Congressman Goodlatte (R-VA), Chair of the House Judiciary Committee
UPDATED: Monday, Nov. 18, 2013 at 1:13pm
Last week CQ Roll Call reported that House Judiciary Chairman, Congressman Bob Goodlatte (R-VA), is continuing to fast track the Innovation Act (HR 3309) despite growing concerns from both Republican and Democrat members of the House Judiciary Committee. CQ Roll Call reports that there are 8 members of the Judiciary Committee who are asking for more time to study the legislative proposal. Two of those 8 are Congressman John Conyers (D-MI), who is currently Ranking Member on the Committee and himself a former Chair of the House Judiciary Committee, and Congressman James Sensenbrenner (R-WI), also a former House Judiciary Chair.
It is hard to understand the rush to move on the Innovation Act, which was only introduced a little more than three weeks ago on October 23, 2013. Yet, despite bipartisan misgivings within the House Judiciary Committee and a growing concern among innovators and Universities, Goodlatte is planning a markup of the legislation for Wednesday, November 20, 2013.
By e-mail sent late this morning House Judiciary Committee Members were advised that if they wanted Amendments to be considered they needed to be pre-filed no later than 11:15am on Tuesday, November 19, 2013. Accompanying this e-mail were the current version of HR 3309 as well as the Manager’s Amendment.
Of course, action in Committee does not guarantee passage by the full House of Representatives, but a bill supported by a senior member of Republican leadership like Goodlatte should certainly get its day on the floor in the House if it makes it out of Committee, which I suspect it will. Even then it would have to go across the Capitol to the Senate before it would ever wind up on the President’s desk.
Enter Professor Robin Feldman, who has become the preeminent researcher on issues of patent litigation, particularly as it refers to so-called patent monetizers. Professor Feldman has found striking new data on patent trolling and the effects of the America Invents Act, which to me suggests that the AIA has clearly been successful in its intended goal of reducing the number of defendants in a single patent infringement litigation.
Professor Feldman’s new analysis was developed by breaking down the massive data set she collected into a month-by-month analysis of patent infringement lawsuits. The data examines all patent lawsuits over four key years, which represents approximately 15,000 patent infringement lawsuits and 30,000 patents asserted. Not surprisingly to those of us who have closely followed the America Invents Act, but there was an enormous spike in litigation leading up to the implementation of the AIA in September 2011. The following graph tells the story.
The USPTO has revised the rules of patent practice to implement preissuance submissions by third parties in accordance with provisions of the America Invents Act (AIA).  Third party submissions provide a mechanism for interested parties to contribute to the quality of issued patents by submitting patents, published patent applications, or other printed publications of potential relevance to the Patent Office for consideration during examination and inclusion in the file. See 37 CFR 1.290(a).
A preissuance submission may be made in any non-provisional utility, design, and plant application, as well as in any continuing application. It is worth specifically noting that preissuance submissions may be made regardless of when the underlying application was originally filed. Thus, a third-party preissuance submission can be made in any application filed on, before or after September 16, 2012.
A third-party preissuance submission must include a concise description of the asserted relevance of each document submitted, and must be submitted within a certain statutorily specified time period. The third party must submit a fee as prescribed by the Director, and a statement that the submission complies with the statutory provision.
This will seem almost unbelievable to many, but as of March 16, 2013, long held trade secrets are now patentable. In fact, should Coca-Cola want to patent a secret process for making Coke they would be able to do so. But how is that possible?
35 U.S.C. 102 (a)(1) now reads:
A person shall be entitled to a patent unless—(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention…
The USPTO explained their interpretation of the critical “or otherwise available to the public” language as follows:
Residual clauses such as “or otherwise” or “or other” are generally viewed as modifying the preceding phrase or phrases. Therefore, the Office views the “or otherwise available to the public” residual clause of the AIA’s 35 U.S.C. 102(a)(1) as indicating that secret sale or use activity does not qualify as prior art.
Therefore, if you have a long held trade secret — and really kept it secret — it simply will not be considered prior art any more for a patent application. So if you have been telling clients that they could not patent a long held trade secret, as was the proper advice under pre-AIA 102, you should re-evaluate. Those trade secrets are patentable now when on March 15, 2013 and earlier they were not.
Everyone in the industry knows that over the past several years there have been numerous patent eligible subject matter issues raised and decided (to some extent) in the United States Supreme Court, the Federal Circuit and in the Patent Trial and Appeals Board at the USPTO. None of these cases are what I am referring to here in this section. In perhaps lesser known fashion Congress made two significant, but limited, statutory changes to what is considered patent eligible subject matter.
1. Tax strategy patents
The first of two noteworthy changes relates to tax strategy patents, which became effective on September 16, 2011.
In a bizarre circumstance Congress chose not to render tax strategy patents patent ineligible under 35 U.S.C. 101. Rather they chose a far more convoluted route. Tax strategy patents are still patent eligible subject matter pursuant to Section 101, but for purposes of evaluating an invention under section 102 or 103 of title 35, any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, is deemed insufficient to differentiate a claimed invention from the prior art.
The deeming of tax strategies, known or unknown, as being within the prior art does not does not apply to that part of an invention that (1) is a method, apparatus, technology, computer program product, or system, that is used solely for preparing a tax or information return or other tax filing, including one that records, transmits, transfers, or organizes data related to such filing; or (2) is a method, apparatus, technology, computer program product, or system used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor. Thus, you can still patent technologies, including software related innovations, that relate to the preparation of tax filings and the like.
The AIA is a complex bill that includes the most significant changes to U.S. patent law since at least the 1952 Patent Act, perhaps since the inception of patent laws in the United States in 1790. What makes these changes so significant is the fact that they are widespread and relate fundamentally to what is considered prior art, which at its base makes up the fabric of patent examination and review of issued patents for validity purposes. Add to it the procedural changes and the AIA easily is one of the most momentous, if not the most momentous, changes to patent law and patent practice ever. Thus, summarizing the AIA in a few pages while providing any semblance of exhaustive treatment is simply not possible. Notwithstanding, I endeavor to provide a high level overview of some of the provisions of the AIA that contain issues that could be characterized as traps for the unwary.
First, it is worth noting that the most significant changes did not go into effect right away. Rather, there were waves or phases of implementation. The first phase of implementation was relatively minor and occurred within the first 60 days. The second phase of AIA implementation became effective on September 16, 2012, and brought with it a host of new post-grant procedures, supplemental examination, changes to the oath or declaration requirement, and other various items. By any objective measure phase two ushered in massive changes to patent law and procedure.
By comparison, however, the second phase of AIA implementation pales in comparison to the third phase of AIA implementation. Effective on Saturday, March 16, 2013, the United States became a first to file country (more or less), abandoning the first to invent laws that were long the hallmark of U.S. patent law and practice. The oddity, however, is that what has been adopted is not really a true first to file system that resembles what first to file means to the international community. Thus, the United States remains an island on to itself with respect to whether a claimed invention is novel.
EDITOR’S NOTE: This year I will be speaking at the AIPLA meeting on The AIA: Traps for the Unwary. I will publish my paper here on IPWatchdog.com in segments over the next week. We also have on tap a wide ranging discussion with AIPLA Executive Director Todd Dickinson, and a few other AIPLA-centric pieces are in progress. Ultimately our AIPLA coverage will culminate, as usual, with full coverage of the AIPLA annual meeting, which takes place at the Marriott Wardman Park Hotel from October 24-26, 2013.CLICK HERE to register for the AIPLA annual meeting.
The America Invents Act (AIA),  signed by President Barack Obama on September 16, 2011,  ushered in many significant changes to U.S. patent law. The USPTO summarizes the changes that went into effect on March 16, 2013 as follows:
(1) Convert the U.S. patent system from a ‘‘first to invent’’ system to a ‘‘first inventor to file’’ system; (2) treat U.S. patents and U.S. patent application publications as prior art as of their earliest effective filing date, regardless of whether the earliest effective filing date is based upon an application filed in the United States or in another country; (3) eliminate the requirement that a prior public use or sale be ‘‘in this country’’ to be a prior art activity; and (4) treat commonly owned or joint research agreement patents and patent application publications as being by the same inventive entity for purposes of 35 U.S.C. 102, as well as 35 U.S.C. 103. These changes in section 3 of the AIA are effective on March 16, 2013, but apply only to certain applications filed on or after March 16, 2013. 
Honestly, it is impossible to in any single article or series of articles describe the magnitude of the changes ushered in by first to file. This is because Congress has fundamentally altered the definition of what is considered prior art. An applicant is still entitled to a patent unless there is prior art that renders the claimed invention unpatentable because it is not new or because it is obvious. But what references and information can be considered prior art? That is where things have fundamentally changed.
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