With the enactment of the Leahy-Smith America Invents Act (AIA), the United States will follow the rest of the world by adopting a “first-tofile” system. Under the new system, the first inventor to file a patent application will have the right to pursue a patent to an invention -- whether or not she is the first person to actually conceive of and reduce the invention to practice. To the victor go the spoils.

The AIA provides a single lifeline to a true inventor who loses the race to the USPTO. Under 35 U.S.C. § 135 (“Section 135”), interference proceedings are replaced with “derivation proceedings,” where a second filer for a patent can prove that the first filer derived the invention from her

The Effective Date

As an initial matter, the new derivation proceedings will only apply to patent applications having priority claims of March 16, 2013 and later. Until then, interference proceedings will continue to be available to earlier applications under the “old” version of 35 U.S.C. § 135.

The Gate Keeper

Section 135 provides sole discretion to the Director to institute a derivation proceeding, stating that “[w]henever the Director determines that a petition … demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding.” 35 U.S.C. § 135(a), emphasis added. Thus, before a case of derivation is brought to the Patent Trial and Appeal Board (“PTAB”), the second filer must convince the Director to initiate the derivation proceeding. [1]. Importantly, the Director’s decision is “final and non-appealable.” [2].

Section 135 provides that a second filer must file a petition, setting forth “with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s application and, without authorization, the earlier application claiming such invention was filed.” Id. Accordingly, the second filer has the burden to show that the first filer (1) derived the claimed invention and (2) filed an application without authorization.

Although it seems rudimentary to prove unauthorized filing, it may be exceedingly difficult to adequately establish derivation in light of the USPTO’s lack of subpoena powers. Indeed, there may be very few instances where the second filer can prove such derivation without access to documents in the possession of the first filer. [3]. It will be interesting to see what burden of proof is required for the Director to institute a derivation proceeding and whether second filers elect to file such cases in district courts under 35 U.S.C. § 291, rather than with the USPTO. [4].

The Timing

A second filer must bring a derivation proceeding to the USPTO within one year from “the date of first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention.” 35 U.S.C. § 135(a), emphasis added. However, even if a second filer petitions the USPTO within this time, the PTAB may defer action on the petition “until the expiration of the 3-month period beginning on the date on which the Director issues a patent that includes the claimed invention that is the subject of the petition.” 35 U.S.C. § 135(c).

If a second filer prefers to bring a derivation case in district court, 35 U.S.C. § 291 provides that such an action must be filed “before the end of the 1-year period beginning on the date of issuance of the first patent containing a claim to the allegedly derived invention.” 35 U.S.C. § 291(b), emphasis added.

The Remedy

Under Section 135(b), a final decision of the PTAB, “if adverse to the claims in an application for patent, shall constitute the final refusal by the Office on those claims” and such a decision constitutes “cancellation of those claims.” 35 U.S.C. § 135(b). In other words, the only available remedy to a true inventor who files second is the cancellation of the wrongdoer’s patent claims.