Yesterday, the Senate passed the America Invents Act of 2011 (H.R. 1249), the most significant legislative change in patent law in nearly 60 years. The President is expected to sign the bill into law within the next week or two. The Act harmonizes U.S. patent law with other countries by switching the U.S. patent system from a "first-to-invent" to a "first inventor-to-file" system. Under existing U.S. law, when a dispute arises as to which of two parties invented an invention, the patent is awarded to the party who first invented the invention. Under the new law, the patent would be awarded to the party who first filed their patent application with the Patent Office.

The Act also provides a new robust post-grant review procedure. During the first 9 months after issuance of a patent, a third party can petition for cancellation of a patent claim based on any ground for invalidity. Presently, third parties can only request reexamination of a patent based on prior art, and have limited input during the proceeding. This new procedure, which is similar to the opposition system in the European Patent Office, provides a viable and cheaper alternative to litigation in district court for invalidating a patent.

The Act also limits the parties who can file false patent marking lawsuits to the Attorney General and those who have suffered a competitive injury. Damages are also limited to those adequate to compensate for the injury. In the last few years, hundreds of false patent marking suits have been filed by non-competing parties seeking the cash penalty permitted under this qui tam provision. The changes to the false marking statute apply to any action pending on or initiated after enactment of the Act. This provision will clearly put an end to the vast majority of these pending suits.

The Act also provides a number of other significant changes including:

  • Changes the standard for initiating inter partes reexamination (now referred to as inter partes review) from "a new substantial question of patentability" to a reasonable likelihood that the petitioner will prevail with respect to at least one challenged claim
  • Permitting third parties to submit to the Patent Office any publication of potential relevance to the examination of a pending application with a concise description of its relevance
  • A supplemental examination procedure for issued patents upon request by a patent owner to consider, reconsider, or correct information believed to be relevant to the patent, and a showing that the information raises a substantial new question of patentability. This procedure is intended to allow a patent owner to cleanse his patent of inequitable conduct issues from the original prosecution of the patent. Conduct relating to information provided in the supplemental examination that has been considered, reconsidered, or corrected may not form the basis for a later finding that the patent is unenforceable, unless the allegation was plead with particularity prior to the request for supplemental examination or the supplemental examination was not concluded prior to any litigation being filed. Supplemental examination, however, cannot cure fraud on the Patent Office.
  • The ability to request "prioritized examination" for a fee of $4,800 (reduced by half for small entities)
  • The one year grace period to file a patent application after disclosure of an invention is limited to disclosures by the inventor or derived from the inventor
  • The prior use defense from patent infringement, previously limited to business methods, has been expanded to cover any prior commercial use
  • Failure to comply with the best mode requirement is no longer a ground for patent invalidity or unenforceability