Earlier this week, the Senate overwhelmingly passed (95–5) the America Invents Act (S.23 or AIA) which represents a major patent reform initiative. Many are saying this is the largest patent reform measure since the 1952 Patent Act. I would argue that two reforms from the 1980’s are at least as important as the AIA: Federal Courts Improvement Act of 1982 (establishing the Court of Appeals for the Federal Circuit) and the 1984 Hatch-Waxman Act (establishing the modern generic drug system).
Of course, neither of those 1980’s reforms rewrote the core patent law fundamentals of novelty and nonobviousness. In this post, I look at how the AIA re-defines these doctrines.
Filing Date Prior Art: Under the new law, Sections 102 and 103 of the patent act would be largely rewritten. The new Section 102(a) defines novelty and eliminates invention-date rights (with the exceptions noted below). The new focus a patent applicant’s “effective filing date” and whether prior art existed before that date. As a general matter, this shift expands the scope of potential prior art and therefore should make it more difficult to obtain patent protection. In addition to the date change, the statute adds a new catch-all phrase to the scope of prior art. Courts will be asked to consider what it means to be “otherwise available to the public.” Under the new provision classifies prior art as items “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public.” Section 102(a)(1). In addition, a third-party application on file at the PTO will count as prior art as of its effective filing date once that application is published or patented. Section 102(a)(2). Of course, the effective filing date allows for priority claims
Narrow Grace Period: The new law would substantially narrow the current one-year pre-filing grace period so that that it only applies to negate pre-filing disclosures (1) by the inventor, (2) derived from the inventor, or (3) after the inventor had already publicly disclosed. A technical problem with the new Section 102(b) provision is that the key term – “disclosure” – is left undefined. The grace period provision is written as an exception to the filing-date prior art provision discussed above. However, it is unclear whether the exception applies to all types of prior art including “on sale” activities.
Patent Races and First-to-File: In a patent race with two or more entities seeking protection for the same invention, the patent would be awarded to the first-to-file a patent application rather than the first-to-invent. This eliminates current Section 102(g), interferences, and questions of conception, diligence, reduction to practice, abandonment, suppression, and concealment. Except that the new law would allow for a derivation action (court) or proceeding (USPTO) when the first-filer “derived” their claimed invention from another. An oddity of the statute is that the derivation action may only be filed when the patent office issues two patents that claim the same invention. An important aspect of the derivation proceedings before the USPTO is that they allow the parties to settle their case.
One problem with the derivation provision that will be left to the PTO and courts is that the key term – “derived” – is not defined. If given a broad meaning, the derivation proceedings could offer inventors something akin to the copyright doctrine of derivative works.
This invention-date focus will likely drive more provisional patent application filings for US entities. The prior-disclosure grace period limitation may drive a revival in formal invention disclosure publications. However, because this narrowed grace period is still broader than that available in most countries, a pre-filing disclosure may negate foreign patent rights.
No Prior User Rights: The Senate Bill does not include any provision for prior user rights. Although current law only has limited prior user rights, a prior user who is sued for infringement may be able to invalidate that patent by claiming prior invention under Section 102(g). That option is eliminated in a first-to-file system leaving a prior user potentially liable for infringement.
Nonobvious Subject Matter: The new law would rewrite Section 103 as follows
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
One shift in the nonobviousness statute merely codifies the current law’s focus on “claims” rather than the “subject matter sought to be patented.” We’ll hope that courts will not interpret the phrase “the claimed invention as a whole” as requiring the courts to examine the entire claim-set as a whole.
The most important change is that the new provision considers obviousness as of the “effective filing date” of the patent claims being considered rather than “at the time the invention was made.” Of course, the courts already ignore the language of the statute and allow post-invention 102(b) prior art to be used for obviousness analysis.