The US Congress is poised to fundamentally change the patent application process in the United States if the Senate approves the America Invents Act on September 6, 2011. All indications point to the Senate approving the bill and President Obama signing it into law shortly thereafter.  

The America Invents Act will be the most significant change to US patent law in almost 60 years. There are many changes disclosed in the Act, but we have summarized just a few of the more pertinent provisions and how these changes will impact inventors and businesses going forward:  

First Inventor to File System

In an attempt to provide greater certainty regarding the scope of patent protection and promote harmonization of the US patent system with nearly all other countries in the world, Congress is replacing the “first to invent” system with the “first inventor to file” system. Under this new system, whoever files a patent application on a claimed subject matter first will be entitled to a patent over another inventor who later files an application on the same claimed subject matter, regardless of who first invented the claimed subject matter.

Prior art will encompass any publication (including patents and published patent applications), public use, on sale or otherwise available to the public before the effective filing date of the claimed invention. A one-year grace period is being maintained to file an application after a disclosure of the invention by the inventor or another (such as an employer) who obtained the subject matter of the invention from the inventor.  

Adopting the first inventor to file system means that inventors will no longer be able to swear behind references to avoid certain invalidity challenges. Furthermore, interference proceedings will be replaced with derivation proceedings in the USPTO for first inventor to file applications and patents. The first inventor to file system will take effect 18 months from the date of enactment.

Based on the first inventor to file system, it is recommended that all businesses review and possibly revise internal procedures to ensure that all inventions in its queue are filed as quickly as possible. Although the Act includes a one-year grace period, greater care should be taken to file a patent application before public disclosure of the invention to help avoid issues and costs associated with derivation proceedings.

Inventor’s Oath or Declaration

Effective one year from the enactment of the Act, applications may be filed in the name of assignee (or a person/business to which an inventor has an obligation to assign). This provision eliminates the need to deal with inventors who are unable or unwilling to sign an oath or declaration required for prosecuting a patent application.  

Prioritized Examination

Applicant can pay an additional $4800 ($2400 for a small entity) to file a request for prioritized examination of a nonprovisional application for an original utility or plant patent. Companies can take advantage of this prioritized examination ten days after the enactment of this Act.

Preissuance Submissions

A third party may submit any publication of potential relevance to a patent application before the earlier of a notice of allowance or the later of (1) six months after the date of first publication or (2) the date of the first rejection. This new provision allows anyone to challenge another’s filings, by bringing forward prior art during prosecution, which is a more cost effective approach to limit a competitor’s patent rights compared to litigation or reexamination proceedings. This provision will be in effect one year from the date of enactment of the Act.  

Post Grant Review Process

Within nine months after grant or reissue, a Petitioner may request to cancel one or more claims of a patent on any ground except the best mode requirement. Filing a petition for post grant review of a patent will be more cost effective than challenging a patent in litigation or filing an inter partes review, which is replacing the current optional inter partes reexamination.

After the nine month window closes, third parties will be able to challenge a patent through an inter partes review to be conducted by Patent Trial and Appeal Board within one year. Basis for requesting an inter partes review is limited to prior art patents and printed publications. Ex Parte reexaminations may still be filed.

Defense to Infringement Based on Prior Commercial Use

The Act expands the defense to infringement based on prior commercial use to affiliates and to all areas of technology with no restriction to business method patents. To use the defense, a party must show a reduction to practice and commercial use at least one year before the effective filing date of the subject patent. The Act prohibits deeming a patent invalid on novelty or non-obvious subject matter grounds solely because such prior commercial use defenses are raised or established.  

Transitional Program for Covered Business Method Patents

According to the Act, an eight year transitional post-grant review proceeding will be established for reviewing the validity of covered business method patents, as defined in the Act. A Petitioner for review of a business method patent must have been sued for, or charged with, infringement of the patent before filing a petition for a transitional proceeding. The effective date of this transitional program for business method patents is one year after enactment of the Act and applies to patents issued before, on, or after that date.

False Marking

The Act prohibits anyone other than the United States from suing for applicable penalty under the false marking statute, and allows only a person who has suffered a competitive injury to file a civil action under the false marking statute for recovery of damages adequate to compensate for the injury. This portion of the Act shall apply to all cases that are pending on, or commenced on or after, the date of the enactment of this Act.