Patent reform, over six years in the making, has now become law. President Obama signed the America Invents Act today. The new law will have immediate and important consequences for your patent filing and enforcement strategies. Although the new law ushers in many changes to existing patent practice and procedure, two shifts from existing law are likely to have the most dramatic effects. First, the new law attempts to shift some patent disputes from the courtroom to the Patent Office. As a result, some aspects of patent prosecution (i.e. , the process of applying for and obtaining patents) will become more litigation-like and some aspects of patent litigation will become more prosecution-like. Second, the new law shifts from a first-to-invent to a first-to-file system. This shift also affects both patent prosecution and litigation strategies. Thus, it will be important to coordinate your patent prosecution, enforcement, and defense strategies with both prosecuting attorneys and courtroom litigators. McCarter & English's team of patent prosecutors and litigators have worked together for years and thus are well able to help you devise the most effective, coordinated strategies. These two shifts are discussed below.
New Proceedings to Challenge or Strengthen Patents. Many disputes as to the validity or scope of a patent that were once fought in court may now be conducted in the Patent Office. In particular, three new procedures combine aspects of patent prosecution and courtroom litigation and promise to provide quicker and cheaper resolution of these issues.
- Post-Grant Review . In a post-grant review, anyone may challenge a patent within nine months after it issues. While the review is pending, court litigation involving the patent may be stayed or deferred. The review is conducted in the Patent Office and is based on any invalidity ground that could be asserted in court. Unlike traditional proceedings in the Patent Office, however, post-grant review will allow for some litigation-like procedures, such as depositions and oral hearings. At the same time, prosecution-like procedures will be available. For example, the patent owner may amend the patent claims to correct weaknesses. The advantage of post-grant review, from the perspective of an accused infringer or competitor of the patentee, is that it can be a less expensive and quicker way than courtroom litigation to attack or avoid a patent. Also, because there is no presumption of validity in the proceeding, the challenger will not bear the same burden of persuasion that would apply in court and thus may have an easier time establishing invalidity. The advantage of this proceeding to the patent owner is that it may result in a patent that is stronger and easier to enforce against competitors. Indeed, the patent challenger will be estopped in ensuing infringement litigation from raising any invalidity challenges that were or could have been raised in the review.
- Inter Partes Review. This procedure, formerly known as inter partes reexamination, allows any person to challenge patent validity based on prior art patents or printed publications. Like post-grant review, inter partes review is conducted in the Patent Office. The new procedure differs from the old in that depositions, oral hearings, and other litigation-like features will be available to the parties. The threshold for instituting this review is higher than for the old procedure, however. The Patent Office must decide the review within one year or, at most, eighteen months. That time frame sharply contrasts with existing practice, in which inter partes reexaminations have often taken three years or more. During that time, co-pending infringement litigation is often stayed or deferred, thus tying up the patent and allowing the competition to infringe for an unacceptable time. Thus, this procedure promises quicker resolution of issues and less delay in enforcement against infringers.
- Transitional Review of Business Method Patents. Starting in one year, parties accused of infringing business method patents may seek review of the patent in the Patent Office. Business method patents are defined as those that claim "data processing or other operations used in the practice, administration, or management of a financial product or service." The procedure resembles post-grant review, except that the nine-month post-issuance filing deadline does not apply. Any ground for invalidity may be argued. During the review, court litigation may be stayed. This procedure likewise promises to be quicker and cheaper than challenging the patent in court.
- First-to-File. The new law harmonizes U.S. practice with foreign practice by shifting from a first-to-invent to a first-to-file system. This shift makes early identification of inventions and early filing of corresponding patent applications crucial. In short, inventors who win the race to the Patent Office will be better positioned to enforce their patent rights. This shift also expands what can be considered as prior art for purposes of invalidity challenges in litigation or review proceedings. While the new law preserves the traditional one-year grace period for filing a patent application after sale or public disclosure of the underlying invention, that grace period may be less valuable than before. The first-to-file rule may also affect your strategy for filing continuation applications and other aspects of the patent application process.
The new patent law is complex and ushers in many other changes to existing law and practice. Some provisions take effect immediately, while others do not take effect for a year or more.