Fulbright & Jaworski LLP: Senate Passes Leahy-Smith America Invents Act, Patent Reform Heads to President

Fulbright & Jaworski LLP: Senate Passes Leahy-Smith America Invents Act, Patent Reform Heads to President

By John E. Schneider

On September 9, 2011, the Senate approved the Leahy-Smith America Invents Act ("the Act"), sending the bill to President Obama for signature. The Act represents the most significant change in U.S. Patent Law since the current statute was enacted in 1952. This Alert addresses two of the significant changes in U.S. Patent Law: (1) the adoption of a first-to-file system for awarding patents and (2) the creation of new procedures for challenging or amending a patent after it has been issued.

The Act also includes several provisions addressing hot-button issues in litigation, including amending the joinder standard for joining defendants in a patent infringement action and eliminating qui tam false marking actions entirely. Fulbright has prepared a detailed analysis of all key provisions of the Act. Click here to download Fulbright's White Paper.

A. First-to-File System

1. From First to Invent to First to File

Bringing the United States into alignment with the rest of the world, the Act abandons the current first-to-invent system in favor of a first-to-file system. The first-to-file system and the accompanying redefined categories of prior art will go into effect in February 2013. When these provisions go into effect, the U.S. will no longer award a patent to the first person to create an invention, but instead will award the patent to the first person to file an application for the invention. One exception to the rule is if the first filed application or patent was "derived" from the inventor of the later filed application.

2. Redefined Categories of Prior Art

The scope of prior art is changed by the Act to reflect the change to a first-to-file system. First, the Act eliminates the current one-year grace period that allows an inventor "swear behind" sales/offers for sale or public use of the invention less than one year before the filing date. Now, only disclosures made by the inventor or on his behalf will get the benefit of the one year grace period. Second, a patent or published application will be deemed prior art as of the filing date of the first application filed anywhere in the world to which the patent or application properly claims priority. Currently, a U.S. patent or application that claims foreign priority is only prior art as of its U.S. filing date or its PCT filing date in some circumstances. Third, the prior sale/offer for sale bar is no longer limited to sales in the United States, but instead includes sales/offers for sale anywhere in the world. Finally, the Act excludes certain commonly owned patents from being considered prior art.

These changes in U.S. patent law reinforce the need to file applications in an expeditious manner to establish an early priority date. While the first to file system does not go into effect until February 2013, patentees should start putting a system in place to ensure timely filing of applications.

B. Post Issuance Procedures

The Act creates new procedures for challenging or amending a patent after issuance. In addition to traditional reissue and Ex Parte Reexamination proceedings, the Act provides for three new post-issuance procedures: Post Grant Review, Inter Partes Review, and Supplemental Examination. The new review procedures will be available starting in September 2012.

1. Post Grant Review

Similar to a European Opposition Proceeding, Post Grant Reviews give a third party the opportunity to challenge the validity of a patent on any statutory grounds by filing a petition for Post Grant Review with the U.S. Patent and Trademark Office ("USPTO") within nine months of the patent's issuance. If the USPTO determines that the petition demonstrates that it is more likely than not that one or more claims are unpatentable or if the petition presents a novel or unsettled question of patent law, a Post Grant Review may be instituted. The review is then heard by a three-judge panel of the Patent Trial and Appeal Board ("PTAB") (formerly the Patent Board of Appeals and Interferences).

The Post Grant Review provides for full participation by both parties and requires that the USPTO reach a final decision on the petition within 12 to 18 months. The burden of proof is on the party seeking the Review, and the standard for proving unpatentability is a preponderance of the evidence. The Act requires that the requestor raise all issues of patentability known to the requestor in the proceeding or the requestor may be estopped from raising them in the future.

While Post Grant Reviews offer a quick and relatively inexpensive means for challenging a patent, the estoppel provision of the Act forces a challenger to elect between filing a Post Grant Review or taking his chance in District Court. In addition, because the window for requesting Post Grant Review is short and a party requesting Post Grant Review must raise all issues of patentability, parties contemplating using this procedure may wish to start monitoring patent applications of interest during their pendency in the Patent Office.

2. Inter Partes Review

Inter Partes Review replaces the current Inter Partes Reexamination procedure. Like Inter Partes Reexamination, Inter Partes Review is limited to patents and printed publications as prior art under Sections 102 and 103. The major differences between the two procedures is that the standard for granting review and the arbiter conducting the review. First, the standard for initiating review changes from the current standard of whether the cited art presents a substantial new question of patentability to whether the petition shows that there is a reasonable likelihood that the petitioner will prevail with respect to at least the claim of the challenged patent. Second, like Post Grant Reviews, Inter Parties Reviews will be heard by the new PTAB, not a patent examiner. By contrast, current Inter Partes Reexamination is conducted the same way as normal examination where a patent examiner is charged with determining the merits of the claims.

A petition for Inter Partes Review cannot be filed until nine months after a patent has issued or until the completion of any Post Grant Review. Otherwise, an Inter Partes Review can be filed at any time during the life of the patent.

As with Post Grant Review, a party requesting Inter Partes Review must raise all issues of patentability that can be raised in the proceeding and may be estopped from raising the issues in a later proceeding if the review goes to final judgment. The Act also requires that the Inter Partes Review proceeding be completed within 12 to 18 months.

3. Supplemental Examination

The Act also creates a new procedure called Supplemental Examination. Supplemental Examination gives a patent owner the opportunity to reopen examination of an issued patent to address issues that raise a substantially new question of patentability and address those issues at the USPTO. The proceeding is similar to current owner-requested reexamination, except that the review is not limited to consideration of patents or printed publication; any issue of patentability may be addressed during the procedure. The Act also makes it possible to cure inequitable conduct by, for example, bringing to the USPTO art that had been previously withheld. A patentee may only take advantage of this curing provision by filing for Supplemental Examination prior to making any efforts to enforce the patent.

Conclusion

The enactment of the Leahy-Smith America Invents Act brings significant changes to the way we secure and challenge a patent. All parties touched by the patent system should consider, with their counsel, any changes in procedure that should be implemented to account for the provisions of the Act.

Click Here to download Fulbright's White Paper on the key provisions of the bill.

This article was prepared by John E. Schneider (jschneider@fulbright.com or 713 651 5462) from Fulbright's Intellectual Property and Technology Practice Group.

Disclaimer

Fulbright & Jaworski L.L.P. has offices in:

Austin, Beijing, Dallas, Denver, Dubai, Hong Kong, Houston, London,
Los Angeles, Minneapolis, Munich, New York, Pittsburgh-Southpointe, Riyadh, San Antonio, St. Louis and Washington, D.C..

Copyright 2011 - Fulbright & Jaworski L.L.P., all rights reserved.

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Comments

anty wong
  • 09-19-2011

Great