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The America Invents Act: six key changes in U.S. Patent Law.

On September 16, 2011, the President of the United States signed into law the Leahy-Smith America Invents Act. This law includes some of the most significant changes to U.S. Patent Law since the early 1950's, changing the U.S. patent system to a "first to file" system. The Act also introduces procedures, such as post grant review and supplemental examination, and alters existing procedures such as inter-partes reexamination.

As with many industries, patents are an integral part of the plastics industry. Many polymer materials, processes and products developed by participants at all levels of the plastics industry are the subject of numerous patents and patent applications. Accordingly, the significant changes implemented by the America Invents Act (AIA) will shortly influence decisions made by companies in the plastics industry, including when to file applications, how to cure defects in granted patents and how to challenge issued patents. This paper focuses on a number of changes to U.S. Patent Law that will likely influence the plastics industry and its approach to filing patent applications and reviewing granted patents.

Filing Applications and the Transition to the First to File System

One of the more salient changes made by the America Invents Act is the transition from a "first to invent system" to a "first to file system".

Prior to the implementation of the AIA, the American patent system was a "first to invent" system. Under this regime, an inventor was determined on the basis of who was the first to conceive and diligently reduce to practice an invention. Reduction to practice may have been actual or constructive, through the filing of a patent application. [1].

Transitioning to the first to invent system brings the U.S. patent system in harmony with other countries. Within the parameters of the AIA, after March 16, 2013, inventorship will primarily be determined by who was the first to file a patent application [2]. The amended law does provide a grace period, discussed below, where a public disclosure by the inventor may not necessarily defeat the right to seek patent protection. However, when foreign filings are contemplated, keep in mind some jurisdictions do not provide a grace period.

Previously, if a question of inventorship was raised between two or more co-pending applications, or between co-pending applications and granted patents, the question was resolved in proceedings known as interference proceedings. During interference proceedings the issues of conception, reduction to practice and diligence were examined [3]. These proceedings were inter-partes proceedings involving all of the parties to the patent applications or patents. Records of inventive activity (notebooks) were critical when addressing some of the issues, such as the earliest date of conception. However, in the grand scheme, interferences were relatively rare with only 46 interferences pending in 2010 [4].

Under the first to file system, interference proceedings will be displaced by derivation proceedings. Derivation proceedings allow the applicant of a later filed application to challenge the inventorship of claims presented in an earlier filed application on the basis that the claims were derived from the inventor(s) of the later filed application [5]. While it remains to be seen, given the rarity in which interference proceedings are filed, it would appear that the same might hold true for derivation proceedings.

Commentators have suggested that in order to address some of the issues that may arise during derivation proceedings it will remain useful to maintain records of inventive activity in addition to records of any public disclosures [6]. Such records may include to whom disclosures were made, when the disclosures were made, and what exactly was disclosed.

Grace Period

The AIA revamps the novelty provisions of U.S. Patent Law. Under the new provisions, generally speaking, a person is entitled to a patent unless the claimed invention was patented, described in a printed publication, in public use, or on sale or otherwise available to the public prior to the effective date of the patent application being examined [7].

However, an inventor's own disclosure of claimed subject matter will not bar a patent application, provided the disclosure was made no more than one year before the effective filing date of the patent application [8]. In other words, if an inventor publishes or publically discloses an invention, the inventor still has one year to file before such disclosure operates as prior art to his application.

Interestingly enough, a disclosure by the inventor will operate as prior art against third parties. In that sense, companies may, at times, have reason to actually consider early publication, followed by filing, within the one year grace period.

Best Mode

U.S. Patent Law requires that an inventor set forth the best mode of carrying out the invention contemplated by the inventor at the time the invention was filed [9]. In the context of the plastics industry, depending on what a given patent application is directed to, disclosure of best mode may include describing preferred processing parameters, reaction conditions, product designs or material formulations known to the inventor at the time of filing the patent application.

Prior to September 16, 2011, failure to disclose best mode could be raised in civil litigation as a basis to challenge the validity of patent claims. However, a determination of what was known to the inventor at the time of filing the patent had to be made, which led to a fair amount of discovery.

The AIA eliminates the ability to challenge best mode during patent validity or infringement proceedings. Thus, a failure to disclose best mode cannot be used as a basis to cancel, hold invalid or otherwise render unenforceable any claim of a patent. [10].

However, as the underlying requirement to disclose best mode has not changed, the U.S. Patent Office will continue to consider whether the best mode was provided during the examination process. The Patent Office will assume that the best mode has been disclosed in an application, unless evidence presented to the Patent Office points to the contrary [11]. Yet, if the Patent Office finds that best mode is not disclosed, the claims of an application will be rejected. Therefore, it is unclear what the practical effect of the AIA will be on the "best mode" requirement.

Further, some foreign jurisdictions also require best mode be disclosed in a patent and certain penalties may still apply in these jurisdictions for failing to disclose best mode.

Supplemental Examination

A new procedure, entitled "Supplement Examination," will become available September on 16, 2012. During supplemental examination, the patent owner (but not third parties) may request the Patent Office to consider, reconsider or correct information believed to be relevant to the patent [12]. The request may be based not only on patents and printed publications but on other issues as well [13]. In order for supplemental examination to be granted, the request must raise a substantial new question of patentability [14].

Supplemental examination may now be used to "cure" conduct relating to information that had not been considered, adequately considered, or incorrect in the original prosecution. Specifically, rules of practice before the Patent Office require that all information material to patentability known to individuals associated with the filing and prosecution be provided to the patent examiner [15]. Failure to comply with this duty may result in the patent later being deemed unenforceable, particularly if it is found that there was intent to deceive the Patent Office by withholding a reference [16]. Supplemental examination "cures" the taint of an alleged intent to deceive relating to information that was not considered during examination but later considered during supplemental examination. However, there are timing restrictions to supplemental examination.

For example, if an accused infringer alleges unenforceability of a patent in a civil action, before the patent owner requested supplemental examination, the patent owner may not use supplemental examination to eliminate the allegation of withholding the reference with an intent to deceive the Patent Office. In addition, the patent owner may not utilize supplemental examination to eliminate an accused infringer's charge of withholding a reference with an intent to deceive if the patent owner commenced suit before supplemental examination proceedings are concluded. [17].

This procedure may nonetheless be particularly useful in situations where references were unintentionally not disclosed to the Patent Office due to an omission of a party. Supplemental examination appears to allow for such references to be considered during a due diligence phase prior to any litigation proceedings, thus allowing the patent owner to minimize the issues that may develop during enforcement proceedings.

Post Grant Review

Post grant review is a new procedure introduced by the AIA, which allows a non-patent owner to file a petition to institute a review of a granted patent. The petition may request that the Patent Office cancel one or more claims of a patent on grounds including a lack of utility, lack of novelty, obviousness or a failure to enable the invention. This petition must be filed within nine months of the granting of a patent. [18]. This represents the first time the U.S. Patent Office has itself allowed members of the public to openly challenge patent grants on a variety of grounds. In some respects, it relates to opposition proceedings that have been in place before the European Patent Office.

If the information presented by the third party would demonstrate that it is more likely than not that at least one of the claims challenged in the petition is unpatentable, if unrebutted by the patent owner, a post grant review may be instituted [19]. The petition may also be granted if the petition raises a novel or unsettled legal question that is important to other patents or patent applications [20]. Once the petition has been granted, the third party requestor will have the burden of proving unpatentability by a preponderance of the evidence [21].

A third party is not limited to presenting only what is available in patents and printed publications. Additional evidence, such as evidence of prior sales, may be introduced in such a proceeding through affidavits or declarations. The patent owner may then file a preliminary response to the petition setting forth reasons why a post grant review should not be instituted. [22].

Unlike other reexamination proceedings that may be filed anonymously, the third party must be identified in a post grant review. [23]. Furthermore, if the third party already filed a lawsuit challenging the validity of the patent, a post grant review will be barred. If a third party filed a petition for post grant review and then files a lawsuit, the lawsuit will not be allowed to proceed. [24].

It should be noted that post grant review does have an important consideration. Should the patent claims be confirmed, the requester will be barred in litigation from utilizing the prior art identified in the post-grant review proceedings [25]. However, if the post grant review is terminated upon request by the third party and the patent owner, the above effects on later proceedings before the Patent Office and in lawsuits will not attach [26].

In addition, post grant review will allow for discovery limited to evidence directly related to factual assertions advanced by either party in the proceeding [27].

Inter-Partes Review

Under the AIA, inter-partes review replaces inter-partes reexamination as of September 16, 2012. Inter-partes reexamination was a proceeding that allowed a third party to question the patentability of the claims of a granted patent [28]. The Patent Office would review the claims to determine if they remain patentable in view of prior art that is either newly cited or previously cited but presented in a different way than applied during examination [29]. All parties, including the patentee and the third party requestor, participated in the proceedings [30]. In view of the cited art, the individual claims would be confirmed, amended or cancelled [31].

Inter-partes reexamination could only be filed in applications that were filed on or after November 29, 2000. Of the 278 inter-partes reexamination certificates issued in granted patents, all of the claims were confirmed in 13% of the certificates, all of the claims were cancelled in 44% of the certificates and changes to the claims were made in 43% of the certificates [32].

Similar to inter-partes reexamination, inter-partes review allows a person who is not the owner of a patent to file a petition to institute a review of a granted patent in view of other patents or printed publications [33]. Again, all parties, including the patentee and third party requestor, may participate in the proceedings [34]. However, inter-partes review may not be initiated until nine months after the grant of a patent or issuance of a reissue application [35]. And, unlike inter-partes reexamination, inter-partes review does not restrict the body of patents that may be reexamined through this procedure.

In order for a petition for interpartes review to be granted the third party must demonstrate that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition [36]. That is, based on the evidence provided at least one claim would be found to lack novelty or be obvious in view of the patents or printed publications.

If a claim is amended and not substantially identical to the originally granted claims, intervening rights may be available to an alleged infringer. That is, an alleged infringer may be excused from liability for actions occurring prior to the issues of an interpartes review certificate. An alleged infringer may be liable for actions covered by the amended or new claims as of the date of the issuance of the inter-partes review certificate. In addition, if the claims are not substantially amended, an alleged infringer may be liable for damages as of the grant date of the patent. [37].

In that situation, where the claims of a patent are confirmed over some prior art, and the patent owner sues the reexamination requester for infringement, the requester will not be permitted to again utilize the same prior art to challenge validity in a court proceeding [38]. However, if the interpartes review is terminated upon request by the third party and the patent owner, the above effects on later proceedings before the Patent Office and in lawsuits will not attach [39].

In addition, inter-partes review will allow for limited discovery, including depositions of witnesses, submitting affidavits or declarations and what is otherwise necessary in the interest of justice [40]. Limited discovery was not previously provided for in inter-partes reexamination.

Ex-Parte Reexamination

While ex-parte reexamination was not changed by the AIA, it is important to note that ex-parte reexamination still remains as a proceeding that may be utilized to review granted patents. Ex-parte reexamination is a process wherein the patent owner, a third party, or the Director of Patents of the Patent Office may request reexamination of a granted patent upon showing of a substantial new question of patentability. Like inter-partes review, only patents and printed publications may be raised. Once reexamination is granted review continues only between the Patent Office and the patentee. [41].

Of the 8,375 ex parte reexamination certificates issued in granted patents, 23% issued with all claims confirmed, 11% issued with all claims cancelled and 66% issued with claim changes [42]. When considered in light of data for inter-partes reexamination, the data appears to suggest that when a third party is involved in post grant proceedings, a higher number of claims are cancelled.

Table 1, below, provides a short summary of the procedures discussed above for challenging applications and granted patents under the AIA.

Conclusion

The above are just a few key provisions that have been altered by the AIA and it remains to be seen how the above changes in the United States Patent Law will be implemented by the U.S. Patent Office and interpreted by the courts. Nevertheless, the switch to a first-to-file system, and the introduction of post-grant proceedings, is likely to provoke more challenges to patentability at the U.S. Patent Office as opposed to validity challenges during civil litigation. The availability of supplemental examination may now also allow patent holders to review and strengthen patent claims, prior to a consideration of enforcement proceedings.

None of the material herein is offered nor should be construed as legal advice and is not intended to create attorney-client relationship. You should not act or rely upon information in these materials without seeking professional legal advice.

References

[1.] 35 U.S.C. [section] 102(g).

[2.] P.L. No. 112-29, [section] 3, 125 Stat. 284, 285-287 (2011).

[3.] 35 USC [section] 135.

[4.] United States Patent and Trademark Office, Process Production Report FY 2011: Board of Patent Appeals and Interferences.

[5.] P.L. No. 112-29, [section] 3, 125 Stat. 284, 289 (2011).

[6.] Practical Implications: The Impact of the America Invents Act, AIPLA (October 5, 2011).

[7.] P.L. No. 112-29, [section] 3, 125 Stat. 284, 285-286 (2011).

[8.] Id.

[9.] 35USC [section] 112, 1st paragraph.

[10.] P.L. No. 112-29, [section] 15, 125 Stat. 284, 328 (2011).

[11.] MPEP [section]2165.03.

[12.] P.L. No. 112-29, [section] 12, 125 Stat. 284, 325 (2011).

[13.] United States Patent and Trademark Office, America Invents Act, Implementation Information, Patent Examination, Supplemental Examination, <http://www.uspto.gov/aia_implementation/patents.jsp#heading-9> (October 18, 2011).

[14.] P.L. No. 112-29, [section] 12, 125 Stat. 284, 325-326 (2011).

[15.] 37 CFR [section] 1.56.

[16.] Therasense, Inc. v. Beckton, Dickinson and Co., et al., --Fed.--(Fed. Cir. 2011)(en banc).

[17.] P.L. No. 112-29, [section] 12, 125 Stat. 284, 325-326 (2011).

[18.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 306 (2011).

[19.] Id.

[20.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 307 (2011).

[21.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 309 (2011).

[22.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 306 (2011).

[23.] Id.

[24.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 307 (2011).

[25.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 308 (2011).

[26.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 310 (2011).

[27.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 308 (2011).

[28.] 35 U.S.C. [section] 311.

[29.] 35 U.S.C. [section] 313.

[30.] 35 U.S.C. [section] 314.

[31.] 35 U.S.C. [section] 316.

[32.] United States Patent and Trademark Office, Inter Partes Reexamination Filing Data, (June 30, 2011).

[33.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 299 (2011).

[34.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 302 (2011).

[35.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 299 (2011).

[36.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 300 (2011).

[37.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 303-304 (2011).

[38.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 300-301 (2011).

[39.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 303 (2011).

[40.] P.L. No. 112-29, [section] 6, 125 Stat. 284, 303 (2011).

[41.] 35 U.S.C. [section] 302.

[42.] United States Patent and Trademark Office, Ex Parte Reexamination Filing Data, (June 30, 2011)

Steven J. Grossman, Ph.D. and Beth A. Filip, Grossman Tucker Perreault & Pfleger, PLLC, Manchester, NH

Beth Filip, J.D., is an associate at Grossman, Tucker, Perreault & Pfleger, PLLC and graduated with a B.S. in Plastics Engineering from the University of Massachusetts, Lowell. Steven Grossman Ph.D., J.D., is a founding member of Grossman, Tucker, Perreault & Pfleger, PLLC and is a professor at the University of Massachusetts, Lowell, in the Department of Plastics Engineering.
Table 1. Summary of Various Procedures Available Before USPTO
for Challenging Applications/Patents Under  the AIA

Characteristics of           Derivation          Supplemental
Proceedings                 Proceedings           Examination

What is the effective   March 16, 2013         Sept. 16, 2012
date?

What patents/apps is    Applications/patents   Any issued
the proceeding          filed on or after      patent
applicable to?          March 16, 2013

When may the            One year from          Any time after
procedure be            publication/issue      issuance
instituted?             date of relevant
                        claim(s)

Who may request         Inventor or            Inventor or
the proceeding?         Applicant of a later   Applicant of
                        filed application      patent at issue

Are parties other       No                     No
than the
applicants/inventors
allowed to
participate?

May requestor           No                     No
remain anonymous?

Issue to be             Who invented the       Patentability in
reviewed?               claimed subject        view of patents,
                        matter                 printed
                                               publications

Is discovery or         Evidence--             Evidence--
evidence allowed?       Declarations           Declarations

What is the             Sufficient Evidence    Substantial new
threshold for                                  question of
instituting the                                patentability
proceeding?

Characteristics of         Post Grant          Inter-Partes
Proceedings                  Review               Review

What is the effective   Sept. 16, 2012      Sept. 16, 2012
date?

What patents/apps is    Any issued patent   Any issued patent
the proceeding
applicable to?

When may the            Within 9 months     After 9 months
procedure be            of issuance         from issuance
instituted?

Who may request         Third party         Third Party
the proceeding?

Are parties other       Yes                 Yes
than the
applicants/inventors
allowed to
participate?

May requestor           No                  No
remain anonymous?

Issue to be             Patentability in    Patentability in
reviewed?               view of patents,    view of patents or
                        printed             printed
                        publications, as    publications
                        well as other
                        grounds

Is discovery or         Discovery /         Discovery /
evidence allowed?       Evidence--          Evidence--
                        Declarations        Declarations

What is the             More likely than    Reasonable
threshold for           not that at least   likelihood
instituting the         one of the          petitioner will
proceeding?             challenged claims   prevail with
                        is unpatentable     respect to at least
                                            one challenged
                                            claim

Characteristics of         Ex-Party
Proceedings                 Review

What is the effective   Currently
date?                   Available

What patents/apps is    Any issued
the proceeding          patent
applicable to?

When may the            Any time
procedure be            after issuance
instituted?

Who may request         Third Party,
the proceeding?         Inventor, or
                        USPTO
                        Director

Are parties other       Only to
than the                initiate the
applicants/inventors    request for
allowed to              review
participate?

May requestor           Yes
remain anonymous?

Issue to be             Patentability
reviewed?               in view of
                        patents or
                        printed
                        publications

Is discovery or         Evidence--
evidence allowed?       Declarations

What is the             Substantial
threshold for           new question
instituting the         of
proceeding?             patentability
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Title Annotation:Leahy-Smith America Invents Act
Comment:The America Invents Act: six key changes in U.S.
Author:Grossman, Steven J.; Filip, Beth A.
Publication:Plastics Engineering
Geographic Code:1USA
Date:Apr 1, 2013
Words:3657
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