Patent Reform 2011: House of Representatives Bill No. H.R. 1249

Representatives Lamar Smith, Bob Goodlatte, and Darrell Issa have introduced their version of the America Invents Act (AIA) to the House of Representatives. H.R. 1249. [AIA.pdf] The AIA closely tracks the Senate’s bill on comprehensive patent reform (S. 23) that was passed in the Senate earlier this year on a 95-5 vote. Parallel changes include a switch to a first-to-file system (with the retention of a limited one-year grace period); establishment of a modified inter partes reexamination and post grant opposition system; providing USPTO with fee-setting authority; neutering of the false marking provision; allowing pre-issuance submissions by third-parties; creating a supplemental examination system to correct inequitable conduct; and elimination of best mode failure as an invalidity defense.

The statute continues to include a substantial error in its codification of the grace period. Namely, the grace period only applies to “disclosures” and not to other commercialization activities such as sales and offers for sale.  In addition, it is unclear whether the grace period would apply situations such as the original public use case of Pennock v. Dialogue, 27 U.S. 1, 23, 7 L. Ed. 327 (1829).  In that case, the Supreme Court ruled that the inventor could not obtain a patent on its hose-making process because the inventor had sold the product (hoses) for several years before filing for patent protection. 

Some key differences from the Senate version that will lead to substantial debate include: 

  1. Details of the Post Grant Opposition Provisions…
  2. Prior User Rights: Whether “prior user rights” should be expanded to accompany the switch to a first-to-file regime. This issue arises when, for instance, a manufacturing company is using a particular process as a trade secret before another party invented and patented the process.  Under our current first-to-invent regime if the prior-user was sued for infringement, the patent would likely be invalidated under Section 102(g). See  Dunlop Holdings Ltd v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 1975).  The invention-date priority contests of Section 102(g) are eliminated in a first-to-file system, raising the question of whether a non-patent-filing manufacturer should be given some prior user rights that would continue to allow these trade-secret uses. Currently, the patent statute also has a prior user right codified in Section 273. That section, however, is limited purely to business method patents. The proposed legislation would expand Section 273 to cover all patents.
  3. Special Business Method Proceedings, venue restrictions, interlocutory appeals, and attorney fee shifting.
  4. Automatic stay of litigation for inter partes reviews.
  5. Elimination of Tax Strategy patents (by considering the subject matter within the prior art).
  6. Codification of Knorr Bremse (failure to present advice of counsel cannot be used as evidence of willful infringement). 

Read the Bill: File Attachment: 033011_America Invents Act.pdf (266 KB)

84 thoughts on “Patent Reform 2011: House of Representatives Bill No. H.R. 1249

  1. The government just has to complicate everything it gets its dirty hands into.The patent process is already complicated and drowning in Confusion and fees.Makes sense to streamline the process,to make it easier for people to get products in the Marketplace.Also there should be from the U.S.P.T.O. A Patent Funding Program- Grants,Specifically for Individual-Low income.At a disadvantage when currently there is no funding for individuals.SIMPLIFY.I am an individual with a physical disability,Psoriatic Arthritis 16 years.I can’t get out to conventions,etc.Like other people can.I have several Inventions.Currently there ideas,intellectual property waiting to be made reality.Making us Millionaires.Possibly Multi-Millionaires.My goal for 2011 become a Millionaire.One of my many goals for 2011.

  2. The 1952 Congress, as a whole, decided that false marking was a societal evil that undermined the integrity of our patent system, which system conceives of limited monopoly in return for inventive disclosure. So serious was the problem that they changed the earlier statute’s $100 minimum fine per offense to one that had a $500 maximum fine per article.

    Apparently, Congressman Darrell Issa believes that Government by way of the expenditure of taxpayer dollars is the better way to address that societal evil than by having private individuals do the job for the Government for free.

  3. Wanting to discover more about H.R. 1249, I found this site through google. Great website. Thank you to those who contribute here.

  4. Ned,

    I fear that whether Congress has that particular case in front of them or not, it would not matter. Congress is reacting to today’s pressures and lacks the historical perspective to apply that case.

    Further, as I alluded to, with a switch to First to File, that case probably should be overruled. The basis will now be entirely different. Someone has penned on these boards that the ground rules will be different and that is true to a fundamental level.

    I think it is a good time to consider what I suggested – that we should focus on the present and that it should not matter how long something has been done in secret. We should be encouraging everyone to bring there ideas forward and share them. So what if an idea has been secret for 10, 20, or 50 years? As a secret, it is “new” to everyone else. If it is brought forward now, it is as if it were just invented – how can we ask anything more? We should not seek to penalize and make permanent a decision to keep something secret. So in this sense I very much disagree with the Holding that only the diligent have a right to a patent. The Quid Pro Quo in its purest form does not include the notion of “only the diligent” – such is an artificial construct and one that is better taken care of with a race to the Office.

    That is the carrot portion. The stick portion should also be used. There should be absolutely no prior use rights of any kind. If you want a right, you need to work it and bring it forward. If you are going to complain (not you personally) that there are those have spent significant monies preparing to commercialize, I say tough – some of that money should have been spent on a patent application. Comparatively speaking, in most cases the patent application is a relative drop in the bucket. Anything less than striving to patent should be considered unclean hands in comparison to others who are using the patent system. I have no problem basing court decisions on equity – but that equity must be guided by principles, that although tough, are eminently fair in the patent sense. Thus, with both the carrot and the stick, the patent system still exudes the policy of the invention up for grabs to whoever captures it first (and proves as much with a patent application filing).

    As for your drawing the implication that somehow secret prior use is rightfully prior art, I have to tell you I cannot understand where you are coming from with this thought. That would be the worst of all worlds. Further, your idea of leaving the first user alone is not workable in the court system we have because the first user is a defense and one not openly knowledgeable to the patentee. You would be asking all patentees to play a game of Russian Roulette. In fact, your position still rewards the secret keeper. That is simply not fair for the reasons given in my prior post.

    NYB,

    I am not certain what the position you are trying to take. Are you saying that there are vehicles that one can choose to make public their invention without getting a patent? I would most definitely agree, but that calculus has no place in the current discussion. No one has indicated that such venues will be eliminated in the changes being contemplated in Congress. There is not, nor ever has been, a limitation on anyone openly sharing their ideas with the public. Instead, here, we are purposely talking of those who wish to gain the patent right. If I have misunderstood your post, please correct me.

  5. As I tried to explain, I didn’t say there was a guarantee of a patent, just a win as opposed to the later filer. Nor did I say first-to-publish was the be all – I said it was better than the current first-to-invent or a pure first-to-file.

    “The American public, on the other, gets the milk for free without buying the cow. Now who’s gonna complaign about that?”
    Apparently, you and Ned Heller.

  6. “The reason why is that during the patent evaluation process (especially in a First to File with no swearing behind), the first person to willingly share the advance with the public obtains the benefit of patent rights. Isn’t that what truly matters?”
    Yes it is.

    “The race goes to the swift. As it should.” Not if the race is the process of hiring a patent attorney to prepare a patent application according to USPTO regulations. Patent applications take 18 months to publish. The first to file a patent application may not be the first person to willingly share the advance with the public.

  7. New Light, I still think Congress should be aware that the present statute overturns one of our oldest Supreme Court patent cases. They should have that information so that they can actually read the case before they decide.

    What is the policy argument here? I think the Supremes had it right in Pennock. Only the diligent have a right to the patent. After that, everyone has a right to the invention, if they can discover it. That is the policy, I believe.

    So what does that imply? File diligently, but the prior use is prior art against all. In practice, the first filer can maintain his patent only by leaving the first user alone. That essentially grant that user a prior user right that is not limited in any way.

  8. Sorry NYB, it dont matta who it is “as opposed to”, there just ain no guarantee of patent as your statement alludes to.

    Forced publication aint the be all ya want it to be.

    Least ways for the one making the disclosure. The American public, on the other, gets the milk for free without buying the cow.

    Now who’s gonna complaign about that?

  9. that was as opposed to someone else who files for the same thing after public disclosure but before you file.

  10. “Parallel changes include a switch to a first-to-file system”

    There are several problems with the bill, FTF is just one. For small firms one problem is it can take years to get an invention ready for market because they typically are working on fumes on a pay as you go system. If they have to file before they are ready they can end up tipping off large potential competitors who with far greater resources can finish the invention before the true inventor and beat them to market. Plainly, it’s strongly in favor of large firms.

    Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large corporations maintain their monopolies and kill their small entity and startup competitors (which is exactly what they intended it to do) and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

    Please see link to truereform.piausa.org for a different/opposing view on patent reform.
    link to docs.piausa.org

  11. Good morning Ned,

    You ask if my argument fits the scenario of indefinite trade secret use that ultimately is revealed in the process of obtaining a patent.

    I would think that it does not.

    The reason why is that during the patent evaluation process (especially in a First to File with no swearing behind), the first person to willingly share the advance with the public obtains the benefit of patent rights. Isn’t that what truly matters?

    In essence, it matters not how long the item has been secretly around, what matters is that it will be finally shared. I believe that you are too selectively focused on water under the bridge, rather than the promotion, albeit not immediate. The phrase “there is nothing new under the sun” seems most appropriate in the sense that the fundamentals of everything already exist, and it is in the sharing that matters. Why begrudge that sharing? Why not promote that sharing, even after a time as trade secret?

    I see nothing wrong with overturning Pennock.

    Mind you, this only works if there is no swearing behind and no prior user rights. It is those mechanisms that allow chicanery and gamemanship into the equation. It is those mechanisms that defeat the sense of urgency that should be used to promote the sciences and the useful arts. I think that both a carrot and a stick should be wielded. With a pure First to File we would have that. If the secret user waits too long – then shame on him and he has unclean hands and deserves no equitable recompense. The race goes to the swift. As it should.

  12. Perhaps we ought to give private use a grace period of one year. They file within the year, or abandon their right to do so.

    Now, where did I think of that?

  13. Your argument fits just as well, does it not, with allowing one to keep his invention as a trade secret indefinitely and still get a patent.

    That is what is on the table with the new legislation.

  14. Yes, you mentioned Pennock above. Gotta’ go back and have a look at the rationale for telling an inventor if you use your invention secretly your right to a patent is waived. Seems like over-reaching by the court or government to me.

  15. Steve look at the USPTO filing stats, which corps have been filing the most apps at the USPTO recently. Korean and Japanese Corps are right up there in the top ten. More than 50% of filings are from non-US Applicants. And Chinese corps haven’t seriously started yet. Imagine them doing what Korea did over the last 15 years. How much bigger than South Korea is the People’s Republic of China?You think any of these Asians “worry” a lot about the prior art now? You think they will worry “less” when FtF comes in: I think that is simply not possible.

  16. Ned,

    I am not sure that I can agree with you that making even secret us prior art.

    In effect, you are still rewarding the hoarding of knowledge and denying the benefits of having a patent system.

    All one would have to do is diligently document all secret use and share nothing (something that by shear size, large and established companies can do much more readily than small companies. The large and established companies then can compete on that shear size, sharing nothing and not worrying at all about small innovative companies. If any such small innovators show up, the large company has yet another nuclear patent weapon and can wipe out the patent of the innovator. Thus the small company has been put at a distinct disadvantage by actually sharing their information in the patent process – not to mention the expending of the costs of obtaining the patent. Large Company loses nothing – no risk, no expenditures in the patent process and no sharing of information.

    This asymmetry of expenditures and risks cannot be fair and, in fact, works against the very purpose of the patent system. Please rethink your position.

  17. Babel Boy, good policy argument on Coke, but that same policy argument applies regardless of regime, FTF or FTI. We, however, have had since Pennock v. Dialog, that such suppression or concealment causes the abandonment of a right to a patent.

    What the Congress does not know is that they are going to reverse one of our oldest Supreme Court cases without really knowing that they are doing so, and without any real discussion of the policy arguments you and I for example may discuss here.

    On the other hand, if we were to make all prior use prior art, we would kills two birds with one stone, would we not?

    The more I think of it, the better I like making even secret use prior art. It will be reveal if and when the prior user is sued.

  18. “But if it is an object to eliminate interferences, the right to priority must be able to be determined on the record of the public disclosure.” Agreed, but some (not all) inventions can be disclosed by simply posting a video on YouTube. The insistence on a written description and drawings may have worked 50 years ago, but in today’s world it is an unnecessary complication on the process for determining priority.

    “What does this require? Do we get first to invent priority or do we get effective filing date priority. The two are not the same and the statute provides no clue as to what is intended.” It is clear it’s not effective filing date since we’re not amending Section 120. Yes, the statute changes priority from the first inventor to document their conception in a secret notebook to the first inventor to publicly disclose their invention. A good public policy as the previous Patently-O posting that I linked explained.

    If you think about it, I think you’ll find that you agree. We are changing the priority standard from secret conception to public description. Don’t attack the statute on the basis that it doesn’t require enablement because the previous priority standard didn’t require enablement either.

  19. Ned: Somehow, we need to restore into the statute this simple concept to prevent a party from obtaining a patent despite secret commercial use for an indefinite period.

    Nottt so fast, Ned. What you say sounds right, but let’s give it some thought in the context of a world where first to invent doesn’t carry any water.

    Hypo: I invent Coca-cola, keep the formula secret for 100 years, sell a gazillion gallons of it, and make a ton of money. I have a de facto monopoly, but I have not yet tapped into my 17 ro 20 or whatever year de juris monopoly. Anyone who wanted to can make and sell it during that time and nothing I can do.

    I would argue that the de facto monopoly of my invention is irrelevant as to whether I am entitled to a patent. If I want to take the risk of losing that monopoly, that’s my business decision, and, believe me, a lot of inventors make the same decision. The patent rules and restrictions should only apply to the de juris monopoly because the deal is, I tell the country how to do the invention, and the country gives me a LEGAL monopoly. The deal is not that the public has a right to the invention because I practiced it in secret.

    Say that after 100 years of pushing Coca-Cola and making kids fat and hypertensive some cat invents mass spectrometry and I start to sweat now because maybe they can reverse engineer my formula. So why shouldn’t I be able to claim my de juris monopoly by obtaining a patent at that point? I don’t see the unfairness here so long as at the time I file the invention is still secret and no one has patented or invested in commercialization of the invention.

    Getting to the less hypothetical issues – prior rights is, in my opinion, absolutely necessary in a F2F world and I applaud the House for that, although after actually reading their draft I reserve the right to squeal. They’re Republicans, after all.

    If I invent and commercialize an invention but choose not to patent – whether or not I keep the invention secret – I should not later be cut off because somebody files an application on the same invention – so long as the other guy filed the application after I started commercialization; i.e., made an investment. Sitting on your hands may justify losing the patent, but it shouldn’t justify losing your continued use of your own invention or your investment in it.

    Presumably, prior rights would operate only as a defense to infringement and would not be transferable to any entity that is not owned and controlled by the inventor, or is not the employer of the inventor. IOW a prior rights defense to infringement should not be transferable to one who is a stranger to the invention.

    One problem will be Medimmune. In the new world a patentee should be able to make a good faith inquiry of an infringer as to prior rights without the cost of filing a suit and without the threat of triggering a retaliatory DJ action. In fact, such an inquiry should be a perquisite for filing an infringement suit.

    Mostly thinking out loud here . . . as, apparently, everybody is.

  20. You want to publish because it ensures that you get the patent (as long as you follow up with a patent application within a year)

    Um, no. But if ya believe that I got a couple other lines I can toss your way.

  21. JUST LET THE PTO CHARGE WHAT IT NEEDS TO AND KEEP THE MONEY.

    That will cure the backlog and any quality problems which are ALL caused by a lack of Examiners, equipment and staff. Congress has screwed the system up for decades by stealing money. Congress is the problem, not our Patent System.

    Forget all other the changes to the Patent System.

    We will regret it if we change our System to be like all others. They don’t do as well as we do and are run by Big Companies.

  22. NTB, “priority?” Why of course it gives priority just as much as prior invention does today. But if it is an object to eliminate interferences, the right to priority must be able to be determined on the record of the public disclosure.

    What does this require? Do we get first to invent priority or do we get effective filing date priority. The two are not the same and the statute provides no clue as to what is intended.

    Let us assume it is the latter. Today, effective filing date requires disclosure in the manner provided by Section 112, p. 1. If that is what was intended, then let’s say so.

  23. “Actually, ‘publicly disclosed’ needs the modifier ‘in the manner provided by Section 112, p.1,’ and preferrably, ‘in English’ if the publication is going to be effective in giving the first discloser the benefit of a filing date without actually filing.”

    The first public disclosure doesn’t give the benefit of a filing date – it determines priority as to two competing filers (assuming they each file within one year of their respective public disclosure). Comparing the first-to-publish regime to the first-to-invent regime, which requires mere conception (not enablement) in the inventor’s secret notebook which can be in any language, first-to-publish is better.

  24. Actually, “publicly disclosed” needs the modifier “in the manner provided by Section 112, p.1,” and preferrably, “in English” if the publication is going to be effective in giving the first discloser the benefit of a filing date without actually filing. The proponents of the legislation, pulling their sheep clothing over their wolf shoulders, assure us that that, to be effective, the first disclosure has to be “enabling” etc. But, if its purpose is to inform Americans, lets put the teeth that such a notion requires into the statute now, and not later when some obscure, barely enabling disclosure is published in Timbuktu’s most remote library, by indexing a paper written in Basque and this is said to be equivalent to a first filed patent application in the US.

  25. OK, thanks for the clarification.

    Obviously, the new statute is a work in progress regardless of how one feels about the whole concept of FITF.

  26. Read the patently-O posting that I linked to. With the grace period like it is proposed, “first-to-file” is actually a misnomer and the regime is more properly thought of as first-to-publish. You want to publish because it ensures that you get the patent (as long as you follow up with a patent application within a year) unless someone filed a patent application before you published. It’s also good policy to base the patent right on public disclosure because public disclosure immediately benefits the general public. It doesn’t matter if the filer didn’t get the publication or is in another country, it’s still prior art.

  27. NYB, I’m not an attorney or agent, but it seems that relying on such a presumption is problematic. What if the filer doesn’t get the publication that had the disclosure. What if the filer is in some other country? As an inventor, under “First to File,” the risk would simply be too great to disclose before filing. So, there goes any effective grace period. If my logic is not correct on this, I welcome any comments.

  28. Rany, see my comments above and the posting I linked to.

    The first-to-publish grace period gets us half way there. A presumption in a derivation proceeding that the second person who discloses saw the first disclosure gets us the rest of the way there.

  29. “The only kind of public disclosures that will reserve a filing date are those that describe the invention in the manner of Section 112, p. 1.”

    The statute doesn’t say that. There is no reason why a product that is sold in such a manner as to enable a member of the public to file a patent application with a written description of the product cannot be considered a public disclosure.

    “As to presumptions of derivation, where in the statute is that?” I didn’t say it was in the statute, I said it should be.

    “Second, shouldn’t the first filer have the presumption in his favor?” That’s what I proposed.

  30. Doesn’t “First to File” effectively eliminate any grace period because anyone, anywhere could, after seeing a disclosure, file their own patent application and claim it was their invention. Wouldn’t the true inventor have to prove that they saw his disclosure, which would be difficult if not impossible?

  31. Sure thing. I recall a case just like this a few years back where the defendant had reverse-engineered a Chinese remedy to determine its active ingredients. Lo and behold, what did they find?

    I suspect that any cure anywhere in the world that is effective to any degree is effective because of some active ingredient. People actually explore the world looking for such cures. Today they do it for good purposes. Tomorrow for prior art.

    So, don’t think this is a fantasy. There are real cases on this topic.

  32. Hi Max,
    There are less swamping of technology areas by big companies today than most people think. There is room for invention walking between large companies IP.
    My worry, which may be wrong, is with FtF that big companies (include China, Korea, etc.) can apply for thousands of patents with less worry about prior art. Is this wrong?

  33. Hi Josh,
    I believe the first-to-invent system will increase the number of patent applications.

    Having many patents in an area is an effective monopoly since it is too costly to fight a suit that accuses your company of violating 100′s of patents. Forget re-exam; all you have to do is lose one claim in one patent. If first-to-file becomes law, we will see almost every case settling above $3M. Today, settlements are typically less than 1/10 of that even if you have solid patents.

    Also, the suggestions that appear in this dialog that most patents are “crppy” is just plain uneducated. One thing the Patent office does well is push back on claims. They take the time to look for prior art and really challenge inventions. It is funny that people complain about how long it takes to get a patent (time of review) and then turn around and say that patents are “crppy”.

  34. Agree it is a mistake to fashion the law to punish, rather than reward, a trade secret holder for disclosing the trade secret in a patent application. Doing so would encourage keeping the trade secret a secret rather than bringing it to market. And as we all know, trade secrets are bad. I’m sure 6 would play us a tune on the world’s smallest stradivarius as we weep over the tragic consequences of trade secrets.

  35. Ned: If we are going to let Chinese herbal remedies, and Indian secret formulas for magical cures become prior art in the US against solid US research

    Excuse me? You think that US researchers doing actual scientific research (as opposed to not nutraceutical charlatans co-opting the research of others) are going to have problems getting patents under the new regime because of “Chinese herbal remedies” or “Indian magical cures”? What the hxll are you talking about?

  36. Ned-O,

    As I done observe – one way or another, we be goin to clsoe the patent doors (cause that be what Big Biz want and we all know that Sunshine is but a Shell for Big Biz).

  37. Steve Taylor I hold 7 patents in UIs and I am currently working in Artificial Intelligence

    News flash: anybody who wants to do this, give me a call. Get your credit card out and in a few years you too will have “7 patents” and you can claim that you are working in the field of “artificial intelligence.”

    ping: These crrppy patents will not be filed so much as to receive a patent (remember the actual drop in value) but will be a defensive move.

    Sounds like the public will reap the benefits of the dedicated disclosures, especially if the disclosures are primarily in the softie waftie fields where we shouldn’t have patents anyway.

  38. If we are going to let Chinese herbal remedies, and Indian secret formulas for magical cures become prior art in the US against solid US research, and for what policy reason I do not understand, why don’t we go the next step and make all prior use be prior art regardless of whether it was pubic, and for the full boat — obviousness as well. Why do half measures here.

    The laws of Dracon show no mercy or clemency. They were meant to be applied without reason. So too here when we allow this “s h * t” to happen.

  39. NYB, I thought so as well. But check Dennis explanation above. The only kind of public disclosures that will reserve a filing date are those that describe the invention in the manner of Section 112, p. 1.

    A product does not come with a written description, but a competitor can provide one in his own application.

    As to presumptions of derivation, where in the statute is that? Second, shouldn’t the first filer have the presumption in his favor? The second filer has to prove, in the PTO, that he disclosed first in response to a rejection over the first filer. There is no presumption there.

    Now it gets real interesting does it not? Assume the first filer is then rejected over the second filer based on the second filers proofs of prior disclosure where the disclosure is of the prior use variety? But, he says to the PTO, “Hold on there. That prior use did not have all the elements of the second filer’s claim. See, it was missing element X. I was the first to disclose the X and the whole invention.

    So, now what is the PTO going to do? We have two parties arguing with it about matters of public use. This should be the basis for an interference. But there is no interference in the new statute. That is gone.

    This is an ugly, ugly mess.

  40. pingaling As for reducin filings – you be wrong and be wrong for the wrong reason. The real driver would be that “patents” will be weaker and just not worth it.

    Right. I suppose that’s why application filings increased after KSR.

    If global prior use goes through, there be no reason to engender teh costs, and you will see an increase – but an increase in crrppy patents thrown at the wall.

    If there is an increase, I highly doubt it will be significant. But we’ll certainly remember this prediction from pingaling. And once again, it’s rather amusing to see pingaling worrying about “crxppy patents being thrown at the wall.” It’s almost as if pingaling believes that this doesn’t happen routinely already. But everybody knows that’s not true.

  41. Dear Congressman -

    Please vote against HR 1249. The First to File provisions would create a race to the patent office that would advantage large corporations over start-ups and individuals and degrade patent application quality. The large corporations can hire teams of expert lawyers to rapidly prepare patent applications where as individuals can barely afford to hire a single attorney.
    Additionally, the first to file provision will create a malpractice night mare, with every patent attorney that looses the race to the patent office being sued for not filing an application fast enough.
    Therefore, applications will be rushed and the information “disclosed” to the public through the application process will be full of errors and inconsistencies and create confusion, where the intention is to make technology “patently obvious”.

    Again, please vote against HR 1249.

    Feel free to use this as the basis for your own note.

    You Congressman can be emailed from here:

    link to writerep.house.gov

  42. If a competitor’s publicly sold product can be later described in another party’s patent application, then it would seem that the product was publicly disclosed and the competitor can protect the product by filing within the one year grace period.

    The derivation proceeding should have a presumption that the second party who discloses or files a patent application after the first party publicly disclosed is presumed to have derived the invention. I am much more comfortable with having presumptions based on public disclosures than on secret inventors notebooks to establish conception.

    See link to patentlyo.com

  43. Maxie,

    The key to Steve’s post is more bullets. He not be sayin that there are not bullets presently.

    As for reducin filings – you be wrong and be wrong for the wrong reason. The real driver would be that “patents” will be weaker and just not worth it. If global prior use goes through, there be no reason to engender teh costs, and you will see an increase – but an increase in crrppy patents thrown at the wall. These crrppy patents will not be filed so much as to receive a patent (remember the actual drop in value) but will be a defensive move. Yes Big Corp already does this – just take a deep look at some of the Big Corp patent landscape) – but the benefit of simply getting “stuff” out there as a picket fence increases (not decreases). Little Corp cant afford these types of picket fences but Big Corp can and Big Corp will use them to stomp Little Corp. Why? Because they can.

  44. The new law is going to really open up opportunities for corporate sabotage:

    Filing “improvement” patents on intelligence about new products in the business will be the best defense against the grace period. The patent will describe the competitor product thereby defeating his later-filed patent application, and may eventually result in our own blocking patent on an obvious improvement. Derivation? Make my day, punk.

    Slick.

    Second, if a small fry dares patent in my field, I stomp him good when his patent emerges. I file an opposition and make it very expensive. Let’s just see if he can keep his business afloat.

  45. Steve, I’m interested but don’t quite understand. Are you saying that BigCorp has been frustrated up to now, unable to file swarms of patent applications until First Inventor to File becomes law? i had thought they were doing that already.

    There seems to be a common misapprehension that FtF will increase filing numbers. I think the opposite because, in FtF your own earlier filings destroy your later filings. You get one shot only, so it has to be your best shot. I think FtF will reduce filing numbers, when people figure that out.

    But tell me your view.

  46. Would the first-to-invent system prevent large companies from filing 5000 patents a month?? I think no. Being able to file 5000 patents per month does not mean monopoly in technological or paradigmatic breakthrough.

    My concern with large companies is industrial espionage. Evidence shows that large companies are much better at copying/stealing ideas than at genuine innovation.

  47. Something to keep in mind on the first-to-file…the past may not be an indicator of the future.

    With first to file, a large entity (China, Google, IBM, etc.) can afford to file thousands of patents in any area of technology they believe is critical to the future. As an indicator that this is correct, China is already setting up many think-tanks across the US with the expressed intent to create patentable IP. If they do not have to worry about previous inventors, they can more easily swamp any area of technology. Try and challenge five thousand patents per month that are filed in your area of expertise.

    Please tell me why, as a small inventor (I hold 7 patents in UIs and I am currently working in Artificial Intelligence), that I should not be afraid of China, IBM and Google if this new law passes. They already have me out-gunned with the ability to request re-exam, set venue and drag cases out years. This law appears to me to give them additional bullets to shoot me with.

  48. I like your middle para Paul.

    I think we should distinguish the later filings of the first filer and the filings of other parties during the black hole 18 months between first filing and the resultant A publication of the first-filed application.

    I think we need to keep in mind that, in FtF country, it will frequently be of decisive importance that the claim on which one relies is indeed entitled to the declared priority date at the start of that 18 month period (even more so when secret prior art is available for obviousness attacks on the claims). this imperative to support the claims will deter filers from playing the games you imagine.

    From the first prio date there are 3 periods in which follow up patent applications can be filed. They arei) during the Paris prio year ii) after that year ends, but before A publication iii) after A publication at 18 months. Presumably you are not against an applicant declaring more than one prio date in his PCT? Presumably you are not against using A publications in obviousness attacks. we are debating what to do about the intervening 6 months. I think Art 54(3) EPC (no secret prior art for obviousness in this 6 month period) is the right “half way house”, between those two extremes, to play fair with those independent inventors who filed on something novel but later than that first priority filing. The “games” you imagine, even if they are widespread, can win for the applicant an extra patent term of 6 months max.

  49. “Plus keeping new technologies secret does not advance the useful arts for the public benefit, as the Constitution intends.”

    yes and keeping things secret would further complicate the issue of inventorship. And…i think Ned Heller is right.

  50. Regardless of Circuit Court cases that invent new equitable doctrines, the Supreme Court cases are controlling on this issue. While they hold that personal use for commercial purposes is a bar to obtaining a patent — an abandonment of the right to obtain a patent — they have never gone so far as to hold that the secret use by a third party is prior art. If that were the case, every prior invention would be prior art as of its date of reduction to practice even where it is “suppressed or concealed” within the meaning of Section 102(g). The 102(g) cases as well all require that the invention be publicly disclosed (within two years) for the prior reduction to practice to become prior art.

  51. …more harm that good.

    This would be a huge drag on innovation, start-ups, and sole inventors in the US.

  52. Clearly you did not understand my point. The law as it stands is not a problem for Americans. It puts American inventors in a much better place than foreign inventors. American inventors now clear a broad path around their patents because they are prior art for obviousness purposes. This “benefit” is not enjoyed by foreign inventors today.

    The new statute will strip from Americans a benefit they now exclusively enjoy, and make it non exclusive. The only real beneficiary here are foreign inventors.

  53. Does the house bill change S. 23. If it does not, what you say here Paul is not right.

    The senate clearly understood that everything in 102(a) had to be public, including “on sale.” Private commerical activities are not “publicly on sale” and they are not “public use.” This tracks European law on the topic whereby private commerical discussions and the like are not the kind of activity that would be considered a public use.

  54. Ned, the new 102 would fix that existing problem. 102(e) and other prior art will no longer limited to in the U.S.

  55. True, and that is what the law is now, and still will be under the pending legislation. Plus keeping new technologies secret does not advance the useful arts for the public benefit, as the Constitution intends.

  56. Ned, like that old corset case, a statutory public use does not have to be externally visible to everyone to be considered a patent-killing “public use.” Like internal parts used in a commercial car, software used in a commerical PC, etc. But you may well be right that old cases prior to the present patent statute referred to that statutory bar as an “abandonment.”
    But the NON-statutory equitable estoppel of Metalizing Engineering only prevents belated patenting by someone of a truely trade secret manufacturing process that is not abandoned but rather has been used too long to make commercial products. That party cannot get a patent, but someone else who later independently re-invents their manufacturing process CAN get a patent on it, and presumably enforce it against anyone, even the prior user, absent a “prior user” defense.

  57. the trade secret defense should only be allowed for protecting the owner of the trade secret not for invalidating a patent because 1) there is no public disclosure and 2) the self interest of the owner of a trade secret does not represent the interest of other players of the business community

  58. CPC, yes indeed, Dennis appears not to understand this aspect of the law.

    The golf ball was in the public domain and it could be reverse engineered. But a trade secret process by definition cannot by statute be prior art because it is not a “public use.”

    The Supreme Court cases all deny a patent to the trade secret user on the basis of abandonment, which is a person bar, not a bar premised on third party prior art.

  59. Good point there Paul on how the current FTI system inherently favors American inventors by providing prior art effect for obviousness purposes their prior inventions made in the US, but denies foreign applicants that same benefit.

    Another good reason why patent reform is good for American….

    er…

    What?

    Oh, never mind.

  60. Actually, Paul, both those decisions are highly consistent with Pennock v. Dialog and other Supreme Court cases barring a “prior user” from obtaining a patent. The legal theory is not estoppel, but abandonment.

    So, this throws into question the validity of W.L. Gore if it is seen to allow allow all private, non commercial use. I can, if you wish, cite you just such a Supreme Court case where the use was for its intended purpose, but was not otherwise “commercial.” That was enough to be deemed an abandonment.

    (The case I am thinking about is the corset fastener case from the mid 1800′s. No use was disclosed to the public, but the use was deemed a public use nontheless.)

  61. I disagree with:

    “This issue arises when, for instance, a manufacturing company is using a particular process as a trade secret before another party invented and patented the process. Under our current first-to-invent regime if the prior-user was sued for infringement, the patent would likely be invalidated under Section 102(g). See Dunlop Holdings Ltd v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 1975).”

    If it is maintained as a Trade Secret, by definition it is suppressed and concealed and would not be prior art under 102(g).

  62. Max, yes, switching to the European idea that applications not filed more than 18 months earlier than one’s own [and thus not published when one filed] are only prior art if what you now claim is fully anticipated by those earlier applications, was never part of any U.S. patent reform consideration.
    It would indeed lead to some game-playing in some situations, resulting in later filed applications covering the same invention. Simply by adding something obvious but necessary to one’s claims from one’s own specification that is not in the earlier filed applications. Or filing in countries not designated by the earlier applicant.

    P.S. We have had a few of these situations of two U.S. patents on the same invention, but for a different reason. It is due to our In re Hillmer decisions on 102(e) limiting the prior art effect of earlier filed applications to their U.S. filing date but not denying them their their foreign priority date for claiming purposes.

  63. As Gore v. Garlock* holds, even if a secret use is for commercial purposes it is NOT statutory prior art against the patent, it would only be a personal equitable estoppel against that commercial user getting a patent after the bar time period. Judge Learned Hand generated that equitable estoppel years ago in his famous Metalizing Engineering case, cited with approval by the Fed. Cir. Although sometimes confused with 102(b)prior use [which must be public], it only applies to stop the prior secret commercial user itself from getting a patent [after the date runs], and is not “prior art” as a true 102(b) bar is.
    The subsequent Invitrogen v. Biocrest Fed. Cir. decision further clarifies that secret use for research, even for research for other products, [not for making and selling any products by a secretly used, and then more than one year later filed, patentable method], is not a commercial use triggering Metalizing Engineering equitable estoppel.

    *W.L. Gore & Assoc. v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed.Cir. 1983)

  64. Dennis, you have to make clear that 102(g) requires that the invention be publicly disclosed or described in a patent application (within two years of reduction-to-practice). Thus a trade secret user can today not avail himself of the defense.

  65. Interesting. Is this perhaps prompted by the experience in Europe over the last 30 years, where the prior user defence works only in the jurisdiction where the prior use took place. With 40+ countries covered by the EPC, what’s the use (to BigCorp) of a defence to infringement that works in only one of them?

    It is hard enough to assess evidence of non-public acts performed inside Europe. Weighing evidence of non-public acts in the Far East, that took place before the filing date of ther claim up to 20 years before the infringement trial, might be a lot harder.

  66. Thank you moocow. I can see that multiple parties acquiring patents on inventions that are not patentably distinct is legally messy. But so too, I think, is doing justice in real life fact patterns.

    I see that Dennis has included “using secret prior art for obviousness” in his poll. It is, I appreciate, the long-standing status quo in the USA. Is this “multiple parties” thing perceived in the USA as a problem caused by European patent law?

  67. The derivation proceeding determination clause (135(a)) smells constitutionally flawed. “The determination by the Director whether to institute a derivation proceeding shall be final and non-appealable.” The Court has withheld judicial review of certain very limited categories of administrative adjudication, e.g., hire / fire decisions for national security positions. Not remembering any case where the Court approved such an outright curtailment of judicial review over the executive branch. Even the Gitmo cases do not seem to support the language of this statute.

  68. The part I don’t get about the prior user defense in the house bill is its availability for secret commercial uses anywhere in the world. So… you could be suing an infringer for infringement of your U.S. patent in U.S. district court and they could establish a prior user defense based on the nonpublic activities of their Taiwanese subsidiary? Seems like a dead giveaway to certain big high-tech companies who offshored all their manufacturing to Asia.

  69. Max:
    using “filings of others” type prior art for obviousness purposes prevents multiple parties from getting patents on inventions that are not patentably distinct. That’s the theory.

  70. Dennis, I never understood “disclosure” to be limited to some sort of publication. So, this point needs clarification if it is possible for a product to be sold publicly within a year of filing and for someone else to file a patent application or publish some sort of “bulletin” disclosing the inventions therein disclosed and prevent you, by that malicious act, from obtaining a patent. (This would force many derivation proceedings, a real nightmare compared to interferences.)

  71. Dennis, your post “implies” that the secret process involved in Pennock v. Dialog was a public use that could bar third parties from obtaining a patent on the invention. Not so. Private commercial use is not prior art to third parties even today.

    Pennock v. Dialog was about abandonment, a concept that has remarkably been removed from the new statute.

    He is a quote from the case.

    “The true construction of the patent law is that the first inventor cannot acquire a good title to a patent if he suffers the thing invented to go into public use or to be publicly sold for use before he makes application for a patent. This voluntary act, or acquiescence in the public sale or use, is an abandonment of his right [to obtain a patent], or rather creates a disability to comply with the terms and conditions of the law on which alone the Secretary of State is authorized to grant him a patent.”

    Somehow, we need to restore into the statute this simple concept to prevent a party from obtaining a patent despite secret commercial use for an indefinite period.”

  72. Because U.S. Representatives and Senators are to distracted with the Budget, a new war and other sound bite items that resonant with voters to give any real attention to Patent Reform.

  73. So, Dennis, does the House Bill perpetuate the legal fiction that unpublished material, that not one member of the public knew about (I refer to filings of others at the USPTO, known only to the inventor and the PTO), is nevertheless available for obviousness attacks?

    Why do AIPLA and IPO want to move to a Winner Take All, turbo-charged FtF, lacking the delicate balance between rival filers that is promulgated in the European Patent Convention?

    This is not harmonisation, it is leapfrogging past ROW.

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