PATENT REFORM ARRIVES:
WHAT YOU NEED TO KNOW TO
STAY AHEAD OF THE COMPETITION
Today President Obama signed into law the Leahy-Smith America Invents Act, H.R. 1249. The America Invents Act is the first major United States patent system overhaul in nearly sixty years, and affects nearly all aspects of patent acquisition and enforcement. The Act puts the United States in conformance with the vast majority of other countries, but will disadvantage any inventor who fails to understand the new landscape. The following summarizes the important provisions of the Act and explains what the changes mean for you.
- First Inventor-to-File System - the America Invents Act transitions the United States from a first-to-invent system to a first inventor-to-file system, which makes the timely filing of patent applications critical. Under the new system, delay in filing exposes an inventor to the risk of a competitor filing earlier, and being granted a patent, regardless of who was the first to invent.
- The first-to-file system takes effect in eighteen months. Until then the first-to-invent system remains in effect. Since proof of first invention requires diligence in reducing the invention to practice after it has been conceived, inventors cannot assume the right to obtain a patent will remain open indefinitely during the transitional period. Accordingly, inventors should review their intellectual property portfolios and decide which inventions to patent now.
- The first inventor-to-file system will require more frequent and diligent review of potentially patentable inventions and quick decisions on whether to proceed with patenting. The eighteen month transitional period provides an opportunity to establish necessary review and decision-making procedures.
- Mirick O'Connell attorneys are prepared to work with you to review your procedures and portfolios to help make these important determinations.
- Derivation Actions - the America Invents Act replaces first-to-invent interference proceedings with first-inventor-to-file Derivation Actions. Derivation Actions will be used to determine whether the inventor named in an earlier-filed application derived the claimed subject matter from an inventor in a later-filed application. In essence, they protect inventors from IP theft. Derivation Actions will provide some relief for inventors who lost the race to the patent office, and procedures will be developed within the year. We are actively monitoring these developments to represent our clients in proceedings immediately following the shift to the new system.
- Prior Art - the America Invents Act changes the scope and use of prior art in a number of substantial ways.
- Pre-issuance Submissions by Third Parties - under current law, third parties can contest issuance of a patent only by submitting prior art, without comment, within two months of the application's publication date. The America Invents Act dramatically changes this procedure, as third parties can now submit prior art either until the later of (1) six months after the date of publication of the application or (2) the date of first rejection. More importantly, third parties are required to provide a concise description of the relevance of the submitted document(s).
- Post-issuance Submissions - Anyone can now file prior art against an issued patent to aid with post grant oppositions. Between pre-issuance and post-issuance submissions of prior art, the patent office will have substantially more resources to determine issues involving validity and scope. We will be able to assist our clients with submitting prior art against competitor's applications where appropriate.
- Scope - the America Invents Act dramatically expands the scope of prior art. The Act provides that prior art now includes patents, printed publications, inventions in public use or on sale, or any inventions otherwise available to the public before the effective filing date. However, the vague language of the Act will undoubtedly lead to hotly-contested litigation in the upcoming years.
- Post-Grant Opposition Review - The America Invents Act creates a new post-grant opposition review system that significantly increases the opportunity to challenge the validity of granted patents. There are two new procedures available for challenging a patent. First, within nine months after a patent grant date, any third party can challenge a patent on any legal ground, using the post-grant review procedure. Second, after nine months, any third party can challenge a patent based on prior art patents and printed publications using the inter-partes review procedure.
- The post-grant opposition review and inter-partes review proceedings will provide a cost-effective and expedited alternative to civil litigation. While the patent office will develop the exact procedures for the two types of review, it is clear they will provide more tools to challenge the grant of a patent, including direct and cross examination testimony, expert witnesses, and other forms of discovery typically used during civil litigation.
- Through post-grant opposition procedures, we will be able to provide a substantial advantage to our clients by systematically monitoring competitor's filings, and initiating post-grant opposition review where appropriate.
- Automatic Stay of Litigation - the America Invents Act provides that civil actions will now be automatically stayed during the pendency of post-grant review or an inter-partes review. Under the prior system, a stay was a discretionary decision of the court, and could force a party to simultaneously litigate infringement in court and dispute validity with the patent office. Now, the resolution of patent disputes will be more predictable, but could also take longer to resolve.
- Increased Fees - the America Invents Act will dramatically change the fees associated with filing and maintaining a patent, with the fee-setting power now being vested in the patent office. While other provisions of the America Invents Act are to take effect in eighteen months, many of the fee changes take effect within days.
- Effective 10 days after enactment, a 15% surcharge will be added to all patent-related fees, including filing, examination, extension, and maintenance fees;
- Effective 10 days after enactment, patent applicants have the option of paying a $4,800 fee to have their application accorded special status. The Patent Office's goal is to reach a final disposition on prioritized applications within twelve months of the grant of prioritized status.
- Effective 60 days after enactment, a $400 surcharge for applications not filed electronically will be applied.
- Fees will be reduced by 50% for small entities, 75% for micro-entities, and the prioritization fees will be waived for patent applications for technology that is important to American competitiveness. Please call with any questions about the status of your company.
Mirick O'Connell's attorneys are actively monitoring the changes to the patent system, and are prepared to advise you on how to best prepare for success under the America Invents Act.