An act to streamline, harmonize US patent law

On September 16, 2011, the US President Barack Obama signed the Leahy-Smith America Invents Act – enacting it into law that is widely perceived as a reform to foster innovation and stimulate US economic growth by streamlining, harmonizing the US patent process. The new law will speed up the patent process that will help applicants and entrepreneurs bringing their inventions to market sooner, creating jobs and new business avenues. This reform is proposed to give a boost to American companies and inventors who suffered costly delays and unnecessary litigation, and to focus instead on innovation and job creation.

The new law have several effective dates for various provisions, some changes coming in effect immediately whereas other changes will not be implemented until 2012 and 2013. Some of the key highlights of American Invents Act include:

Section 3

First Inventor to File

Amends 35 USC § 100 to reform the US patent system by adopting a first-to-file system instead of a first-to-invent system, bringing the US in conformity with the rest of the world in determining priority of invention based on the earliest date a patent application was filed with a patent office. There is a limited one-year grace period related to public disclosures made by the inventor.

Derivative proceedings

Amends 35 USC § 135 to replace interference proceedings with “derivative proceedings” to determine whether an inventor of first-filed patent application derived the claimed subject matter without authorization from an invention named in a later filed application. This reform will eliminate long-standing interference proceedings. A petition for derivative proceeding will only be allowed if it is filed within a limited one-year period beginning on the date of the first publication of a claim in the earlier filed application.

Conditions for patentability; novelty

Amends 35 USC § 102 to redefine the scope of prior art as anything patented, published, on sale, or in public use before filing, or any patent application filed by another before the effective filing date of the claimed invention. This reform will now broaden the scope of on-sale or public use outside the US, bringing the US in conformity with practice of other jurisdictions such as EU and India. This reform will now allow US examiners to take into account traditional/indigenous knowledge whether in written or oral form as prior art in determining novelty of the invention.

Conditions for patentability; non-obvious subject matter

Amends 35 USC § 103 to consider obviousness as of the effective filing date of the claimed subject-matter rather than at the time invention was made.

Amendments made to section 3 will come in effect 18 months after the date of enactment, i.e. March 16, 2013.

Section 4

Inventor’s oath or declaration

Amends 35 USC § 115 to permit applicants to make a “substitute statement” instead of an inventor’s oath when an inventor is deceased, under legal incapacity, or cannot be found or reached after diligent effort.

Filing by other than inventor

Amends 35 USC § 118 to allow applicants to file the application for patent when inventors has assigned or are under the obligation to assign the invention, bringing the US in conformity with the rest of the world in permitting applicants to directly file patent application on behalf of inventors.

Amendments made to section 4 will come in effect 1 year after the date of enactment, i.e. September 16, 2012.

Section 5

Defense to infringement based on prior commercial use

Amends 35 USC § 273 to expand “the prior user” defense to infringement to all patents rather than restricting only to business method patents. The prior user have the burden of showing a prior use of the claimed invention more than a year before the priority date of the claimed invention. Even if a prior use is kept confidential it will be a valid defense to infringement. The prior use defense is not available in case where the invention was owned by or under obligation of assignment to a university or technology transfer organization at the time invention was made.

An act to streamline, harmonize US patent law - II

Section 6

Inter partes review

Amends 35 USC § 311 to replace inter partes re-examination with “inter partes review” allowing third party to challenge validity or scope of an issued patent only on a ground that is permissible under 35 USC § 102 and 103. The review must be filed within nine months after grant or reissuance of patent or after the grant of termination of post-grant review. Prior art submissions are limited to patents and printed literature.

Post grant review

Enacts 35 USC § 321 to allow third party (petitioner) to institute a post-grant review for an issued patent. The review must be filed within nine months after grant or reissuance of patent. This reform will permit third party to challenge the validity or scope of patent based on any ground of patentability and prior art submission is not limited to patents and printed literature. Importantly, in the case of both post-grant review and inter partes review proceeding, the third party will be estopped from raising similar invalidity arguments in subsequent USPTO or the International Trade Commission (ITC) or litigation proceedings that were raised or reasonably could have been raised during the review.

This reform will now allow the US to have post-grant opposition procedure similar to Europe and India. Amendments made to section 6 will come in effect 1-year after the date of enactment, i.e. September 16, 2012 and will be applicable to any patent issued before or after the effective date.

Section 7

Patent Trial and Appeal Board

Amends 35 USC § 6 to existing Board of Patent Appeals and Interferences with newly formed “Patent trial and Appeal Board” to hear appeals and conduct derivation, inter partes review and post-grant review proceedings. The Patent Trial and Appeal Board will be having a panel of at least three members.

Appeal to Court of Appeals for the Federal Circuit

Amends 35 USC § 141 to permit either party to appeal the Patent Trial and Appeal Board adverse decision only to the US Court of Appeals for the Federal Circuit.

Amendments made to section 7 will come in effect 1-year after the date of enactment, i.e. September 16, 2012 and will be applicable to proceedings commenced on or after the effective date.

Section 8

Preissuance submission by third parties

Amends 35 USC § 122 to permit third party to submit, for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing within six months of publication of the application.

Amendments made to section 8 will come in effect 1-year after the date of enactment, i.e. September 16, 2012 and will be applicable to any patent application filed before or after the effective date.

Section 9

Venue

Amends 35 USC § 32, 145, 146, 154(b)(4)(A) and 293 to shift default venue from United States District Court of Columbia to “United States District Court for the Eastern District of Virginia.”

This amendment is in effect immediately and will apply to any civil action commenced on or after the effective date.

Section 10

Micro entity defined

Enacts 35 USC § 123 to include a new class of inventor “micro-entity” which has filed no more than four applications, and has gross income below a designated level without having transferred ownership interest in the application to an entity with gross income exceeding such limit. This provision is in effect immediately.