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The America Invents Act:. The Fundamentals Of The New U.S. Patent System And What It Means To The American Inventor. Gregory P. Sitrick Rowan P. Smith Steven J. Wietrzny. Overview. Word on the street? Jobs? Faster/better patents? Less litigation? Harmony? What is it really?

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the america invents act

The America Invents Act:

The Fundamentals Of The New U.S. Patent System And What It Means To The American Inventor

Gregory P. Sitrick

Rowan P. Smith

Steven J. Wietrzny

overview
Overview
  • Word on the street?
    • Jobs? Faster/better patents? Less litigation? Harmony?
  • What is it really?
    • Essence of the new patent system
    • Select provisions
  • Which way does it lean?
    • Perks & Pitfalls
  • What to do about it
    • Practice tips
  • When to do it?
    • Time tables
congress
Congress
  • “It is the sense of Congress that the patent system should promote industries to continue to develop new technologies that spur growth and create jobs across the country which includes protecting the rights of small businesses and inventors from predatory behavior that could result in the cutting off of innovation.”
congress5
Congress
  • “It is the sense of the Congress that converting the United States patent system … will improve the United States patent system and promote harmonization of the United States patent system with the patent systems commonly used in nearly all other countries throughout the world with whom the United States conducts trade and thereby promote greater international uniformity and certainty in the procedures used for securing the exclusive rights of inventors to their discoveries.”
the president
The President

“This much-needed reform will speed up the patent process so that innovators and entrepreneurs can turn a new invention into a business as quickly as possible… Here in America, our creativity has always set us apart, and in order to continue to grow our economy, we need to encourage that spirit wherever we find it.”

– President Obama, September 2011

big business
Big Business

“For six years, Congress has worked to shape a bill to modernize the U.S. patent system. Throughout this process, Microsoft has been a strong supporter of sensible reforms. Today, the Senate takes up HR 1249, the America Invents Act, a measure approved by the House in June. We urge the Senate to pass HR 1249 without amendment.”

– Horacio Gutierrez, Corporate Vice President &

Deputy General Counsel, Microsoft

banks
Banks

“We are pleased that the House legislation includes an important section addressing poor-quality business-method patents that are plaguing the financial services industry. With inclusion of this vital language, the undersigned trades support the America Invents Act, as introduced in the House.”

– Steve Bartlett, President and CEO,

The Financial Services Roundtable

university tech transfer
University Tech Transfer

“This, basically, is a big-business patent bill. It doesn’t benefit small business and individual inventors. And we're in an economy where you want small businesses to prosper and hire.” WARF will “do fine” under the new law, but smaller university patent offices may not.

– Carl Gulbrandsen, Managing Director,

Wisconsin Alumni Research Foundation

anti reform groups
Anti-Reform Groups

“The ‘first-to-file’ provision grants powers not enumerated by the U.S. Constitution. 

H.R. 1249 would overturn 220 years of settled practice by giving patents not to the actual inventors of discoveries but to the winners of the race to the patent office.”

The ‘transitional review’ provision violates the Fifth Amendment. 

Buried in Section 18 of the bill, the ‘transitional review’ or ‘bank bailout’ provision reduces the enforceability of patents related to the banking industry, which are constitutionally protected forms of private property. It does so without providing compensation to property owners, violating the Takings Clause of the Fifth Amendment.”

– saveourjobs.net

first to invent fti
First-To-Invent (FTI)

Hallmark: “swear behind” practice

A invents

A invents

A files

Patent to A

Patent to B

Time

B invents

B files

first to file ftf
First-To-File (FTF)

Hallmark: “absolute novelty”

A invents

A files

A files

Patent to A

Patent to B

Time

B invents

B files

aia system
AIA System

Conditions for Patentability/Novelty

A person shall be entitled to a patent unless:

  • 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
  • the claimed invention was described in a patent or published application filed by another before the effective filing date of the claimed invention
aia system15
AIA System

EXCEPT...

aia system16
AIA System

Exceptions

  • Grace period/“publish behind”– public disclosure by applicant made one year or less before the effective filing date of the claimed invention (subsequent non-applicant disclosure or filing also exempt)
  • Derivation – public disclosure by non-applicant who obtained information from applicant (limited to patent/published application if before grace period)
  • Team – public disclosure made by co-owner
aia system17
AIA System

A invents

A files

A files

Patent to A

Patent to B

Time

B invents

B files

aia system18
AIA System

Hallmark: “publish behind” practice

A publishes

A invents

A files

Patent to A and

  • B is barred
  • B may publish before A files

Time

1 year

B invents

B files

aia system19
AIA System

A invents

A publishes

A files

Patent to A

  • A may be 2nd inventor
  • A may be 2nd filer

Time

1 year

B invents

B files

aia system20
AIA System

First-(Inventor)-To-File-(With Grace)

OR

First-(Inventor)-To-(Publish Then)-File

aia system21
AIA System

Select Provisions

  • Review provisions
  • Derivation provisions
  • Litigation provisions
  • Miscellaneous provisions
validity review
Validity Review

Old Law

Published appl. Submissions

Ex partereexamination

Inter partesreexamination

Litigation in federal court

AIA

Pre-issue submissions

Post-issue submissions

Ex partereexamination

Post grant review

Supplemental examination

Business method review

Inter partes review

Litigation in federal court

derivation
Derivation

Derivation Action

  • The owner of a patent may have relief by civil action against the owner of another patent that claims the same invention and has an earlier effective filing date, if the invention claimed in such other patent was derived from the inventor of the patent
  • Must be filed within 1 year of issuance of the first patent containing a claim to the allegedly derived invention
faster examination
Faster Examination

Prioritized Examination

  • Fast track exam for applications filed on or after 11/26/2011
  • $4,800 fee
  • Limited to 10,000 applications per fiscal year and four (4) independent claims and 30 total claims
  • Need to prosecute promptly or may lose
  • Does not carry over to continuing applications
  • New regulations have been promulgated
miscellaneous
Miscellaneous

Tax Planning/Human Organisms

  • Cannot patent tax strategies or human organisms
  • Does not apply to method, apparatus, technology, computer program product or system for taxes or financial management

Assignee Applicant/Declarations

  • Application can be filed in assignee name (with declaration)
  • Declaration can be combined with assignment

Micro Entity

  • Establishes new class entitled to ¼ fee rate
  • Meet patent count and income ceiling
  • University employees/assignors
litigation defenses
Litigation - Defenses

Prior Commercial Use

Previously this issue arose in the context of internal business processes in which the confidential practices (e.g., trade secrets) were not prior art available as a defense against a later filed patent.

litigation defenses35
Litigation - Defenses

Prior Commercial Use

In 1998, the CAFC decided the State Street Bank case which held that methods of doing business can be patented if they produce a useful, concrete and tangible result.

litigation defenses36
Litigation - Defenses

Prior Commercial Use

In 1999, Congress reacted to quell the financial industry's fear of liability with §273:

“it shall be a defense to an action for infringement … [against] claims for a method in the patent being asserted … [if the defendant] commercially used the subject matter before the effective filing date of such patent”

litigation defenses38
Litigation - Defenses

Best Mode

  • Failure not a basis to invalidate
  • Still requirement and may be invoked in prosecution/PGR

Advice of Counsel

  • Failure to obtain or offer opinion cannot be used to provide willfulness/treble damages
litigation defenses39
Litigation – Defenses

Marking

  • Eliminates qui tam actions for false marking – only US government and “competitive injury” can get damages
  • Marking with expired patent is not a violation
  • (Virtual marking permitted – US Pat. www.xyz.com)

Joinder

  • Prohibits joining unrelated defendant in single action
  • Joinder permitted if infringement arises out of same transaction or occurrence or common questions of fact
potential effects
Potential Effects
  • Reduced predatory patent litigation (trolls)
  • Availability of various out-of-court pre-issue and post-issue review procedures
  • Easier to avoid punitive damages
  • Greater continuity of global patents
  • Expanded prior user rights
  • Virtual marking
other perks pitfalls
Other Perks & Pitfalls
  • Anti-derivation policy
  • Micro entity fee structure
  • Fast track examination
  • Early injunctions not stayed
  • Early filing and/or disclosure
  • Emphasis on monitoring
universities
Universities
  • Supports existing urge to publish
  • Prior user defense less likely
  • Micro entity fee structure
  • Fast track examination
on balance
On Balance
  • The AIA presents a mixed bag, but seems to favor large businesses. However, some benefits are shared by, or at least do not adversely disadvantage, small businesses. Some provisions directly help small business, universities and tech transfer offices.
practice tips
Practice Tips

1. Expedite internal disclosure

    • establish good record keeping procedures
    • streamline disclosure process and work with counsel to ensure expeditious filings
    • meet more frequently
    • Prioritizing technology and inventions

2. Expedite filing

  • consider simultaneous disclosure/filing
  • use provisionals (consider stacking)
  • develop application template

3. Early public disclosure

  • initiate grace period
  • preclude other filers
  • establish derivation claim
  • consider “quiet disclosure”
practice tips47
Practice Tips

4. Clean House

  • consider supplemental reexamination
  • (pre-litigation or as routine)
  • less need to correct markings
  • use virtual marking – maintain free web-site
  • file electronically
  • consider non-publication request

5. Competitive surveillance

  • keep regular watch of competitive holdings
  • docket key time periods from publication/issuance
  • consider various validity review procedures
practice tips48
Practice Tips

Pre-Issuance

within 6 months of application publication or first Office Action submit prior art patents/printed publications

Within 1 yearof application publication petition for derivation proceeding in Patent Office

Post-Issuance

Within 9 months of patent issuance petition for post grant review based on any ground of invalidity

After 9 monthsof patent issuance or conclusion of post grant review OR within1 year of service of complaint petition for inter partes review based on patent and printed publication art

Within 1 yearof patent issuance file derivation action in Federal Court

Any timeafter patent issuance submit prior art patents/printed publications/patentee statements in Court or Patent Office

contact information
Contact Information

Rowan P. Smith

One Renaissance Square

Two North Central Avenue

Phoenix, Arizona 85004

(602) 229-5733

rowan.smith@quarles.com

Gregory P. Sitrick

One Renaissance Square

Two North Central Avenue

Phoenix, Arizona 85004

(602) 229-5317

gregory.sitrick@quarles.com

Steven J. Wietrzny

411 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

(414) 277-5415

steven.wietrzny@quarles.com

the america invents act53

The America Invents Act:

The Fundamentals Of The New U.S. Patent System And What It Means To The American Inventor

Gregory P. Sitrick

Rowan P. Smith

Steven J. Wietrzny