News

SEPTEMBER 9, 2011

Yesterday, September 8, 2011, Congress passed patent reform legislation when the Senate voted 89-9 to approve a bill passed by the House of Representatives on June 23, 2011. The bill, which President Obama is expected to sign, makes a variety of significant amendments to the current patent statute.

Key provisions of the reform bill include:

• Fees. The new statute imposes a 15% increase in most patent fees, effective 10 days after enactment. Please contact your COJK attorney if you would like to discuss early payment of outstanding USPTO fees (e.g., issue fees, maintenance fees) prior to this fee increase.

• Adoption of a first-inventor-to-file system, replacing the current first-to-invent system. The adoption will align U.S. law with that of other countries. Under "first-to-file," the first inventor to file a patent application will be awarded the patent, other conditions being met, rather than the first inventor to conceive the invention. An inventor will still have a one-year grace period for filing a patent application following the inventor's own disclosure of the invention. "First-to-file" takes effect beginning with applications filed 18 months after the law is enacted. The new system will likely encourage the early filing of patent applications. Applicants may also consider filing more than one provisional application to capture those developments made after filing of a previous provisional application in order to secure priority dates.

• Expanded Definition of Prior Art. Section 102 prior art now includes offers, sales and public uses anywhere in the world, rather than just the U.S. Prior art also includes patents and published applications "effectively filed" anywhere in the world before the filing date of the claimed invention.

• Expanded Prior User Rights. Current law restricts the "prior user defense" to business methods adopted prior to the date of a patent application. The restriction has now been removed, effective for patents issued on or after the date of enactment. To invoke the defense a commercial use, either internally or an actual arm's length sale or transfer, must have occurred at least one year prior to the effective filing date of the claimed invention or the date it was disclosed to the public. This defense is not applicable if the patent was developed under a federal government funding agreement or by a nonprofit institution of higher education that did not receive private funding in support of that development.

• Post-Grant Review. A new "post-grant review" procedure is established. Effective one year from enactment, any person other than the patent owner may, within 9 months of patent issuance, request post-grant review by a new Patent Trial and Appeal Board, which replaces the present Board of Patent Appeals and Interferences. The patent may be challenged on any ground of patentability. This is unlike other forms of post-issuance review under the new statute, such as inter parties review, in which the grounds for challenging a patent are limited to prior art patents and publications. The review must be completed within one year (extendable to 18 months for good cause).

• Inter Partes Review. Following the later of the conclusion of a post-grant review or 9 months after patent issuance, a patent can be challenged in an inter partes proceeding before the Patent Trial and Appeal Board on the basis of prior art patents or printed publications. Becoming effective one year after enactment, this "inter partes review" is similar to the present inter partes reexamination, but the review will be conducted by the Patent Trial and Appeal Board rather than patent examiners in the USPTO Central Reexam Unit. There are other differences, including a modestly heightened standard for obtaining the review. The review must be completed within one year (18 months if good cause), which is much shorter than the 3-4 years it commonly takes under the current system for inter partes reexaminations.

• Supplemental Examination. A new, supplemental examination procedure will allow a patent owner to request the USPTO to consider, reconsider, or correct information relevant to the patent, thereby permitting patent owners to cure allegations of possible inequitable conduct arising from the original prosecution. If a substantial new question of patentability is raised by the request, the Director will order reexamination of the patent. This provision takes effect one year after enactment and applies to any patent issued before, on, or after that effective date.

• Interferences. Interference proceedings are eliminated, replaced by derivation proceedings in instances where a later applicant claims that a first applicant derived the invention from the later applicant's work. Interferences already in progress will continue. This provision will take effect 18 months after enactment.

• Ex parte Reexamination. Ex parte reexaminations will continue to be available if requested by a patent owner or a third party, without change. Ex parte reexaminations will apparently continue to be handled by examiners at the USPTO, rather than by the Patent Trial and Appeal Board, which will handle post-grant reviews, inter partes reviews and derivation proceedings.

• Best Mode. Failure to disclose the best mode of making and using a claimed invention will no longer be a basis for finding patent invalidity in proceedings commenced on or after the date of enactment. However, inclusion of the best mode is still required under § 112, although it will likely be difficult for an examiner to determine if an application discloses the best mode.

• Prioritized Examination. The act sets a fee of $4,800 for prioritized examination. This will enable the USPTO to commence the "fast track" examination process announced in April of this year, but then postponed in light of budget restrictions. This fee is in addition to the usual filing fees for search, examination, publication, etc. Small entities will enjoy a 50% reduction in the prioritized examination fee. This provision becomes effective 10 days after enactment.

• Micro-Entity Status. Effective 60 days after enactment, a "micro entity status" will be established. Qualifying entities, including institutions of higher education, will enjoy a 75% discount on USPTO fees compared to the 50% discount provided for small entities.

• Submission of Prior Art. Upon payment of a small fee, third parties will be allowed to anonymously submit prior art and comment on the relevance of the documents to the examination of a pending application. To have the art considered it must be submitted no later than 6 months after publication or before the date of first rejection, so long as a notice of allowance has not issued.

• Opinions of Counsel. Effective one year after enactment, the failure of an accused infringer to obtain an opinion of counsel or to produce such opinion during litigation cannot be used to prove willful infringement or inducement of infringement.

• False Marking. Effective immediately, only the U.S. government may collect a penalty for "false marking" of a patent number on a product. A competitor may sue for false marking, but upon a showing of liability may only collect compensatory damages sustained through "competitive injury." This provision should put a halt to the hundreds of false marking suits that have been clogging the courts.

• New Method of Marking Allowed. Effective immediately, patent owners may now mark their products "virtually" by noting their web address on the product along with the word "patent" or "pat." and by posting information about patent(s) covering the product on the website. This provision will allow owners to update their patent markings more easily, without having to change their product labels.

The reform bill includes numerous other provisions of lesser importance. Additionally, more detailed information about the bill will be posted on our website at http://www.cojk.com within the next several days.