Final action on patent law reform appears likely in September. The legislation moved quickly and on a bipartisan basis in 2011. The Senate approved its version of the "America Invents Act" (S. 23) by a 95-5 vote on March 8, 2011. The House of Representatives bill (H.R. 1249), which was primarily based on the Senate version, was approved by a 304-117 vote on June 23, 2011.

It is most probable that the Senate will simply approve the House bill and send it to President Obama for signature ("enactment"). Our presentation summarizing that bill is here.

The most important and immediate changes address the inadequate funding of the Patent and Trademark Office (PTO). Fees collected by the PTO shall be solely for the use of the Office. Any excess over the amounts authorized for expenditure shall be placed in a separate fund and will not be automatically diverted at yearend. The PTO will be granted authority to set fees by rule-making. Until a new fee schedule is adopted, a 15% surcharge will be added to substantially all PTO fees, starting 10 days after enactment. You may want to pay future maintenance fees before then. The Act also includes a new $4,800 fee for preferential examination, which will enable the PTO to start its fast track examination program later this year.

In litigation, the best mode of defense will not be available in cases filed after enactment, and a prior user defense will be available with respect to patents issued on or after that date. Private false marking claims will be severely restricted in both new and pending litigation. Proof of competitive injury will be required and marking with an expired patent number will no longer be actionable if the patent covered that product. Our summary of provisions that will be effective immediately upon enactment is here.

One year after enactment, new procedures will be available for PTO review of issued patents. Inter Partes reexamination in the Central Reexamination Unit will be replaced by proceedings before the renamed Patent Trial and Appeal Board. Any ground of invalidity can be raised in a Post Grant Review petition, filed within 9 months of patent issue or reissue. Invalidity on grounds of prior patents and publications can be raised in an Inter Partes Review at any time when Post Grant Review is not available.

The first-inventor-to-file priority system will take effect 18 months after enactment. It is accompanied by a personal exclusion from invalidation by the applicants' own "disclosures" within one year before filing a patent application (the personal grace period). The new law will expand the scope of prior art. Anticipatory prior use and "on sale" activities would no longer be limited in this country," and "on sale" activities would include applicants' and third party sales, regardless of whether they reveal the claimed invention. Also, the In re Hilmer doctrine would be effectively abolished, and the priority date of a patent application will be the effective date for both anticipation and obviousness.