First Inventor to File: USPTO Derivation Proceedings Go Final
|Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: September 10, 2012 @ 11:26 am
The United States Patent and Trademark Office (USPTO) announced today that it is creating a new proceeding designed to ensure the first person to file a patent application is actually the true inventor. The new proceeding will ensure that a person will not be able to obtain a patent for an invention that he or she did not actually invent. If a true inventor is not the first to file, the true inventor may challenge the first applicant’s right to a patent by demonstrating that the first application is claiming an invention derived from the true inventor.
This new procedure, called a derivation proceeding, is required thanks to the enactment of the Leahy-Smith America Invents Act (AIA), which went into effect on September 16, 2011. The AIA ushers in a great many changes to patent law and procedure, with the most significant being the change from first to invent to first to file, which does not actually become effective until March 16, 2013. The flavor of first to file adopted by the AIA is not the typical first to file system seen in many other jurisdictions around the world. The American flavor still provides a grace period, although it is peculiar to the inventors own disclosures and can be defeated by subsequent disclosures of third parties. The grace period is, therefore, quite fragile to the point that it is virtually non-existent. Much concern was voiced, however, over whether one could learn of an invention and then win a race to the USPTO. That is where the derivation proceedings come into play. The U.S. version of first to file is better stated as “first inventor to file.”
“Our historic shift to a first-inventor-to-file system reduces legal costs, improves transparency, and allows us to harmonize our patent system with the rest of the world, all of which will help U.S. innovators and strengthen our economy,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “This derivation proceeding will ensure that under a first-inventor-to-file system, the inventor is always the one who obtains the patent. We’re pleased to release this final rule to the public months in advance of its implementation, to allow stakeholders greater time to prepare.”
The USPTO currently is seeking comment on its proposed rules for implementing first-inventor-to-file, which will also go into effect on March 16, 2013. Comments on the proposed first inventor to file rules are due no later than October 5, 2012. For more see Defending the USPTO Interpretation of the New Grace Period and USPTO Publishes Proposed Examination Guidelines for First to File. Thus, the examination guidelines and interpretations are still in draft form, although I do not anticipate they will substantively change insofar as interpretations of the law are concerned. These rules disclosed today relative to derivation proceedings are not proposed rules, but rather are final rules.
Comments and Revision of Proposed Rules
The Office received 251 written submissions of comments from intellectual property organizations, businesses, law firms, patent practitioners, and individuals. The comments provided support for, opposition to, and diverse recommendations on the proposed rules. The USPTO did take into account the comments received and made a number of modifications to the proposed derivation rules. There were 7 major differences between the final rules and the proposed rules identified by the USPTO. They are as follows:
- The final rule clarifies that the phrase “same or substantially the same invention” means patentably indistinct (§ 42.401).
- The final rule also clarifies that the phrase “the first publication” means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374.
- The final rule clarifies that a petition for a derivation proceeding must be filed within the one-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the allegedly derived invention (§ 42.403).
- The final rule clarifies the petition must show that the petitioner has at least one claim that is the same or substantially the same as the invention disclosed to the respondent (§ 42.405(a)(2)(ii)).
- The final rule clarifies that the petition must demonstrate that the inventor from whom the claimed invention was allegedly derived did not authorize the filing of the earlier application claiming the derived invention (§ 42.405(b)(2)).
- The final rule clarifies that the petition must show why the respondent’s claimed invention is the same or substantially the same as the invention disclosed to the respondent (§ 42.405(b)(3)(i)).
- The final rule eliminates the requirement that the petitioner must contact the Board to discuss alternate modes of service when the petitioner cannot effect service of the petition and supporting evidence (§ 42.406(b)). Instead, the final rule clarifies that: (1) upon agreement of the parties, service may be made electronically; (2) personal service is not required; and (3) service may be by EXPRESS MAIL® or by means at least as fast and reliable as EXPRESS MAIL® (§ 42.406 (b)).
Derivation Proceedings in a Nutshell
Derivation proceedings will be conducted by the Patent Trial and Appeal Board and proceed in a manner similar to inter partes reviews and post-grant reviews. Unlike patent interferences, derivations will be conducted in a single phase without the use of a “count.” An inventor seeking a derivation proceeding must file an application. 35 U.S.C. 135(a). An inventor, however, may copy an alleged deriver’s application, make any necessary changes to reflect accurately what the inventor invented, and provoke a derivation proceeding by filing a petition and fee timely.
The petition that must be filed by the inventor alleging derivation must be filed within one year of the first publication by the earlier applicant of a claim to an invention that is the same or substantially the same as the respondent’s earlier application’s claim to the invention. Such publication may be the publication by the USPTO of an application for patent or by the World Intellectual Property Organization (WIPO) of an international application designating the United States. See § 42.403.
In addition to timely filing, § 42.405(b) requires that the petition identify the precise relief requested and also demonstrate that the claimed invention in the subject application or patent was derived from an inventor named in the petitioner’s application. The petition must further state that the inventor named in the petitioner’s application did not authorize the filing of the earliest application claiming the derived invention. Furthermore, the petitioner must further show why the claim is the same or substantially the same as the invention disclosed to the respondent.
If the Director determines that the petition demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding and that the determination of whether to institute a derivation proceeding is final and nonappealable. A derivation is unlikely to be instituted if the petitioner’s claim is not otherwise in condition for allowance, regardless of whether the standards have been otherwise satisfied.
Substantial Evidence and Practical Advice
Section 42.405(c) provides that a derivation is not sufficiently shown unless it is supported by substantial evidence. This includes at least one affidavit addressing communication and lack of authorization. Further, the showing of communication must be corroborated.
One open practical question is whether derivation proceedings will be at all useful. How will the inventor alleging derivation be in possession of sufficient evidence to demonstrate communication and lack of authorization? The best evidence of each will be in the hands of the party who is the alleged deriver, not the inventor claiming to be the source of the invention. Moreover, proving a negative (i.e., lack of authorization) may be challenging, as proving a negative can always be.
With this in mind inventors and companies that employ professional inventors will need more not less documentation relating to conception, reduction to practice and the circumstances of disclosure. Who, what, when how and why will become critical in terms of access to the invention post conception, which is different than current requirements. Under the current first to invent law evidence of conception, diligence and reduction to practice are required in order to prove one is first to invent. In order to take benefit in a derivation proceeding that evidence will still be essential, but so will the particulars surrounding access to the invention. Therefore, best practices will mandate more strict innovation records, which will be news to many who erroneously believed first to file would do away with record keeping requirements pertaining to invention.- - - - - - - - - -
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.