America Invents Act Lained .Auth Checkdam

The Leahy-Smith America Invents
Act: Changes to United States Patent

Law and Practice
Charles E. Miller
COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

#2988628
Stated Objectives of Patent Reform
Improve quality of patents granted by the PTO
International harmonization of patent laws
Early determination of rights
Reduce patent litigation costs and risks of alleged

infringers
2 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Summary of Changes
Patent Law
Post Grant Procedures
Litigation Related
PTO Practice, Operations, Fees and Funding

Patent Law
First Inventor to File
Grace Period for Inventor Disclosure
Definition and Scope of Prior Art
Derivation Proceedings
Bar to Patents Covering Certain Subject Matter

First Inventor to File
The Act eliminates first-to-invent system
Patent awarded to first inventor to file
Priority is based on application filing dates

Effective March 16, 2013
Adoption of the First-to-File system is not conditioned on
adoption by Europe and Japan of a U.S. style 1 year grace
period
Interference proceedings are abolished

Grace Period For Inventor Disclosure
The Act includes a 12-month grace period prior to the

effective filing date (i.e., the earliest priority date) for
public disclosures by an inventor or by another who
obtained the subject matter from the inventor
Public disclosure during the 12-month grace period by

another party who did not obtain the subject matter from
the inventor will not prevent the inventor from obtaining a
patent ONLY IF the inventor made a public disclosure of
the subject matter first

Definition and Scope of Prior Art
Public use and on sale activities in any country are

prior art not just public use or on sale in the U.S.
These public use and on sale activities are prior art only
if they are disclosures of the claimed invention
U.S. patents and published patent applications of other
persons (i.e., different listed inventors) are prior art as of
their earliest claimed priority date
When a U.S. patent or patent publication listing different
inventors is owned by the same person or subject to assignment
to the same person as of the earliest claimed priority date of the
claimed invention, that U.S. patent or patent publication is not
prior art under new 102(a)(2).

Definition and Scope of Prior Art (continued)
Priority Date
Disclosures before the Priority Date are
prior art, with three exceptions:
1. An inventors own direct or indirect
public disclosure and/or sales within
1 year before the Priority Date;
2. Third party disclosures within 1 year
before the Priority Date ONLY IF the
inventor publically disclosed the
invention before the third party
disclosure; and
3. Third party disclosures within 1 year
before the Priority Date IF that third
1 year before
party disclosure was obtained
Priority Date
directly or indirectly from the inventor

Derivation Practice
Effectively replaces current interference practice

Two types:
patent v. patent: civil action
published application v. published application: PTO
A civil action must be filed within 1 year from the issuance of the first
patent (1) containing a claim to the allegedly derived invention and
(2) naming as an inventor an individual alleged to have improperly
derived such invention
A derivation proceeding in the PTO must be filed within 1 year from
the first publication (1) containing a claim to an invention that is the
same or substantially the same as the earlier applications claim to
the invention; and (2) naming as an inventor an individual alleged to
have improperly derived such invention

Derivation Proceeding in the PTO
The PTO will prescribe what is sufficient evidence

required to prove and rebut a claim of derivation
If an inventor in an earlier application is found to have

derived the invention from the true inventor, then claims
in the earlier application will be refused or cancelled
Parties in a derivation proceeding in the PTO can

settle/arbitrate any claims of derivation
Must provide a copy of the settlement agreement to the PTO
Must notify PTO of arbitration award to make arbitration award
enforceable

Bar to Patents Covering Certain Subject
Matter
Any patent filed that has a claim covering any strategy
for reducing, avoiding, or deferring tax liability is deemed
insufficient to differentiate a claimed invention from the
prior art
This does not apply to (1) systems and methods for

preparing a tax filing or organizing that data; and (2)
methods and systems for financial management
Patents with a claim directed to or encompassing a

human organism are not permitted

Post Grant Procedures
Ex parte Reexamination
Supplemental Examination
Post Grant Review
Inter partes Review
Review of Business Method Patents

Ex parte Reexamination
Ex Parte Reexamination procedures will remain in effect
Can be filed by anyone, including patent owner
Can only cite patents or printed publications as prior art
The current threshold of substantial new question of

patentability will continue

Supplemental Examination
Only patent owner can initiate procedure, and any grounds can be raised
as a basis for the request
Purpose is to permit the PTO to consider, reconsider, or correct information

believed by the patentee to be relevant to the patent
Can be used to purge inequitable conduct and unenforceability claims,

except those that pled with particularity in a civil action before the filing of
the Supplemental Examination request
Threshold is whether a substantial new question of patentability has been

raised
The mere fact that a request for Supplemental Examination was or was not
filed can not be used as relevant to enforceability of a patent
If PTO becomes aware of fraud, the matter may be referred (confidentially)

to the Attorney General for further investigation

Post Grant Review
Person who is not patent owner may petition for review of a patent
within 9 months from patent grant (similar to European Opposition
Proceeding)
Grounds for invalidity are any that can be raised against a patent in
court
Post grant review will be granted if it is more likely than not that at
least one of the claims challenged is unpatentable, or if the petition
raises a novel or unsettled legal question that is important to other
patents
Petitioner has the burden of proof by a preponderance of the

evidence
Patent owner has right to file preliminary response to petition

Post Grant Review (continued)
Post Grant Review to be completed within 1 year and conducted

before a newly formed Patent Trial and Appeal Board
Petitions for Post Grant Review are not allowed if the petitioner
challenged the validity of the patent in court prior to filing the
petition, and any civil action filed by petitioner after filing petition for
Post Grant Review is automatically stayed
If a civil action is filed within 3 months from the date patent grant,
the court can not stay a decision on a patent owners motion for a
preliminary injunction
Petitioner can not raise issues in a civil action that were or could
reasonably have been raised in the Post Grant Review proceeding
once a final written decision of the Patent Trial and Appeal Board is
issued

Post Grant Review (continued)
If multiple parties file petition for Post Grant Review for the same
patent, then those petitions may be consolidated in a single review
Limitation on Post Grant Review for reissue patents that have

claims of the same or narrower scope than the original patent
Appeal of final decision can only be taken to the Federal Circuit
Post Grant Review can be settled, but a copy of the settlement

agreement, and any agreements mentioned in the settlement
agreement, must be filed with the PTO
Agreement may be treated as confidential business information at the
request of a party
Intervening rights apply to any amendments made to the claims,

and amendments can not be broadening

Inter Partes Review
Person who is not patent owner may petition for review of a patent
the later of (1) 9 months after patent is granted or (2) the date of
termination of a Post Grant Review proceeding
Grounds for invalidity limited to novelty and nonobviousness based

on prior art consisting of patents and printed publications
Inter partes Review will not be granted unless reasonable

likelihood that petitioner would prevail with respect to at least one
claim (slightly raised threshold from that of Post Grant Review)
Patent owner has right to file preliminary response to petition
Inter Partes Review to be completed within 1 year and conducted by

the Patent Trial and Appeal Board

Inter Partes Review (continued)
Petitions for Inter partes Review are not allowed if the petitioner
challenged the validity of the patent in court prior to filing the
petition, , and any civil action filed by petitioner after filing petition for
Inter partes Review is automatically stayed
A petition for Inter partes Review is also not allowed if the petition is
filed more than one year after the date on which the petitioner is
served with a complaint alleging infringement of the patent
Petitioner can not raise issues in a civil action that were or could
reasonably have been raised once a final written decision of the
Patent Trial and Appeal Board is issued

Inter Partes Review (continued)
Appeal of final decision can only be taken to the Federal

Circuit
Inter Partes Review can be settled, but a copy of the

settlement agreement, and any agreements mentioned
in the settlement agreement, must be filed with the PTO
Agreement may be treated as confidential business information
at the request of a party
Intervening rights apply to any amendments made to the

claims

Summary of Post Grant Procedures
Ex Parte Supplemental Post Grant Inter Partes

Reexam Examination Review Review
Who can
anyone patent owner third party only third party only
file?
patents and printed patents and printed
Basis publications
any grounds any grounds
publications
(1) more likely than
substantial new substantial new
not or (2) novel or reasonable
Threshold question of question of
unsettled legal likelihood
patentability patentability
question
later of 9 months
any time after any time after within 9 months after grant or date
Timing grant grant from patent grant of termination of a
Post Grant Review
yes issues that yes issues that
Estoppel none none were or could have were or could have
been raised been raised

Review of Business Method Patents
A transitional post-grant review proceeding for review of the covered

business method patents, and which take effect September 16, 2012 and
expire 8 years thereafter
A covered business method patent is a patent that claims a method or

apparatus for performing data processing or other operations used in the
practice, administration, or management of financial products or services. It
does not include patents for technological inventions.
Petitioner must be the real party in interest that has been sued or charged
with infringement under the patent
Proceedings are same as Post Grant Review and are conducted by the
Patent Trial and Appeal Board
Petitioner can not raise issues in a civil action that were or could reasonably
have been raised in the proceeding once a final written decision of the
Patent Trial and Appeal Board is issued

Litigation Related Changes
Joinder
Prior User Rights
Marking and False Marking
Best Mode
Advice of Counsel
Litigation Against the USPTO

Joinder
Parties that are accused infringers may be joined in one

action only if:
the parties relate to the same accused product or process;
and
common questions of fact will arise for all defendants
Basis for joining unrelated parties can not just be

because they all are alleged to infringe the same patent
Can be waived by an accused infringer
Applies to all civil actions filed on or after September 16,

2011
Prior Commercial Use Rights
A prior commercial use rights defense is available

against all patents, not just business method patents
Prior commercial use

Must have been in the U.S.
Occurred at least 1 year before the earlier of (1) the earliest
claimed priority date, or (2) the earliest public disclosure of the
claimed invention that qualifies for the prior art grace period
exceptions
Person asserting prior commercial use defense has the

burden of establishing the defense by clear and
convincing evidence

Prior Commercial Use Rights (continued)
Defense is available for premarketing regulatory reviews and

nonprofit laboratory use
Defense is not available if patent was owned by a university
Defense is personal, non-assignable or licensable, unless with the

entire business
If assigned with entire business, then continued commercial use is

only permitted at same sites used the earlier of (1) the earliest
priority date or (2) the date of assignment
Defense can not be used if the subject matter of the prior

commercial use was derived from the patentee

Prior Commercial Use Rights (continued)
Defense is not a general license to all claims in the patent, but only
the specific subject matter of the prior use
Abandonment of the commercial use shuts off defense as of the

date of abandonment
If defense is asserted without a reasonable basis for doing so and

person asserting the defense is found to infringe the patent, then
case will be deemed exception for purposes of awarding attorney
fees to other party
Patent is not invalid on this basis alone if defense is proven
Applies to any patent issued on or after enactment

Marking and False Marking
The Act eliminates qui tam lawsuits for false patent

marking
Only the US can sue for the statutory penalty
Private parties can sue for damages, but this requires

proof of a competitive injury
Not false marking if product was covered by a now-

expired patent
Changes are in effect now, includes pending cases

Best Mode
Eliminates an alleged infringers ability to argue that the

patent owner did not identify the best mode for
enablement in the patent specification
The PTO retains the ability to reject an application for

lack of best mode disclosure
These changes are in effect now

Advice of Counsel
Failure to obtain advice of counsel with respect to any

alleged infringed patent, or failure to present such advice
in defense in a civil action, can not be used to prove
willful infringement or intent to induce infringement
Obtaining advice of counsel can still help in defeating a

claim of willful infringement or intent to induce
infringement

Litigation Against the USPTO
The location of litigation against the USPTO is changed

to the U.S. District Court for the Eastern District of
Virginia from the U.S. District Court for the District of
Columbia
Eliminates the right of de novo review of PTO

reexamination decisions in the U.S. District Court for the
District of Columbia direct appeal to Federal Court will
be the sole means of judicial review

PTO Practice, Operations, Fees and
Funding
Prioritized Examination
Inventor Oath and Assignee Filing
Pre-issuance Submissions of Prior Art
PTO Fees
New Micro Entity Status

Prioritized Examination
The PTO is to provide for prioritization of examination of

applications for products, processes, or technologies
that are important to the national economy or national
competitiveness without recovering the aggregate extra
cost of providing such prioritization.
Directed towards so-called green technologies
Additional $4,800 fee (50% discount for small entities)
Goal is to provide a first substantive response from the

PTO within 12 months of patent application filing

Inventors Oath and Assignee Filing
Employers and other assignees may file patent

applications without declarations executed by the named
inventors
An inventor oath or declaration would be required before

issuance of a notice of allowance
Can provide a substitute to the inventor oath or

declaration if the inventor is under obligation to assign,
but refuses or can not otherwise sign

Pre-issuance Submissions of Prior Art
Any third party may submit written prior art for

consideration and inclusion in the record
Written submission must be before the earlier of

the date of allowance
six months after the publication of the application
the date of the first rejection of any claim
Practically, there will be a 6 month window from

publication for filing any written submission, unless you
otherwise are aware of the application and can submit
earlier than publication date

PTO Fees
Gives permission for the PTO to set and adjust its fees
There will be a 15% surcharge on almost all fees,

including maintenance fees, effective September 26,
2011
Implements a $400 fee for non-electronic filing

Micro-Entity Status
The Act also establishes a new micro entity
A micro entity is entitled to a 75% discount of many PTO

fees.
Micro entity is generally a person who is employed by an

institution of higher education, or has not been named
on more than 4 prior applications and meets certain
income requirements

Summary of Effective Dates
Topic Effective Date
Joinder of Accused Infringers September 16, 2011
Micro-Entity Status September 16, 2011
Prioritized Examination September 16, 2011
Inter Parte Reexamination Threshold Change September 16, 2011
Virtual Marking September 16, 2011
False Marking Actions Limited September 16, 2011
Best Mode Issue September 16, 2011
Venue Change September 16, 2011
Business Methods September 16, 2011
Priority Examination September 16, 2011
Fee Increase September 26, 2011
Inter Partes Reexamination
Abolished September 16, 2012
Advice of Counsel September 16, 2012
Post-Grant Review September 16, 2012
Inter Partes Review September 16, 2012
First-to-File March 16, 2013

Thank you
Dickstein Shapiro LLP

1633 Broadway
New York, NY 10019
Tel No. (212) 277-6559 | Fax No. (212) 277-6501
Charles E. Miller
millercharles@dicksteinshapiro.com
COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

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The Leahy-Smith America Invents

Act: Changes to United States Patent

COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Improve quality of patents granted by the PTO

International harmonization of patent laws

Early determination of rights

Reduce patent litigation costs and risks of alleged

2 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Post Grant Procedures

PTO Practice, Operations, Fees and Funding

3 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

First Inventor to File

Grace Period for Inventor Disclosure

Definition and Scope of Prior Art

Bar to Patents Covering Certain Subject Matter

4 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

The Act eliminates first-to-invent system

Patent awarded to first inventor to file

Priority is based on application filing dates

Interference proceedings are abolished

5 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

The Act includes a 12-month grace period prior to the

Public disclosure during the 12-month grace period by

6 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Public use and on sale activities in any country are

7 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

8 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Effectively replaces current interference practice

9 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

The PTO will prescribe what is sufficient evidence

If an inventor in an earlier application is found to have

Parties in a derivation proceeding in the PTO can

10 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

This does not apply to (1) systems and methods for

Patents with a claim directed to or encompassing a

11 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Post Grant Review

Inter partes Review

Review of Business Method Patents

12 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Ex Parte Reexamination procedures will remain in effect

Can be filed by anyone, including patent owner

Can only cite patents or printed publications as prior art

The current threshold of substantial new question of

13 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Purpose is to permit the PTO to consider, reconsider, or correct information

Can be used to purge inequitable conduct and unenforceability claims,

Threshold is whether a substantial new question of patentability has been

If PTO becomes aware of fraud, the matter may be referred (confidentially)

14 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Petitioner has the burden of proof by a preponderance of the

Patent owner has right to file preliminary response to petition

15 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Post Grant Review to be completed within 1 year and conducted

16 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Limitation on Post Grant Review for reissue patents that have

Appeal of final decision can only be taken to the Federal Circuit

Post Grant Review can be settled, but a copy of the settlement

Intervening rights apply to any amendments made to the claims,

17 COPYRIGHT 2011. DICKSTEIN SHAPIRO LLP. ALL RIGHTS RESERVED.

Grounds for invalidity limited to novelty and nonobviousness based

Inter partes Review will not be granted unless reasonable

Patent owner has right to file preliminary response to petition