The U.S. Patent System is Changing – A Summary of the New Patent Reform Law

1. The U.S. Patent System is Changing –A Summary of theNew Patent Reform Law

2. The ACC, Wine, and U.S. Patent Law Reform

3. The ACC, Wine, and U.S. Patent Law Reform

4. U.S. Patent Des. 127,007"Design for a Wine Bottle"

5. U.S. Patent No. 8,061,538"Wine Rack" 

6. “Patent Reform” is Here • The America Invents Act was passed by Congress late summer. It was signed by the President (and therefore enacted) on September 16, 2011. • So, the biggest change in our patent system since 1952 is now going to happen. (In fact, some parts of the law are already in effect.) • When signing the law, the President said: “I am pleased to sign the America Invents Act.  This much-needed reform will speed up the patent process so that innovators and entrepreneurs can turn a new invention into a business as quickly as possible.”

7. Key Provisions • Changes U.S. to a First-to-File System • Effective March 16, 2013 • Changes what is Prior Art • Effective March 16, 2013 • Now for Prior User Defense • More Review Procedures in the Patent Office to Challenge Validity • Effective Sep. 16, 2012 • Other Provisions of Interest • Effective now (Marking and Prioritized Examination) • Effective Sep. 16, 2012 (Assignee filing)

8. FIRST-TO-FILE SYSTEM

9. First-to-File • The First-to-File System comes into effect 18 months after enactment (March 16, 2013). Until then, the current system remains in effect. • “Race to the Patent Office” • Eliminates interference proceedings (no longer litigate "first to invent" issues) • Changes definition of “prior art” to eliminate the ability to "swear behind" prior art cited against patent application • First-to-File system will not apply to any applications with a proper claim of priority earlier than March 16, 2013.

10. PRIOR ART

11. Prior Art • Changes go into effect with First-to-File • The “prior art” against which patentability is judged has been expanded. • Anywhere (scope expansion) in the world before the filing date (time expansion): • Patented • Described in a printed publication • In public use • On sale • Otherwise available to the public (new-scope expansion- expect litigation on this point)

12. Prior Art • “Prior art” also includes U.S. patent applications (or PCT applications designating the U.S.) that are later patented or published • These are prior art as of their earliest effective filing date, which can be a foreign application • Prior law limited this to the earliest actual U.S. filing date • Cannot “swear behind” as allowed under prior law

13. Prior Art • Obviousness • Judged as of effective filing date (rather than “at the time the invention was made”) • Patent applications, even if "secret," considered as of filing and before published (most other countries base on publication except for novelty) Reform: Obviousness includes secret prior art. Effective Filing Date

14. Prior User Defense • The Prior User Defense has been expanded. • Previously limited to methods of doing or conducting business • Now covers any “invention” • Effective now (i.e., applies to all patents issued after September 16, 2011) • Provides a defense to infringement if -- • Accused infringer made commercial use of the invention in the U.S, and • The commercial use occurred more than 1 year before effective filing date

15. Prior User Defense • This is a “personal” defense • Cannot be licensed or assigned by itself (or expanded by acquisition) • Must show continuous use • Not a general license for the entire patent (only extends to the thing that was used) • Interplay with Trade Secrets • May increase the value and desirability of maintaining trade secrets • If successful, allows continued commercial use of anything later patented by a third party

16. VALIDITY CHALLENGES

17. Validity Challenges and Reexamination • Third-Party Pre-Issuance Submissions • Ex Parte Reexamination • Inter Partes Reexamination • Post Grant Review (PGR) • Inter Partes Review (IPR) • Supplemental Examination • The new procedures take effect September 16, 2012

18. Challenges Pre-Issuance Submissions (before earlier NOA or later of first rejection/publication + 6 mths ) Ex Parte Reexam (continues as normal) Post-Grant Review (only by a third party and up 9 months after patent issues) Inter Partes Review (after the later of 9 months after issuance or after post-grant review) Patent Grant

19. Pre-Issuance Submissions • Any third party can file (can be a “straw man”) • Patent applications, patents, or other printed publication of potential relevance • Time limit -- earlier of (i) allowance or (ii) later of 6 months after publication or first rejection • Must include description of each document's relevance • Filer cannot otherwise communicate with the patent examiner • Applies to all applications pending on or after September 16, 2012

20. Post-Grant Review Post-Grant Review Inter Parties Review • Standard • "more likely than not" that at least 1 of the challenged claims is unpatentable • Grounds • Any section 102/103 prior art • Section 112 (enablement and definiteness) • Some discovery available • Standard • Substantial new question of patentability • Grounds • Prior art patents and printed publications • Anticipation or obviousness • Some discovery available • Any third party can file -- do not need to be threatened. But, there is a preclusion against using the same defenses later in litigation. • The fee to file one of these may be very steep, such as $40,000 or more. But, cheaper (and faster) than litigation.

21. Supplemental Examination • By Patent Owner • Consider, reconsider, or correct information believed to be relevant to patent • Patent Office has 3 months to determine if substantial new question of patentability • If initiated, addresses all identified substantial new questions (without limitation to patents and printed publications). So broader than current ex parte reexamination. • Would typically be used to “fix” a patent about to be enforced

22. PATENT OFFICE PROCEDURES

23. Patent Office Procedures • Prioritized Examination • Patent Office Funding

24. Prioritized Examination • Can request “prioritized examination” of an application for a fee of $4800 • Request must be filed at the time the application is filed • No need to give a reason • Moves to the top of the Examiner’s queue • In effect now, but currently limited to 10,000 per year

25. Patent Office Funding • PTO has authority to set its own fees • The fees to approx. actual PTO costs • Immediate 15% surcharge • Proposed Fee Increases • Suppl. Exam- $5,180 + $16,120= $21,300 • Reexams – Ex parte Reexam increased from $2,520 to $17,750 • Inter Partes Review - $48,000?

26. PATENT MARKING

27. Patent Marking • False Marking and Virtual Marking. • False marking penalties reformed. • Can “mark” products via reference to a website. • Effective now.

28. CONCLUSIONS

29. Observations • First to File makes the U.S. patent system more similar to other countries • March 16, 2013 (critical date) • Expect companies may file more provisional applications • Even with First to File, detailed inventor records remain important. • Because of the Post-Grant Review time limit, early notice of competitor patents is even more critical— consider Monthly patent watch and assessment. • Virtual Marking – consider for patent marking • Supplemental Examination – consider before litigating

30. Discussion