CLIENT ALERT: “America Invents Act”

The United States Senate passed, and President Barack Obama signed the America Invents Act September 16, 2011, at Thomas Jefferson High School for Science and Technology in Alexandria, Va. The Act is the first major overhaul of the United States Patent System in over 50 years and we believe that changes included in the Act may significantly impact your patent filing and enforcement strategy. Summarized below are several of the critical amendments that are included in the Act.

1) First to File – The Act has changed the basis for granting a patent from first to invent to first to file a patent application. The statute provides a limited one-year grace period for filing an application after public disclosure. However, the period of grace only extends to disclosure by the inventor or by someone who obtained the disclosed information from the inventor. This change eliminates interference proceedings and the practice of “€œswearing behind”€ a reference. The effective date for this change is 18 months after the date of enactment, i.e. March 16, 2013.

2) Post-Grant Proceedings -€“ The Act creates two different procedures for third party initiated post-patent grant reviews:

(i) The Post-Grant Review must occur within a nine (9) month window following the grant of the patent and allows the petitioner to challenge the patent on any invalidity grounds, including prior art, written description and enablement. If the petitioner has previously filed a civil action asserting patent invalidity, they are precluded from filing a Post-Grant Review petition.

(ii) The Inter Partes Review will replace the current inter partes reexamination procedure. Patents may be only challenged for novelty or obviousness reasons based on prior art patents and publications. Petitions for Inter Partes Review must be filed after the later of either:

a. Nine (9) months after the grant of the patent; OR
b. The date that the post-grant review is terminated (if applicable).

An Inter Partes Review is not allowed if the petitioner has previously filed a civil action asserting invalidity of the patent.

3) Prior Art Submissions -€“ The Act has changed how and when a third party may submit references. A concise description of the submitted art must be provided describing its relevance to the pending application. The third-party submission can be made as a matter of right within six months of publication of the application; it can be made more than six months from publication as long as neither a Notice of Allowance nor a first office action has been issued.

4) Relaxation of Requirements for Inventor Oath and Declarations -€“ The Act has instituted a new mechanism for submitting a “€œsubstitute statement”€ in lieu of an oath or declaration if the inventor is:

(i) Dead;
(ii) Incapacitated;
(iii) Cannot be found or reached after diligent effort; OR
(iv) Is under an obligation to assign but has refused to sign.

5) False Patent Markings -€“ The Act has changed the standing requirements for bringing an action based on false patent markings. In order to file a lawsuit, the plaintiff must show that they have suffered a competitive injury. The U.S. Government may also institute an action and recover statutory damages. The Act also allows for the institution of virtual marking by using the word “patent€” or “€œPat.”€ on a product and then referencing a publicly accessible website that provides additional information about the patent.

6) Other Important Provisions provided in the Act include:

(i) Removal of best mode as basis for invalidating a patent
(ii) Creation of Micro-Entity Status-75% reduction in fees
(iii) Prior-User Rights defense to infringement
(iv) Tax Strategy subject matter is unpatentable
(v) USPTO granted fee setting authority
(vi) Limitation on joinder of defendants in infringement actions
(vii) Ex Parte Reexamination Standard changed
(viii) Priority Examination of Applications – effective September 26, 2011, the USPTO will be authorized to proceed with its “Track I” program for fee-based prioritized examination, at a cost of $4,800 for large entities.
(ix) Advice of Counsel – Lack of advice cannot be used to prove willful infringement
(x) Limitation on Inequitable conduct claims
(xi) A 15% surcharge will be added to all patent-related fees, including patent maintenance fees. The surcharge goes into effect on September 26, 2011.

This brief overview highlights several key provisions of the Act that will impact your intellectual property rights in the future. Further information will be sent to you as the rules implementing the new law are developed. We expect these new rules to be published over the next few months.

We look forward to helping you navigate through these important changes to the United States Patent Law.