In a two-part series on his blog IP Watchdog, attorney Gene Quinn offers a terrific primer on the America Invents Act (AIA). (Read the Act here.) The Act is dense, with language choices changing from section to section on some terms and remaining the same in others. “Every time you read [the Act] you notice something a little different,” Quinn observes, noting that patent attorneys should read the entire Act at least 10 times. That being said, here is Quinn’s high-level overview of key provisions:

First-to-file: The biggest change to U.S. patent laws, and certainly the most discussed, is the conversion from a first-to-invent system to first-to-file. However, “first-to-file” has certain international meanings that will not apply, Quinn writes. A traditional first-to-file system is one that demands absolute novelty in order to obtain a patent. Under the U.S. first-to-file system, the inventor will still have a personal grace period, which is not available to inventors outside the U.S. This personal grace period says that the inventor’s own disclosures, or the disclosures of others who have derived from the inventor, are not used as prior art as long as they occurred within 12 months of the filing date of a patent application relating to the invention. However, disclosures of third-parties who independently arrived at the invention will be used against the inventor. In other words, there is no grace period relative to third party, independently created disclosures — an enormous difference between the old and new laws. The first-to-file provisions go into effect on March 16, 2013.

False marking: Prior to enactment of the AIA, anyone could bring a legal action in court to seek damages when someone affixed a patent number on a product that either was not patented or had an expired patent. The person bringing the lawsuit could recover $500 in damages for each case of mismarking, regardless of whether damage occurred to anyone, including the party bringing the lawsuit. With passage of the AIA, only the U.S. government may sue for the civil penalty authorized by 35 USC 292(a). Nevertheless, a person who has suffered a competitive injury as a result of marking a product in violation of § 292 may file a civil action in district court for recovery of damages adequate to compensate for the injury. Marking of a product with a patent that covered that product but has expired is no longer a violation. The new marking provisions apply to cases that are pending on, or commenced on or after Sept. 16, 2011 — the date of the AIA’s enactment.

Joinder and consolidation: The AIA curtails patent trolls by making it impermissible to bring patent infringement litigation against dozens of defendants in a single infringement action. Under the AIA, accused infringers may be joined in one action or have their actions consolidated for trial only if: 1) a claim is made against parties jointly or severally, or a claim arises out of the same transaction, occurrence, or series of transactions or occurrences; and 2) questions of fact common to all defendants or counterclaim defendants will arise in the action. Thus, under the AIA patent owners will no longer be able to sue dozens, or hundreds, of defendants in the same case. The joinder and consolidation changes became effective on Sept. 16, 2011.

Best mode: The best mode requirement historically created a statutory bargained-for-exchange by which a patentee obtains the right to exclude others from practicing the claimed invention for a certain time period and the public receives knowledge of the preferred embodiments for practicing the claimed invention. The best mode requirement was a safeguard against the desire on the part of some people to obtain patent protection without making a full disclosure, as required by the statute. With the enactment of the AIA, the best mode requirement has largely been gutted. The failure to disclose the best mode is no longer a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable. This applies to all litigation proceedings commenced on or after Sept. 16, 2011.

Non-infringement opinions: After the enactment of the AIA, the failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may no longer be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent. The law picks up on the Federal Circuit’s decision in Seagate, where the Court said there was no affirmative obligation to obtain a non-infringement opinion. Several questions remain, however, Quinn adds. For example, will courts interpret 35 USC 298 to preclude consideration of the lack of an opinion of counsel in the determination of whether to enhance damages? Will courts interpret 35 USC 298 to preclude consideration of the lack of an opinion of counsel relative to sanctions motions and awarding of attorney’s fees when there is little or no due diligence prior to bringing an action?

Prior user rights: For about a decade, the United States has had a very limited prior user right defense applicable only to business method patents, Quinn writes. Section 5 of the AIA dramatically expands prior user rights in a section titled “Defense to infringement based on prior commercial use,” which pertains to all inventions except those at the time of invention owned or subject to an obligation of assignment either to an institution of higher education or a TTO whose primary purpose is to facilitate the commercialization of technologies developed by one or more higher education institutions. The prior use defense can be raised if 1) such person, acting in good faith, commercially used the subject matter in the United States and 2) such commercial use occurred at least one year before the earlier of either a) the effective filing date of the claimed invention or b) the date on which the claimed invention was disclosed to the public. Further, the defense is a personal defense that cannot be conveyed to others unless it is acquired through a bona fide transfer of the entire enterprise or line of business to which the defense relates. The defense will only apply to sites where the commercial use occurred before the later of the effective filing date of the claimed invention or the date of the assignment or transfer of such enterprise or line of business.

Post-grant review: A petitioner in a post-grant review may seek the cancellation of one or more claims of an issued patent. The petition for a post-grant review must be filed not later than nine months after the date of the grant of a patent or the issuance of a reissue patent.  However, a post-grant review may not be instituted if the petitioner filed a civil action challenging the validity of a claim of the patent before the petition for review is filed. A post-grant review can be initiated when the information presented in the petition demonstrates that it is more likely than not that at least one of the claims challenged in the petition is unpatentable or by demonstrating that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. Post-grant review also comes with some estoppel concerns and litigation issues. “The $64,000 question is whether it will be easier to initiate a post grant review or whether it will be easier to initiate an ex parte reexamination,” Quinn writes, with an ex parte reexamination requiring the presence of a substantial new question of patentability and post-grant review generally requiring a likelihood of success on the merits. “Whether there will be any discernible difference in how the Patent Office interprets the standards remains to be seen.” 

Preissuance submissions: Rule 99 gives anyone the right to submit prior art they know about, up to 10 references, within two months of the publication of an application.  A Rule 99 submission, however, must not include any explanation of the patents or publications, or any other information. Thanks to the AIA, the ability to submit relevant prior art is broader.  Effective Sept. 16, 2012, the law allows any third party to submit any patent, published patent application, or other printed publication that may be potentially relevant to the examination of the application. This submission can be made up until the earliest of 1) the date a notice of allowance is given or mailed or 2) the later of six months after first publication of the patent application or the date of the first rejection of any claim by the examiner during prosecution.

Sources: IP Watchdog and IP Watchdog

Posted October 19th, 2011 under Tech Transfer

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