As summarized in part I of our two-part report, on March 16, 2013, some of the most significant recent changes to United States patent law will be implemented pursuant to The Smith-Leahy America Invents Act (the “Act”).

Under this Act, the United States will move from a ‘first-to-invent’ system to a ‘first-to-file’ system. Filing under the new first-to-file regime, as opposed to before March 16, 2013, will prevent an inventor from relying on an earlier invention date to defeat an earlier filing by someone else, for the same invention.

Applicants under the new Act will be subject to new provisions related to the scope of applicable prior invention disclosures (‘prior art’) that can be advanced to invalidate their patent applications, both before and after grant. Subject to certain exceptions, including the one year grace period for an inventor’s own disclosures, discussed below, patents are granted only for “new” inventions and not inventions that had been previously disclosed to the public.

Currently, a prior sale, commercial use, or public disclosure must be domestic (within the USA) in order to be considered ‘prior art’. Such sale, use or disclosure in a foreign country, unless also published in a publication, patent or patent application, would not be considered patent-defeating ‘prior art’. The new law will extend the scope of prior art to include just about any publicly available subject matter worldwide, whether made available by use, sale or demonstration.

As of March 16, 2013, persons who conduct business or attend conferences and events in foreign countries would still be able to avail themselves of the one year grace period to file a patent application following a sale, use or demo of the invention. However, the resulting ‘disclosure’, will immediately start a one year clock ticking with respect to the deadline for filing a patent application. By the same token, foreign disclosures of an invention, by third parties, will affect one’s own United States patent application more adversely under the new regime.

Furthermore, this change in the scope of patent-defeating prior art, will affect an inventor’s disclosure obligations to the United States Patent and Trademark Office (USPTO). The inventor will have to ensure that sales and other public disclosures are disclosed to the USPTO.

Furthermore, applicants under this regime will become subject to a Post-Grant Review (PGR) process giving third parties an opportunity to challenge the patent on a broader range of grounds than currently applicable to such challenges. It will now be even more important for a company to monitor emerging technologies in itsown field of commercial endeavour, by setting up a U.S. patent watch to avail itself of the PGR process. This will allow companies to challenge patents for inventions that they have reason to believe do not merit patent protection,for example, due to their own and others’ public disclosures.

The strategy of disclosing an invention to prevent others from securing patent protection (“defensive publication”) will also be more advantageous under the new filing-date focused regime. Under the new regime, a company may decide to disclose an invention simply with the intent of destroying the “novelty” of the invention, and be more assured of preventing others from being able to file a valid patent application afterward. Furthermore, as intimated in Part I of this report, under the new regime, such a publication might form part of a strategy to avail oneself of the one year grace period, while effectively foreclosing others from filing a patent. However, there are several important, possibly adverse, implications of employing this particular strategy.

The United States and Canada are among only a handful of countries that provide a one year grace period post-publication that enables the publishing party to still file a patent application. Therefore, publication without first filing a patent application, would effectively foreclose a person’s ability to obtain protection in the vast majority of commercially important countries that do not provide for a grace period in their patent laws, like Japan, China, India, Australia, Korea and important European markets, to name just a fewcommonly sought after patent jurisdictions.

Furthermore, a pre-filing public disclosure by an inventor may lead a competitor to use the published invention before the patent application is filed, for example, in the case of a patent application for production equipment, bymaking the equipment shortly after the publication. Grandfathering-type provisions accorded by various countries, like Canada, to machines or articles made or used before a first patent filing (in our example, the post-disclosure filing date) may adversely impact an inventor’s ability to stop a competitor from using the‘grandfathered’ equipment in competition with the inventor.