For a better part of the past year, there has been talk about the possibility of Congress moving a technical corrections bill to fix some “errors” within the America Invents Act (AIA). The AIA was signed into law on September 16, 2011 and contains, as most major pieces of legislation do, some minor drafting errors. On Friday, November, 30, 2012, a bill making technical changes to the AIA was introduced in the House of Representatives. The bill number is HR 6621. The proposed AIA package does NOT include a so-called “fix” to post-grant review that some considered to be substantive and not technical.
To rewind: Earlier this year, there had been some behind the scenes discussions on Capitol Hill about possibly modifying the AIA’s PGR estoppel provisions in a way that would have been problematic to patent owners. The discussed change would have removed from the AIA the “could have raised” estoppel standard. Concerns about weakening the PGR estoppels provisions as part of a ‘technical” package were communicated by members of the Innovation Alliance, university, inventor, and venture capital communities.
Fast forward to today: The bill does not contain the troubling PGR “fix.” Key staff on the Hill believe the measure to be non-controversial. House passage of the measure could take place before year’s end. What follows is the text of a draft section-by-section analysis of what was expected to be in the introduced AIA package of fixes.
Manus Cooney, former Chief Counsel to the Senate Judiciary Committee and a prominent DC lobbyist.
Last week I published part 1 of my conversation with Manus Cooney, who is one of the preeminent intellectual property lobbyists in Washington, D.C. Cooney, a former Chief Counsel to the Senate Judiciary Committee, is currently a partner with American Continental Group and was intimately involved in lobbying Congress relative to the America Invents Act (AIA), primarily on behalf of his client Tessera Technologies, who aligned themselves with the Innovation Alliance.
In part 1 we discussed lobbying in general, shining some light on the process as a whole and explaining why it is unrealistic to expect you can enter the debate near the end and have any hope of affecting change. In part 2, which is reproduced below, we discuss the specifics of lobbying the AIA, as well as the fight against further erosion of patent rights. And you thought that patent reform was over. Sadly, the fight continues.
COONEY: Going back to the AIA, when it comes to passing legislation, it’s important to know how each of the Congressional bodies work. It may be an oversimplification but it is usually the case that whatever the House Majority Leadership wants to pass, it usually gets done. In the Senate, however, it’s different because of its rules. There, whatever the Majority wants to pass has a shot at getting done. In other words, if the House Leadership, the Republicans in this case today, and the Chairman of the Committee want to see a particular measure passed, more often than not, particularly on an issue as esoteric and complex as patent law, the party members of the majority party are going to adhere or defer to the wishes of Leadership, And as a result, you’re trying to either create a situation in advance of the House measure coming to the floor where you have the support of the Leadership or you have created an environment where it’s less certain to the House Leadership and the Chairman that they will in fact be able to prevail, and thereby create an environment where they have to negotiate. Oftentimes in the House, your laying the foundation for a fight in the Senate where there is less deference to the Leadership. The rules are such that, in theory, any Senator can offer an amendment to any bill at any time, and you have a better shot at winning on the merits, so to speak. That has a way of forcing consensus. So realizing that those tend to be the ground rules, the landscape you’re dealing with, you develop a strategy for your clients.
Washington – The most significant reform to the U.S. patent system in more than a century took a major step forward at 12:01 am Sunday, as numerous provisions of the Leahy-Smith America Invents Act of 2011 went into effect. The new rules will spur innovation and economic growth by streamlining the patent application process and introducing new procedures to ensure patent quality. Seven reforms to U.S. patent law went into effect one year after the signing of the bipartisan patent reform legislation by President Barack Obama on September 16, 2011.
Some of the new rules are as follows:
Three new administrative trial provisions — inter partes review, post-grant review, and the transitional program for covered business method patents—will offer third parties timely, cost-effective alternatives to district court litigation to challenge the patentability of an issued patent. Additional information on third party submissions can be found here.
The supplemental examination provision allows applicants to submit additional information relevant to the patentability of an issued patent to the Office in a new procedure that may protect the patent from an inequitable conduct charge.
The inventors oath and declaration provision that for the first time allows assignee filing of a patent application.
The citation of prior art and written statements provision will enable the Office to treat the claims in a patent consistent with how a patent owner represents its claims to the courts or in other Office proceedings.
The SHIELD Act is very short and is only directed at computer and software patents, which makes absolutely no sense if you ask me. The seminal provision of the Act states:
Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.
Anyone interested in reading this is likely old enough to have heard the old saying “Be careful what you wish for – you may get it.” Now we have it. Many people situated variously within and outside of the patent system of the United States urged the adoption of first-to-file. The underlying reasons included harmonization with the laws of other nations, and simplification or elimination of some proceedings in our own system, etc. with a view toward curing some of what has been ailing the U.S. patent system. The day, March 16, 2013, is now approaching when first-to-file will be a reality.
There are many questions about the scope and possible impact of the AIA. Exactly how it will all play out remains to be seen. A significant question is what will be the likely impact of the AIA upon the operations of the USPTO, an organization that has been so greatly over-burdened in recent times.
There are two free webinars this week relative to the America Invents Act to alert you to. Given the enormity of the changes and how every time I read the legislation I seem to find something new, you might want to take time to sign up for both. The first will be hosted by the United States Patent and Trademark Office on Monday, October 31, 2011 beginning at 1:00 pm ET. The second, which will focus specifically on how the AIA will impact your business, is provided by K&L Gates and will be on Thursday, November 3, 2011 from 3:00pm to 4:30 pm ET.
Since prior user rights first came up as an issue in the patent reform debate I have been opposed to the idea. Whether I like prior user rights or not, the reality is that prior user rights are now a part of U.S. patent law. Nevertheless, the debate goes on about whether prior user rights are a good idea. In fact, the United States Patent and Trademark Office is tasked through the America Invents Act with conducting a Prior User Rights Study. To facilitate this study a public hearing on prior user rights was held on October 25 in the Madison Auditorium at its Alexandria, Virginia campus of the USPTO.
With this in mind I thought I would once again revisit prior user rights. One of the arguments I have heard recently supporting prior user rights is that a corporation that is going to invest billions of dollars into a facility should know that their investment is safe and that the plant can’t be shut down by a later filed patent application. This argument is so specious as to be nearly laughable if you ask me. This strikes me as just more of corporate America wanting the government to save them from themselves.
No doubt you have heard about the new law that is upon us in the land of patents; it’s in all the papers and on all the blogs. The America Invents Act was signed by President Obama on September 16, 2011, and marks the largest single re-write of U.S. patent law ever. Even the 1952 Patent Act pales in comparison because that was almost completely a codification of existing case law that had developed over the decades. America Invents, however, embarks upon a new path and leads us into the great unknown in many respects.
Those preparing to take the patent bar exam or contemplating sitting for the exam at some point in time in the future likely don’t want to hear that U.S. patent law is heading into the great unknown. How can you be expected to take a pass the patent bar examination under these circumstances? First: Relax. You do not have to unlearn or forget what you are currently learning, or soon will learn, for the patent exam or for your practice life after you pass the exam. That being said, the sooner you do take the patent bar exam the better off you will be!
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.
The United States Patent and Trademark Office (USPTO) released two Federal Register Notices on October 7, 2011, seeking written comments and announcing two public hearings for two studies the agency is required to conduct under the America Invents Act. Specifically, Congress is requiring the USPTO to study and report on the availability of prior user rights in foreign countries as well as options to aid small businesses and independent inventors in securing patent protection for their inventions. The USPTO reports for both studies are due in mid-January 2012.
“The objective of the written comments and hearings is to collect information from the public on the scope of the two studies,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “Public participation in both the Prior User Rights Study and the International Patent Protection Study is necessary to assist the agency in preparing for Congress the most informed and accurate report possible.”
I was speaking with John White via telephone yesterday about the America Invents Act. Yes, John and I are thoroughly immersed in this legislation and coming up with wrinkle after wrinkle that you probably never thought about. Fun I know, but that is what two wild, crazy and tremendously charismatic patent attorneys talk about! In any event, I told him I was having difficulty and asked him — how do you describe prior user rights, post-grant review and supplemental examination simply? His response: “You don’t.” We went on to talk about how first to file isn’t all that simple either, although the name suggests otherwise. This thing, the monstrosity that is the America Invents Act, will be a full employment act for lawyers! But when is it ever good for clients when it is good for the attorneys?
In any event, on this note I embark upon Part 2, which will seek to make sense of prior user rights, post-grant review, preissuance submission and patentability changes. This will leave inter partes review, supplemental examination and derivation proceedings for the finale — Part 3. I will endeavor to describe these in the most straight forward way possible, but I am going to completely punt on Section 18 as it pertains to business methods and post-grant review, at least for now. I just see no way to explain that in a “simple” way. Notwithstanding, look for an article on Section 18 soon (a relative term I know), along with an article about specific peculiarities and likely unintended consequences of the Act.
Now that the “ink is dry” on the American Invents Act (which I refer to as the “Abominable Inane Act” or AIA), it’s now time to consider how to cope with (and even take advantage of) the AIA. See my prior article — American Davids of Innovation, Start Your Engines: Strategies for Coping with First to File Under the America Invents Act. Take advantage of the AIA? Oh, yes. I’m referring to the new “grace period” provision in Section 3(b)(1) (Exceptions for Disclosures Made 1 Year Or Less Before The Effective Filing Date Of The Claimed Invention) which will eventually become new 35 U.S.C. 102(b)(1) which may allow the inventor/patent applicant to have his/her cake and eat it too, come March 16, 2013 when this provision of the AIA goes into effect.
By now virtually everyone in the patent and innovation communities knows that on September 16, 2011, President Barack Obama signed into law the Leahy-Smith America Invents Act. This is an enormous change to U.S. patent laws, likely the largest change in U.S. patent law since at least 1790. The last major re-write was in 1952, and that wasn’t a re-write so much as a codification of case law that had developed over the previous decades. This is a major change and one that must be thoroughly and completely respected in terms of breadth and depth.
A lot of arguing has been going on here on IPWatchdog.com about certain portions of the so-called first to file provisions contained in the Act. Truthfully, the new 102(b)(1)(B) is not written as clear as it probably could be, but I have steadfastly maintained that it provides only a personal grace-period, nothing more. Many have criticized me at great lengths, and some have even told me via private e-mail they have stopped reading IPWatchdog because I am dead wrong. I have even had a variety of entertaining discussions with Staffers on the Hill and a variety of senior attorneys and high ranking corporate counsel. Notwithstanding those who vehemently disagree with me, with every new statement made by the United States Patent and Trademark Office my position seems to be further confirmed.
The grace-period provided to inventors is only a personal grace-period and subsequent disclosure that is not derived from the inventor will create a statutory bar to patentability. My source? The United States Patent and Trademark Office.
Earlier today I spoke at the Practising Law Institute program on the America Invents Act. We had a good turnout in the room and an excellent turnout via webcast. The program was 4 hours long, and truthfully we could have gone on for at least several more hours without running out of material. For those who stayed online we ran long by about 20 minutes, and stayed talking with attendees and answering questions of live attendees for another 20 minutes. We are already talking about reprising the presentation for an audience at PLI’s New York City location on Seventh Avenue, so stay tuned.
There will be plenty of time to drill down on the particulars of the America Invents Act. The Act is dense, language choices from section to section in some places change and in other places remains the same, making you suspect that different terms must mean different things but the same term in different places has to mean the same thing, right? Our moderator, Denise Kettelberger (Faegre & Benson) said that patent attorneys should really read the Act about 10 times, which is really good advice. Every time you read it you notice something a little different, and during the presentation of others today I found myself taking notes and looking up things in the Act with new understandings. This is a major re-write of patent laws and not one that is at all simple.
That being said, I thought I might take this opportunity to provide a high level overview of the America Invents Act. What follows is discussion of 5 provisions contained in the Act. Look for an overview breakdown of additional provisions (prior user rights, supplemental examination, post-grant review, etc.) coming soon.
Senator Leahy (left) and Congressman Smith (left) at AIA signing.
The America Invents Act reshapes U.S. patent law in fairly profound ways with established major industries benefitting, but providing unwanted challenges for some. The final bill changes the US system to a first-inventor-to-file system. It creates several post-grant review mechanisms whereby 3rd parties can challenge another’s patent application, including the allowance of submission of prior art by 3rd parties and the creation of a new, post-grant administrative review proceeding. The financial sector will get additional tools to address long-held concerns over “business method” patents such as those at that heart of litigation involving several large banks and a company which holds patents on processes for securing checks electronically. The AIA also effectively bans the practice of patenting tax strategies. The bill also restricts the practice of plaintiffs in infringement cases joining together large groups of defendants who may have no business relation to each other.
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more. The treatise is continuously updated to address relevant Federal Circuit and Supreme Court decision impacting patent drafting.
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