The America Invents Act Patent Reform in 2011

1. The America Invents ActPatent Reform in 2011 Presented by Justin Leonard

2. Status of the Act • Senate's version passed 95-5 on March 8 • House's version passed 304-117 on June 23 • President pledged support for either version • Senate voted 93-5 to end debate on patent reform and bring the House’s version to a vote in the Senate

3. Oppose Verizon Adobe Apple Dell Generic Pharm. Assoc. Cisco Stance on the Act Support • Microsoft • Phrma • IBM • Medtronic • Motorola • GE • Exxon Mobile

4. Key Changes • First-to-file system • Derivation proceeding, instead of interference • Expansion of prior art available • Additional “Post-Grant Review” proceeding • Different “Inter Partes Review” proceeding • Expanded 3rd Party Pre-issuance submissions • New Supplemental Examination proceeding • New Virtual Marking & Revised False Marking

5. Other Changes • New Micro Entity Status • Elimination of Best Mode Defense • Allow assignee filing

6. First-to-File System • Sec. 102. • (a) A person shall be entitled to a patent unless • (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or • (2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.

7. First-to-File System • Defines prior art relative to the invention's effective filing date, rather than the date of the invention (conception + reduction to practice) • Priority thus goes to the first inventor to file, even if that inventor was not the first to invent

8. First-to-Invent Honors small inventor Richer Disclosures ↑ Commercial Testing First-to-File vs. First-to-Invent First-to-File • World Harmonization • ↓ Prosecution Costs • ↓ Litigation Costs • ↑ Risk of Idea Theft

9. First-to-File System • Eliminates costly interference process • No more questions re: conception date, diligence until reduction to practice, or abandonment • Decreases costs of prosecution as well as litigation • Introduces derivation proceedings • Proceeding determines whether one applicant derived the claimed invention from another applicant • Petition to institute proceeding at the PTO must: • be filed within 1 year of publication of disputed claim • be stated with particularity • be supported by substantial evidence

10. Expansion of Prior Art Available • Reduces the scope of the 1 year grace period so that it only applies to: • public “disclosures” • made by the inventor • made by someone who obtained the disclosed matter from the inventor • Patents or published applications • filed after such a public disclosure • NOT third-party disclosures made before the inventor’s own disclosure

11. Grace Period Example

12. Expansion of Prior Art Available • Removes geographic limitations for public sale and public use bars • Public sale or use anywhere in the world serves as a bar, not just sale or use in the U.S. • Permits secret prior art to be used as basis for obviousness, while removing applicant's ability to swear behind • Most other countries only permit secret prior art to be used as basis for anticipation, not obviousness

13. Post-Grant Review Proceedings New Proceedings • Post-grant Derivation (same as pre-grant) • Post Grant Review • Inter Partes Review Preserved Proceedings • Ex Parte Reexamination • Reissue

14. Post-Grant Review • Instituted by anyone to cancel issued claims • Based on most any invalidity grounds, including 101, 102, 103, 112, etc. • Must petition to institute w/i 9 months of issue, BUT can't do so if have already filed civil action • Must choose b/w Post-Grant Review & civil action • Petition granted if either: • Reasonable likelihood of success w/ respect to 1+ claims • Raises novel or unsettled legal question

15. Post-Grant Review • Proceeding permits litigation-like discovery • Patentee allowed 1 chance to amend, by canceling challenged claim or proposing substitute claim in place of challenged claim • Estops petitioner from maintaining other PTO proceedings, or from asserting civil litigation, based on grounds that could have raised • A civil action filed after Post-Grant review is automatically stayed

16. Inter Partes Review • Replaces and differs in important ways from the current Inter Partes Reexamination • Instituted by anyone to cancel issued claims • Based on limited invalidity grounds (102 & 103) • Can't file petition until after time window for post-grant review has closed • Can't file if have already filed civil action, or if 6 months have passed since served w/ complaint

17. Inter Partes Review • Petition granted if reasonable likelihood of success w/ respect to 1+ claims • Higher than current standard that there be a substantial new question of patentability • Regardless if raises novel or unsettled legal question • Otherwise similar to post-grant review • Litigation-like discovery • 1 chance to amend • Estops other PTO proceedings & civil actions • House's version automatically stays civil actions

18. Pre-Issuance Submission by Third Party • Revises procedures by which 3rd party can submit publications for consideration • Extends time period during which can submit to be either within 6 months of publication or before the 1st office action, whichever is later • Now requires, rather than prohibits, the 3rd party to provide concise statement of publication's relevance

19. Supplemental Examination • Allows patentee to propose supplemental examination of an issued patent in view of newly submitted information (e.g., publications) • Unlike ex parte re-exam, exposes claims to a full re-examination (including 101, 112) • But directly cures any non-fraudulent inequitable conduct that may have occurred with respect to the submitted information • Usefulness may be limited after Therasense, since ex parte re-exam could also cure

20. Marking • Public notice provided by “virtual” markings that direct the public to a freely-accessible website for patent info • Exempts virtually marked products that have expired as basis for false marking • Eliminate private suits for false marking, except if competitive injury

21. Micro Entity Status An applicant qualifies for 75% reduced fees if: • Otherwise qualifies as small entity • Is named in only a small # of U.S. Non-provisional apps (House = 4; Senate = 5) • Not including apps assigned due to employment • Meets max gross income requirements • Has not and is not obligated to assign to an entity not meeting the max gross income requirements • OR employed by & obligated to assign to institute of higher education (Senate requires public institute)

22. Key Effective Dates • First-to-File & prior art expansion → 18 months after passage of the Act • Post-grant proceedings → 1 year after passage

23. Other Changes • Expands prior user rights beyond just business methods • Would strengthen trade secret practice • Gives the PTO the ability to set its own fees, but burdens the PTO with Congressional oversight of excess funds • Prohibits “human organism” claims

24. Controversial Questions • Does the grace period’s “disclosure” include public use or sale? • The Act eliminates the 102(c) abandonment provision. What, if any, effect does that have? • For example, on commercial exploitation of an invention as a trade secret prior to patent filing?

25. What do you think? Will the Act… • provide harmonization benefits? • disadvantage small inventors? • disadvantage U.S. inventors? • decrease patent quality? • increase application backlog? • decrease scientific progress by effectively allowing best mode secrets? • decrease patent value?

26. Implications for You? • Encourage clients to file before effective dates? • When do you advise clients of which option(s)? • File quick application → preserve all rights at potentially ↑ cost and/or ↓ quality • Publicly disclose → forfeit foreign rights, but preserve U.S. Rights for 1 year, ↓ cost • Keep secret until file detailed application → risk loss of all rights to intervening filer, ↑ quality

27. Implications for You? • Advise clients to focus more on publication strategy than internal documentation? • Recommend public disclosure or provisional? • Warn clients of increased risk caused by secret prior art? • More likely to recommend trade secret over patent if House's version passes?

28. Implications for You? • Recommend re-exam or post-grant review as better alternative than civil action? • Recommend re-issue or re-exam for curing inequitable conduct, despite supplemental exam option?

29. Thank you ! Presented by Justin Leonard