An important change to the United States patent system in the Leahy-Smith America Invents Act (AIA) is the introduction of post-grant review (PGR) proceedings that allows third parties the opportunity to request review of any newly issued or reissued U.S. patent based on a broad range of reasons. The laws enacting post allowance proceedings are found in new Sections 321–329 of 35 U.S.C. and take effect on September 16, 2012. However, only patents issuing from applications filed on or after March 16, 2013 can be challenged, so these changes will gain particular relevance in subsequent years.
Any party may challenge a patent using the PGR process. However, unlike current re-examination proceedings, a PGR challenge may be for any reason, including non-patentability under any of 35 U.S.C.§§101, 102, 103, and 112 (except for best mode), and for double patenting. A request for PGR must be filed within 9 months of patent issue or reissue. After the period for PGR has expired, third parties can challenge a patent at the U.S. Patent and Trademark Office using inter partes review, which allows a third party to request review of any U.S. patent for double patenting, anticipation, or obviousness. An additional transitional post-grant program exists for business method patents.
On its face, the new provisions for PGR are very similar to the European Patent Office opposition practice. Thus, a greater understanding of current opposition practice is helpful in determining the risks a newly granted patent will face under the new laws. Some of the more important provisions are:
| Post-Grant Review | EPO Opposition | |
| Time Period | Patents filed after March 16, 2013 (i.e., filed under new first-to-file provisions) | Not relevant |
| Time to Challenge | Within 9 months of issuing | Within 9 months of granting |
| Board Composition | The Patent Trial and Appeal Board (reformation of the current Board of Patent Appeals and Interferences), which consists of 3 member panels, none of whom were involved in prosecution of the patent | The Opposition Division, which consists of 3 technically qualified examiners, 2 of whom were not involved in prosecution of the patent |
| Basis of Challenge | Grounds include:
| Grounds include:
|
| Sufficiency Standard | At least one claim must “more likely than not” be unpatentable, or the petition raises a novel or unsettled legal question | Sufficiency of evidence is immaterial for admissibility of an opposition |
| Identity of Third Party | Real party of interest must be identified | A straw man is permissible |
| Claim Amendments | Claims may be amended but not broadened; a single motion amending the claims is allowed | Claims may be amended but not broadened; amendments may be allowed up to the date of the oral hearing |
| Level of Proof | Preponderance of the evidence | Balance of probabilities (facts are more likely to be true than the other) |
| Estoppel | For all grounds the petitioner raised or reasonably could have raised; no estoppel issues if matter is settled prior to decision on the merits | No estoppel |
| Civil action | A civil action is stayed if it is filed after PGR is initiated | Infringement proceedings may be stayed depending on the court's own opinion of the likelihood of the opposition succeeding |
| Time frame | Final Decision will be issued within 1 year of the notice of grant of PGR (6 month extension for good cause) | Final Decision takes about 3 years |
| Appeals | Federal Circuit | EPO Board of Appeals |
In Europe, approximately 5% of European patents are opposed. Approximately 1/3 of the opposed patents are maintained as granted, 1/3 are maintained with amended claims, and 1/3 are revoked.1 Comparatively, only about 0.3% of U.S. patents are subject to the currently available, but much more limiting, inter partes re-examination procedure.2 Taking into account the number of patents that are opposed in Europe, it is conceivable that, in comparison to current inter partes re-examination procedures, up to an order of magnitude more U.S. patents will be adjudicated using PGR once the new laws come into effect.
The opposed European patents can be divided by sector, with chemistry patents being opposed the most (7.8% opposed from 2000 to 2008), followed by mechanical engineering (5.6% opposed). The lowest level of opposition is in the electrical engineering sector (2.2%).3 Further refinement shows even more diversity. For example, within the chemistry sector, 2.6% of organic fine chemistry patents, 8.5% of macromolecular/polymer patents, 8.7% of pharmaceutical patents, and 14.0% of food chemistry patents are opposed.4 One of the reasons suggested for this difference is that oppositions are more common when a product is covered by a single patent, such as in pharmaceuticals, in contrast to products covered by multiple patents, such as in microprocessors.5
The characteristics of the patents that are more likely to be opposed within the European opposition system have also been analyzed. There is no reason to suggest a similar trend would not occur for U.S. PGR proceedings. Factors that increase the likelihood of opposition include:
- an increased economic relevance (using the number of designated states as a proxy);
- a greater number of claims;
- more references cited; and
- more forward citations (how many other patents/application cite the patent).
Each of these factors, in some way, relates to the perceived importance of the patent, either by the patentees or by the industry. Some of the factors that affect outcome of the opposition proceedings are the length of pendency (positive correlation with revocation) and number of citations (negative correlation with revocation).6
While the information obtained from the European system can be valuable, there are significant and substantive differences between the new PGR process and European opposition proceedings that must be taken into account as well. Perhaps the greatest difference between the two proceedings is the difference in estoppel provisions. There is no estoppel in Europe, so a third party may be quite willing to oppose an important competitor’s European patent. However, under the new 35 U.S.C. § 325(e), a third party is estopped from raising any issue that was raised or reasonably could have been raised during PGR in both civil and administrative proceedings. Thus, the third party may decide upon a different course of action than PGR in the United States. The third party may either decide to forgo use of PGR proceedings as too risky or to “throw in the kitchen sink” and raise every “reasonable” issue. Alternatively, the third party may be much more likely to exit the PGR process via settlement before a final written decision triggers the estoppel provisions under 35 U.S. C § 328.
The PGR procedure will offer more opportunities to challenge U.S. patents without resorting to litigation. However, the introduction of this procedure will require a careful analysis, both by third parties in the decision of which patents to review and by patent owners to gain an understanding of the risks new patents face under the new law.
1 “Statistics for EPO Propositions and Appeals – Update” 2010 by James Wilding, HLBBshaw Ltd. 4.7% opposed in 2009 and 5.2% in 2008, Date of Access, Nov. 2, 2011.
2 U.S. Patent Office IP Quarterly Report June 2011. Date of Access, Nov. 2, 2011. (Of note, within these proceedings, 71% of these patents are known to be in litigation.)
3 Scellato et.al., “Study on the quality of the patent system in Europe,” PATQUAL, March 2011. Date of Access, Nov. 2, 2011.
4 Id.
5 European Commission, Pharmaceutical Sector Inquiry – Preliminary Report, Nov. 28, 2008. Date of Access, Nov. 2, 2011.
6 See Scellato et. al.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
The November 2011 edition of Nutter’s IP Bulletin features a number of articles dedicated to some of the most challenging and sweeping provisions of the Leahy-Smith America Invents Act (AIA) signed into law on September 16, 2011. This article highlights, and provides practical tips for coping with, a variety of miscellaneous, important AIA provisions that should not be overlooked by practitioners who may otherwise be focused on some of the more widely discussed provisions. The provisions discussed in this article include the best mode defense, citation of prior art in a patent file, false marking and virtual marking, inter partes review, inventor’s oath and declaration, supplemental examination, tax strategies in patent applications, and third party prior art submission.
The AIA provides different effective dates for different provisions. For each of the miscellaneous provisions discussed below, the effective date is provided, along with a brief summary of the provision and some practical tips for coping with the provision.
Best Mode Defense
Effective Date: September 16, 2011
Brief Summary: Failure to disclose best mode in a patent application is no longer a basis for invalidating a patent or rendering a patent unenforceable. (AIA § 15)
Practical Tips: While the AIA lessens the importance of best mode considerations following issuance of a patent, the best mode of carrying out an invention must still be considered during prosecution. 35 U.S.C. §112, first paragraph, requires that the specification of a patent application “shall set forth the best mode contemplated by the inventor of carrying out his invention.” Although best mode rejections during prosecution are rare, applications may still be rejected under 35 U.S.C. §112, first paragraph, on best mode grounds. It is therefore important to ensure that the inventor’s best mode of carrying out the invention is disclosed in a patent application despite the AIA taking the teeth out of best mode post-issuance.
Citation of Prior Art in a Patent File
Effective Date: September 16, 2012
Brief Summary: The AIA allows third parties to anonymously submit prior art or statements to be placed in the file of an issued patent for use in any future reexamination, inter partes reexamination, or post-grant review of the patent. In particular, new 35 U.S.C. §301(a) provides that “[a]ny person at any time may cite to the Office in writing – (1) prior art consisting of patents or printed publications which that person believes to have a bearing on patentability of any claim of a particular patent; or (2) statements of the patent owner filed in a proceeding before a Federal court or the Office in which the patent owner took a position on the scope of any claim in a particular patent.” (AIA § 6, Ch. 32)
Practical Tips: This AIA provision could be a powerful tool in ensuring that certain prior art be considered in a reexamination or post-grant review proceeding for a particular patent. By monitoring patents issued to competitors and/or in a particular technical field, it may be possible to submit prior art that limits or invalidates a patent post-issuance without requiring civil litigation. Maintaining a well-indexed library or database of potential prior art and patentee statements can help quickly identify material that may be ideal for patent file submission.
False Marking and Virtual Marking
Effective Date: September 16, 2011
Brief Summary: The AIA provides that lawsuits can be filed based on false marking, i.e., physical marking of product/packaging with patent information, and, newly by the AIA, on virtual marking, i.e., product/packaging directing the reader to a publically accessible website providing a product’s patent information. However, the AIA removed qui tam remedies that previously existed and permitted any individual to file a lawsuit based on allegations of false marking, even if the individual was not harmed by such markings. Now only the United States can sue for false or virtual marking unless the plaintiff can prove a “competitive injury.” The AIA also provides that marking a product with a patent that covered the product but has since expired is no longer considered a marking violation. (AIA § 16)
Practical Tips: While it remains good practice to review products/packaging for the addition of valid patent marks and the removal of expired patent marks, the AIA lessens the sometimes very expensive consequences of unintentional false or virtual marking. Nevertheless, it is generally advisable to carefully monitor physical patent marks on your own products/packaging and your competitors products/packaging. By now allowing lawsuits based on virtual marking, the AIA appears to encourage periodic review of not just virtual patent marks on your own website to ensure its current accuracy, but the virtual patent marks on competitors’ websites for its current accuracy.
Inter Partes Review
Effective Date: September 16, 2012
Brief Summary: Inter partes review replaces inter partes reexamination as of the effective date, thus changing 35 U.S.C. § 311. Inter partes review allows a third party to request review of any U.S. patent for double patenting, 35 U.S.C. §102, and/or 35 U.S.C. §103 reasons. The request will be granted if there is a “reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged.” (AIA § 6, Ch. 31)
Practical Tips: If any patents are identified as candidates for inter partes reexamination prior to September 16, 2012, it would be advisable to consider whether the rules of inter partes reexamination or the new rules of inter partes review would be more beneficial to the requestor of reexamination, and file the request on the appropriate date. The AIA details numerous requirements and procedures for inter partes review that should be consulted in making such a determination. The implications of inter partes review should likewise be weighed against post-grant review when a patent first issues or reissues and litigation.
Inventor’s Oath and Declaration
Effective Date: September 16, 2012
Brief Summary: The AIA changes the current inventor’s oath and declaration practice, namely by 1) not requiring the inventor’s oath and declaration to identify inventor citizenship, 2) requiring a statement that “the application was made or was authorized to be made” by the affiant/declarant, and 3) allowing the inventor’s oath and declaration to be made in an Assignment of Record. (AIA § 4)
Practical Tips: The AIA should generally not have much effect on current oath/declaration and assignment practices. However, this AIA provision can make the preparation, execution, and filing of formal papers easier. For applications filed on or after September 16, 2012, in which an assignment is desired, paperwork can be reduced by combining an inventor’s oath and declaration with the assignment.
Supplemental Examination
Effective Date: September 16, 2012
Brief Summary: New 35 U.S.C. §257 provides that a “patent owner may request supplemental examination of a patent in the Office to consider, reconsider, or correct information believed to be relevant to the patent, in accordance with such requirements as the Director may establish.” (AIA § 12)
Practical Tips: Following this provision’s effective date, it may be advisable for patent owners to review their issued patents for any incorrect information that may be appropriate to correct through supplemental examination. Supplemental examination may be used to cure various ills of a patent that would otherwise prove burdensome, if not fatal, during any subsequent litigation involving the patent. For example, supplemental examination may be requested to have a reference reviewed that was not cited during prosecution in anticipation that a third party might assert that reference in an inequitable conduct claim. It is important to note that once a reference has been asserted in a civil action for purposes of alleging unenforceability of a patent, the reference is no longer eligible for consideration using Supplemental Examination.
Multi-Party Patent Infringement Lawsuits
Effective Date: September 16, 2011
Brief Summary: 35 U.S.C. § 299(a) only permits multiple defendants to be included as parties in a lawsuit under very limited circumstances. In order for there to be multiple defendants, the patent owner must seek to hold the defendants jointly or severally liable, or the relief sought from all of the defendants must arise out of the same transaction, occurrence, or series of transactions or occurrences relating to the alleged infringing acts involving the same accused products or process. The party bringing the lawsuit must further allege that there are questions of fact common to all accused infringers. (AIA § 19)
Practical Tips: This provision was primarily directed at curtailing patent infringement lawsuits brought by “patent trolls” or non-practicing entities. Prior to enactment of the AIA, a single party could lump a host of alleged infringers in a single lawsuit in an attempt to save costs. Following the announcement of this provision, a number of last minute multi-party defendant lawsuits were brought prior to the effective date. It is anticipated that the number of lawsuits brought by “patent trolls” or non-practicing entities may be reduced in light of this provision. However, if a patent owner does meet the provisions now provided for in 35 U.S.C. § 299, the party should feel comfortable in alleging patent infringement against multiple parties.
Failure to Obtain or Present an Opinion of Counsel
Effective Date: September 16, 2012
Brief Summary: Recent Federal Circuit decisions regarding how the failure to obtain an opinion of counsel in a patent infringement case should be treated were codified in 35 U.S.C. § 298. In particular, § 298 states that “[t]he failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.” (AIA § 17)
Practical Tips: This provision does not change the status quo in light of recent Federal Circuit decisions. Thus, although the failure to obtain the advice of counsel, or present such advice to the court or jury cannot be used to proved willful infringement, it remains a factor that can be considered in making a willfulness determination; it just cannot be the sole factor for arriving at the conclusion of willful infringement. Further, obtaining advice of counsel may still be prudent in a number of situations, such as to provide exculpatory evidence and to obtain the desired peace of mind prior to launching a product.
Tax Strategies in Patent Applications
Effective Date: September 16, 2011
Brief Summary: All tax strategies are deemed to be within the prior art, regardless of whether the strategies were “known or unknown at the time of the invention.” A “tax strategy” as defined by the statute includes “any strategy for reducing, avoiding, or deferring tax liability.” The AIA provides for two exceptions: 1) the part of an invention “used solely for preparing a tax or information return or other tax filing,” and 2) the part of an invention “used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor.” (AIA § 14)
Practical Tips: The AIA strictly curtails reliance on a tax strategy for patentability by deeming all tax strategies within the prior art. It is therefore important to carefully consider before filing a patent application, and during prosecution of applications pending on or after September 16, 2011, whether novel and/or nonobvious subject matter other than a tax strategy is disclosed and can be claimed. It is also important to remember that this AIA provision does not necessarily allow all tax strategies to be made, used, or otherwise practiced without fear of patent infringement. This AIA provision only applies to applications pending on or after September 16, 2011, and to patents issued on or after September 16, 2011. Patents issued before September 16, 2011, and claiming tax strategies may therefore be enforceable.
Third Party Prior Art Submission
Effective Date: September 16, 2012
Brief Summary: New 35 U.S.C. §122(e) allows “[a]ny third party” to submit prior art “for consideration and inclusion in the record” of any pending patent application provided that various conditions specified in the statute are met. Some of the conditions relate to a time window for third party prior art submission, which must be made before 1) a Notice of Allowance has been given or mailed, or 2) the later of 6 months after the date of publication, or the date of first rejection of any claim in the application by the Examiner. (AIA § 8)
Practical Tips: This AIA provision could be a powerful tool in limiting, curtailing, or delaying issuance of others’ patent applications. By monitoring patent applications filed by competitors and/or in a particular technical field, it may be possible to submit prior art during prosecution that prevents, limits, or delays issuance of a patent application that may be potentially problematic, i.e., for infringement reasons. Maintaining a well-indexed library or database of potential prior art can help quickly identify prior art that may be ideal for third party prior art submission. Such a library or database may be particularly beneficial for in-house prior art such as publically available product brochures and conference presentations that a patent examiner may not be able to find as easily as patents and articles. Because the AIA only allows prior art to be submitted by a third party within a limited time window, any procedures to monitor and review newly published, newly allowed, and newly rejected patent applications should be time sensitive. While this AIA provision ultimately benefits patent applicants by helping to ensure that the best prior art is considered during prosecution, this AIA provision could also be a time-consuming nuisance to patent examiners and to patent applicants if prior art is submitted by a third party. However, the nuisance effect may be limited because, unlike the AIA provision related to third party submission of prior art for issued patents, the AIA does not provide that third party submission of prior art for pending patent applications can be made anonymously.
This article strives to provide an overview of various AIA provisions. For a complete understanding of these and other provisions of the AIA, and how they may affect your patent prosecution and litigation strategies, consult the text of the AIA and your legal counsel.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
Perhaps none of the provisions of the recently enacted Leahy-Smith America Invents Act (AIA) will have a more significant impact on the day-to-day patent practice in the United States than the switch from the current “first-to-invent” system to a “first-to-file” system. Indeed, the AIA substantially redefines the scope of prior art and establishes a “First-Inventor-to-File” (FITF) system. Though more akin to foreign “first-to-file” systems, the FITF system includes substantial differences that are highlighted throughout the remainder of this article to institute new best practices that address this legislation.
The race to the U.S. Patent and Trademark Office (PTO) begins in earnest on March 16, 2013. As of that date, current sections 102 and 103 of the patent statute will be replaced with provisions of the AIA that focus on an application’s effective filing date in the determination of whether art that existed prior to that filing date bars the patentability of the claimed invention. Whereas applicants can currently “swear behind” a reference (under certain circumstances) to eliminate its effect as prior art, or establish prior invention in an interference proceeding, the determination of novelty and non-obviousness under the FITF system will no longer be based on the date of invention (e.g., conception and reduction to practice). Rather, an applicant will be entitled to a patent unless “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” (Emphasis added.) It is worth noting that the definition of invalidating prior art has therefore expanded to include the sale or public use of the claimed invention even outside of the United States. Further, an applicant will be entitled to a patent unless “the claimed invention was described in a patent . . . or in an application for patent . . . in which the patent or application . . . names another inventor and was effectively filed before the effective filing date of the claimed invention.” In sum, the first inventor to file a patent application—with limited exceptions—will be entitled to a patent on that invention even if that inventor was not the first to invent the claimed subject matter.
Notably, unlike many foreign countries, the United States’ FITF system includes a one-year grace period for public disclosures made by an inventor or another who receives information regarding the invention from the inventor. Indeed, an early public disclosure by the inventor can prevent a later disclosure or application of another from barring the patentability of the inventor’s subsequent application directed to the earlier-disclosed subject matter and filed within the grace period. Similarly, an early public disclosure by one inventor can preempt another from obtaining a “monopoly” in the United States on the disclosed subject matter, even if the subject matter was invented (but not published or filed) prior to the disclosure.
While some commentators suggest that the FITF system of the AIA promotes an aggressive, pre-filing defensive publication strategy to block potential competitors, such a pre-filing publication can serve as invalidating prior art in foreign jurisdictions that require absolute novelty. Accordingly, before inventors decide to publish any potentially patentable inventions, inventors and assignees should consult with patent counsel regarding the ramifications of such a disclosure on their U.S. and foreign patent rights. If such protection is desired, U.S. inventors and assignees should at least file U.S. provisional applications prior to any public disclosure. Filing provisional patent applications prior to making any public disclosures can protect the applicant’s rights both domestically and abroad while still allowing for later, fast publication to get the applicant’s art on record against its competitors. Importantly, inventors and assignees should consider instituting new procedures to efficiently disclose potentially patentable subject matter to their patent counsel, and work quickly to draft and file applications on the subject matter (whether to be publicly disclosed or not prior to filing the application).
In a related aspect, the AIA also creates a new “derivation proceeding” which supplants the current interference proceedings, which is part of the expiring “first-to-invent” system. In a derivation proceeding, a party can challenge an earlier-filed application or a patent resulting from an earlier-filed application if the applicant of the earlier-filed application “derived” the invention from the challenging party. In the case of an allegedly derived issued patent, a civil action must be filed within one year of the issue date of that patent. In the case of a derived patent application, the derivation proceeding can be instituted at the PTO by petitioning the Director within one year of the “first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention.” 35 U.S.C. § 135 (emphasis added). Though an earlier invention date will not allow an applicant to swear behind a prior art reference during prosecution under the new FITF regime, recording procedures (e.g., laboratory notebooks) nonetheless remain critical in defending against or asserting claims in a derivation proceeding.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
For many years, the United States Patent and Trademark Office (PTO) has provided, and still does provide, a 50% fee discount to “small entity” patent applicants. The Leahy-Smith America Invents Act (AIA) introduces an additional applicant classification: the “micro entity.” At least under the current, not-yet formally adopted definitions in the AIA, micro entity applicants are entitled to a 75% reduction in fees associated with filing, searching, examining, issuing, appealing, and maintaining a patent application. However, even though applicants already have the ability to claim micro entity status, because the PTO has not yet set fee schedules reflecting this new status, the benefits of this new status are not anticipated to be seen until 2013.
Micro entities are defined in a new section of title 35 added by the AIA—35 U.S.C. § 123. The new section requires applicants seeking micro entity status to make four certifications. Alternatively, applicants associated with an institution of higher education can also claim micro entity status.
First, an applicant must certify that it qualifies as a small entity under the existing requirements of 35 U.S.C. § 41. This means the applicant must be an individual, a small business having less than 500 employees, or a non-profit organization. It is important to note that if the applicant has assigned or licensed rights to the invention (or is under an obligation to do so) to another party that does not meet these requirements, small entity status, and thus micro entity status, cannot be claimed.
Second, an applicant must certify that he or she has not been named as an inventor in more than four previously-filed United States patent applications. Neither provisional applications nor Patent Cooperation Treaty (PCT) applications that do not subsequently enter the United States in a national stage filing qualify as a previously-filed United States patent application. Foreign applications also have no bearing on this patent application count.
Third, the applicant must certify that he or she did not have a gross income in the calendar year preceding the year the application was filed that was greater than three times the median household income. For the past few years, the median income has been around $50,000, so the gross income limit is approximately $150,000.
Finally, the applicant must certify that he or she has not assigned or conveyed (or is under an obligation to do so) a license or ownership interest in the application to another party whose gross income in the preceding calendar year exceeded the three-times-median-income limit discussed above. Importantly, for inventors looking to leave current jobs to start new companies, applications that have been assigned (or applications that are obligated to be assigned) as a result of previous employment do not count against the four previously filed patent applications for an applicant.
For each of these four certifications, if the application includes multiple applicants, each applicant must be able to make each of the four certifications for the applicants to be able to assert micro entity status.
The current, not-yet formally adopted definitions in the AIA also allows for applicants associated with an institution of higher education to take advantage of the micro entity fee discounts. In order to do so, applicants must certify that their employer (from whom they receive the majority of their income) is an institution of higher education. Applicants must also certify that they have assigned (or were under an obligation to assign at the time of the invention) a license or other ownership interest in the application to the institution of higher education.The four certifications discussed above are inapplicable to a micro entity status claim related to being associated with an institution of higher education.
Applicants associated with universities and other educational institutions may wonder which institutions qualify under the AIA. The AIA defines institutions of higher education by specific reference to the Higher Education Act of 1965. That statute defines institutions of higher education as public or non-profit accredited institutions that admit post-secondary students for programs lasting 2 years or longer. Importantly, the Higher Education Act of 1965 defines an institution of higher education as being located in the United States (including its territories), which is in contrast to the small entity regulations that include institutions located in any country as non-profits eligible for small entity status. As a result, foreign universities will not be able to take advantage of the micro entity fee discounts, at least under the current, not-yet formally adopted definitions in the AIA.
The new micro entity status can provide significant savings to applicants who, in many cases, can use the saved capital to help build businesses around their innovations. Applicants must be weary, however, of actions that may invalidate their micro entity status. For example, assigning or licensing rights to a party that does not qualify as a micro entity can revoke the status, and require payment of higher fees to the PTO. The penalties for failing to appropriately update an applicant’s status with the PTO and pay any required fees can be severe. These actions can be regarded as inequitable conduct (a fraud on the PTO) that can result in the loss of the application or patent.
The provisions of the AIA creating the micro entity status went into effect upon President Obama’s signature on September 16, 2011. However, applicants cannot presently take advantage of the micro entity fee discount. This is because a significant amount of administrative rulemaking is still required at the PTO to implement the new provision and other provisions of the AIA. In fact, the AIA gives the PTO Director authority to impose additional income limits, annual filing limits, or other limits on who may qualify as a micro entity, meaning the micro entity status may have additional limitations upon implementation. In a press release dated September 21, 2011, the PTO confirmed that the micro entity fee discount will not be implemented until a later date. The PTO has more recently stated that implementation of the discount will likely take place in 12 to 18 months, putting the implementation date sometime in 2013.
Applicants looking to take advantage of the new micro entity status should monitor the PTO website for announcements regarding the fee structure, and should further consult a patent attorney to ensure they appropriately claim the new status.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
As discussed in our March issue, earlier this year the United States Patent and Trademark Office (PTO) published a proposed prioritized examination procedure to allow applicants to speed up patent application prosecution by meeting particular requirements, including paying an additional fee. However, the PTO later delayed the implementation of the “fast track” or Track I procedure because of funding limitations—the PTO could not hire the number of new examiners needed to meet “fast track” pendency goals without impacting the examination of non-prioritized applications. The delay is now over, as the Leahy-Smith America Invents Act (AIA) brought the “fast track” back as of September 26, 2011.
Prioritized examination (PE) provides a patent applicant the ability to receive expedited review of his or her original utility or plant application for an additional fee if the application is filed on or after September 26, 2011. The expedited review is aimed to result in a final disposition within twelve months of prioritization. Final disposition can include the mailing of a notice of allowance or a final office action, filing a notice of appeal or a Request for Continued Examination (RCE), or abandoning the application. Prioritization is lost after filing an RCE, or through the course of an appeal or interference.
Applicants receive prioritized status by filing a request (Form PTOSB424) with a $4800 fee, exclusive of typical filing and prosecution fees. Small entities receive a 50% discount. It remains to be seen whether micro entities will receive a 75% discount, as the PTO has yet to set its fee schedules for micro entities. Applications subject to PE can have up to 4 independent claims and 30 total claims, and excess claim fees do still apply. If an applicant amends claims to exceed the claim limits, PE is terminated. Currently, the PTO is limiting prioritized applications to 10,000 per fiscal year, and for the uninitiated is providing a Quick Start Guide to help applicants figure out how to file their requests.
When an application enters Track I, it is accorded special status and placed on the examiner’s special docket throughout the course of prosecution until a final disposition is reached. The time periods for reply are the same as for standard, non-prioritized applications, unlike accelerated examination (AE). However, any petition for an extension of time to file a reply or request for suspension will automatically terminate the application’s prioritized status, and the application will revert to the standard prosecution track.
The PE procedure is not intended to replace the currently available AE procedure. Both options co-exist as alternatives. AE has a lower filing fee, limits applicants to 3 independent and 20 total claims, requires up-front search and analysis, and limits response time periods to one month. It is anticipated that most applicants will find PE more palatable than AE because under PE there is no requirement to create written prosecution history by performing and submitting an up-front search and analysis.
The PTO website provides statistics on PEs. As of November 4, 2011, for the 2011 fiscal year (which ended on September 30, 2011), 852 total prioritized applications were filed, 365 of which have been granted and 4 of which have been dismissed. For the 2012 fiscal year (which concludes on September 30, 2012), 377 prioritized applications have been filed, 26 of which have been granted and none of which have been dismissed. There does not appear to be a present danger of being locked out of PE during the 2012 fiscal year due to the 10,000 application limit.
As the PE procedure has only just begun, it is difficult to predict whether the PTO will be able to meet its 12 month pendency goal. At its current rate, this goal appears achievable, but if applicants are adopting the “wait-and-see” approach, these early successes may result in an increase in prioritization requests and pendency times.
Applicants interested in expediting the prosecution of their applications should consult their patent attorneys about pursuing this option, particularly when attaining a patent within a year may provide real value for the applicants.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
The Leahy-Smith America Invents Act (AIA) broadens the scope of prior art that can be used to reject claims of a patent application or to invalidate claims of a patent. Under the current statute, a prior sale, commercial use, or public disclosure not otherwise published made in a foreign country could not (and cannot through March 16, 2013) be used as prior art unless the foreign sale, use, or disclosure appeared in a publication, patent, or patent application. The new law, which includes a revised 35 U.S.C. § 102, expands the scope of prior art to make it more consistent with patent laws in most foreign countries by removing the limitation that a prior sale, commercial use or public disclosure must be domestic to constitute prior art. Accordingly, the new law extends available prior art to include any subject matter that is publically available in the world prior to the filing date of the application. This new scope applies to all applications with an effective filing date on or after March 16, 2013.
Naturally, the effect on applicants and practitioners is that the expanded scope of prior art may make it more difficult to obtain or enforce a patent. To the extent a use, sale, or other public disclosure is documented in a foreign country, it can be used to reject a patent application or invalidate a patent. While it remains to be seen what evidence of a foreign sale, use, or other public disclosure will be sufficient to rely upon as prior art, it is anticipated that this type of art will more likely be relied upon by a defendant in patent litigation because, at least in the near term, it will likely be difficult for an examiner to obtain and verify evidence of such a foreign disclosure. The examiner’s resources in this context are limited, particularly in light of the time constraints under which he or she typically operates.
One way in which examiners can be made aware of foreign disclosures, of course, is through the applicant and practitioner’s duty of disclosure. The expanded scope of prior art under the new law will require care by applicants and practitioners to properly cite in an Information Disclosure Statement any sales, uses, or other public disclosures not otherwise published in foreign countries that could affect the patentability of the application. The impact on practitioners and applicants in this regard is anticipated to be minimal because an applicant’s own sale, use, or public disclosure in a foreign country will often be in a country in which the applicant is also seeking patent protection. Thus, because most other countries do not allow a one-year grace period between disclosures and patent application filings, it is anticipated that foreign sales, uses, or other public disclosures by an applicant will typically not affect the patentability of the applicant’s United States patent application.
While the expanded scope of prior art may have only a minimal impact on Information Disclosure Statement practices, it may have a more significant impact on actions taken by applicants and inventors in foreign countries prior to filing a patent application. Previously, sales, commercial uses, and other public disclosures not documented in a patent or printed publication in foreign countries did not qualify as prior art, and thus applicants and inventors could make sales in foreign countries or present at a conference in a foreign country without distributing any published materials without affecting their patent rights in the United States. Not anymore. Applicants should take care not to make any such public disclosures if they desire to prevent their one year clock for filing a patent application in the United States from beginning to tick. Applicants, such as universities and hospitals in particular, should ensure their inventors do not make public disclosures at conferences, regardless of location, without first filing for patent protection or filing within the one year grace period afforded by the new U.S. “first-to-file” system. Even if an inventor is planning to attend a conference in a foreign country but not formally present at the conference, applicants should make sure the inventor is aware of the consequences of making an unintended public disclosure during the conference because such a disclosure could impact the applicant’s patent rights.
Because the scope of prior art does not expand until March 16, 2013, the effect of this expansion on various practices is not yet fully vetted. For example, at this time it does not appear that the expanded scope of prior art will apply to pre-issuance submissions, as the relevant provisions in the AIA refer only to the submission of patents, published applications, and printed publications. Thus, third parties aware of a foreign use that might serve as prior art appear to have to wait until after a patent has granted to challenge it in a post-grant review proceeding or litigation.
Overall, the changes in the scope of prior art, along with other provisions of the AIA, provide further incentive to file patent applications as soon as possible so that applicants can limit the possible universe of prior art that might be applied to reject the application or invalidate the resulting patent.
This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.
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