patent in an unobvious manner. In the absence of a terminal disclaimer, this would lead to an affirmance

    When a terminal disclaimer causes two patents to expire together, a situation is created which is tantamount for all practical purposes to having all the claims in one patent. It is common for a single patent to contain overlapping — i. e. generic and specific — claims. We have previously indicated that generic and specific claims, though by definition they “overlap,” may be considered as “distinct” in the double patenting context. In re Sarett, 327 F.2d 1005, 51 CCPA 1180.

    …on subject matter which does not differ from the subject matter of that patent in an unobvious, that is to say “patentable” way. But by his terminal disclaimer he has foreclosed the possibility of such an extension of protection.

    Not sure the case law supports your view. In fact, since the decision specifically references obviousness, this plays to Gene’s favor.

  12. Anon October 27, 2011 1:33 pm

    O/T from the given text of this article, but Gene (and EG, since EG has a good mindset of looking at how to proceed now tha tthe AIA is law), do you have any thoughts on the ramifications of the Prior User Rights (or more correctly put Prior User Defense)?

    What should we as advocates be doing for our clients (both small start-ups and large multi-nationals) given this new provision of law?

    Anyone else with ideas? (All comers welcome!)

  13. American Cowboy October 27, 2011 1:55 pm

    I can’t come up with a way to “plan” or “take action” to take advantage of prior use rights. It is one of those things you use after the fact in the extraordinary case where the facts support it.

  14. Anon October 27, 2011 2:19 pm

    Thanks American Cowboy,

    Perhaps I should try to be more explicit, as I think it is decidedly not one of those things that you do not plan for or take no action for, and that “waiting to use” after the fact will lead to very horrible results. After all, the defense comes with some tight strings and some heavy penalties.

    I think the dialogue to date, in that it has focused on whether or not the move (tied to first inventor to file) is constitutional (an argument that I think is not yet resolved, but one I want to separate this discussion from), has overshadowed the tactical, pragmatic, and yes immediate, considerations that attorneys should be focused on in regards to this provision.

    The provision has obvious (and possibly conflicting) ramifications for the client sets I mentioned (small start-up, large multinational) as well as implications for the University/tech spin-off entities (mea culpa, as I also have a few of these as clients).

    Additionally, the USPTO has a call for comments for a study that they are doing right now. A study that is due to Congress by January 15, 2012 (in about two and half months). A study, by the way, that has seen as primary inputs the same groups that pushed for First to File (and now claim that extensive Prior User Rights must be – and have been – included because of the solution they have pushed for).

    For attorneys, this is not an issue that can wait.

  15. Aaron October 27, 2011 4:24 pm

    Blind Dogma,

    See footnote 4 in Braithwaite:
    “While analogous to the non-obviousness requirement of 35 U.S.C. § 103, that section is not itself involved in double patenting rejections because the patent principally underlying the rejection is not prior art”

  16. Blind Dogma October 27, 2011 5:52 pm

    Aaron,

    yes I saw that, but continuing in the case after that footnote:

    the absence of a terminal disclaimer, this would lead to an affirmance. In re Simmons, 312 F.2d 821, 50 CCPA 990. But, unlike Simmons, a terminal disclaimer was filed in this case, which brings us to a consideration of its effect.

    Ask yourself why the terminal disclaimer is important in the case you site (the answer will center around just which art was in question – and which was not). The footnote you reference is for prior art after the original Braithwaite, but before the continuation (technically, continuation in part, but we will keep this simple). But now, with the AIA, even (especially) this self-stoppage is gone! I still maintain that the case you cite does not support your position, and better supports Gene’s.

  17. Anon October 27, 2011 9:41 pm

    Gene,

    Thank you for opening a thread on the Prior User Defense (I am trying to train myself to say the technically correct thing).

    American Cowboy (and all others) I invite you to post your thoughts on this subject on Gene’s new thread.

  18. Inventor0875 October 28, 2011 1:17 am

    Regarding Gene’s item 1 (Foreign and international filings as prior art of of filing date):

    Isn’t this change going to interfere with fast examination (including Track 1 accelerated examination in <1 year)?

    Doesn't it create an uncertainty that is not resolved for 1 year ?

    Even when known at 1 year, Patent Office can not disclose to another party until published (18 months) ?

    Is prosecution delayed (to 18 months) by a reference that may ultimately be overcome in later prosecution ?

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