Far-ranging changes to the U.S. patent system will begin to take effect with President Obama’s signing of the Leahy-Smith America Invents Act (“the Leahy-Smith AIA”).

A number of litigation-related provisions will go into effect immediately. First, defendants in an infringement action will no longer be able to allege that the asserted patent fails to disclose the “best mode” of practicing the invention. Failure to disclose best mode was a basis for holding the patent invalid or unenforceable under the prior law.

Second, a plaintiff will be barred from joining multiple defendants in a single lawsuit on the sole basis that they have all infringed the same asserted patent(s). This provision also bars a court from consolidating cases for the same reason unless the multiple defendants consent via a waiver. This joinder provision is an attempt to raise the litigation costs for entities that own the rights to patents but do not actually make or use anything based on the patented technology. Instead, their business model is to sue others who (allegedly) do. But it will also raise the costs for many other patent owners and inventors seeking to enforce their patents in a competitive marketplace.

Third, a new defense to infringement based on “prior commercial use” will apply to all patents issuing after enactment of the Leahy-Smith AIA. The new defense is based on acts occurring at least 1 year before either the effective filing date of the claimed invention or the date on which the claimed invention was publicly disclosed by the inventor or joint inventor, whichever is earlier. Commercial use includes an otherwise infringing use of the invention in “a manufacturing or other commercial process” in the United States “either in connection with an internal commercial use or an actual arm’s length sale or other arm’s length commercial transfer of a useful end result” of the commercial use. Also encompassed is any use during a premarketing regulatory review period “during which the safety or efficacy of the subject matter is established” and use by a nonprofit research laboratory or other nonprofit entity “for which the public is the intended beneficiary.”

Another immediate change is an increase in the burden on a requester for reexamination in inter partes reexamination proceedings. The standard for reexamination will change from “a substantial new question of patentability” to “a reasonable likelihood that the requestor would prevail” with respect to at least one of the challenged claims. Under the new law, adverse reexamination decisions in both ex parte and inter partes proceedings can be appealed only to the Federal Circuit under the new law.

Other provisions of the Leahy-Smith AIA will begin to take effect in the days and months after its enactment. Many fees, including maintenance fees, will increase by 15% ten days after the Act becomes law. The Act blunts this effect for some by a newly created “micro-entity” status that will give those qualifying a 75% discount on certain USPTO fees. Universities and colleges benefit from being expressly labeled micro-entities as “institutions of higher learning” in the Act.

Some key provisions will be implemented later. In what may be the most significant change to U.S. patent law under the Leahy-Smith AIA, the U.S. patent system will change from a “first to invent” to a “first to file” system 18 months after enactment. The new provisions will apply to any pending application (or patent issuing therefrom) that contains (or contained at any time) a claim having an effective filing date on or after the date that is 18 months after enactment, and to any application that claims priority to an application having such a claim. This includes the changes to sections 102 (novelty) and 103 (obviousness) as well as a new “derivation proceeding” that will determine whether an inventor named in an earlier-filed application derived the claimed invention from an inventor named in a later-filed application without authorization. Interference practice will also eventually be eliminated by these changes to the law.

Additional changes do away with false marking suits, or at least make it much more difficult for plaintiffs to pursue false marking actions against patent owners.