We are rapidly closing on the next wave of implementation for the America Invents Act in the United States.  On 16 September 2011, the U.S. enacted landmark patent legislation.  As a result of the Leahy-Smith America Invents Act (AIA) the patent laws of the United States will experience the most widespread changes since the initial patent statute was first passed in 1790.  Not even the 1952 Patent Act is as sweeping because that almost exclusively codified decades of common law into the statute, with only one significant departure from the law as it evolved under the guidance of the Judicial system.

The most sweeping changes to American patent law will not take effect until March 16, 2013, but there have already been some changes and the next wave of changes become effective on September 16, 2012, on the anniversary of President Obama signing the bill into law.  The next round of changes largely deal with post grant procedures and challenges, but also deal with a variety of smaller issues, such as implementing the OED statute of limitations for disciplinary actions and the submission of third party prior art during a patent prosecution.

For the international community, however, there is an important change slated for September 16, 2012.  The AIA will changewho is entitled to be an applicant in U.S. national applications. This change will impact applicants who have filed under the Patent Cooperation Treaty (PCT).  The change removes the requirement that the inventors be named as applicants solely for the purposes of U.S. designation.

The United States Patent and Trademark Office (USPTO) announced today that it will publish final rules in the Federal Register on Tuesday, July 31, 2012, that relate to the statute of limitations provisions for disciplinary actions brought by the Office of Enrollment and Discipline (OED) at the USPTO.  For an advance copy see Implementation of Statute of Limitations Provisions for Office Disciplinary Proceedings.

“The final rule implements a key provision of the AIA by specifying the timing for the one-year period included in the statute of limitations for Office disciplinary actions,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “The Office promulgated this final rule with the benefit of valuable public input and we thank our stakeholder community for that feedback.”  Reviewing the proposed rules in comparison with the final rules it does seem that the USPTO took legitimate, constructive criticism, which resulted in a final rules package that in my opinion more closely reflects the Congressional mandate in the AIA, while still balancing the desire not to prematurely file a disciplinary action and giving patent practitioners adequate time to respond to inquiries.

Earlier today the United States Patent and Trademark Office published proposed examination guidelines to implement the first-to-file changes of the America Invents Act (AIA), which go into effect on March 16, 2013.  The USPTO also published proposed rule changes to implement first to file in the Federal Register this morning as well.

At least over the last  year there has been great debate on IPWatchdog and elsewhere about the meaning of the new grace period under the AIA.  I have been explaining that under the US first to file system the inventor will still have a personal grace-period, but that the grace-period is personal and relates only to the inventor’s own disclosures, or the disclosures of others who have derived from the inventor. Further, I have explained that disclosures of third-parties who independently arrived at the invention will be used against the inventor. Said another way, there is no grace-period relative to third party, independently created disclosures.

And round 2 of the implementation of the America Invents Act (AIA) at the United States Patent and Trademark Office (USPTO) has begun.  Earlier today the USPTO published final rules to implement the preissuance submission provisions of the AIA. The preissuance submission final rules appear in the Federal Register and set forth the procedure that a third party must follow to submit patents, published patent applications, or other publications of potential relevance to the examination of another’s pending patent application.

“The preissuance submission provision in the America Invents Act aims to bring the most relevant prior art to the examiner’s attention as early as possible during prosecution to enhance examination effectiveness and efficiency,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “The agency is please to publish the preissuance submission final rules in the Federal Register several weeks before September’s effective date of the provision to give stakeholders ample time to learn the requirements of the final rules.”

Earlier today David Kappos, the Director of the United States Patent and Trademark Office, testified before the Senate Judiciary Committee at the Senate’s first oversight hearing of the America Invents Act.  Among other things, Director Kappos noted that the USPTO continues to move forward on AIA implementation, saying that the much anticipated new rules packages to implement the next round of AIA changes will be released on or before August 16, 2012, giving the Office time to train personnel prior to implementation on September 16, 2012.  Kappos also outlined how the USPTO, in the wake of the AIA’s passage, is now taking the lead internationally in creating a truly 21st Century global patent system.

The testimony of Director Kappos did not reveal much, if anything, new to those who have been following the USPTO, rather the testimony seemed more to keep the Senate Judiciary Committee in the loop.  Notwithstanding, some of Kappos’ prepared remarks did contain facts and figures that may be of interest.  Additionally, Kappos revealed that the USPTO received over 600 comments relative to the location of the additional Satellite Patent Offices called for in the AIA.  Kappos told the Senators that he expects to complete that review process and announce the next Satellite location something this summer.

The U.S. Commerce Department’s United States Patent and Trademark Office (USPTO) today announced a proposed rule change with the publication of a Federal Register titled Changes to Implement Micro Entity Status for Paying Patent Fees.  The Office seeks written comments no later than July 30, 2012.

The amend to the rules of practice in patent cases is for the purpose of implementing the micro entity provision of the Leahy-Smith America Invents Act (AIA).  If an applicant qualifies as a micro entity, then the applicant is eligible to pay reduced patent fees once the USPTO exercises its fee setting authority under the AIA.  The fee setting provision in the AIA sets the micro entity discount at 75% of the fees set or adjusted for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.

Article One Partners (AOP), the world’s largest patent research community, earlier today announced the results from its second annual Napa summit. In a comprehensive survey designed to gauge the state of the global patent industry, 36 senior executives from more than 20 Intellectual Property (IP)-leading companies discussed issues facing the IP industry. The survey results, which were compiled anonymously, found that although patent threats are on the rise, collaborative solutions are key to both deterring and managing nuisance lawsuits.

“The IP industry reached a critical turning point last year,” said Cheryl Milone, founder and CEO of Article One Partners. “The AIA overhauled the U.S. patent system, and NPEs are growing both in volume and in sophistication. In this challenging environment, preventing and mitigating patent litigation threats is becoming a top priority for companies across industries. By facilitating a better understanding of the patent challenges faced by today’s companies, the senior thought leaders at the Napa summit are equipping decision makers to better handle today’s patent environment.”

The U.S. economy is dependent on patents and other IP assets for stability and growth. According to the President’s 2008 Economic Report [1] intellectual property accounts for 33 percent of the value of U.S. corporations, with patents representing one third of this value. In total, U.S. intellectual property is worth an estimated $5 trillion, which represents more than a third of U.S. gross domestic product (GDP). Just recently the United States Patent and Trademark Office also released the study titled Intellectual Property and the U.S. Economy: Industries in Focus, which found that intellectual property intensive industries support at least 40 million jobs in the United States and contributes more than $5 trillion dollars to U.S. gross domestic product (GDP). These facts augment the necessity of a stable, clear and predictable patent system.

Another objection to prior user rights (see my previous articles on the subject here and here) is that Section 273 uses language that is untested in the court system.  Clarity with respect to statutory construction is especially important to those who wish to take advantage of a prior use but will only later find out when tested during litigation that their use does not qualify under the statute.  As argued by Sen. Roy Blunt, “assurances are all the more important for U.S. companies in the biotechnology field with extraordinarily long lead times for commercialization of its products.” [2]  Therefore the scope of protection and reliance upon the defense is concerning to those who might enjoy this defense which may lead to a detrimental reliance on the part of those would be prior users.

Those who are even casually familiar with patent law and patent practice undoubtedly know that when dealing with inventions it is always better to file a patent application sooner rather than later. There are many reasons to file sooner rather than later, perhaps chief among them is to prevent the so-called statutory bar from preventing a patent from issuing. The most common statutory bar situation arises when a product that is the embodiment of an invention is publicly used or on sale in the United States more than 12 months prior to a US application being filed. In order to prevent a statutory bar an application needs to be filed promptly, but the 12 month grace period can lull inventors into a false sense of security.

Of course, if you are availing yourself of the privilege of the 12 month grace period in the United States you have already forfeited foreign patent rights. In most of the rest of the world an absolute novelty rule is followed, which means that you must have a patent application on file prior to making any sale, use or public disclosure of the invention. Some will bicker with this as being an overbroad statement, but not by much. If what you sell, use or disclose publicly informs about the invention (which is virtually always the case) you lose the ability to seek foreign patent rights unless you had a patent application on file prior to the informing event. Once again, even the current first to invent law in the United States favors filing early.

But what happens if two or more applications filed by different inventors define the same invention? The old saying is that the more things change the more they stay the same, which very well might be exactly what happens as we transition from interference practice to derivation proceedings.

Raymond P. Niro is a nationally recognized trial attorney specializing in the enforcement of patent, trade secret and related intellectual property rights. The name Niro, however, is not like any other in the patent industry. It was as a consequence of a lawsuit one of his clients brought against Intel in 2001 that the term “patent troll” was coined. It seems to me, however, that the fact that Niro is viewed by some as a bad guy is owed to the fact that he has been extremely successful, which means infringers have paid his clients an awful lot of money over the years.

On March 12, 2012, Niro went on the record with me in an exclusive interview.  This interview came about because Niro and I will be speaking at the Managing Intellectual Property program titled US Patent Reform Forum 2012 on March 27, 2012 in Washington, DC. In a preview of what Niro will discuss on the 27th, we discussed many things, including the nearly constant attempts to erode patent rights, efforts to make it more difficult for patent owners to seek redress for infringement and what the America Invents Act will mean for patent litigation moving forward.  We also discussed the undeniable reality that there are bad actors in the industry.

Monsanto is a company that developed a system for weed control that employs genetically modified crops that resist glyphosphate herbicide (better known as Roundup). Upon planting such crops, farmers can spray Roundup over their fields to kill weeds while sparing the resistant crops, a technique that allows for much more efficient weed control than is possible with unmodified plants. See Monsanto Co. v. McFarling, 488 F.3d 973, 976 (2007). One of the patents embodying such genetically modified seeds is U.S. Patent No. 5,352,605.  The ‘605 patent claims relate to a plant cell containing a genetic promoter sequence that facilitates a plant’s production of a modified enzyme. Further, the parent application discloses methods used to infect plant cells, which were genetically transformed, causing them to become resistant to an antibiotic (kanamycin) at concentrations which are toxic to untransformed plant cells. Monsanto obtained patents to protect it’s methods for creating genetically modified seeds which are then licensed to farmers for a one time use.

Monsanto’s seeds aided soybean farmers in producing higher crop yields, which has greatly increased agricultural productivity. See Guanming Shi, Pricing of Herbicide-Tolerant Soybean Seeds: A Market-Structure Approach, 12 J. Agrobiotechnology Mgmt. & Tech. 8 (2009). The public benefits as well from efficient farming and agriculture innovation.  Additionally, the agricultural sector has acknowledged the spur in innovation fostered by the U.S. patent system.  Lead by the extension in the 1980’s of utility patents covering plants and animals (See Diamond v. Chakrabarty, 44 U.S. 1028 (1980); Ex parte Allen, 2 U.S.P.Q.2d 1425 (1984); Ex parte Hibberd, 227 USPQ 443 (1987)), Guanming Shi correctly concludes that patent protection provided incentives for private research and development investments in the U.S. seed industry.

The statement of Senator Patrick Leahy in the Congressional Record sums it all up nicely: “After dozens of congressional hearings, markup sessions, and briefings, and countless hours of Member and staff meetings, through two Presidential administrations, and three Congresses, patent reform is finally a reality.”

On September 16, 2011 President Barack Obama signed into law the America Invents Act, which constituted the most significant overhaul to the U.S. patent system since the Patent Act of 1952.  Some of the most pronounced amendments to Title 35 of the United States Code include replacing interference proceedings with derivative proceedings, initiation of inter partes review, eliminating failure to disclose the best mode as a challenge to a claim, the addition of post grant review process and various changes to the fee setting authority by the USPTO.  But that was just the beginning.

On Wednesday of last week I was in Washington, DC, and then on Thursday and Friday I traveled to New York City for the 6th Annual PLI Patent Institute.  Over these days out and about I heard similar stories from well placed individuals in the industry.  Had I heard it only once from one source I would have believed it to be true, given who was telling me, but I heard substantially the same thing from several very credible sources.  The troubling news starts with the fact that a technical amendments bill to the America Invents Act (AIA) that is working its way around Capitol Hill, and in true government by ambush fashion it could work its way into a bill at any time!   Everyone interested in stopping substantive changes to the AIA needs to be prepared to act fast!  In fact, I understand that if the Stop Online Piracy Act (SOPA) had moved forward the AIA Technical Amendments bill would have been attached to it.

What is the big deal about technical amendments?  The problem is that not all of the amendments will be “technical.”  For example, there is a plot afoot to change the estoppel provisions in the AIA relative to post-grant review and inter partes review.  As enacted, estoppel attaches relative to any ground raised or which reasonably could have been raised during the proceeding.  There is an intense effort to have the technical amendments modify the estoppel provisions to provide estoppel only for that which was “actually raised,” thereby excising the “reasonably could have raised” language.  This is obviously a substantive amendment, and a truly terrible idea.

USPTO Proposes Rules of Practice for Trials before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decisions

Washington – The United States Patent and Trademark Office (USPTO) has proposed a consolidated set of rules related to trial practice before the Patent Trial and Appeal Board. The proposed rules implement the provisions of the Leahy-Smith America Invents Act relating to inter partes review, post-grant review, the transitional program for covered business method patents, and derivation proceedings.

Begins process mandated by the America Invents Act’s fee setting provisions to deliver on promises to the IP community and achieve long term financial stability

Washington – Under the America Invents Act (AIA), the United States Patent and Trademark Office (USPTO), for the first time in its history, was given the authority to work with IP stakeholders to set fees through the regulatory process. The agency took a first step towards that end this week when it published proposed fees for all of the patent services it provides. See Table of Patent Fee Changes and Executive Summary: Patent Fee Proposal.