Ziolkowski Patent Solutions Group, SC

On September 16, 2011, the Leahy-Smith America Invents Act (The Act), H.R. 1249, became law, resulting in the most sweeping reform of US patent law in 60 years. As illustrated in the timeline above, some provisions of The Act went into effect within the first few weeks following enactment, while other provisions will be implemented in stages over the coming months and years.

The below summary provides a high-level look at key changes that are on the horizon for the US patent system to help you understand how The Act may impact any immediate or near-term decisions regarding filing US patent applications or proceeding with certain patent-related matters. Additional information, including a link to the full text of The Act, is provided in the Additional Resources section, at the end of this document.

What you need to know NOW

The Act did not immediately change the US from a first-to-invent system to a first-to file system.

Currently, the US patent system remains a “first-to-invent” system, which means that the person who first conceived the invention is entitled to the patent. This is in contrast to the majority of the world that, on the other hand, has a “first-to-file” system, rendering patent rights to the inventor who is the first to file a patent application, regardless of the date of invention.

Although The Act does change the US to a “first-to-file” system, this change will not be implemented until March 16, 2013. That is, patent applications filed prior to March 16, 2013 will still be examined by the US patent office under the “first-to-invent” system.

The following changes were implemented between September 16, 2011 and October 1, 2011 (STAGE 1):

Micro-Entity. Traditionally, patent applicants were categorized either as a “large” entity or a “small” entity. If a patent applicant qualifies as a “small” entity, the majority of the US PTO fees are reduced by 50%. In an attempt to encourage more patent filings by sole inventors and small companies, The Act adds “micro-entity” as a third category of applicants. A “micro-entity” is a small entity where the applicant is listed on no more than four (4) previously-filed patent applications (certain additional limitations will also apply). If an Applicant qualifies as a micro-entity, certain US PTO fees are reduced by 75%. H.R. 1249, §10.
Fee Increase. Congress instituted a 15% surcharge on most US Patent Office fees. This 15% fee increase is defined as a “transition surcharge” and is effective immediately (i.e., September 26, 2011) until a more formal US PTO rulemaking process is complete. A link to the official US PTO fee schedule is provided in the Additional Resources section, below. §11.
Best Mode. The best mode contemplated by the inventor for carrying out the invention must be disclosed in a patent application. While The Act has not removed this requirement, The Act now makes clear that failure to disclose the best mode “shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable.” §15.
Inter Partes Reexamination. The Act immediately implements a new standard for initiating an inter partes reexamination, which requires a showing that there is a reasonable likelihood that the requester will prevail with respect to at least one of the patent claims challenged in the request. On September 16, 2012, the US PTO will stop accepting requests for inter partes reexaminations and implement a new inter partes review procedure (discussed below). The standard for ex parte reexamination remains unchanged. §6.
Prior Use Defense. The Act expanded the scope of the “prior user rights” defense to patent infringement to include prior commercial use of any subject matter in any technical field (under the previous law, the defense applied only to methods of doing or conducting business). The change applies to patents issued on or after September 16, 2011. §5.
Prioritized Examination Fee. A patent applicant who wishes to expedite examination of their patent application may pay an additional fee of $4800 in addition to the standard examination fees. The $4800 is reduced for small entities. §11.
Tax Strategies. An invention related to a strategy for reducing, avoiding, or deferring tax liability is deemed insufficient to differentiate from the prior art. §14.

What you will need to know LATER

Provided below is a brief overview of a number of key provisions that will be implemented in future stages of the patent reform. As the implementation dates for the various stages get closer, we will provide additional information to help you understand how the changes may affect your patent strategy.

STAGE 2 - Changes implemented November 15, 2011

Electronic Filing Incentive. Patent application filing fee is increased by $400 if the application is not filed electronically. §10.

STAGE 3 - Changes implemented September 16, 2012

Revised Inventor’s Oath. Simplified standards for unavailable inventors. §4.
Third Party Submission of Prior Art References. Broader opportunity for third parties to submit prior art during prosecution of another party’s patent application. §8.
Supplemental Examination. New procedure for considering prior art that was not considered during prosecution. §12.
Prioritized Examination for “Important Technology.” If the technology is deemed important to the national economy or competitiveness, a patent application may receive priority for examination. §25.
Inter Partes and Post Grant Review. Completely revamped review process for issued patents. Revised post grant review procedures apply within nine (9) months of issue; revised inter partes review procedures apply nine (9) months after the patent issues. §6.
Business Method Patents. Limitations to be implemented in bringing lawsuits against alleged infringers of patents containing business method claims. §18.

STAGE 4 - Changes implemented March 16, 2013

First-to-File System Implemented. To be eligible for a patent, an inventor must (1) file a patent application first, (2) publish the subject matter to be patented and then file a patent application within a year, or (3) prove that an applicant who filed first derived the claimed subject matter from the inventor. §3.
Derivation Proceedings. If the inventor of an earlier-filed patent application can be shown to have derived the invention from the inventor of a later-filed patent application, the later applicant can initiate a derivation proceeding within one (1) year of issuance of the earlier-filed patent application. §3.
Definition of Prior Art. Concurrent with changing to First-to-File, the definition of prior art under 35 U.S.C. § 102 and the conditions for patentability under 35 U.S.C. § 103 will be dramatically redefined. In general, information that is made public prior to a filing date will be available as prior art under § 102 or in an obviousness assessment under § 103, unless that information derives from the applicant.

Additional Resources

Please visit the below sites for additional information regarding the AIA:

**This above information regarding implementation of the Leahy-Smith “America Invents Act” is provided by ZPS Group, SC for informational purposes only and does not constitute legal advice, nor can it be inferred therefrom that an attorney-client relationship has been formed. Should you need legal assistance or have questions regarding this letter or other matters, please call our office at 262-268-8100.

Patent Reform Act