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Announcement: Second Annual University of Minnesota Law School Patent Symposium

Seminar: Patent Law After the America Invents Act: How the AIA Has and Will Continue to Change Patent Strategy and Decision Making

Second Annual U of M Law School Patent Symposium
Friday, April 12, 2013
University of Minnesota Law School – Room 25

Registration and Continental Breakfast 8:00 a.m. to 8:30 a.m.
Seminar and Panel Discussion 8:30 a.m. to 12:00 p.m.
Lunch in Auerbach Commons 12:00 p.m. to 1:00 p.m.

It has been well over a year since the Leahy-Smith America Invents Act (AIA) was signed into law. As of March 16, 2013, all the key provisions of the AIA will have gone into effect. Our experienced panel will help business and legal professionals better understand how the Act has and will continue to alter patent strategy, decision making and best practices.

Topics include:

  • The practical effect of the recently implemented “First to File” system.
  • The now available “Post Grant Review,” including the applicable procedures and rules.
  • Updates and developments regarding Patent Infringement Remedies.
  • Updates and developments regarding Patentable Subject Matter.
  • Patent prosecution strategy and decision making under the AIA.
  • Patent litigation strategy and decision making under the AIA.
  • The top patent law developments not involving the AIA.

Speakers and Panel Members:

Margo Bagley, University of Virginia Professor of Law
Melissa Buss, 3M Office of Intellectual Property Counsel
Aleya Champlin ’91, Of Counsel, Briggs and Morgan, P.A.
Thomas Cotter, University of Minnesota, Briggs and Morgan Professor of Law
Michael Lafeber ’93, Shareholder, Briggs and Morgan, P.A.
John Lunseth ’77, Shareholder, Briggs and Morgan, P.A.
Ruth Okediji, University of Minnesota, William L. Prosser Professor of Law

Additional details are available here.

Please RSVP by Friday, April 5 to e-mail

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USPTO Final Rule Changes Need for Statement about Transition Applications

On February 14, the U.S. Patent and Trademarks Office (USPTO) announced its final rules implementing the first-inventor-to-file (FITF) provisions of the AIA, scheduled to go into effect on March 16, 2013. After a number of comments from stakeholders, the USPTO changed the rule regarding patent applications filed on or after March 16 that claim priority to an earlier-filed application.

Previously, the United States Patent and Trademark Office had issued proposed rules implementing the first-inventor-to-file provisions of the America Invents Act (AIA).

Among other things, the Office had proposed additional requirements for nonprovisional applications filed on or after March 16, 2013, that claim the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013. According to the proposed rule, if a nonprovisional application contains at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant would be required to provide a statement to that effect. A statement would also have been required if the nonprovisional application does not have a claim to a claimed invention that has an effective filing date on or after March 16, 2003 but discloses subject matter not also disclosed in the foreign, provisional, or nonprovisional application.

The Office is providing in the final rule that a statement is required only if a transition application contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013. Thus, no statement is required if a transition application discloses subject matter not also disclosed in the prior- filed foreign, provisional, nonprovisional application, or international application designating the United States of America but does not ever contain a claim to a claimed invention that has an effective filing
date on or after March 16, 2013. The Office is also providing that an applicant is not required to provide such a statement if the applicant reasonably believes on the basis of information already known to the individuals designated as having a duty of disclosure with respect to the application that the transition application does not, and did not at any time, contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013.

Thus, an applicant in this situation is not required to conduct any additional investigation or analysis to determine the effective filing date of the claims in their applications.

AIA’s March 16th Deadline Approaches

As you may know, the America Invents Act (AIA) has key amendments to the patent law effective March 16, 2013 that will convert our patent system to a “first inventor to file” system for granting priority to patents as opposed to our current system of “first to invent”.  This means starting March 16, 2013 there will be many inventors and their companies who will race to the Patent Office to be first to file.

In order to ensure upcoming patent applications fall within the existing rules granting priority to the first to invent and avoid triggering the new rules granting priority to the first inventor to file, many patent applications will have to be filed before March 15, 2013. Over the next three months, the Patent Office expects to be overwhelmed with new patent applications.

On and after March 16, 2013, this means that it will be important to file your patent applications at the earliest practical date so that others do not file before you on the same invention.  In other words, if someone else files a patent application on your invention before your filing date, you may lose rights to your invention.  Because of Patent Office confidentiality (the first 18 months from filing date),  no one will be able to monitor the Patent Office filings to check whether someone else has filed before you.

Patent trolls and the AIA – a Potential non-Litigation Business Strategy

On March 16, 2013, the United States changes from a “first to invent” country to a “first inventor to file” country for patent applications.

Patent “trolls” or “non-practicing entities” (NPEs) own patents but do not make, use or sell the patented product.  Instead, patent trolls have in the past generally followed a business model in which, under the threat of patent litigation, they demand and receive relatively small amounts of revenue from a large number of targets.  Each of the targets believes that it is in its best interest to pay the troll a relatively small licensing fee for use of the patent rather than face the possibility of huge, uncertain damages in a patent infringement lawsuit. By owning a large number of patents, a patent troll can have a large potential market. However, section 299 of the AIA, effective as of September 15, 2011, limits the ability of patent trolls to join large numbers of accused infringers in a single patent infringement suit. Thus, the AIA section 299 may drastically change the traditional litigation business strategy used by patent trolls.

However, the AIA also opens up a potential new, non-litigation business strategy for patent trolls.

As of March 16, 2013, 35 U.S.C. 102(a)(2) becomes effective. This section of the patent law states “A person shall be entitled to a patent unless…the claimed invention was described in a patent issued…or in an application published…in which the patent or application…names another inventor and was effectively filed before the effective filing date of the claimed invention.” 35 U.S.C. 102(b)(2), however, contains an exception to the above.  It states: “A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if…the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.”

A picture is worth a thousand words. Take a look at the following example in which B is a patent troll that owns invention B and A is a target company which owns invention A.

Under the AIA, as cited above, if B’s effective filing date is earlier than A’s effective filing date, B will be prior art to A and the disclosure in B may prevent patent A from issuing. However, this result can be avoided if A owns invention B “not later than the effective filing date” of invention A.  On or after March 16, 2013 an issued patent or pending patent application that would be prior art to a new application has potential value to the applicant for a new patent. Thus,  the date of March 16 can be a “bridge” between the troll’s patent or application having no value to target A and a value that may be large, depending on the significance of the target’s new patent application and the presence/absence of other prior art. If company A believes that invention A is key to its business, company A may be willing to buy application B at a significant price. However, if there is other prior art, company A may only be willing to pay the troll less money for application B.

This strategy has the disadvantage that (probably) the patent troll can only use it against one target at a time,  because the troll is selling the leveraging patent, not licensing it to many targets. However, if section 299 of the AIA has the predicted deterrent effect on the joinder of multiple defendants, the strategy may be the only one left to the patent troll.

Note that this strategy will not work before March 16, 2013. Before that date, company A may be able to “swear behind” the filing date of invention B under 37 CFR 1.131 by establishing by oath or declaration that the subject matter of invention A was invented prior to the effective date of invention B.  Therefore, it is prudent for company A to file a patent application for invention A prior to March 16, 2013, particularly if it is aware of invention B. By doing this, company A cuts off the troll’s potential market for invention B.

AIA – Summary of new § 102(a) and (b)

The America Invents Act of 2011 contains a number of very important changes to United States patent law. Probably the most discussed change is that of a “first to invent” system to a “first inventor to file” system.  This change is implemented in Sections 102(a) and 102(b) of Title 35 of the United States Code, and will go into effect on March 16, 2013.  These two sections contain a lot of changes making them significantly different from their current counterparts.  It is difficult to read the text of the statute and understand its full impact without going through a number of scenarios.  The link in this post is to a Powerpoint presentation that lays out most of the significant timing questions via a number of distinct scenarios.  The presentation also includes a number of “take-aways” and practice tips that are immediately significant for applicants to understand even prior to March 16, 2013.

USPTO Proposed Rules on First-inventor-to-file under the AIA Require Statement regarding Claim to the Benefit of the Filing Date of an Application Filed Prior to March 16, 2013

On July 26, 2012, the United States Patent and Trademark Office issued proposed rules implementing the first-inventor-to-file provisions of the America Invents Act (AIA). These proposed rules will be in effect for any United States Patent Application filed after March 16, 2013. The proposed rules in the Federal Register are available for public comment until October 5, 2012.

Among other things, the Office is proposing additional requirements for nonprovisional applications filed on or after March 16, 2013, that claim the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013. If such a nonprovisional application contains at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect. A statement is also required if the nonprovisional application does not have a claim to a claimed invention that has an effective filing date on or after March 16, 2003 but discloses subject matter not also disclosed in the foreign, provisional, or nonprovisional application.

The Office stated that examination costs will “significantly increase” if the Office must determine on its own the effective filing date of every claim ever presented in an application filed on or after March 16, 2013, that claims priority to or the benefit of a foreign, provisional, or nonprovisional filed prior to March 16, 2013.

Please see our earlier post on the implications of this portion of the AIA at https://intellectualip.com/2012/07/23/america-invents-act-aia-effective-filing-date-a-trap-for-the-unwary/.

America Invents Act (AIA) Effective Filing Date: a Trap for the Unwary

Many inventors and businesses believe that they do not need to worry about the “first inventor to file” changes of the AIA until March 16, 2013. Here we show why they need to start worrying about it now.

Section 3 of the America Invents Act (AIA), 35 U.S.C 146, becomes effective on March 16, 2013. However, paragraph (n) of this Section of the AIA contains a particularly hazardous trap in regards to the “effective filing date” of a patent application. The section reads:

(n) EFFECTIVE DATE-

(1) IN GENERAL- Except as othewise provided in this section, the amendments made by this section…shall apply to any application for patent, and to any patent issuing therefrom, that contains or contained at any time —

(A) a claim to a claimed invention that has an effective filing date…that is on or after the effective date described in this paragraph or

(b) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim.

Let’s try to unpack the text and understand the trap.

First, the simple case – no trap. Smith files a patent application on March 16, 2013. March 16, 2013 is the “effective filing date.”  This is the first such patent application that Smith has filed for the claimed invention. The invention does not claim priority to an earlier-filed patent application. Result: the AIA “first inventor to file” provisions apply. Assuming Smith is the first inventor to file a patent application for the claimed invention, Smith will be entitled to a patent (providing, of course, that the invention is patentable under other provisions, such as novelty and nonobviousness, not successfully challenged under the post-grant review provisions of the AIA, or other possible reasons for unpatentability).

Under the Patent Act of 1952, as amended, in effect through March 15, 2013, a patent applicant could claim priority to a previously-filed patent application, as long as at least one inventor of the current patent application was named in the previously-filed patent application and the current patent application contained a reference to the previously-filed application. If both the effective filing date and the priority date of the current application are before March 16, 2013, the “first to invent” law that most inventors and businesses are familiar with will apply. However, under the AIA, Section 3(n), if even one claim in the current application is not entitled to a filing date before March 16, 2013, all of the claims will be treated under the new “first inventor to file” provisions.

So here is an example of the trap. On August 1, 2012, Smith (thinking that he does not need to worry about the AIA “first inventor to file” changes), files patent application A. Application A contains only one claim, with three elements, (a), (b), and (c). Elements (a) and (b) are thoroughly described in the patent application, but the description of element (c) is not very good. Smith plans to do some more experimentation on element (c). Patent application A receives an effective filing date of August 1, 2012. On March 16, 2013, with the experimentation on element (c) complete, Smith files a new patent application B with exactly the same claim with exactly the same elements: (a), (b) and (c). The new patent application B contains a reference under 35 U.S.C. 120 to the previously-filed application, A.

If Smith had filed application B on March 15, 2013, Smith would not have gotten an effective filing date for claim 1 of application B of August 1, 2012, because element (c) was not adequately described in patent application A. But it might not matter. If someone else filed a patent application C before Smith’s filing date, and the other application C was not a statutory bar under 35 U.S.C. 102(b), Smith could “swear behind” the other application C by showing that he, Smith, invented the claimed invention before the filing date of the other application C. Thus, Smith could have taken advantage of the “first to invent” law.

However, when Smith delays only one day, until March 16, 2013, to file application B, he has fallen into the trap. Elements (a) and (b) receive a priority date of August 1, 2012. But element (c)  receives an effective filing date of March 16, 2013 because it was not adequately described in application A.  This puts all of claim 1 (and any other claims) under the “first inventor to file” law. Now, Smith can not “swear behind” application C because “first inventor to file” is in effect. Smith does not get a patent on application B (unless Smith can show by the new “derivation proceedings” that the inventor of application C derived the invention from Smith, or unless Smith and the other inventor were both obligated to assign their patent applications to the same person).

Note also that Smith can’t cure this situation by deleting element (c) of claim 1 before a first Office Action citing application C, because the AIA applies to any patent application that contained at any time a claim with an effective filing date on or after March 16, 2013!

Inventors who file patent applications in the United States need to be aware of this trap. Smith either should have done enough experimentation to support element (c) in patent application A as of August 1, 2012, or Smith should have filed application B as soon as the experimentation on element (c) was complete but before March 16, 2013. The moral of the story is: file early and file often starting now.

Patentable Inventions: AIA’s Limitations

A patent may be issued in the United States only for certain inventions. Section 101 of the Patent Code sets the statutory boundary on eligible subject matter, and provides:

“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”[1]

Notwithstanding, there is a “clear congressional mandate that a very broad swath of inventions be eligible for patent protection.”[2] The limitations on what subject matter may be patentable, however, are not always clear.

Read the rest of this entry

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