The America Invents Act (AIA) was signed into law by President Obama on September 16, 2011. The new law brings, over time, substantial reform to U.S. patent law. One significant change is a transition from a “first-to-invent” to a “first-to-file” system, which takes effect on March 16, 2013, and will apply to any application and patent with a claim having an effective filing date on or after March 16, 2013.

Under a true “first-to-file” system, the first inventor to file a patent application will be entitled to priority over all latecomers, regardless of whether that inventor was the first to invent. Under the AIA, the term “effective filing date” is statutorily defined as the date on which the inventor first filed an application for the invention in the U.S. or elsewhere. Similarly, the scope of prior art, as defined under the new Section 102 now encompasses situations in which the invention is on sale, available for public use or “otherwise available to the public” before the effective filing date anywhere in the world. Basically, the AIA, implements the “first-to-file” concept in the United States by providing that a patent can issue only if the application is filed before the date the claimed invention was “otherwise available to the public” (such as by printed publication, patent, public use, and so on). This is very similar to the “absolute novelty” requirement that is in force in the rest of the world, for example, in Europe and Japan.

However, the AIA provides some exceptions to the “first-to-file” rule. In particular, the law maintains the one-year grace period exception so that a disclosure by the inventor, or a person who obtained the subject matter disclosed directly or indirectly from the inventor, will not be considered as prior art. This allows an inventor a limited time frame (one year) to still file a patent application after disclosing his own invention. The grace period as provided under the AIA is similar in some ways to the grace period that Canada allows.

Also, independent disclosure by third parties before the effective filing date of the patent application but during this grace period will generally be considered prior art. At first, this appears to be similar to the situation in Canada. However, another exception under the AIA allows an inventor to use his own earlier disclosure to eliminate the prior art effect of a patent application filed by someone else. In particular, under the new Section 102(b)(1)(B) of the AIA, any potential prior art made available during the grace period interval between the inventor’s public disclosure of the subject matter of his invention, and the application’s filing date, cannot be applied against the inventor’s application. This can have some bizarre consequences.

For example, Inventor A invents something on August 21. Two months later, Inventor B independently invents the same thing. But Inventor B publishes the invention, for example, in a scientific journal on, say October 21 of that year. Inventor A then files a patent application on November 27. Inventor B files a patent application on April 26 of the following year. In this example, Inventor A is the first to invent and the first to file but Inventor A would not be entitled to a patent. Basically, Inventor A’s first-filed patent application is anticipated by Inventor B’s earlier publication. This is to be expected under the absolute novelty provisions of the AIA since Inventor B’s disclosure would not fall within Inventor A’s one-year grace period exception (Inventor B independently invented the invention and published it).

However, the exception under the AIA that allows an inventor to use his own earlier disclosure to eliminate the prior art effect of a patent application filed by someone else does have a bizarre consequence. In this example, Inventor B will be able to obtain a patent for the later-filed application by using the earlier publication (October 21) to negate any prior art effect of Inventor A’s earlier filed patent application.

Therefore, when an inventor publicly discloses an invention, and assuming no prior disclosure from a third party, that inventor effectively reserves a right to apply for a patent for that invention within one year even if a third party independently makes a similar disclosure and application during that intervening year. The new law appears to encourage inventors to disclose as soon as possible in order to secure a prior right to apply for a patent, and perhaps even to the point of racing their competitors to public disclosure in order to foreclose their competitors’ ability to obtain a patent.

In the fast paced world of software development the AIA can put a twist on strategies that, to-date, have relied on developing in secrecy before applying for a patent. Public disclosures of inventions before filing may become desirable.

However, it is important to balance the benefits arising from early disclosure under the AIA against the strict absolute novelty provisions that apply in other countries. The strategies that companies use to effectively secure their rights will now depend even more on whether that invention is intended to be protected globally or just in Canada and the U.S.