America Invents’ Act Brings About Major Changes To U.S. Patent Law

'America Invents’ Act Brings About Major Changes To U.S. Patent Law

Dylan McGuire

The Leahy-Smith America Invents Act (H.R. 1249), approved by the Senate on Sept. 9, 2011, makes fundamental changes in the way patents are filed and handled in the United States. Corporate attorneys will want to familiarize themselves with these changes, said Eric E. Bensen, an intellectual property and litigation management attorney and co-author of several books on these topics.

“I think most people looking at the Act will agree that the most significant change is changing the U.S. system from one in which the first to invent certain subject matter would generally get the patent, to one in which the first inventor to apply for a patent on the subject matter will generally get the patent,” Bensen told the LexisNexis In-House Advisory in an interview.

Bensen explained, however, that this change may prove to be more “theoretical” than practical because most inventors have been using their filing date as their “priority date.”

“In that sense we were largely operating on a first-to-file system anyway. The real change is that under the current system, if you are the second to file but you were the ‘first to reduce to practice’ or the ‘first to conceive and then were diligent in reducing your invention to practice,’ and if you can prove that, then you can get the patent even though you were the second to file, but under the Act, that will no longer be the case,” Bensen said.

In-house counsel may not have to make a significant change in their practices under the new law, he said. “What they want to do is make sure they have the staffing in place and the systems in place to file for a patent as soon as is practical if there is a new invention. I think large corporations do that anyway, so in that sense I’m not sure that would necessitate a big change–but certainly they need to be aware that they don’t have that fall back of proving they were the first to reduce to practice,” said Bensen.

The first to file provisions of the new law will not go into effect until February 2013, so counsel will have a year to plan for the changes.

Bensen said that besides the first-to-file requirement, the Act includes an “expanded prior user right” which he explained as a “defense to infringement.”

“Generally, if you were the first to use an invention—as defined as a process or an invention used in a manufacturing process—that is later claimed in a patent and you were using it from more than a year before the application for the patent was filed, you have a defense to infringement.”

“Under the current system, if you invent a process you have the choice between keeping the process as a trade secret or seeking a patent. The risk of keeping it as a trade secret is that it’s a suppressed invention and is not prior art, so a later inventor could get a patent and preclude you from using it. But that won’t always be the case under the new act’s prior user provision and that’s going to make trade secret protection more appealing,” Bensen said.

The Act also has expanded features through which a patentee or third party can ask the U.S. Patent and Trade Office (PTO) to reexamine a patent. For example, under the old laws, the patentee had the option to seek a reissue of a flawed patent in order to cure the flaw and create a new patent that would withstand challenges.

“But under the Act, there will be a new proceeding called a ‘supplemental examination’ that will allow the patentee to go back and ask the PTO to take a second look at information that was not considered originally or was misapplied originally when the patent was filed,” said Bensen.

“So it’s giving you as the patentee a second chance to go back to the PTO and clean up something that went wrong originally to help avoid an inequitable conduct finding without having to go through the reissue process,” he said.

Bensen explained that the Act will in essence split the current inter partes reexamination process to include a post-grant review that can be done in the first nine months after a patent has been granted, while limiting inter partes reexamination proceedings to a period no sooner than nine months after a patent granted.

“The advantage of the post-grant review is that it has a lower threshold to be instituted and permits the PTO to consider broader grounds to invalidate the patent,” Bensen said. “So if you’re in house counsel and you do a lot of prosecution work you certainly want to get up to speed on the details of those provisions,” he said.

Bensen also suggested that the Act may have left open an important question respecting willful infringement and opinion letters.

“There’s a provision that says that the failure to get the advice of counsel is not relevant to a finding of willful infringement. However, there are two questions relevant to a finding of willful infringement. One is, did you willfully infringe? But there’s a separate question of, if you willfully infringed, how much are damages being enhanced? And the statute says, ‘OK you can’t use the lack of an opinion letter with respect to the first question,’ but it doesn’t address the second question. An opinion letter can impact how much damages are enhanced … so it may still be worth getting those letters in the right circumstances,” Bensen advised.