america invents act: strategies and surprises · agenda ! the new 102: pitfalls & open issues !...

America Invents Act: Strategies and Surprises

with Eric B. Hall, Ph.D., J.D.

Warning!

Agenda

w The New 102: Pitfalls & Open Issues w Post Issuance Procedures: Overview w Suggested Strategies

“The biggest change to U.S. patent law in 60 years.”

Here’s one opinion…

“There will be heightened uncertainty for the rest of the decade,” says Paul Michel, a retired judge of the U.S. Court of Appeals for the Federal Circuit, in evaluating the provisions of the new legislation. “The bill makes fundamental changes, and many sections are poorly written and ambiguous.”

Why Do We Have an AIA?

Does the AIA solve the problem?

If you really want to improve quality…

The Purpose of the AIA

w  “We need a system that ensures patent certainty, approves good patents quickly and weeds out bad patents effectively.”

The New 102

New Language in the New 102

The Exceptions

Patent Filed by X

Disclosure by Y

Disclosure by X

April 2013 April 2014

(b)(1)(A) (b)(1)(B)

The Exceptions

Many Changes…

w Use and sales are now world wide w No grace period for independent third

party art w Patents prior art as of foreign priority date w Section 102(c) is gone (abandonment) w Section 102(f) is gone (derivation) w Section 102(g) is gone (priority fights) w  “Known or used by others” is gone

When does the new system begin?

w March 16, 2013 (Effective Filing Date) w Get ready for a filing deluge next March.

•  Prior art arguably broader under new rules. •  Law is unsettled under new rules. •  Yet prior art narrower in some respects.

w Deleted sections of 102. w Has Metallizing been overturned?

Judge Learned Hand (1946) w  “[I]t is a condition upon an inventor’s right to a patent that he

shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or legal monopoly. It is true that for the limited period of two years he was allowed to do so, possibly in order to give him time to prepare an application; and even that has been recently cut down by half. But if he goes beyond that period of probation, he forfeits his right regardless of how little the public may have learned about the invention; just as he can forfeit it by too long concealment, even without exploiting the invention at all.”

w  “It is indeed true that an inventor may continue for more than a year to practice his invention for his private purposes of his own enjoyment and later patent it. But that is, properly considered, not an exception to the doctrine, for he is not then making use of his secret to gain a competitive advantage over others; he does not thereby extend the period of his monopoly.”

Metallizing Engineering Co. v. Kenyon Bearing and Auto Parts, 153 F.2d 516 (2d Cir. 1946)

Legislative History “Subsection 102(a) was drafted in part to do away with precedent under current law that private offers for sale or private uses or secret processes practiced in the United States that result in a product or service that is then made public may be deemed patent-defeating prior art. That will no longer be the case. In effect, the new paragraph 102(a)(1) imposes an overarching requirement for availability to the public, that is a public disclosure, which will limit paragraph 102(a)(1) prior art to subject matter meeting the public accessibility standard that is well-settled in current law, especially case law of the Federal Circuit.” (Senator Leahy) 157 Congressional Record at 1496.

Legislative History?

When does the old system end?

w  How long will we need to remember the old rules? •  Provisional filed on March 15, 2013 •  Converted on March 15, 2014 •  Normally would expire on March 15, 2034 •  Assume a PTA of 6 years (the longest on record) •  Patent now expires on March 15, 2040 •  A lawsuit is filed on February 15, 2046 •  Assume 2 years to trial. •  Trial in 2048 under the OLD RULES!

When does the old system end? w  Will conception and reduction to practice ever be

gone forever? •  On Sale: “Ready for patenting,” the second prong of the

Pfaff test, “may be satisfied in at least two ways: by proof of reduction to practice before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.”

•  Derivation: “Derivation requires complete conception by another and communication of that conception by any means to the party charged with derivation prior to any date on which it can be shown that the one charged with derivation possessed knowledge of the invention.”

When do I need to start worrying about it?

March 16, 2013 March 16, 2012

“Grace” Period

Overseas Sale

You need to update your record keeping now!

3rd Party Publication

You Are Here!

Filing Date

A “First to File” System?

w  “The AIA changes the U.S. patent system from a first-to-invent system to a first-to-file system, which is consistent with patent laws of most other countries.”


w April 2012: GiantCo discovers new compound w May 2012: Professor makes same discovery w  June 2012: Professor posts discovery online w  July 2012: GiantCo files a patent application w Aug. 2012: University files patent application

Who wins under the old rules?



Who wins in Europe?



Who wins under the AIA?



Yes – under our new “first to file” system the winner here is the party that was second to invent and second to file!



What about now under the AIA?

Why?

w  If uniformity with the rest of the world was the goal, why include a grace period that is out of harmony with the absolute novelty that prevails in the European system?

Why Have a Grace Period?

w  “The American Invents Act, however, adopts a one-year grace period for inventors. This will protect inventors from having their own invention used against them as prior art, while encouraging early disclosure of new inventions, regardless of whether an application may later be filed for a patent on it. Prior art will be measured from the filing date of the application, and will typically include all art that publicly exists prior to the filing date, other than disclosures by the inventor within one year of the filing.”

http://www.leahy.senate.gov/imo/media/doc/PRESS-FirstInventorToFile-OnePager-FINAL.pdf

Secret & Public? w  Here is the old 102(b):

•  A person shall be entitled to a patent unless … the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or…

w  “Public use” and “on sale” in the old 102 include commercial activities that are not public such as a confidential sales contract or a secret use of a process or machine to make products sold to the public. What about under the new 102?

The New 102 has a New Phrase

w Does “otherwise” mean that Congress intended to limit “public use” & “on sale” to publicly available events? •  House Report: New phrase emphasizes that

the art must be publicly accessible.

“Otherwise Available to the Public”

w Or is the “otherwise” phrase just a catch-all to make sure nothing slips by? •  If so, what could slip by the other four categories

(particularly in light of how the courts have construed “printed publication”)?

w Will it cover the public distribution of an item in which the relevant feature is hidden?

w Who are “the public”? What about a disclosure in confidence to a large group of customers?

What is a disclosure? w  The grace period applies to “disclosures” made

by the inventor within a year of filing. w  Where do we look to find out what a disclosure is

in 102(b)(1)? How about 102(a)(1)?

What About 102(a)(2)?

The $10,000,000 Question w  Are the grace period “disclosures” in 102(b)(1)

the same as the patent defeating events in 102(a)(1), or are the grace period “disclosures” in 102(b)(1) a subset of the 102(a)(1) events?

w  For example, is a secret offer for sale included under 102(a)(1) but not a “disclosure” under 102(b)(1)?

w  Three Possibilities for 102(a) events & 102(b) disclosures: •  Both include “secret” uses and sales •  Neither includes “secret” uses and sales •  102(a)(1) includes them, but 102(b)(1) does not

Why does it matter? Part 1

w June 2013: Secret offer for sale w August 2013: Patent application filed

Is the June event covered by the grace period? Does it need to be?

When will those questions be answered? What should we do before they are answered?

Why does it matter? Part 2

w June 2013: Secret offer for sale by X w July 2013: Independent 3rd party publication w August 2013: Patent application filed by X

Is the June event a prior “disclosure” that overcomes

the July publication?

Sen. Patrick J. Leahy (D-Vt.) w Congress “intend[ed] that if an inventor’s

actions are such as to constitute prior art under subsection 102(a), then those actions necessarily trigger subsection 102(b)’s protections for the inventor and, what would otherwise have been section 102(a) prior art, would be excluded as prior art by the grace period provided by subsection 102(b).” 112 Cong. Rec. S1496 (daily ed. Mar. 9, 2011).

Another Open Question

w How much protection does an early disclosure really provide against subsequent disclosures by others?

What is “the subject matter”?

Example

w June 2013: Invention is published by X w July 2013: Obvious variation published by Y w August 2013: Patent filed on invention by X

Can the July publication be used to reject the invention as obvious? What if Y

derived information from X? (Did Y “obtain the subject matter

disclosed” from X?)

Another Example

w June 2015: You disclose A+B+C w July 2015: I disclose A+B+D w August 2015: You file patent on A+B+C

Can my article be used against your application? Did you

disclose in June the “subject matter” of my July article?

The New Grace Period is Different!

Will we miss 102(f)? w  Under old law, 102(f) is treated as prior art under

103, thus preventing patents on obvious variations of a derived invention (as well as on the derived invention itself).

w  We now have a derivation proceeding: •  A later-to-file originator can petition for a derivation

proceeding within a year of the publication of a later filed claim that is the same or substantially the same as the earlier filed claim of the alleged copier.

w  A civil action is also possible within one year after issuance of an earlier filed, derived patent that “claims the same invention.”

Some Initial Problems w  A derivation proceeding must be filed within a year of

the first publication of an allegedly derived claim. w  That first publication could be a U.S. patent application

or publication of a PCT application designating the U.S.

w  Thus, the “true inventor” may need to file a U.S. application and petition for a derivation proceeding before knowing whether the alleged deriver has actually filed a U.S. application.

w  What constitutes “first publication?” What if claims publish but are later revised to include derived subject matter?

A Classic Case of Derivation w You invent a new compound. w  I find out about it and file a patent application. w You see my patent publication, you know I

derived the compound, and you file your own application with a claim that is the same as one of my published claims.

w Section 135(b) allows the PTAB to “determine whether an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner’s application.”

Next Example

w As before, you invent a new compound. w As before, I find out about it – but this time I

file a patent application that claims an obvious variation of your compound.

w You read my published application (in which you see the obvious variant for the first time) and you believe I derived the underlying idea (but not the obvious variant) from you.

What can you do?

What can you do? w Can you claim the obvious variant?

• Obvious part was derived from me. •  Could you sign the oath?

w Assume you file a claim to the original compound – can you trigger a derivation proceeding? •  Is your claim the same as my claim? (No) •  Is your claim substantially the same as my

claim? (Maybe)

What can you do?

w Assume that “substantially the same” includes obvious variants? Is there still a problem?

w  The PTAB’s authority under 135(b) is limited to determining whether the alleged copier derived the “claimed invention” from the originator – Is that the case here?

w Does “derived” means “derived in part”? Does “claimed invention” includes obvious variants?

One More Twist

w As before, you invent a new compound. w As before, I find out about it – and, as

before, I file a patent application that claims an obvious variation of your compound.

w But this time, let’s assume you do nothing (or you wait too long). Do I get my patent?

What would prevent me? Not 102(f)!

Did Congress Intend This Result?

w Some jurisdictions treat derived information for novelty only. Did Congress intend this result in the name of harmonization?

New Post Issuance Procedures

Supplemental Examination Inter Partes Review (IPR) Post Grant Review (PGR)

(Ex Parte Review not changed)

Three New Procedures

Supp. Exam w  Used by

patentee w  Not limited to

102/103 w  Can fix

inadvertent/negligent errors

w  “Substantial new question”


Supp. Exam IPR w  Used by

third parties w  Limited to

102/103 w  Must wait 9

months w  Discovery w  “Reasonable

Likelihood”

w  Used by patentee

w  Not limited to 102/103

w  Can fix inadvertent/negligent errors



Supp. Exam IPR w  Used by




Likelihood”

Inter Partes Reexam is available until 9-16-12, albeit under the new “reasonable likelihood” standard. Acceptance rate went from 95% to 85% in the first quarter after the change.

w  Used by patentee

w  Not limited to 102/103

w  Can fix inadvertent/negligent errors



Supp. Exam w  Used by

patentee w  Not limited to

102/103 w  Can fix

inadvertent/negligent errors


IPR w  Used by




Likelihood”

PGR •  Used by

third parties •  Not limited

to 102/103 •  Within 9

months •  Discovery •  “More likely

than not”

Supplemental Exam Danger

Reexamination vs. PGR

w PGR support can include supporting factual or expert opinion evidence in addition to the patents and printed publications used now during reexamination.

w PGR can also consider §101 and §112. w PGR standard is one claim more likely than

not unpatentable, while reexam must raise substantial new question of patentability.

$$ Costs $$

w The cost for filing a supplemental examination request is $5,180 for the initial request plus $16,120 (refundable) for the ex parte re-examination fee.

w PGR and IPR are before the PTAB rather than the CRU.

w Will the supplemental examination create a two-tier patent examination process?

$$ Costs $$

w  For IPR, the fee ranges from $27,200 for 20 claims up to $68,000 for 51 to 60 claims, plus $27,200 for each additional 10 claims.

w  For PGR, the fee ranges from $35,800 for 20 claims up to $89,500 for 51 to 60 claims, plus $35,800 for each additional 10 claims.

w A derivation proceeding is only $400. (Why so low?)

Estoppel w PTO: A patent applicant or owner whose

claim is canceled is precluded from obtaining in any patent (i) a claim to substantially the same invention, (ii) a claim that could have been filed in the proceeding, or (iii) an amendment of the specification that was denied in the proceeding.

w Civil Action: May not assert in civil litigation or before the ITC that a claim is invalid on any ground that was raised or reasonably could have been raised during IPR or PGR.

Questions

w Who will win the discovery battles? w Are the fees too high? w  Is it too much of a gamble?

Suggested Strategies

Strategies w File before March 16, 2013.

•  Best strategy when possible for most applications, particularly if uncertain whether bar exists under new rules or if third party disclosures have occurred.

•  There may be some applications that should be delayed for filing under the new rules.

•  File same application twice – before & after? w File as early as possible under the AIA.

Strategies w Should you disclose?

•  Not interested in patent protection? •  Interested in U.S. patent only?

w  “Poor Person’s Provisional”? •  Foreign patent rights? •  Not maintained in confidence. •  Provisionals are only $250.

Strategies

w File Provisional Applications •  Remember New Railhead – improve process? •  Evolving series of provisional applications? •  Danger with multiple provisionals? •  File quickly for all invention disclosures? •  Convert as quickly as possible.

Strategies w Monitor Competition

•  Post Grant Review (Ticking Clock) •  Possible Derivation (Ticking Clock)

w How guard against PGR? •  More upfront prior art searching? •  Bypass broadest claims? •  File application before March 16, 2013

w Better & faster internal procedures •  Develop efficient invention disclosure system •  Education about land mines

Strategies

w Develop parallel docketing systems – one for the old rules and one for the new rules.

w Maintain & improve record keeping •  Still needed even under first to file system •  Derivation proceedings •  Prior use defense •  Track disclosures & potential disclosures

Strategies

w Prioritize patent applications w  Supplemental Examination w  Increased prior art searching w  File multiple applications throughout development

process for important inventions? w  Increased Reliance on Trade Secret Protection?

w  Patent uncertainties in AIA w  Best mode eliminated w  Strengthened prior use defense w  Metallizing possibly eliminated

An interesting outcome for a bill dedicated to public disclosure!

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america invents act: strategies and surprises · agenda ! the new 102: pitfalls & open issues !...

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