As mentioned in our Newsalert of 13 July 2011, the U.S. has moved to substantively overhaul its patent system. Last Friday, President Obama signed the “America Invents Act” into law, making a number of significant reforms to U.S. patent law. Some reforms take effect immediately and others will commence in 12 or 18 months.

Important Immediate Changes

Many official fees of the U.S. Patent and Trademark Office (USPTO) will increase by 15% on 26 September 2011. Also, commencing 14 November 2011, the USPTO will charge a $400 surcharge for a U.S. patent application that is not lodged electronically.

Other immediate changes include:

  • Eliminating the patent invalidity ground of failing to disclose in the patent specification and drawings the best mode of carrying out the invention, for litigation commenced on or after 16 September 2011;
  • Prohibiting the patenting of human organisms and strategies involving tax avoidance or deferral;
  • Expanding prior inventor defences and prior commercial user rights;
  • Allowing patented products to be marked with internet website details for information about patents to increase damages for infringement;
  • Providing prioritised examination by paying a prioritisation fee and subject to restrictions on claims to commence on 26 September 2011; and
  • Increasing the threshold test for determining if inter partes re-examination is to commence.

Staged Longer Term Changes

Many of the substantive changes will only come into effect much later in stages, some in 12 months after enactment (16 September 2012) and others in 18 months after enactment (16 March 2013).

Change to First to File

Perhaps the most momentous change is that the U.S. patent system will transition to a “first-to-file” system, replacing the longstanding “first-to-invent” system of the U.S. This change will commence on 16 March 2013.

Under the “new” first-to-file system, U.S. patent rights will be granted on the basis of the first to file a patent application in respect of patent claims having an effective filing date of 16 March 2013 or later. This standard is the one used by most patent systems around the world. In contrast, the first-to-invent system grants patent rights to the person who was first to invent the invention, in appropriate circumstances. Technically, it is presently possible for a person who later files a U.S. patent application to defeat the patent rights of an earlier patent applicant, where the later-filed U.S. application can be shown to have been invented earlier. Ordinarily, U.S. patent rights are granted to the person who was first to file, but in a small number of cases this might not be the case.

This change to a first-to-file system will remove uncertainty in such circumstances, as it will favour those who file earlier irrespective of who was first to invent.

Expanded Grace Period

The grace period against self-disclosure by an inventor, or those who derive from the inventor, is expanded so that it is measured with reference to the effective filing date of a claim in a U.S. patent application. Previously, the grace period was measured from the filing date in the U.S., which was the filing date of a U.S. provisional patent application, a U.S. utility patent application, or an International (PCT) patent application designating the U.S. Under the expanded grace period, the effective filing date may be the priority date of a U.S. patent application where priority is claimed from an Australian provisional, standard, or innovation patent application or another non-U.S. patent application for which priority may be claimed in the U.S.

Importantly, the grace period does not apply to disclosures made by a third party, unless the third party derived the invention from the inventor.

Enlarged Prior Art Base

Public use, sales, and other activities making the invention publicly available anywhere, including outside the U.S., will constitute potential prior art. Previously, such activities were only prior art where they occurred in the United States more than 12 months before the earliest U.S. filing date.

Other Significant Changes

Other longer term changes include:

  • Allowing corporations and other assignees to file U.S. patent applications in appropriate circumstances, not just inventors;
  • Simplifying the filing of a U.S. patent application where an inventor is uncooperative;
  • Introducing a post-grant review, or “opposition”, system allowing any third party to challenge the validity of a U.S. patent within 9 months of grant of the patent;
  • Introducing a supplemental examination procedure allowing a patent owner to have a granted patent reviewed by the USPTO to consider information possibly affecting the validity of the patent;
  • Allowing pre-issuance submissions of prior art by a third party to the USPTO before the Notice of Allowance issues on a U.S. patent application before 6 months after the publication of the application or the date of the first substantive rejection by the Examiner, whichever is later; and
  • Introducing a transitional post-grant review of financial business methods.

The foregoing list is not an exhaustive listing of all the changes, but highlights major reforms introduced by the America Invents Act.

A number of these changes will not apply to already granted U.S. patents and pending U.S. patent applications. For quite a number of years to come, “first-to-invent” U.S. patents and patent applications will co-exist with “first-to-file” U.S. patents and patent applications made in the future under the reformed laws.

We welcome these changes, as they will likely improve the position of Australians and many others seeking patent protection in the U.S.