New Patent Law to End U.S. First-To-Invent Patent System

The America Invents Act signed into law by President Obama on September 16, 2011 includes new First-To-File patent provisions that in about a year and a half will end the traditional First-To-Invent patent system for U.S. patent rights. The text of the America Invents Act along with proponents of the new law assert that these changes will lead to greater certainty in the scope of patent protection for inventors and patent owners, resulting from simplification of patent office procedures and greater harmonization with foreign patent systems. In any event, the new First-To-File provisions introduce some uncertainties into the patent field, and patent experts and inventors are looking forward with interest to what the courts’ interpretations of certain aspects of the new provisions will be.

Prior to the America Invents Act, the U.S. had a pure First-To-Invent patent system which was largely unique among patent systems of the world. Under the previous U.S. patent laws, an inventor could win U.S. patent rights to his or her invention even if another party had filed a patent application at the United States Patent and Trademark Office (“USPTO”) before the inventor filed an application, as long as the inventor could prove that he or she had actually invented the claimed subject matter before the intervening party. In some instances, multiple inventors in a field will invent the same invention unaware that another party has already developed or is simultaneously developing the same invention.

If an inventor invented first in the race against other inventors (the “First Inventor”) but was slower in preparing and filing a patent application on the invention and therefore filed the patent application subsequent to another inventor’s filing (the “First Filer”), the First Inventor could, after filing, invoke an interference proceeding at the USPTO and could therein attempt to prove that he or she was truly the first to invent.1 Upon winning such an interference proceeding, the First Inventor would then receive the patent rights to the invention and not the First Filer. Such interference proceedings were rare but when carried out added significant expense and time delays to the patenting process.2 Most or all other foreign systems avoided the challenges of such interference proceedings by implementing First-To-File patent systems, in which patent rights were awarded to the inventor who first filed a patent application for an invention regardless if he or she was actually the first to think of the invention and reduce it to practice.

Certain portions of the America Invents Act, including most of the First-To-File provisions, do not come into effect until at least 18 months after the Act’s signing date, on or after March 16, 2013.3 For patent applications filed on or after that date (which also do not claim priority on an application filed before that date), interference proceedings will no longer be available and the U.S. patent system will move toward a First-To-Invent system.4 Proponents of the new law assert that (1) U.S. applicants will benefit from these First-To-File provisions because then U.S. applicants will be more prepared to deal with foreign patent systems when trying to obtain foreign patent rights, and (2) the USPTO and patent applicants will benefit from the elimination of costly and often-lengthy interference proceedings.5 Proponents believe that these benefits will outweigh any unfairness to inventors that would result in the rare instance that the first person to invent was not the first to file and therefore obtains no patent rights. Less than a few tenths of one percent of eligible patent applications have been involved in an interference proceeding.6

However, the new First-To-File provisions include a new grace period unique from other First-To-File systems. Under the new provisions, an inventor who is the first to publicly disclose his or her invention will receive a one-year grace period for filing and that public disclosure will trump (1) any intervening disclosure of that invention and (2) any patent application filing for that invention made by another party within that one-year grace time period.7 In other words, if Inventor A publishes his invention in June of 2013, then, unaware of that publication, Inventor B files a patent application for the same invention in July 2013, Inventor A can still receive the U.S. patent rights to the invention if Inventor A files a U.S. patent application for the new invention within one year of June 2013, i.e. before June 2014. In the new provision, 35 U.S.C.§ 102(b) will contain the public disclosure exceptions to the novelty-destroying prior art that will be defined in 35 U.S.C. § 102(a). The large potential benefits of obtaining the grace period from such a public disclosure might motivate some patent experts to recommend that inventors purposely publicly disclose their invention before filing a patent application in order to receive the benefits from invoking the one-year grace period. Under the previous First-to-Invent provisions (which are still the law until March 16, 2013), many patent experts have recommended that no public disclosure of the invention be made until after a patent application is filed. The public disclosure exception for trumping intervening prior art will keep certain aspects of the First-To-Invent regime in the new First-To-File system, causing some to refer to these new patent provisions as a hybrid system.

Opponents to the First-To-File provisions argued that these new provisions shift more power in technology wars to large corporations at the expense of small businesses and independent inventors. These opponents argue that large corporations have more money available to use for filing patent applications, and therefore can with less second-guessing rush to file patent applications for new inventions in order to be the first to file and prevent second parties from usurping the patent rights to the invention. In contrast, small businesses and independent inventors often need to perform extra analysis to determine high likelihoods of economic success from the inventions or even need to raise money to proceed through the patent application process before deciding to file, and therefore might sometimes lose the race to file first at the patent office, even though they were the first to think of the invention and reduce it to practice.

In any event, the new law overturns decades worth of court decisions clarifying the meaning of the traditional First-To-Invent laws. As such, the new provisions will at least bring temporary uncertainties into the patent field as inventors must wait to learn how the courts will interpret any ambiguities in the law. Specifically, patent professionals look forward to learning, inter alia, what the courts and the USPTO decide will qualify as a “public disclosure” that will trigger the new grace period.8

Caleb D. Wilkes, Esq. is an associate with Collard & Roe, P.C. in Roslyn where he practices in the areas of intellectual property law, including patent prosecution as well as patent and trademark litigation.

1. See 35 U.S.C. 135 (a).
2. The American Intellectual Property Law Association Report of the Economic Survey 2011 indicated that the median total cost for a two-party interference proceeding at the USPTO is $338,000.
3. See America Invents Act H.R. 1249 Section 3(n).
4. See America Invents Act H.R. 1249 Section 3(n)(2).
5. See America Invents Act H.R. 1249 Section 3(o) and 3(p).
6. See remarks from David Kappos – Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) available at http://www.uspto.gov/blog/director/entry/director_s_forum_david_kappos (specifically the last four paragraphs of Mr. Kappos’ November 10, 2009 blog post).
7. See America Invents Act H.R. 1249 Section 3(b)(1) at 102(b)(1)(A) and 102(b)(2)(B)
8. The statute has some unclarity as to which of the actions specified in the new 35 U.S.C. 102(a)(1) would trigger the one-year grace period under the new 35 U.S.C. 102(b) if performed by an inventor. s