University-Specific Implications of the America Invents Act

 

On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act. This presents the most important change in U.S. patent legislation since 1952. This summary presents the key changes that the Act imposes on university patent practice.

First Inventor To File

The most substantial change of the Act is the transition from a first-to-invent system to a modified first-inventor-to-file system that includes a grace period. The current law allows for a 12-month grace period during which disclosure of the invention by others does not necessarily constitute prior art, so long as the inventor could prove first-to-invent status.  Under the AIA, the patent seeker receives a 12 month grace period where he may file a patent application so long as the disclosure was made by the inventor himself or herself, a joint inventor or any third party who obtained the invention from them.[1] However, once another made the disclosure, the application is barred.   

This grace period suggests that universities should allow their academic scientists to publish their inventions as soon as possible, even before filing a patent application, so as to prevent others from being first to disclose. However, consideration of international filing should also be taken into account. Specifically, considering that the European Patent Office does not have a grace period, and that many other countries have grace periods of only 6-months, universities looking to make an international filing should be wary of publishing their inventions before filing.

Based on this fact, best practice in most circumstances would be to file a patent application as soon as possible. Further, considering the race mentality necessitated by first-inventor-to-file, universities should apply the “staged filing” approach, particularly in fast moving fields. Under this approach, as soon a new idea can be written down, a provisional application is filed. This allows the current ideas to develop over the next year, and file improvements to that idea in other provisional patent applications. Finally, with the one-year deadline approaching for the filing of nonprovisional or PCT applications, the university may then ascertain the value of the invention and combine all the provisional’s into a single nonprovisional application if appropriate. 

Record Keeping Changes

Under the current first-to-invent system, when there is a dispute over who first invented the patentable subject matter, an interference proceeding is implemented to resolve the dispute. Once interference has been suggested, the examiner refers the suggested interference to the Board of Patent Appeals and Interferences. An administrative patent judge proclaims the interference, which is then administered to the Board. Then, a panel of Board members enters final judgment on questions of priority and patentability arising in interference. As a result of this process, interferences are often used as opposition or cancellation proceedings.

Interference proceedings encouraged university inventors to take records of progress made in their inventions conception and reduction-to-practice. In general, the more detailed the records, the easier to prove an earlier invention date thereby winning an interference proceeding.

With a first-to-file system, inquiries into who in fact were the first to invent are irrelevant. However, the AIA implements a new method to strip priority from inventors who derive their idea from others and file first. This occurs via derivation proceedings.[2] To initiate a derivation proceeding the AIA requires: (1) a petition filed within one year of the publication that is the same, or substantially the same as a claim in an earlier patent application; (2) an oath; and (3) that the derivation is proven with “substantial evidence.”[3] The Director then rules on the petition. If granted, the Patent Trial and Appeal Board (this is the post-AIA name for the Board of Patent Appeals and Interferences) make the determination. However, the PTO has not yet described the standards that will be applied in such a proceeding. It is likely that these proceedings will mimic interference actions, allowing the parties to litigate general patentability issues.

With the move from interference proceedings to the new derivation proceedings, the importance of keeping detailed records throughout the invention process is still of major importance to universities. Under the AIA, the “substantial evidence” burden will place high importance on records kept by the inventor. Thus, universities should continue to advise their inventors to record as much detail as possible throughout their inventive process.

 “University Exception” To The Prior User Defense

Currently, there exists a prior user defense that protects third parties who demonstrate that they were commercially using an invention at least one year prior to the filing of a patent application. Current law provides a prior user defense only for business method patents. The AIA expands this defense to apply to any patented claim to a process, machine, manufacture, or composition of matter used in a manufacturing or other commercial process.[4] However, the Act has implemented a “university exception,” which states that the prior use defense may not be raised against patents, which at the time the invention was made, were owned or subject to an obligation of assignment to a university.[5] Thus, under the Act, universities have a greater ability to bring successful patent infringement suits against prior users.

Oath Changes and Assignee Execution

The AIA makes two changes to the oath/declaration. First, the inventor is no longer required to state that they are the original and first inventor, since this is irrelevant in a first-to-file system.[6] Second, the Act adds the statement “the application was made or was authorized to be made by the inventor.”[7]

The AIA also makes it easier for assignee’s to file for a patent. Current law requires that where an inventor is deceased, under legal incapacity, or cannot be found after diligent effort, or who is under obligation to assign but has refused to do so, the oath or declaration in such an application must be accompanied by a petition including: (1) proof of the pertinent facts; (2) a showing that such action is necessary to preserve the rights of the parties or to prevent irreparable damage; (3) the fee set forth in § 1.17(g); and (4) the last known address of all of the inventors.[8] Under the AIA, an assignee must only file a substitute statement containing identification of the individual inventor, explain the circumstances for the permitted basis for the filing of the substitute statement, and supply any additional information required by the Director.[9] This, lesser standard is particularly helpful to universities dealing with inventors who are no longer able to be reached or are uncooperative, without having to prove the pertinent facts, or the irreparable damage.

Prior Art Submissions

Finally, the AIA greatly expands the ability of third parties, including universities, to question and challenge the patentability and validity of an invention. Currently, third party submissions of prior art to the PTO were limited by a short deadline for filing a submission and the third party could not include any analysis of the prior art submitted. Under the AIA, a third party may submit prior art analysis that can correct an applicant’s mischaracterized prior art classification.[10] This submission may include any documents of potential relevance to the examination of the application, so long as a description of the relevance is provided. Further, the deadline for the submission under the new rule will be the earlier of 1) the date of the notice of allowance; or 2) the later of six months after publication of the application, or the date of first rejection of any claim by the examiner.[11]

 

With these new rules universities should vigilantly monitor published patent applications for patents that they have an interest in. This attentiveness will advantage universities by not finding themselves on the receiving end of a patent infringement lawsuit asserting an invalid patent. On the other hand, these prior art submissions may also be directed against universities. Thus, universities should be prepared to sufficiently differentiate prior art, and to argue that their prior art characterizations are correct.

 

By: Daniel Zemel

Daniel is a registered Patent Agent with significant prosecution experience. Daniel is a 2L at Seton Hall University School of Law. Daniel received his B.S. in Biology from Touro College in Flushing, New York. Daniel can be reached at Daniel.zemel@student.shu.edu.

 

 

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[1] http://www.uspto.gov/aia_implementation/patents.jsp

[2] § 35 USC 135 (2011).

[3] Id.

[4] § 35 USC 273 (2011).

[5] Id.

[6] § 35 USC 115 (2011).

[7] Id.

[8] § 35 USC 116 (2010).

[9] § 35 USC 115 (2011).

[10] § 35 USC 122 (2011).

[11] Id.