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.
On Friday, September 16, 2011, President Obama signed into law “The America Invents Act” (“AIA”) which passed the Senate on September 8, 2011, by a vote of 89-9. The AIA passed the House of Representatives on June 23rd by a vote of 304-117. The measure, which is the product of a seven-years-long legislative battle among patent policy stakeholders, changes how patents are obtained and enforced in the United States. Important reforms to patent law are incorporated into the AIA and, just as significantly, several controversial proposed changes were deleted from the AIA before final passage.
Starting with President Obama’s State of the Union Address in January, where he made innovation and job creation key elements of his speech and specifically embraced passage of patent reform as a means of addressing both issues, patent reform was well positioned to be enacted in 2011. Moreover, Congress was desperate for legislative accomplishments in an environment where partisan differences, a weak economy, and government fiscal concerns dominated. Longstanding pro-reform coalitions and associations continued to expend considerable resources on the bill. Passage was deemed virtually assured when the Chairmen of the Judiciary Committees – Sen. Patrick Leahy (D-VT) and Rep. Lamar Smith (R-TX) – essentially agreed this summer on a common piece of legislation. But, as explained below, nothing’s ever as simple as it seems in Washington.
A great deal of attention has been directed to provisions of the recent Leahy-Smith America Invents Act and the provisions of the act directed to first inventor to file, post grant review, and other such changes to U.S. Patent Law. This attention is much warranted as these represent some of the most significant changes to U.S. Patent Law in recent history.
At least one other provision of the act, however, which appears to be receiving significantly less attention, is likely to have a substantial impact upon the manner in which many patents will be enforced following enactment.
Lechleiter, Foreman, Kullman, Mathews, Hyndman, Leahy, Smith, Goodlatte, Watt, Moran, Poppy, Kappos and Blank Smile while Obama signs the America Invents Act into Law.
Yesterday I had the pleasure of being present at the Thomas Jefferson High School for Science and Technology to witness President Obama sign into law the America Invents Act.
President Obama started by commending the students of what he called “One of the best high schools in the country.” He mentioned that; “We have an exhibit of some of the projects that you guys are doing, including the fist high school student satellite, a wheel chair controlled by brain waves, robotics and more.” He made the crowd smile when he jokingly said; “I am hoping that I will learn something just by being close to you; through osmosis. I already feel smart just standing here.”
On September 16, 2011, President Obama signed the Leahy-Smith America Invents Act and, with his signature, which will marshal in major changes to the U.S. patent system. Many provisions of the Act take effect a year or more after this date including, e.g., procedures for post-grant review proceedings before the U.S. Patent and Trademark Office (after September 16, 2012) and a change to a first inventor to file system (after March 16, 2013). However, a number of changes will take effect on September 16, 2011, or soon thereafter.
Earlier today President Obama signed the America Invents Act at Thomas Jefferson High School in Alexandria, Virginia. Patent reform is now a reality, and over the next 18 months there will be massive changes to U.S. patent law. The Patent Office has already been working on regulatory reforms to the Appeals process and to the Reexamination process, so with the changes in this legislation along with the rulemaking necessary to implement the law there will be little that remains the same by March 16, 2013, when all aspects of the legislation have gone into effect. Virtually nothing that you know about patent law and/or patent process today will be relevant come March 16, 2013.
There are certain aspects of the patent reform legislation that will go into effect immediately, or nearly immediately. One example of a near immediate change is the treatment of fees paid to the United States Patent and Trademark Office. Effective 10 days after the legislation is signed fees will go up at the USPTO, thanks to a 15 percent surcharge.
In CyberSource Corporations v. Retail Decisions, Inc., Judge Dyk (joined by Judges Bryson and Prost) ruled that a method and system for detecting credit card fraud in Internet transactions was patent-ineligible under 35 U.S.C. §101. But in Ultramercial, LLC v. Hulu, LLC, Chief Judge Rader (joined by Judges Lourie and O’Malley) just ruled that a claimed method for monetizing and distributing copyrighted products over the Internet was patent-eligible. In fact, our good Chief Judge has “thrown down the gauntlet” at his Federal Circuit colleagues by stating “breadth and lack of specificity does not render the claimed subject matter impermissibly abstract.” Wow! That “judicial donnybrook” I mentioned in my recent article on the remand decision in Classen Immunotherapies, Inc. v. Biogen IDEC (see CAFC on Patent-Eligibility: A Firestorm of Opinions in Classen ) on what the standard is (or should be) for patent-eligibility under 35 U.S.C. §101 has now broken out.
In Ultramercial, the patentee (Ultramercial) asserted that U.S. Pat. No. 7,346,545 (the ‘545 patent) was infringed by Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent, Inc. (“WildTangent”). The ‘545 patent,relates to a method for distributing copyrighted products (e.g., songs, movies, books, etc.) over the Internet for free in exchange for viewing an advertisement with the advertiser paying for the copyrighted content. What is interesting in this case is that Claim 1 of the ‘545 patent that is allegedly infringed by Hulu, YouTube, and WildTangent recites a method having not one, not two, but eleven total steps. (Side note: One might wonder how anyone can infringe an eleven step method.) WildTangent’s motion to dismiss for failure to state a claim was granted by the district court based on the claimed method being patent-ineligible under 35 U.S.C. § 101. (Hulu and YouTube were dismissed from the case apparently for other reasons.)
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