Almost two weeks ago the United States Patent and Trademark Office issued two Federal Register Notices in anticipation of the U.S. converting from first-to-invent to a first-to-file regime. The first were the Changes to Implement First to File and the second was First to File Examination Guidelines. Both are important. The new regulations that make up 37 CFR are found in the former, but much of the meat and potatoes are found in the later. The Guidelines, which the USPTO says they are not obligated to follow, is where the Office spends most of the time comparing and contrasting old pre-AIA 102 with AIA 102. The Guidelines is also where the USPTO explains which cases they believe have been overruled (i.e., Hilmer and Metallizing Engineering) and which cases continue to have relevance. They also selectively cherry pick portions of the legislative history to back up their interpretations.

Frankly, we know that when the Supreme Court ultimately gets involved interpreting the AIA, which is a virtual certainty, the legislative history will play absolutely no role in interpreting the statute. This Supreme Court holds legislative history in near contempt. It is hard to argue with them on that point knowing how easy it is for something to be included into the legislative history. More interesting, however, will be whether the Federal Circuit will consider legislative history, or at least to what extent. But, as for now, the Patent Office is deferring to legislative history with respect to a number of items. On first glance nothing caught me as out of place particularly, and the Office has to rely on something given that Congress re-wrote the law and used different terminology for things that have had long-standing, well-known meanings.

Therefore, the question really has to be this: Did Congress mean what they said? Of course, that has multiple components: (1) Did Congress mean what they said in the actual text of the bill, which leaves a great many things open to interpretation; and (2) Did Congress mean what they said in the legislative history, which at times is some of the most clear writing you will ever read. The trouble, of course, is that they voted on the text, not the legislative history. Moreover, in one particular instance (relating to Metallizing Engineering) the USPTO relied on comments from Senator Leahy that only occurred after the Senate acted, which hardly seems reasonable to do give that the comment was after the fact and the exact type of remark that Justice Scalia and others seem to detest. How do we know that anyone other than one Senator believed that?  How do we even know that was what that Senator believed when he voted? What a mess!

Washington—The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) today published final rules of practice implementing the first-inventor-to-file provision of the Leahy-Smith America Invents Act (AIA).  The provision, one of the hallmarks of the AIA, is a major step towards harmonization of the U.S. patent system with those of the United States’ major trading partners, allowing greater consistency in the prosecution and enforcement of U.S. patents. The AIA also includes safeguards to ensure that only an original inventor or his assignee may be awarded a patent under the first-inventor-to-file system. The first-inventor-to-file provision of the AIA goes into effect on March 16, 2013, and represents the final implementation of the changes mandated by the AIA.

The USPTO also today published final examination guidelines setting forth the agency’s interpretation of how the first-inventor-to-file provision alters novelty and obviousness determinations for an invention claimed in a patent application.  In particular, the agency’s final examination guidelines inform the public and patent examiners how the AIA’s changes to the novelty provisions of law alter the scope of what is prior art to a claimed invention and how the new grace period operates.

Editorial Note: What follows below was submitted by Professor Feldman pursuant to a request for comments published in the Federal Register. The deadline for receipt of written comments is Friday, January 25, 2013. 

In an efficiently functioning patent market, producers could quickly and inexpensively do the following: 1) identify which rights might be relevant to the product they wish to produce; 2) find the parties who control the interests in those rights; 3) determine the value of those rights in relation to the value off the product to be produced; and 3) secure a license with competitive terms. We are worlds away from such a system, but the Patent and Trademark Office’s proposed rules on disclosure of real-party-in-interest information would take an important step towards that vision, particularly the “broad definition” proposal. As always, promotion of an effective and efficient marketplace for innovation should be of paramount importance to regulatory agencies.

In the last five years, the patent market has undergone a change of seismic proportions. Patent rights are now regularly stripped from any underlying product and traded much like commodities in a largely unregulated market–the market for patent monetization. Prior to this time, the patent system had long operated with the comfort of knowing that more than 90% of patents would never bring any form of direct monetary return. I would refer to these as shadow rights, given that they have hovered on the periphery of the patent system, never fully actualized or fleshed out. We are now shifting to a system in which the opposite will be true–a drastic shift that is likely to have an extensive impact on innovation and the national economy. In our brave new world, large numbers of patents, that would not have garnered any direct return in the past, are being traded and monetized. Their presence in the market, particularly in the form of commoditized, tradable rights, enhances the uncertainty and game playing that may allow patent holders to obtain returns above the value of patent itself. See Robin Feldman, Intellectual Property Wrongs (describing amplification and shadow rights)(forthcoming).

WASHINGTON — The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) announced today its proposal to update the USPTO Code of Professional Responsibility to conform to the Model Rules of Professional Conduct of the American Bar Association (ABA), versions of which have been adopted by 49 states and the District of Columbia. The USPTO is seeking public comments on the proposal for a period of 60 days, ending December 17, 2012.

This proposed rule package adopts most ABA provisions wholesale or with minor revisions and codifies many professional responsibility obligations that already apply to the practice of law. Specifically, the proposed rules will streamline practitioners’ professional responsibility obligations, bringing USPTO obligations in line with most practitioners’ state bar requirements. The package also proposes to eliminate the annual practitioner maintenance fee.

The America Invents Act (AIA) was signed into law by President Obama on September 16, 2011. The AIA ushered in numerous changes to patent law, but there will be even more changes to patent practice and procedure.  The way many things are done at the USPTO on behalf of clients will change, with the next wave of changes becoming effective on September 16, 2012, on the one year anniversary.  Over the next several weeks we will be taking some detailed looks at these changes, as well as flashing back to remember the passing of patent reform.

We begin our journey today with the Supplemental Examination Final Rules, which were published in the Federal Register on August 14, 2012.  Section 12 of the AIA amended chapter 25 of title 35, United States Code, to add new 35 U.S.C. 257, which permits a patent owner to request supplemental examination of a patent by the United States Patent and Trademark Office. The purpose of supplemental examination is to provide an avenue for the patent owner to ask the USPTO to consider, reconsider, or correct information believed to be relevant to the patent. Although supplemental examination goes into effect on September 16, 2012, it can be used for any patent issued on, before or after September 16, 2012.

The United States Patent and Trademark Office (USPTO) announced today that it is creating a new proceeding designed to ensure the first person to file a patent application is actually the true inventor. The new proceeding will ensure that a person will not be able to obtain a patent for an invention that he or she did not actually invent. If a true inventor is not the first to file, the true inventor may challenge the first applicant’s right to a patent by demonstrating that the first application is claiming an invention derived from the true inventor.

This new procedure, called a derivation proceeding, is required thanks to the enactment of the Leahy-Smith America Invents Act (AIA), which went into effect on September 16, 2011. The AIA ushers in a great many changes to patent law and procedure, with the most significant being the change from first to invent to first to file, which does not actually become effective until March 16, 2013. The flavor of first to file adopted by the AIA is not the typical first to file system seen in many other jurisdictions around the world. The American flavor still provides a grace period, although it is peculiar to the inventors own disclosures and can be defeated by subsequent disclosures of third parties. The grace period is, therefore, quite fragile to the point that it is virtually non-existent. Much concern was voiced, however, over whether one could learn of an invention and then win a race to the USPTO. That is where the derivation proceedings come into play. The U.S. version of first to file is better stated as “first inventor to file.”

On April Fool’s day 2008 the entire patent field released a great sigh of relief (and wondered if the reports of success were only a joke).  On that day Dr. Triantafyllos Tafas and GlaxoSmithKline (“GSK”) succeeded in enjoining the U.S. Patent Office from implementing its proposed continuation and claim restriction rules, “Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications” (the “Final Rules”), which sought to revise the rules of practice in patent cases relating, in part, to the filing of continuing applications and requests for continued examination.

Although such Final Rules were widely criticized by most companies in the United States, a sole individual, Dr. Triantafyllos Tafas, a co-inventor of a computerized automated microscope, stood alone against the Rules package for nearly three months against the might of the USPTO.  Dr. Tafas filed suit because he truly believed the U.S. patent system was being manipulated by a few large entities to the significant detriment of research-intensive entities such as emerging companies, universities, and research institutes, particularly those in the chemical, bioengineering, pharmaceutical, and biotech fields.  Dr. Tafas’ beliefs grew from his experience attempting to start his company in Europe where he found few investors willing to invest in small companies whose only major asset was a patent portfolio.  However, he found investors in the U.S. to be much more respectful of U.S. patents and willing to invest in companies with a good patent portfolio, irrespective of whether they were owned by a large multinational or the new kid on the block.  This cemented Dr. Tafas’ belief in the importance of the U.S. patent system.

Washington - The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) announced today that it will publish final rules in the Federal Register on August 14, 2012, to implement three administrative trial provisions of the Leahy-Smith America Invents Act (AIA); inter partes review, post-grant review, and the transitional program for covered business method patents. The administrative trial final rules offer a third party a timely, cost-effective alternative to district court litigation for challenging the patentability of a claimed invention in an issued patent. These rules become effective on September 16, 2012. With this publication, all of the administrative trial rules the USPTO was tasked by the AIA to complete will have been published.

The final rules for inter partes review and the transitional program for covered business method patents apply to any patent issued before, on, or after the September 16, 2012 effective date. By contrast, the post-grant review final rules apply to patents issuing from applications subject to the first-inventor-to-file provision of the AIA, which does not become effective until March 16, 2013.

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.

Many law firms are starting to contemplate the new business opportunity that will arise on September 16, 2012, when the new post grant review procedures are ushered into effect thanks to the America Invents Act.  The next wave of changes in patent law go into effect on September 16, 2012, which is one year to the day that President Obama signed the bill.

Section 7 of the Leahy-Smith America Invents Act changes the name of the current “Board” from the Board of Patent Appeals and Interferences to the Patent Trial and Appeal Board.  The AIA also dictates that the Patent Trial and Appeal Board members will include the Director, Deputy Director, Commissioner for Patents, Commissioner for Trademarks, and Administrative Patent Judges. The duties of the Patent Trial and Appeal Board are to: (1) Review adverse decisions of examiners upon an application for patent; (2) review appeals of reexaminations pursuant to section 134(b); (3) conduct derivation proceedings pursuant to 35 U.S.C. 135; and (4) conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32 of title 35, United States Code. The AIA further requires that each appeal, derivation proceeding, post-grant review including covered business method patent review, and inter partes review shall be heard by at least 3 members of the Board, who shall be designated by the Director.

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.