The America Invents Act represents the fourth consecutive congressional session attempt for the first major change of the United States patent system since 1999, when the American Inventors Protection Act was enacted.
The America Invents Act (S. 23 & H.R. 1249), previously called the Patent Reform Act of 2011, are two similar bills in the two houses of the U.S. Congress. S.23 was passed by the United States Senate on March 8, 2011 and H.R. 1249 was passed by the House Judiciary Committee on April 14, 2011. A tentative deal has been reached among House Republican leadership members, making it likely that the America Invents Act will be considered on the House floor next week.
The proposed legislation would make the following changes to the U.S. patent system:
First-Inventor-to-File and Change of One Year Grace Period
This reform would move the U.S. from the present “first-to-invent” system to a “first-to-file” system. The new law would recognize the first person who files as the legal inventor. The proposed legislation also would modify prior art definitions of the patent law, providing for a one year grace period only for disclosures made by the inventor. Under the present law, the grace period exists regardless of who made the public disclosure. Thus, acts and prior art that would bar a patent would include public use, sales, publications and other disclosures available to the public as of the filing date, other than publications by the inventor, within one year of filing (inventor’s “publication-conditioned grace period”), whether or not a third party also files a patent application. Hence, applicants that do not publish their inventions prior to filing will receive no grace period.
Interference proceedings at the U.S. Patent Office for resolving priority contests among near-simultaneous inventors who both file applications for the same invention would be repealed because priority would be determined based on filing date. An administrative proceeding referred to as a “derivation proceeding,” similar to that which currently is used within some interference proceedings, would be available to ensure that the first person to file the application is actually an original inventor and that the application was not derived from another inventor.
Damages
The proposed amendment would add specific procedures and checks on how a judge manages the damages portion of a case. The amended statute would require that a court “identify methodologies and factors that are relevant to the determination of damages” and that “only those methodologies and factors” be considered when determining the damage award. In addition, prior to the introduction of damages evidence, the court would be required to consider either party’s contentions that the others damage case lacks a legally sufficient evidentiary base. In addition, the statute would require a judge to bifurcate the damages portion of a trial if requested “absent good cause to reject the request, such as the absence of issues of significant damages or infringement and validity.”
Enhanced Damages only for Willful Infringement
The current Patent Act is not expressly limited to situations that involve willful infringement. Section 284 simply states that “the court may increase the damages up to three times the amount found or assessed.” Federal Circuit precedent, however, has limited the statute only to situations where the infringer’s actions are at least objectively reckless. The amended statute would codify that holding with the words “Infringement is not willful unless the claimant proves by clear and convincing evidence that the accused infringer’s conduct with respect to the patent was objectively reckless, [i.e., that] the infringer was acting despite an objectively high likelihood that his actions constituted infringement of a valid patent, and this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer.”
Best Mode
An inventor still would be required to “set forth” the best mode for accomplishing the invention. However, the statute would be amended to exclude failure to disclose a best mode from being used as a basis for invalidating an issued patent. The United States Pat and Trademark Office (USPTO) would still have a duty to issue only those patents where the best mode requirement has been satisfied.
False Marking
A large number of false patent marking cases have been filed in the past year. The bill would eliminate those lawsuits except for ones filed by the U.S. government or filed by a competitor who can prove competitive injury.
Third-Party Challenges to Patent Rights
The bill includes three expanded ways that a third party can use the USPTO to challenge a patent: pre-issuance third-party submissions; third-party requested post-grant review; and inter partes post grant review.
Pre-Issuance Third-Party Submissions: Under the amendment, third parties would be allowed to submit any printed publication along with a description of the relevance to the USPTO to be considered during the examination of a pending patent application.
Third-Party Requested Post Grant Review: A post grant review proceeding would be created (similar to the current reexamination proceeding) which could be initiated by any party. The review would allow a third party to present essentially any legal challenge to the validity of at least one clam. A major limitation on the post grant review is that the request for review would have to be filed within nine-months of issuance of the patent.
Inter Partes Review Proceedings: Once the nine-month window for post grant review has expired, a party may then file for “inter partes review.” This new system would replace inter partes reexamination and would be limited to consideration of novelty and obviousness issues based on prior art patents and printed publications. Third-party requested ex parte reexamination would remain as a viable option.
Oath
The bill would make it easier for a corporation to file a substitute inventor’s oath when the inventor is non-cooperative.
Fee Setting Authority
The USPTO would be given authority to adjust its fees, but only in a way that “in the aggregate” would be necessary to recover the estimated costs of USPTO activities. In addition, a new “micro” entity would be created that would have additional fee reductions.
