KEY POINTS ABOUT THE NEW PATENT REFORM LAW

1. KEY POINTS ABOUT THE NEW PATENT REFORM LAW PROF. PAUL JANICKE UNIVERSITY OF HOUSTON LAW CENTER OCTOBER 2011

2. 1. WE ARE NOT GOING TO A “FIRST TO FILE” SYSTEM • THE SENATE FLOOR REMARKS AND THE HOUSE REPORT MAKE CLEAR THAT THE RULE WILL BE: • IN A CONTEST BETWEEN INDEPENDENT INVENTORS, THE VALID CLAIM WILL GO TO THE FIRST TO PUBLICLY DISCLOSE

3. FIRST-TO-FILE IS THE DEFAULT RULE • TWO ENTITIES VYING FOR SAME PATENT COVERAGE WILL LIKELY CONTINUE TO BE A FAIRLY RARE HAPPENING • CALLING THE STATUTE THIS WAY IS ODD • RULE: WHERE NO ONE HAS PUBLICLY DISCLOSED AND BOTH HAVE FILED CLAIMING ≈ SAME SUBJECT MATTER, THE FIRST TO FILE WINS

4. EXAMPLE • JANUARY A INVENTS • FEBRUARY B INVENTS • MARCH B PUBLICLY USES • APRIL A FILES • MAY B FILES • B WINS, EVEN THOUGH A WAS FIRST TO INVENT AND FIRST TO FILE • A IS BARRED BY THE PUBLIC USE • B IS SAVED BY HIS “GRACE PERIOD”

5. 2. MOST ONE-YEAR CLOCKS FOR TIME BARS WILL BE ABOLISHED • OFFERS FOR SALE AND PUBLIC USES WILL NOW BE WORLD-WIDE • AND THEY INSTANTLY BAR ANYONE WHO IS NOT ALREADY ON FILE SOMEWHERE (PRIORITY DATE) OR IN A GRACE PERIOD

6. SO-CALLED GRACE PERIOD ONLY FOR FIRST-INVENTOR-TO-PUBLISH • WHERE AN INVENTOR’S OWN WORK TRIGGERED THE BAR, DIRECTLY OR THROUGH AN INTERMEDIARY: • HE GETS A ONE-YEAR PERIOD IN WHICH TO FILE, IF NOTHING ELSE HAPPENS • A PARIS CONVENTION FILING WILL BE OK TO AVOID THE BAR >

7. BOTTOM LINE • THE SYSTEM SHOULD BE NAMED “INSTANT BAR SYSTEM, WITH NARROW GRACE PERIOD” RATHER THAN “FIRST TO . . . ” • THE ONLY WAY TO PROTECT AGAINST 3RD PARTY PUBLIC DISCLOSURES IS TO FILE OR PUBLICLY DISCLOSE BEFORE THEY HAPPEN

8. DANGER: TARDY APPLICATION DRAFTING • LAWYERS: MUST TAKE ACCOUNT OF POTENTIAL INSTANT BAR BY 3RD PARTY WHEN COMMISSIONED TO FILE AN APPLICATION • THE CLIENT CAN BE BARRED IF AN INDEPENDENT PARTY PUBLISHES TOMORROW!

9. CLIENTS SHOULD BE WARNED • LAWYERS SHOULD BE AS PROMPT AS FEASIBLE

10. 3. “INVENTION DATE” IS HERE TO STAY FOR QUITE SOME TIME • THE PHASE-IN OF “NEW” PRIOR ART PROVISIONS IS PAINFULLY SLOW • NEW APPLICATIONS FILED AFTER 3/16/13, WITH NO EARLIER PRIORITY CLAIM, ARE UNDER “NEW” PRIOR ART • BUT>

11. ALL NOW-EXISTING PATENTS • ALL APPLICATIONS NOW PENDING • AND PATENTS ISSUING THEREON • ALL APPLICATIONS FILED UP TO 3/16/13 • AND PATENTS ISSUING THEREON • ALL LATER APPLICATIONS, IF THEY CLAIM EARLIER PRIORITY • AND PATENTS ISSUING THEREON • ARE UNDER THE OLD NOVELTY LAW!>

12. RESULT: • WE SHOULD EXPECT TO SEE LITIGATION DEFENSE OF EARLIER INVENTORSHIP BEING ADJUDICATED UNTIL ABOUT 2025; MAYBE LONGER • WE SHOULD NOT SAY INTERFERENCES HAVE BEEN ABOLISHED, OR ARE EVEN OBSOLESCENT, UNTIL AT LEAST 2020 >

13. BEST MODE, HOWEVER, IS RETROACTIVELY PURGED FOR EXISTING PATENTS • ALL “PROCEEDINGS” COMMENCED AFTER 9/16/11 HAVE NO BEST MODE DEFENSE

14. 4. BEST MODE CAN NOW BE CONCEALED? • EVEN DELIBERATELY • § 15 OF THE BILL: • “. . . EXCEPT THAT THE FAILURE TO DISCLOSE THE BEST MODE SHALL NOT BE A BASIS ON WHICH ANY CLAIM OF A PATENT MAY BE . . . HELD INVALID OR OTHERWISE UNENFORCEABLE” >

15. NO LOSS OF PRIORITY EITHER • AMENDED 119, 120 NOW HAVE SPECIFIC EXCEPTION FOR BEST MODE OMISSION • SEEMS TO BE NO PENALTY FOR HIDING IT • A BOON TO FOREIGN ORIGINATORS >

16. MYSTERY: WHY DID CONGRESS KEEP BEST MODE IN § 112? • DOES IT HAVE SOME LINGERING EFFECT? • PTO HAS INDICATED AN INTENTION TO CONTINUE TO ENFORCE IT (SOMEHOW)

17. 5. DERIVED INFORMATION IS NOT PRIOR ART • INVENTOR’S STATEMENT NEW 35 U.S.C. § 115(b) MUST ASSERT BELIEF OF ORIGINALITY • BUT: A LITTLE CHANGE MAY GO A LONG WAY • SLIGHT VARIATION FROM THE DERIVED INFO WOULD SEEM TO BE OK • DERIVED INFO IS NOT PRIOR ART >

18. “PRIOR ART” WAS NEVER DEFINED IN THE 1952 ACT • IT APPEARED ONLY IN § 103 • NOW, IT APPEARS IN THE HEADING OF NEW § 102(a): “NOVELTY; PRIOR ART” • SO, PARTIAL DERIVATION SHOULD HAVE NO EFFECT ON OBVIOUSNESS

19. CONGRESSIONAL APPROACH TO DERIVED INFO: • NEW 35 U.S.C. § 291: “DERIVED PATENTS” • APPLIES ONLY WHERE THE ORIGINATOR SEEKS A PATENT AT SOME POINT • IF ORIGINATOR DOESN’T CARE TO FILE, THE MAINLY DERIVED CLAIMS APPEAR TO BE VALID

20. 6. PENITENCE“SUPPLEMENTAL EXAMINATION,” § 10 OF H.R. 1249, NEW 35 U.S.C. § 257(c) • INEQUITABLE CONDUCT CAN NOW BE CURED BY A POST-GRANT CLEANSING PROCEDURE • ANY WITHHELD INFORMATION CAN BE BROUGHT FORWARD TO PTO • IF CLAIMS ARE RE-ALLOWED, THIS INFO IS BLOCKED IN COURT

21. CONDITIONS FOR CLEANSING • CANNOT COMMENCE OR CONTINUE SUPPLEMENTAL EXAM IF PATENTEE HAS BROUGHT A PENDING INFRINGEMENT ACTION • FILING OF SUIT TERMINATES THE SUPPLEMENTAL PROCEEDING • CANNOT COMMENCE SUPPLEMENTAL EXAM IF A D.J. SUIT IS PENDING AND THE CHALLENGER HAS PLEADED INEQ. CONDUCT “WITH PARTICULARITY”

22. 7. DECEPTIVE INTENT DISAPPEARS • “WITHOUT DECEPTIVE INTENTION” HAS BEEN DELETED FROM THE STATUTE (ALL 7 OCCURRENCES) • CHANGE OF INVENTORSHIP (§§ 116, 256) • ERROR IN REISSUE (§ 251) • FILING A DISCLAIMER (§ 253) • SUING ON A PATENT CONTAINING AN INVALID CLAIM (§ 288) • FOREIGN FILING WITHOUT A LICENSE (§§ 184, 185) >

23. WHY? • PROBABLY: • TOO MANY MENTAL STATES FOR A MODERN COMMERCIAL STATUTE • NEED TO STREAMLINE PATENT LITIGATION • COULD ALSO BE: HARMONIZATION ATTEMPT

24. 8. PUBLIC SUBMISSION OF PRIOR ART AND OTHER INFO • WE HAVE LONG HAD 35 USC § 301: • ANY PERSON, AT ANY TIME, CAN SEND IN PRIOR PATENTS OR PUBLICATIONS FOR CONSIDERATION RE. SOMEONE ELSE’S ISSUED PATENT • IF EXPLANATION IS GIVEN, WILL BE PLACED IN THE FILE • AMENDED § 301 ADDS A WRINKLE THAT COULD BE IMPORTANT >

25. A PERSON CAN NOW SUBMIT CLAIM-SCOPE POSITION STATEMENTS PREVIOUSLY MADE BY PATENTEE • THESE CAN BE USED FOR PURPOSES OF CONSTRUING A CLAIM IN • AN INTER PARTES REVIEW [LATE TYPE] • A POST-GRANT REVIEW [EARLY TYPE] • A REEXAM • CAVEAT PATENTEE: BROAD CLAIM- SCOPE ASSERTIONS CAN BITE!

26. AND WILL NOW BE ALLOWED TO ATTACK PENDING APPLICATIONS AS WELLH.R. 1249 §8, ADDING 35 U.S.C. §122(e) • SUBMISSIONS OF PRIOR PATENTS AND PUBLICATIONS • SOME TIME CONSTRAINTS: • BEFORE NOTICE OF ALLOWANCE • OTHER LIMITS BASED ON APPL. PUBLICATION DATE OR CLAIM REJECTION >

27. THE STATUTE SAYS THESE SUBMISSIONS ARE “FOR CONSIDERATION AND INCLUSION IN THE OFFICIAL RECORD” • EXPLANATIONS ARE REQUIRED • THEORETICALLY, THESE ARE NOT OPPOSITION PROCEEDINGS • PRE-GRANT OPPOSITIONS ARE STILL PROHIBITED BY 35 U.S.C. §122(c)

28. 9. NEW DANGER: UNSUPPORTED CLAIMS • NEW § 102 (STRICT) vs. OLD § 102 (EASIER) • IN A CHAIN OF APPLICATIONS THAT STRADDLES 3/16/13, INSERTION OF ANY CLAIM THAT IS NOT ENTITLED TO PRIORITY: • MAY BE UNPATENTABLE UNDER § 112, OF COURSE • ALSO PUTS ALL CLAIMS UNDER THE NEW, MORE STRINGENT LAW

29. 10. SUBMARINE PRIOR ART • WE WORRIED ABOUT SUBMARINE PATENTS • STILL A PROBLEM, ALTHOUGH LESS WITH 20-YEAR EXPIRATION

30. NOW WE HAVE SECRET RETROACTIVE PRIOR ART, EXTENDED: • PUBLISHED APPLICATION OR PATENT OF ANOTHER IS RETROACTIVE PRIOR ART • AND IT IS EFFECTIVE NOW GOING TO BE AS OF ITS FOREIGN PRIORITY DATE (MORE ON THIS LATER) • YOU CAN’T FIND IT IN A SEARCH, UNTIL RELATIVELY LATE

31. THINGS IN THE REFORM LEGISLATION THAT HAVE BEEN TALKED ABOUT IN THE PRESS

32. ASSIGNEE FILING (FINALLY) • BUT INVENTOR’S “STATEMENT” STILL NEEDED • RISKY TO ASSUME THERE IS AN OBLIGATION TO ASSIGN • HARDLY WORTH IT

33. PRIOR USER RIGHTS • ARE NOW EXPANDED, FROM BUSINESS METHODS TO ALL KINDS OF PATENTS • MIGHT BE NEEDED FOR SECRET METHODS IN FACTORIES • CURRENTLY THESE COULD BE ENJOINED BY A LATER PATENTEE

34. POST-GRANT REVIEW • MUST FILE WITHIN 9 MONTHS OF ISSUE • ANY GROUND OF INVALIDITY, E.G.: • INDEFINITENESS • INELIGIBLE SUBJECT MATTER • ENABLEMENT • WRITTEN DESCRIPTION >

35. 3-JUDGE DECISION • DISCOVERY MIGHT BE ALLOWED • PROTECTIVE ORDERS MIGHT BE FOUGHT OVER • PRIVILEGE ISSUES WILL ARISE • 18-MONTH TIME FUSE • BROAD PRECLUSIVE EFFECT – ANY GROUND THAT WAS “RAISED OR REASONABLY COULD HAVE BEEN RAISED” >

36. COULD BE VERY EXPENSIVE • SMALL AND MIDSIZE PATENTEES WILL BE HARD-PRESSED • MAY HAVE TO ISSUE CHEAP LICENSE TO SETTLE

37. INTER PARTES REVIEW • CAN BE FILED ONLY AFTER 9 MONTHS FROM GRANT • GROUNDS: PATENTS AND PRINTED PUBLICATIONS ONLY • AGAIN, A 3-JUDGE DECISION • BROAD PRECLUSIVE EFFECT RE. ITEMS THAT WERE OR COULD HAVE BEEN RAISED (PATENTS AND PRINTED PUBLICATIONS)

38. COSTS FOR EITHER FORM OF POST-GRANT PROCEEDING • WILL DEPEND HEAVILY ON DIRECTOR KAPPOS’S REGULATIONS • THESE ARE DUE BY SEPTEMBER 2012 • THE PROCEEDINGS BEGIN THEN

39. A FEW ADMINISTRATIVE PROBLEMS • CURRENTLY PTO HAS 102 ADMINISTRATIVE PATENT JUDGES • BACKLOG: 24,000 APPEALS [ABOUT 240 PER JUDGE] • ADDING POST-GRANT REVIEWS WILL BE A BURDEN • LOOKING FOR 100 MORE JUDGES PROBABLE BUDGET: MINUS 10% >

40. DON’T BE FOOLED BY THE “FUNDS CAN BE USED ONLY FOR” LANGUAGE • PRESENT STATUTE HAS THIS AS WELL [35 U.S.C. § 42] • THE WAY IT WORKS: • FREEZE PTO APPROPRIATIONS • SPEND $$ ELSEWHERE • TREASURY’S DEFICIT IS UNCHANGED

41. QUI TAM ACTIONS FOR MISMARKING ABOLISHED“QUI TAM PRO DOMINO REGE . . .” • NEW LAW: ONLY U.S. CAN SUE IN GENERAL • A DAMAGED PRIVATE ENTITY CAN SUE FOR THE AMOUNT OF HARM CAUSED • HIGHLY UNLIKELY • AND NO ONE CAN SUE FOR MISMARKING WITH AN EXPIRED PATENT NUMBER

42. TAX STRATEGY PATENTS ABOLISHED • “DEEMED TO BE WITHIN THE PRIOR ART” [BILL § 14] • MYSTERY: WHY NOT AMEND § 101? • REJECTIONS WILL NOW BE UNDER §102??

43. “HUMAN ORGANISMS” ARE NONSTATUTORY • BUT WHAT IS EMBRACED IN THAT TERM? • CELL LINES? • STEM CELLS? • TISSUE SAMPLES? • LEGISLATIVE HISTORY REFERS TO REP. WELDON’S AMENDMENT • AIMED AT EMBRYOS

44. TWO MINDS NEEDED! • FOR THE NEXT 15 YEARS OR SO, WE WILL BE LITIGATING PATENTS UNDER THE OLD NOVELTY RULES • ALL FILINGS UP TO MARCH 2013, AND THE PATENTS ISSUING ON THEM • AND PROSECUTING UNDER THE NEW ONES >

45. FILING ANY CLAIM AFTER 3/16/13 THAT LACKS AN EARLIER PRIORITY DATE • PUTS ALL THE CLAIMS UNDER AT LEAST THE NEW LAW • IF SOME CLAIMS ARE ENTITLED TO PRE-3/16/13 DATE, A HYBRID TYPE OF PRIOR ART APPLIES TO ALL THE CLAIMS: NEW LAW + OLD 102(g)

46. SPECIAL TREATMENT FOR SOME BUSINESS METHODS • SPECIAL PROCEDURE FOR CHALLENGING ALREADY-ISSUED PATENTS AND FUTURE PATENTS • APPLICABLE ONLY TO FINANCIAL-SERVICE METHODS >

47. SPECIAL KINDS OF PRIOR ART ARE RETAINED • RETROACTIVITY IS PROBLEMATIC • HOW TO EXAMINE APPLICATIONS? • THE STATUTE REFERS ONLY TO POST-GRANT REVIEWS OF THESE PATENTS!

48. AU REVOIR TO HILMER • PATENTS AND PUBLISHED APPLICATIONS NOW EFFECTIVE AS PRIOR ART AS OF THEIR FOREIGN FILING DATES • ON THE PLUS SIDE: FOR THAT APPLICANT, FOREIGN FILING PREVENTS ALL BARS [CF. OLD § 119]

49. ADVISING CLIENTS • FILE EARLY, AS NOW • INCLUDE THE BEST MODE, UNTIL THE SITUATION CLARIFIES • CONSIDER INVITING PREISSUANCE PRIOR ART SUBMISSIONS BY YOUR COMPETITORS

50. BEFORE SUING FOR INFRINGEMENT: • SCOUR THE FILES, U.S. AND FOREIGN, AND CORPORATE RECORDS FOR OMITTED PRIOR ART • INTERVIEW INVENTORS RE. POSSIBLE UNDISCLOSED PRIOR ART • SCOUR THE FILE HISTORY FOR POSSIBLE MISSTATEMENTS • USE SUPPLEMENTAL EXAMINATION IF NEEDED