On March 8, 2011, the U.S. Senate passed S.23, also known as the America Invents Act, which proposes a series of reforms to the U.S. patent system. Most notably, the bill replaces the "first-to-invent" standard in the U.S. with a "first-inventor-to-file" (FITF) system comparable to patent systems in other countries, while retaining some aspects of the U.S. one-year grace period. The definition of prior art drastically changes under the FITF system. Other notable features of the bill include:
- A new post-grant review procedure by which challenges to patents on any grounds can be made within nine months of their issuance;
- Changes to the existing reexamination procedures. Reexaminations are challenges to issued patents in the PTO based on an alleged substantial new question of patentability;
- Replacement of interferences with derivation proceedings. Derivation is an allegation that a patent applicant “stole” an invention from another;
- The granting of fee-setting authority to the PTO and the banning of the diversion of fees the PTO collects; and
- Constraints on false patent marking complaints and procedures for updating marks online. False patent marking occurs when a product is marked with a patent that has expired or does not cover the product.
The America Invents Act was introduced to the House of Representatives on March 30, 2011. H.R. 1249 was subsequently approved by the House Judiciary Committee on April 14, 2011, with slight amendments. Notable substantive differences between S.23 and H.R. 1249 include:
- H.R. 1249 expands prior use rights as a concession to the FITF system;
- Fee-setting authority would expire after six years in H.R. 1249, as opposed to it being permanent in S.23;
- The new post-grant review could be initiated within 1 year, instead of the nine months specified in S.23; and
- H.R. 1249 expands limitations on false marking litigation with a three-year safe harbor after a patent expires.
UPDATE: On June 23, 2011, the House approved a revised H.R.1249 by a vote of 304-117. While there are differences between the House-passed bill and S.23, the core reforms are consistent. These core reforms cover the following topics.
- First-inventor-to-file system
- Redefining prior art
- Interference proceedings
- Derivation proceedings
- Post-issuance proceedings and submissions
- Procedures at the PTO
- Patent litigation
- PTO funding
The most remarkable difference between S.23 and H.R.1249 relates to the PTO funding mechanism. The Senate bill permits the PTO to control its collected fees, whereas the House bill would arguably leave PTO funding to its status quo.
H.R.1249 will now have to be reconciled with S.23 before the President can sign patent reform into law.
Post-Issuance Proceedings and Submissions
The America Invents Act alters the procedures available to patent owners to correct issued patents and to third parties for challenging patents at the PTO. It also expands the information parties can have added to a patent file history and allows third party submissions to pending patent applications.
Inter Partes Review, which replaces inter partes reexamination, may be used by third parties to challenge issued patents on the basis of prior art patents and printed publications. A petition for review is generally due within 9 months (S.23) or 1 year (H.R.1249) of issuance, and will only be granted if the PTO determines that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the challenged claims. Inter partes review is conducted by the new Patent Trial and Appeal Board and, as the name implies, both the third party petitioner and the patent owner can participate.
Post-Grant Review is a new, alternative process by which third parties can challenge issued patents. Unlike inter partes review, third parties who request post-grant review can base their invalidity challenges on any type of prior art, and can also raise issues of indefiniteness, written description, and enablement. The petition for review is due within 9 months (S.23) or 1 year (H.R.1249) of issuance, and will be granted if the PTO determines that it is more likely than not that at least one of the challenged claims is unpatentable or that the petition raises a novel or unsettled legal question. Post-grant review is also conducted by the new Patent Trial and Appeal Board and both the third party petitioner and the patent owner can participate.
Ex-Parte Reexamination remains available to both third parties and patent owners seeking PTO reexamination of issued claims on the basis of prior art patents and printed publications that raise a substantial new question of patentability. There is no deadline for requesting review. Ex parte reexamination is conducted by the examining division, subject to internal appellate review by the new Patent Trial and Appeal Board. As the name implies, only the patent owner can participate once a request for reexamination is granted.
Supplemental Examination is a new procedure available to patent owners wishing to have the PTO consider, reconsider, or correct information believed to be relevant to an issued patent. There is no deadline for requesting supplemental examination. Unlike ex parte reexamination, supplemental examination is not limited to prior art patents and printed publications—the request need only be based on information that raises a substantial new question of patentability. Supplemental reexamination is also conducted by the examining division, subject to internal appellate review by the new Patent Trial and Appeal Board. Participation is limited to the patent owner. The Act's provision that "a patent will not be held unenforceable on the basis of information not considered or inadequately considered in prior examination of the patent if that information is considered during supplemental examination" suggests that this procedure may, in some circumstances, be used to "cure" inequitable conduct.
Reissue remains available to patent owners seeking to correct errors in an issued patent that arose without deceptive intent and rendered the patent inoperative or invalid by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent. Requests to enlarge the scope of the claims must be filed within two years of issue. There is no deadline for requests to narrow claim scope. Reissue is conducted by the examining division. Only the patent owner can participate in the reissue proceeding.
Citations in Issued Patents are no longer limited to prior art patents and printed publications believed to have a bearing on the patentability of a patent claim. Third parties and patent owners can now also submit patent owner statements filed in a federal court or PTO proceeding in which the patent owner took a position on the scope of any of the patent claims, provided any other documents, pleadings, or evidence from the proceeding in which the statement was filed that address the written statement are also submitted. Prior art patents and printed publications can be used by the PTO to invalidate claims during both ex parte reexamination and supplemental examination. Patent owner statements and related information, however, can only be used by the PTO for claim construction during ex parte reexamination, inter partes review, and post-grant review.
Preissuance Submissions by third parties are now allowed as well. Third party submissions in pending patent applications are limited to prior art patents, published patent applications, and printed publications of potential relevance to examination. Submissions are due the date of the first rejection or 6 months after publication, whichever is later, but in either event cannot be filed after the date a Notice of Allowance is mailed. The submissions will be included in the file history and can be considered by the PTO during examination. The identity of the third party can be kept confidential.
The America Invents Act will reduce the number of false marking cases that may be commenced by limiting standing in such cases to persons who have suffered "competitive injury" as a result of a false patent marking.
An amendment to the House version of the Act would also create a three-year "grace period" after expiration of the patent, eliminating liability for any conduct otherwise cognizable under 35 U.S.C. § 292, the false marking statute, within that period.
The House amendment would also eliminate liability for conduct after the three year "grace period" if the word "expired" is placed before the word "patent" or a similar word, "either on the article or through a posting on the Internet . . . ."
The America Invents Act simplifies the marking process by allowing patent owners to update and revise a listing of applicable patents to an article without changing the patent marking designation on the article.