Change? Derviation May Feel a Lot Like Interference Practice

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.

Throughout the world the answer to the question of what happens with multiple people file on the same invention is simple – the first party to file the patent application is entitled to the rights, provided of course that the invention meets the patentability requirements. In the United States, however, the rule is much more complicated, and will remain more complicated for patent applications filed on or before March 16, 2013. The United States first to invent system gives any resulting patent to the party who invented first, even if that part was not the first party to file the patent application. There are, of course catches as you might expect.

A proceeding called an “interference” is the process employed by the Patent Office to determine who obtains a patent in the event there is more than one application covering the same invention. An interference proceeding can be instituted to determine priority of invention between a pending application and one or more pending applications and/or one or more unexpired patents. The Patent Office, however, does not have jurisdiction to conduct interferences which involve only patents, i.e., which do not involve at least one pending application. Jurisdiction over those proceedings is conferred to the Federal courts by 35 U.S.C. § 291.

Interference proceedings will become a thing of the past once we move to a first to file system, which takes place on March 16, 2013. Of course, those applications filed on or before that date will be governed by the previously existing first to invent law, so applicants, practitioners and the Patent Office will be dealing with first to invent issues nearly exclusively through all of 2013, 2014 and 2015 before the pendulum swings toward applications being considered being governed by the U.S. version of first to file, which will still allow for at least some kind of grace period, although the grace period is not likely to be as broad as you may have heard, but that is another topic for another day.

While it is not at all uncommon for multiple patent applications to disclose the same invention, it has become increasingly rare for multiple patent applications to claim the same invention. To the uninitiated this may seem bizarre or confusing, but a patent application has many pieces and parts. The claims in a patent are what defines the exclusive rights, nothing else. Everything else is there for the purpose of explaining the grandiose invention to give meaning to the claims, and so that others can understand what the overall invention is, how to make it and how to use it. The disclosure is, therefore, almost always broader than the claims issued.

A more practical reason for the decreasing number of interference proceedings over the years is the fact that on average they cost well over $600,000 in attorneys fees, making interference proceedings available only to the wealthiest or best funding innovators. Given the cost many times when an interference could be pursued the second filer will simply give up on those claims, thereby obviating the need for an interference. Doing this means that the second filer will lose not only the claim that would have been decided in an interference proceeding, but will also lose all obvious variations of that claim. Still, not many individuals or small businesses can fund an interference proceeding.

At least some are of the opinion that these issues presented by interference practice will vanish once we move to first to file. Nothing could be further from the truth. The concepts that embody interference practice today will live long and prosper! The America Invents Act provides for derivation proceedings, which will be the cousin to interference practice. According to the Patent Office: “Derivation proceedings were created to ensure that the first person to file the application is actually a true inventor. This new proceeding will ensure that a person will not be able to obtain a patent for the invention that he did not actually invent.” See 77 Fed. Reg. 7029 (10 February 2012). Thus, derivation proceedings are intended to deal with a particular issue; namely the person who filed first was not the true inventor. This is typically handled under a combination of interference practice and 102(f), but that will come to a close on March 16, 2013.

Presently the Patent Office is proposing that derivation proceedings be conducted in a manner similar to inter partes reviews and post-grant reviews. They will, however, be unlike current interferences in one important way. Interferences deal with a “count,” which is really just the claim that the parties will be arguing over. Rather than focus on one particular claim derivations will be conducted in a single phase without use of a count or claim.  April 10, 2012 is the deadline to provide the Office with comments on the proposed derivation rules, and the final rules are expected to be published sometime late in July 2012.

How this will philosophically change things remains unclear because the America Invents Act requires that the petition filed to institute a derivation proceeding demonstrate that the claimed invention in the subject application or patent was derived from an inventor named in the petitioner’s application without authorization. The Patent Office has also recognized the similarity between derivation proceedings and interference practice, saying: “Petitions to institute derivation proceedings, while distinct from interference practice, raise similar issues to those that may be raised in interferences in a motion for judgment on priority of invention. Currently, motions for judgment on priority of invention, including issues such as conception, corroboration…”  See 77 Fed. Reg. 7035 (10 February 2012).

Furthermore, vestiges of current patent practice will be retained because under the proposed rule a derivation will not be sufficient unless it is supported by substantial evidence and at least one affidavit addressing communication and lack of authorization. Still further, the communication relied upon must be corroborated. See Proposed § 42.405(c) from 77 Fed. Reg. 7031 (10 February 2012).  Therefore, affidavit practice will remain, as will the long tradition of not trusting the uncorroborated testimony of inventors.

Uncorroborated testimony of inventors is akin to uncorroborated testimony of an accomplice to a crime.  You cannot get a conviction on accomplice testimony alone because an accomplice offered a deal might just say anything.  Similarly, inventors have a vested interest so the law has never taken their testimony at face value without corroboration.  The suspicion with which inventor testimony is held must be adequately appreciated moving forward as we move to a first to file system.  Our first to file system will still have caveats.  Most directly are the caveats presented by derivation proceedings, but there will also be caveats associated with the new 102(b), which will say that the work of another cannot be used against an inventor who disclosed if that work of another was derived from the first inventor.  Thus, there will be derivation proceedings and there will be derivation principles.  In both instances it will be necessary for the applicant to have some proof, so it is definitely necessary to continue to keep invention notebooks and invention records.

What kind of corroborating evidence should be created and kept as one move from idea to invention?  The best way to determine this is to look at current practice.  Once an interference has begun, the terms “conception of the invention” and “reduction to practice” are encountered in connection with priority questions, and these will all but certainly retain their importance with respect to derivation.

Conception of the invention consists of the complete performance of the mental part of the inventive activity. The conception of an invention is the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice. The date of this conception is the date when the inventor’s idea has crystallized in all of its essential attributes and becomes so clearly defined in the mind of the inventor as to be capable of being converted to reality and reduced to practice by the inventor or by one skilled in the art. For there to be conception of invention the inventors definite and permanent idea must include every feature or limitation of the claimed invention.

Reduction to practice can be actual or constructive. Actual reduction to practice refers to the construction of the invention in physical form, or the successful completion of a process. Proof of actual reduction to practice requires a showing that the invention actually worked for its intended purpose. Constructive reduction to practice refers to the filing of a regular patent application completely disclosing the invention, which is treated as equivalent to actual reduction to practice. Constructive reduction to practice is a term of art that refers to the preparation of a patent application. If a the description of the invention in a patent application is sufficiently definite enough to allow one skilled in the art to make the invention, the invention will be considered to be constructively reduced to practice, even if no working model or prototype exists.

Once a derivation proceeding is initiated, the Patent Trial and Appeal Board will determine whether a named inventor in the earlier application derived the claimed invention from a named inventor in the petitioner’s application and, without authorization, filed the earlier application.

In view of the necessity of proving the various facts and circumstances concerning the making of the invention during both an interference proceeding and a derivation proceeding, inventors must be able to produce evidence to demonstrate when they conceived of the invention and when it was reduced to practice. If no evidence is submitted, a party is restricted to the date of filing the application as his/her earliest date of invention. Therefore, it is absolutely critical to keep detailed, understandable and accurate invention records. It is also critical to have the invention records verified by someone competent to understand the invention.


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2 comments so far.

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    April 10, 2012 03:27 pm

    Here’s another question about the coming new derivation proceedings. Retired[?] SAPJ McKelvey had said on more than one occasion that in the majority of modern interferences BOTH parties lose their subject claims due to prior art raised in the motion period before the Board ever even addresses priority of invention. Will that continue to be the case with derivation proceedings? That is, will the Board first address claim patentability over newly raised prior art applicable to one or both parties before even getting into messy derivation issues [which can involve directly conflicting declarations and conflicting sworn cross-examination evidentiary deposition statements]. Or will the PTO require separte parallel post-grant reexamination proceedings rather than deciding unpatentability issues within the derivation proceeding? [I would think it will continue the latter?]

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    April 10, 2012 02:53 pm

    Gene, derivation cases are rare now, and are even more rarely successfully proven. They should logically become even rarer under the new derivation system, since that will require upfront derivation evidence to even initiate [not just interfering claims]. Plus the new and much tougher statutory bars, which eliminate any grace period other than for a full public disclosure by the junior applicant prior to the filing date of the senior applicant.
    Also, the complex interference invention priorty alternative tests of “prior conception plus continuous dilligence” or “prior actual reduction to practice without abandonment or supression”, and all of its case law, are eliminated by the elimination of its basis in 35 USC 102(g), plus the elimination of prior invention as having any relevence unless that invention proven to have been taken and filed on first by someone else.
    In particular, do not see how “actual reduction to practice” will even be relevant, except perhaps in support of proofs of a complete prior conception of all of the elements of a disputed claim prior to the senior party filing date? I would be interested in comments of others.