AIA Priority and Novelty

John DuffyRob Merges

September 2012

AIA: Major Substantive Changes

1.The First-Inventor-to-File System

a. Contrasted with the 1952 Act “First to Invent” System

Conception: 1/1/1980

Reduction to practice:

6/1/1980

1952 Act “Stages of Invention”

Filed: 9/1/1980

Unpacking the “invention date”

Conception: 1/1/1980

Reduction to practice:

6/1/1980

1952 Act “Stages of Invention”

Filed: 9/1/1980

Prior Art Reference, e.g., Jones Article

Conception: 1/1/2014

Reduction to practice:

6/1/2014

AIA“First Inventor to File”

Filed: 9/1/2014

Prior Art Reference, e.g., Jones Article

X X

Why Not Just “First to File”?

• Because a First Inventor ALSO has a “grace period” under the AIA

• So a “First Inventor” – meaning: someone who can SHOW that they invented earlier – MAY be able to preserve priority

Public Disclosure 1/1/2014

AIA Inventor’s Prior Public Disclosure

Filed: 9/1/2014

Prior Art Reference, e.g., Jones Article

Priority of invention• First applicant to file now wins, usually.

• Exceptions are (i) where second filer was first to publicly disclose the invention within the 1-year pre-filing grace period; or (ii) where first actual filer derived invention from another.

• Second exception determined by a “derivation proceeding” – the heir to interferences under the old law.

Grace Period

• The new law does permit a limited grace period that exempts from the prior art both (i) the inventor’s own “disclosures”; and (ii) other parties’ “disclosures” that occur after the inventor’s disclosure.

• Grace period gives 1 year from date of activity to allow time to file.

• But the scope of the grace period is unclear based on the wording of the Act.

First-to-File System: Overview / Results• First filer wins the patent, except where: – (i) the second filer was first to “publicly

disclose” the invention (most important exception);

– (ii) the first filer obtained the invention, directly or indirectly, from the second filer (to be determined in “derivation proceedings”—the heir to old interferences); or

– (iii) the first filer abandons the application prior to publication or issuance.

First-to-File System: Overview / Results• For convenience, we will name the three

exceptions to the first-to-file rule as: – (i) the “public disclosure” exception.

– (ii) the “derivation” exception.

– (iii) the “application abandonment.”

• Exception (i) is the most important, and because of it, the system could be called “first-to-file-or-first-to-publicly-disclose.”

First-to-File System: Doctrines• The first-to-file system’s basic rule and

exceptions flow from two familiar legal doctrines that the statute defines in new ways:– The definition of prior art in new 102(a): Now

defined to be based mainly on time of filing + now also without any geographic restrictions.

– The defined exceptions or grace period in new 102(b).

First-to-File System: Doctrines• We will look first at

–The prior art under new 102(a):

and then second at

–The exceptions/grace period in new 102(b).

First-to-File System: Prior Art• § 102(a) NOVELTY; PRIOR ART.—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 [to another] … or in [another’s] application for patent published … [that] was effectively filed before the effective filing date of the claimed invention.

• Five categories of prior art in 102(a)(1) and a sixth category in 102(a)(2).

First-to-File System: Prior Art• Question: What statutory language establishes the

first-to-file rule?

• Answer: Section 102(a)(2).

• Note that (a)(2) provides the fundamental rule that, between first filer A and second filer B, B cannot get a patent because A’s earlier effective filing date makes the application prior art to B.

• Also, (a)(2) is also the reason for exception (iii)—the “abandonment” exception—to the first-to-file rule. If first filer A abandons his application prior to publication, then B could still get a patent.

First-to-File System: Prior Art• Now let’s examine the 5 categories of prior art

in section 102(a)(1): – Patents

– Printed publications

– Public uses

–On sale material

–Otherwise available to the public

• Questions: What’s new? What’s old?

• Answers: Next slides.

First-to-File System: Prior Art• What’s new in these five categories of prior art?

• Answer:

• Timing (of course) – art is now “prior” if it is before the effective filing date, not the invention date (consistent w/ first-to-file philosophy).

• End of Geographic Restrictions – all categories are global, including public use and on sale.

• Addition of “otherwise available to the public”– similar to old “known … by others”.

First-to-File System: Prior Art• What’s old in these five categories of prior art?

• Answer:

• Much is old.

• E.g., old “printed publication” cases still apply, though the addition of “otherwise available to the public” category might make some cases easier.

First-to-File: Public Use• What’s old?

• Importantly, “public use” is still a category, and the interpretation set forth in Metallizing Engineering and W.L. Gore remains good law. – A secret, noninforming use is a “public” use for

evaluating any patent applications by the user… but is not for evaluating any applications by. As stated in our casebook (p. 544), a secret use is a “public use for one but not others.”

(continued on next slide)

First-to-File: Metallizing Engin’g• Some have asserted that the statute overrules

Metallizing Engineering so that the inventor’s own secret commercial exploitation (possibly for years!) will not bar that inventor from later seeking a patent. – That would reverse centuries of U.S. patent law,

dating back to the S.Ct. decision in Pennock v. Dialogue, 27 U.S. 1 (1829).

• We are confident that the new statute did NOT make such a dramatic shift in U.S. patent policy.

(continued on next slide)

First-to-File: Metallizing Engin’g• Four reasons for our view: • (1) It is a standard canon of statutory construction that

reenactment of statutory language with a known legal meaning continues the known meaning.

• (2) While one sentence in a Senate colloquy does support the opposite view, the entirety of that colloquy was devoted to discussing the grace period. Nothing said there suggested that Congress wanted to undo a fundamental principle of patent law. (cont’d on next slide)

– uniformwould change If secret, noninforming uses are “public uses” for all applicants, then trade secret use would bar future patents by anyone and the prior user rights afforded in AIA would be unnecessary and inexplicable.

First-to-File: Metallizing Engin’g• Four reasons for our view (cont’d):

• (3) Another accepted canon of statutory construction is that Congress does not “hide elephants in mouseholes.” Overturning two centuries of consistent law would be a big elephant to hide in a colloquy.

• (4) Remarks in legislative history are not the statutory text. Indeed, remarks are not always reliable because the speakers could be focusing on a different issue (as is true here).

First-to-File: Exceptions/Grace Period• The exceptions / grace period are set forth in

new 102(b).

• New 102(b) has a simple structure: – Paragraph (b) (1) provides all the exceptions to

102(a)(1) categories of prior art (prior art based on printed publications, public uses, etc).

– Paragraph (b) (2) provides all the exceptions to 102(a)(2) (e.g., a first filed U.S. patent application).

First-to-File: Exceptions/Grace PeriodPrior art in 102(a)

102 (a) (1)Printed publications, public uses, etc.

102 (a) (2)1st filed U.S. patent application by another

Exceptions in 102(b)(limited to 1 year only!)

102 (b) (1)(A) Any “disclosure” coming from the applicant (“directly or indirectly”)(B) Disclosures by others made after a “public” disclosure by the applicant.

102 (b) (2)(A) 1st filer derived invention from 2nd filer.

(B) 1st filer filed after “public” disclosure by applicant/2nd filer.

(C) Common assignee

First-to-File: Exceptions/Grace Period• As shown by the chart, the subparagraphs (A)

and (B) are similar: • The (A) subparagraphs each allow exclusion of

information that came directly or indirectly from the applicant, including even an earlier filed application that was derived from the applicant “A” Grace Period Events.

• The (B) subparagraphs allow exclusion of independently discovered material if the applicant was first to “publicly disclose” “B” Grace Period Events.

Hypos on “A” Grace Period Events• Anne Able files an application on June 1 of Year 1. • In May of Year 1, Anne had published her own article

disclosing the invention removed from prior art under (b)(1)(A).

• In April of Year 1, Dick Dastardly stole Anne’s notes and placed the invention on sale removed from prior art under (b)(1)(A).

• Also in April of Year 1, Dick Dastardly had filed a U.S. patent application using Anne’s notes removed from prior art under (b)(2)(A).

• In each case, the art gets removed by subparagraph (A) in either (b)(1) or (2) because the disclosure came from / was derived from Anne’s own work.

Hypos on “B” Grace Period Events• Bob Baker publicly discloses his invention in an article on

January 1 of Year 1 and eventually files an application on December 31 of that year.

• On February 1 of Year 1, Irene Independent publishes her own article based on her own research on the same subject removed from prior art under (b)(1)(B).

• On March 1 of Year 1 Irene files a patent application based on her own research application is removed from the prior art under (b)(2)(B). Note: First filer (Irene) loses patent to second filer (Bob).

• In both cases, Irene’s independent work gets excluded from the prior art because Bob made an earlier “public” disclosure.

“B” Grace Period Events• “B” grace period events are interesting for several

reasons: – The situations show the added value of making a “public”

disclosure. Like the adage “publish or perish,” this is publish or get weaker grace period protection.

– Late filing applicants, while they can no longer “swear behind” prior art , can attempt to prove that they “published behind” the prior art .

– “Public” disclosures can also be seen as a major limit on the first to file system. 2nd-to-file applicant with an early public disclosure can beat the 1st-to-file.

“B” Grace Period Events• Our Prediction: “B” category grace period events will

give rise to significant complexity and litigation. – Where, as may be common, the disclosure in an applicant’s

early publication is not identical to the disclosure in a later piece of prior art, the PTO and courts will need to decide what portion of the prior art gets excluded because it had previously been disclosed in the applicant’s early publication.

– Still the system should be easier to administer than interferences because there will be much more certainty about the relevant dates of the events.

Misperception about Grace Period• Some have argued that the new statute’s grace period

offers weak protections to inventors because certain 102(a) prior art events (e.g., the inventor’s own secret commercial uses) cannot qualify for the grace period because the event is not a “disclosure” within the meaning of new 102(b).

• That view is incorrect.

• A careful reading of the statute shows that the word “disclosure” in new section 102(b)(1)(A) should be interpreted broadly to encompass any activity that would generate prior art under 102(a)(1). (cont’d)

Misperception about Grace Period• Our view is based on the text, structure and legislative

history of the statute: • (1) Statutory Structure: Section 102(b)(1) specifically

distinguishes between the inventor’s activities that constitute merely a “disclosure” (in (b)(1)(A)) and activities that “publicly disclose” (in (b)(1)(B)). If the concept of “disclos[ing]” were to be defined to mean publicly disclosing, then the word “publicly” in (b)(1)(B) would be rendered “mere surplusage.” Also, sec. 102(b)(2) refers to “disclosures” appearing in patent applications, but filed patent applications do not publicly disclose material (not until publication, 18 months after filing). (cont’d)

Misperception about Grace Period• (2) Statutory text: Some definitions of “disclose” refer

to something less than widespread dissemination; e.g., Oxford Eng. Dict, def. 4 (“open to one’s own knowledge”).

• (3) Legislative History: While the legislative history contains some loose language, there are unequivocal assurances that, within the 1-year grace period, an inventors’ own activities should never create a barrier for them obtaining a patent: “[Grace period] will apply to all actions by the patent owner during the year prior to filing that would otherwise create § 102(a) prior art.” House Cmte Rep. 112-98 at 43.

(cont’d)

Correct View of Grace Period: Two Tiers• The grace period in 102(b) is best interpreted as

provided two tiers of protection. • Very strong protection is provided under the “A”

subparagraphs in 102(b)(1) and (2) so that, during the 1-year grace period, none of the inventor’s own work, publications or commercial activities can be the source of prior art to reject the inventor’s application. – The key concept of “disclosure” should be interpreted

to mean disclosure into the prior art.• Protection is also provided against others’ disclosures

under the “B” subparagraphs of 102(b)(1) and (2) but only if the inventor has “publicly disclosed.”

Five Final Hypos on Novelty / Grace Period

Hypo 1 (simple novelty): 1. Able files an application on June 1 of Year 1,

but …2. On May 1 of Year 1, Baker had published an

article in Science magazine disclosing the material later claimed by Able.

Result: Able’s patent application is invalid for lack of novelty under 102(a)(1), even if Able had independently invented and even if Able had invented long before Baker’s article.

Five Final Hypos on Novelty / Grace Period

Hypo 2 (strong grace period for inventor’s own activity):

1. On June 1 of Year 1, Able enters into a confidential sales agreement with Company X to sell units of Able’s invention.

Result: Without more, Able has until June 1 of Year 2 to file a patent application on the invention. Thereafter, the protections of 102(b)(1) expire, and Able’s sales will constitute prior art against Able.

Five Final Hypos on Novelty / Grace PeriodHypo 3 (limited grace period against others): Same facts as Hypo 2, but in addition: 1. Baker publishes an article on July 1 describing the

invention secretly sold by Able on June 1.2. Baker’s article was not derived from Able’s work.3. Able files a patent application on July 15. Result: Able’s application will be rejected for lack of

novelty due to Baker’s article. Able does not get protection from 102(b)(1)(B) because Able did not “publicly disclose” prior to Baker’s article.

Five Final Hypos on Novelty / Grace PeriodHypo 4 ( first-to-publicly-disclose hypo): Same facts as 3, plus Baker files a patent application

on June 15, Year 2. (Baker is the 2nd filer—11 months after Able—and Baker’s filing is more than a year after Able’s secret sales.)

Result: Baker gets a patent! Able’s secret sales don’t count as prior art as to Baker

(W.L. Gore) so Baker doesn’t have to worry about the grace period +

Baker can rely on 102(b)(2)(B) to overcome Able’s earlier filed patent application because Baker “publicly disclosed” before Able’s filing.

Five Final Hypos on Novelty / Grace PeriodHypo 5 (incentive for public disclosure): Same facts as 3, except Able can prove a public

disclosure on June 30, Year 1. Result: Able’s July 15 patent application would now

win the patent. Able uses 102(b)(1)(A) to remove his own June 1

sales and June 30 public disclosure and uses 102(b)(1)(B) to remove Baker’s July 1 article.

Baker’s application fails novelty because of Able’s June 30, Year 1 publication. Note Baker would lose even if his application were filed July 14, Year 1.