Posts Tagged: "Patent Reform"

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, 2012, 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.

I have done quite a bit of writing about the America Invents Act, but I have been a bit derelict in providing the sequel to America Invents: A Simple Guide to Patent Reform, Part 1. Part of the reason, if not the entirety of the reason, is that the major parts of the American Invents Act that remain are anything but simple. 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.

So what does this AIA “mumbo jumbo” mean in plain English? Well, to me and especially to others who have previously opined on this provision of the AIA, it means you not only don’t blow “novelty” in the U.S. by “publishing” the subject matter of your claimed invention (although you’ll blow “absolute novelty” elsewhere, including Europe, unless you do what I suggest below), but you can essentially “foul the nest” of others that follow after your “published” date. Even better, when you “publish” the subject matter of your claimed invention, you also put a non-patent application “date stake” in the ground as to what you have “published” that is resistant to subsequent intervening “prior art” of third parties when you do file your U.S. application (within a year of that “published” date).

If (B) gives a blanket exclusion to subject matter, which cannot be used as prior art after a disclosure by an inventor, that would lead to nearly ridiculous results. Imagine for example that an inventor discloses a specific embodiment of a coffee cup and then subsequently another who did not derive independently comes up with and discloses a coffee cup with a lid. If (B) does more than relate to a personal grace-period the subsequent disclosure could not be used against the first to publish inventor as prior art because it relates to the same “subject matter.” That would mean that the inventor could incorporate the cup and the lid into his/her patent application and obtain claims. You might be tempted to say that is impossible, but if the cup with the lid is not prior art then under what rationale could an examiner issue a good rejection? This would lead to results that turn the patent system upside down, and was clear evidence to me that those arguing that 102(b)(1)(B) excluded out subsequent independently disclosed inventions was fanciful at best.

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? 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.

It is fair to say that enactment of the AIA is not what most stakeholders championed early on. Many small inventors and innovation companies feel that some of the provisions are not in their best interest. IT would have preferred a bill that did more to change how patents are valued and enforced. Nevertheless, to most stakeholder, the final version of the bill is an improvement over previous versions of patent legislation. When patent reform legislation was first introduced in 2005, its primary objective was to reduce the infringement liability of large technology aggregators by significantly limiting equitable and monetary remedies, restrict venue, and make issued patents far easier to invalidate through post-grant review. In addition, earlier versions of the bill would have given the USPTO unprecedented substantive rulemaking authority and increased the cost and burden of filing a patent application. In combination, these measures would have significantly undermined the enforceability and value of patent rights, while increasing the cost, complexity, and uncertainty of obtaining patents. All of these reforms were advanced by a IT interests set on weakening the ability of small innovators to obtain and enforce patents.

It isn’t exactly a newflash to announce that Washington, D.C. is dsyfunctional, anyone paying attention over the past few years has long since come to that conclusion. Thus, it is hardly breaking news to report that Congress is on the verge of passing a Continuing Resolution rather than actually doing their job and passing a budget for fiscal year 2012. Why do today what is required of you to fulfill the responsibilities of your job when you can just kick the can down the road? Of course, by so doing Congress will embark upon a path that will divert some $600 million from the USPTO during FY 2012.

For example, the new provision retains the existing notion of “public use” and “on sale” under current law; however, a key difference is that the one year grace period of current law will not be available under new 102 (Another key difference is that activities outside the United States may create a so-called public use or on sale bar under new 102). The new grace period under the America Invents Act is personal to the inventor and relates to “disclosure,” which many believe could be interpreted not to cover “public use” or “sale” as those terms are presently understood. Therefore, there is a possibility that your client’s invention may already be unpatentable in the United States by the time he or she contacts you (such as if a “public use” or “offer for sale” even took place the day before he or she consults you).

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. This article is a play-by-play of the process and how it unfolded.

The economics of mass patent enforcement have changed. A patent owner will no longer be able to casually sue a multitude of parties with a single filing, participate in proceedings in a single action in a single venue likely convenient only for the plaintiff, and thereby expeditiously pursue a recovery against numerous disparate parties. Actions will have to be filed individually against each accused infringer. The patent owner will have to participate in, contend with and address procedural and substantive aspects of each action.

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.”

Those rushing to pay fees before September 26, 2011, will save 15%, but the Patent Office will not have access to that money. The budgetary calendar resets on October 1, 2011, which marks the start of Fiscal Year 2012. While the America Invents Act does not put an end to fee diversion key Congressmen in the House of Representatives pledged that they would allow the USPTO to keep 100% of the user fees collected. Thus, presumably, fees paid starting October 1, 2011, would go to the USPTO to use for the purpose intended by the payor; namely the examination of applications and ongoing business operations of the agency.

The America Invents Act, which just recently passed by the Congress and sent to the White House for President Obama’s signature, is the most significant patent reform legislation in decades, and it promises to change virtually all of patent practice as we know it over the next 18 months. Some pieces of the legislation will go into effect almost immediately,…

So the point is that there is the language of the bill, and then there is what we were told was in the bill, which actually isn’t what is in the bill if you are reading the plain meaning. In the coming days President Obama will sign the bill and then the Courts will embark on the long journey to decipher the text and tell us what it means. All the while the USPTO will be proposing and then enacting new rules. Patent law, practice and procedure is in a state of flux to say the least.