So you think you know patent law, part 3

The America Invents Act (AIA) has significantly changed the processes available for prosecuting and challenging a patent. In this final section, I will outline these changes.

I’ll start by describing electronic filing and prioritized examination. Electronic filing has not changed. However, there is now a supplementary $400 fee for filing an application that is not filed electronically. Prioritized examination is currently limited to non-provisional utility and plant patent applications having no more than 4 independent claims or 30 total claims. A maximum of 10,000 requests for prioritized examination will be granted per fiscal year, at a fee of $4,800 (the fee is reduced for small and micro entities). The goal of a prioritized examination is to reach a final disposition of an application within 12 months of granting prioritized status. In addition to this fee-based status, the director may, upon request, grant a given application prioritized status without cost if the product, process or technology is “important to the national economy or national competitiveness.”  No guidance yet exists describing how the quoted phrase will be interpreted.

The AIA prescribes a first-inventor-to-file system (FITF), replacing the United States' traditional first-to-invent priority system. As a result, the entire block of interference proceedings has been repealed — the first inventor to file receives priority. However, there is still an administrative procedure, called a derivation proceeding, whose purpose is to ensure that the individual filing is an original inventor and that the invention did not “derive” (a polite way of saying “was not stolen”) from its true inventor.

To start a derivation proceeding, a patent applicant files a petition setting forth the basis for his belief that the inventor named in an earlier application derived the invention from an inventor named in the petitioner’s application. This petition must be filed within a year of the date on which an affected claim to the earlier application is published. The issue will then be resolved by the Patent Trial and Appeal Board. Appeals can be pursued through civil actions.

After a patent application has been published, 35 U.S.C. 122(e) now provides a procedure for a third party to submit prior art that may be relevant to the examination of that application. The prior art must be submitted either within 6 months of publication, before the date of a first Office action on the merits that rejects any claims, or before the date of a notice of allowance. This is potentially a powerful tool for an entity with sufficient resources to keep track of patent applications of strategic importance.

Moving now to post-issuance procedures relevant to the validity of a patent, the owner of an issued patent can request a supplemental examination if he has encountered new information that raises a substantial new question of patentability. The supplemental examination will be carried out within 3 months and will either find no substantial new question or will order an ex parte reexamination procedure. The object of the supplemental examination is both to strengthen a patent and to allow an entity to decide strategy on a firmer basis.

An early challenge to the validity of claims in an issued patent is provided by the post-grant review. A petitioner may request to cancel claims of an issued patent that may be invalid under 35 U.S.C. 101, 102, 103 or 112, except for challenges based on not including the best mode, which are no longer allowed. The challenger must not own the patent, must not have filed a civil action regarding claim invalidity and must file within 9 months of the grant of the patent at issue. The petition must demonstrate that it is more likely than not that the challenge will be successful.

Following the 9-month period for post-grant review, an inter partes review proceeding may be requested. The scope of the inter partes review is narrower than that of the post-grant review, being limited to challenges under 35 U.S.C. 102 and 103 based on patents or printed publications. An inter partes review is requested by a petition filed more than 9 months after issuance or after any post-grant proceedings are concluded. Both the post-grant review and the inter partes review are carried out by the Patent Trial and Review Board. The decisions of the Board may be appealed in the Federal Circuit.

The AIA also contains significant changes for the process of patent litigation. Under 35 U.S.C. §299, accused infringers can be joined in a single action only if they are connected to the same infringing event. Being accused of infringing the same claim independently is no longer sufficient reason for defendants to be joined together under a single civil action. Joinder can be agreed to by all the defendants, and this new provision does not apply to all Hatch-Waxman cases.

Prior commercial use as a defense against infringement is now expanded to include methods, processes or devices used in manufacturing or other commercial processes. The accused infringer must have commercially used the claimed invention in good faith in the Unites States, either in connection with an internal commercial use or with an arm’s length commercial transfer of a useful product or service at least one year prior to the effective filing date or the date of public disclosure of the claimed invention. A successful defense on this basis could indicate that an inter partes review would invalidate the relevant claims, but such a review does not occur automatically.

Overall, it seems to me that the changes are largely favorable to the large corporate inventors. A party with deep pockets has gained a number of new approaches to attack others' patents and has also gained some protection against the actions of patent trolls. There are some welcome changes for small entities or individual inventors, but I believe that these are overbalanced by the vulnerability associated with multiple new modes for attacks on their patents. The patent law landscape will continue to morph as rules are set by the USPTO to implement the new laws and as courts interpret the new provisions. Don't fall behind!