The Effects of the America Invents Act on Technological Disclosure

By Jason Rantanen

(Note: Given the almost certain passage of H.R. 1249 by the Senate, this analysis refers to that version of the pending patent legislation.  It is available here.).

The principal justification for the impending changes to patent law is that they will promote technological progress in the United States (and thus create jobs).  The questions relating to whether this intended result will be realized are numerous, and in this analysis I focus on just one important issue: the effects the America Invents Act may have on the disclosure of technological information.  I conclude that while the new patent laws have the potential to encourage at least one category of disclosures, they may also negatively impact other types of information disclosures.

At least three aspects of the Act are likely to impact the quantity and quality of disclosures: the changes to the novelty rules of 35. U.S.C. § 102, the creation of a prior user defense, and the effective elimination of the best mode requirement.  Changes to the effectiveness of the inequitable conduct doctrine are also likely to have an impact, perhaps good, perhaps bad, an issue I will discuss at a later time.  Below, I offer a preliminary analysis of the effects of these changes with respect to two categories of disclosures: (1) the mandatory disclosures in the patent document itself, and (2) peripheral disclosures, which I define as the dissemination of information that would not occur but for the existence of a patent system.

Changes to Novelty Rules: The shift to a first to file system is central to the America Invents Act.  Along with that change comes a revamped set of novelty rules – a complete rewrite of Section 102.  Gone is 102(a), and the concept that prior art must precede the date of invention.  Gone too is 102(b) and the one-year statutory bar.  Instead, we will soon (i.e.: in eighteen months) have a new 102(a) under which a variety of things (i.e.: patents, printed publications, public uses, invention being on sale, etc.) that predate the patent's effective filing date constitute prior art, a much more potent statutory bar than presently exists.

This new rule comes with a major exception, however: prior art does not include disclosures (which I interpret as referring to any of the categories of prior art discussed in the new 102(a)) made within one year of filing if "the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor." (proposed language of 102(b)(1)(B))  (The section also contains an exception for disclosures by the inventor or another who obtained the subject matter from the inventor). In other words, inventors will have the ability to negate any prior art from the one-year period prior to filing by engaging in public disclosure. 

This provision has the potential to encourage early disclosures of information by the inventor.  Although on the surface it seems to provide no more ability for inventors to engage in disclosures than the existing one-year statutory bar, under which an inventor was free to disclose whatever it wanted for the one-year period prior to filing, it perhaps may result in more disclosures than under the present structure.  A disclosure race may be encouraged.  If, as Gideon Parchomovsky has suggested, inventors involved in a patent race sometimes engage in strategic disclosures to stymie their competitors, the new 102(b)(1)(B) has the potential to fuel this behavior.  Through early disclosure, inventors who are racing to develop a new technology can not only block their rivals from obtaining a patent—because the disclosure would operate as prior art against the rival's patenting attempts—but can also negate any subsequent attempt by the rival to disclose patent-blocking information of equivalent content.  Rather than a race to invent, perhaps this will produce a race to engage in early public disclosures.  Unfortunately, any such effects are likely to be largely limited to inventors who desire to only file in the United States due to the lack of a self-disclosure exception in many countries. 

Creation of a Prior User Defense: Even as the changes to the novelty rules seem to encourage early peripheral disclosures of technological information, at least for US-only inventors, the creation of a prior user defense pushes towards less disclosure, albeit through different mechanisms.  I see the creation of a prior user defense in Section 5 of H.R. 1249 as impacting the disclosure of technological information in two ways: it may reduce the quantity of patent applications filed, and thus the number of mandatory disclosures that accompany those applications, and it has the potential to shift investment in invention away from self-disclosing inventions to those that can be protected through secrecy mechanisms.

The types of inventions that the prior user defense most applies to are those with the capability of being protected through secrecy.  A prior user defense is less important for inventions whose workings are readily understandable once they are placed on the market because these products already represent potentially invalidating prior art; thus, this type of defense has most relevance for non-self disclosing inventions, a category that includes many processes.  Under the current law, inventors who develop non-self disclosing inventions are faced with a difficult choice: maintain the process as a trade secret, and run the risk of being blocked later by an inventor who obtains a patent, or file for a patent and disclose the process to the public.  Both options have significant costs associated with their selection but the patent and disclose option is hardly foreclosed.

A prior user defense reweights this decision in favor of maintaining secrecy because it reduces the risk of being blocked by a later inventor.  The directional effect of this change is to reduce the number of patents that are filed on secret inventions, and thus reduce the number of mandatory disclosures that accompany those patents.

Of course, not everyone accepts that these mandatory disclosures provide useful technological information.  Consider, however, the effects on peripheral disclosures – specifically, the impact on investment in self-disclosing inventions.  The creation of a prior user defense re-calibrates the scale as between secret inventions and self-disclosing inventions.  By making secrecy a more valuable protection strategy for inventors to pursue, inventors are likely to focus their efforts towards the creation of such inventions as opposed to self-disclosing inventions, at least when the social utility that the inventor can monetize is otherwise equal.  But self-disclosing inventions are inherently valuable for the information that they provide to the public and future inventors – a spillover that inventors cannot fully capture.  The directional result may be the creation of fewer of these valuable inventions.

Elimination of Best Most Requirement: Section 15 of H.R. 1249 effectively eliminates the best mode requirement by amending the list of invalidity defense to exclude best mode  While the best mode requirement remains in 35. U.S.C. 112, and thus theoretically could be used by a patent examiner to reject an application, failure to disclose best mode may also not be a basis for holding a patent unenforceable – i.e.: no inequitable conduct on this ground. 

Although the best mode requirement has been subjected to substantial criticism on the grounds that it represents a trap for the unwary independent inventor while being wholly ineffective for disclosure purposes, the actual impact of the abolition of this requirement may be far broader than expected.  From a directional standpoint, the only effect of this change is to weaken the mandatory disclosure obligations imposed on the applicant, and thus a decrease in the quality of individual disclosures should be predicted.  How great a decrease, and whether the elimination of this requirement will result in more disclosure-providing applications being filed, will be an area to monitor.

 

71 thoughts on “The Effects of the America Invents Act on Technological Disclosure

  1. “”(b) Exceptions-
    (1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION- A disclosure made 1 year or less before the effective filing date of a claimed invention *** shall not be prior art *** to the claimed invention under subsection (a)(1) if– …”

    I agree with Judith’s initial position. This has NOTHING to do with antedating. It simply says the inventor’s own disclosures can not be used to deny his patent.

    Ned, somehow you are reading this backwards. As for the “legistative intent” below … haven’t you ever heard someone talking out their axx before?

  2. Brad–

    I don’t follow.

    Although A2, A3, A4, etc. need not be enabled in the originally-filed provisional, they must nevertheless be sufficiently-well disclosed therein to satisfy 112, in order for your scheme to have merit.

    What then is the benefit added by making disclosure in an “expanded version of the provisional” before such disclosure is made in subsequent “enabled provisionals”?

    I’m missing something.

  3. and has no requirement for enablement

    That is interesting – and science fiction then garners a prior art effect?

    Or am I misunderstanding your point?

  4. The short answer to why expand a provisional before publishing is the nature of the prior art effect udner the new 102(d) – which gives prior art effect to subject matter disclosed and has no requirement for enablement. So, if you invent species A1 and file a provisional application of enabled A1 on day 1, then you can take some time to think of other possible species A2, A3, A4, A5, etc, and within a few days/weeks after day 1,publish an expanded version of the provisional that will now serve as a grace period ofr further development on the entire genus of A inventions, even though the publication may not enable those other species. As further experiments/work is done to enable other species those can have corresponding filings (likely enabled provisionals) if OUS rights are desired, and then all of the work is wrapped up into a utility/PCT filed to convert the original provisional. In this example, the expanded publication is used to broaden the scope of the grace period to cover the unenabled species while work continues on developing those.

    As pointed out by others, the challenge with using the publicly disclosed grace period this way is that it assumes that all inventions fit a model where work on enabling various species off the invention can be completed in a year.

  5. How about 102(b)(1)(A) – when there is an inventor in common – will this require a derivation proceeding? Example, Application 1 to A and B publishes and is cited against Application 2 to A, which is filed 6 months after publication of Application 1. What is needed to remove Application 1?

  6. Jason, the revised statute doesn’t preclude the PTO itself from denying a patent if the PTO knows that the best mode requirement wasn’t fulfilled, it just says that failure to satisfy best mode can’t be raised in court to attack the patent. So if you’re a third party and you have proof that a patentee failed to satisfy best mode, you may still be able to challenge the patent *if you can get that patent before the PTO again*: by invoking an interference or an inter partes re-exam, and then showing the failure to satisfy best mode (which itself is not a basis for instituting either procedure).

  7. wahhhhh, wahhhhhh, wahhhhhh

    Why are you crying, sockpuppet? Because you’ve been pwned again? It appears so. Buy a new box of kleenex.

    Another qeustion for sockie: why not use a consistent pseudonym?

    That’s a rhetorical question, of course. The answer is that the sockpuppet does not want to be accountable for its statements or the fact that it does nothing but troll the same commenters here week after week after week offering vapid gxrbage like this one (and if history teaches anything, it teaches that sockie will start using the term “vapid” in future comments — yes, sockie is that lame).

    You see, sockie, I’ve read Musgrave and explained in very clear terms why Judge Rich’s analysis completely misses the incontrovertible problem raised by claims in the form I identified. Maybe you missed that thread? If so, too bad for you. Try harder to keep up.

    You, on the other hand, have contributed nothing. Nada. Zero. Except your childish pseudonym. Now dry up and blow away to a blog where self-serving rants are admired by all. You know which one I’m talking about.

  8. You should also note that IBM does not inform the Supreme Court of Musgrave, a case relied upon by Rich in In re Benson, a case that was overruled by Gottshalk v. Benson.

    Musgrave is the case where the brilliant Judge Rich fails to recognize (or fails to point out) that claims in the form [old transforming step + mental step] or [mental step + old transforming step] have completely different implications for infringers than claims in the form [novel transforming step + mental step]. For that reason alone, it’s a complete p.o.s., just like every other case that fails to recognize this issue and just like every comment here regarding such claims that fails to recognize this issue.

  9. I don't know if I would go so far as to say what you just said.  But I find it simply amazing that IBM would turn to Congress to get its way by slight of hand.  As I said, this is IBM's opinion (and it may be shared by others) about what makes data processing inventions patentable.  It was not adopted by the Supreme Court when proposed in Bilski.  But IBM, if they knew about Musgrave and did not cite it, essentially lied to the Supreme Court.  Now they double down on their potential fraud (depending on whether they knew about Musgrave) by defrauding Congress.  It makes no difference to me that they might be right.  To get its way by lying, if that is what the did, is way too much.   Further, Congress is way too naive to adopt
    IBM's test of what makes data processing inventions patentable, rather than refer the matter to the courts where it should be decided.

  10. Thanks for the link.

    I have not yet read the brief, but even before going there, the courts have held that there is no such thing as a technological arts test in regards to the “useful arts,” and even the Bilski decision makes it clear that the “useful arts” are broader than the technological arts.

    From a Constitutional perspective, can Congress redefine “useful arts” to only mean technological arts? Since this is a Constitutional term and the Supreme Court has the last word on Constitutional interpretation, and has already definitively provided that interpretation, I would think that the only valid way for Congress to make such a redefining change would be through a Constitutional amendment.

  11. How does failing to disclose the best mode deceive the Examiner?

    “Best” is a relative term and unlinked to any substantive requirement. I can see that the ommission “robs” the public in the sense that the Quid Pro Quo is not fully met, but I cannot see how this rises to the level of deceiving the Examiner.

  12. You cannot.  Even if you read IBMs briefs, you will not get a clear definition.  It is assumed that everyone knows what this means.  But the truth is, no one knows what it means.

  13. You will not find it.

    Here is IBM’s brief in Bilski. /media/docs/2009/08/08-964-ibm.pdf

    Note, they argue from basic principles that Useful Arts means “technology.” But there is no clear definition that I can find in the brief.

    You should also note that IBM does not inform the Supreme Court of Musgrave, a case relied upon by Rich in In re Benson, a case that was overruled by Gottshalk v. Benson. In other words, the very position they advocate was already overruled by the Supreme Court, but they did not tell the Supreme Court that.

  14. Not so simple, I was being very sarcastic and cynical. We have seen all this before, and it comes from Rich and from IBM. “Technological” is their position on what 101 requires for data processing inventions. Regardless of what Rich said about useful arts, it is quite necessary to understand that we are looking at IBM’s position on patentable subject matter in this area. They clearly support Rich and oppose Benson.

    If you or anyone need more information as to IBM’s position, you might just want to read their briefs in Bilski.

  15. Anonymous, thoughtful post.  I largely agree with everything you said.

    But the unexpected just might occur.  Courts might hold that any commercial exploitation that traditionally has been a personal bar is also sufficient to be prior art against third parties.  In such a case, there really would be no need for a prior user statute at all, as the prior trade secret use would invalidate the later patent.

  16. Judith, I share your cynicism.  Indeed.  There is no limit on how much of the claimed subject matter must be disclosed, where, what language, how long, whether the disclosure must be equivalent to a patent filing and describe the invention in a manner provided by 112, p.1, or just be a simple drawing, or be nor more than a verbal description to a passing guru in a remote rainforest.  

    Must the claims under rejection find full support in the public disclosure — or is it sufficient that the public disclosure
    only be the same as the reference?  The difference here really is important.  Today,  one can remove a reference by filing a 131 affidavit showing prior invention of the subject matter of the reference — regardless of whether the claims rejected are "fully supported" by the "prior invention."  (E.g., the claim is to a genus and the reference discloses a species.  The 131 needs only to show prior invention of the species.)  Is that what the new statute means?  I think it does, but I am not sure.

    Regarding time and place, there simply are no limits on how long the disclosure must be.  Can a five minute disclosure in Central Park to a passing crowd, filmed and documented by the applicant, be
    sufficient?  It is there, in the public domain for five minutes, but is then withdrawn.

    Then we get into the other tricks that can make a mockery of the new law.  We can, as you suggest, put a copy of the disclosure in a remote library somewhere in the world, index it, so that anyone attending that library can find it.  Just that the index might be in some obscure language, that as practical matter the subject matter remains a secret.

    Such are the problems one can expect throughout the statute that employs undefined terms in contexts without precedent.  We shred 2011 years
    of careful development of patent law through long experience for this?  Why in the world would we do such a thing?

  17. Jules, I do agree with you that the new statute is going to create a problem, just as is universal public use.

    I can imagine an examiner citing a reference that claims priority to a Chinese application, using that application’s date as the effective prior art date. We are now going to have to get a translation just to see if the subject matter forming the basis of the rejection is described therein and whether, the US patent has a claim that is supported in the Chinese application as required by 112, p.1.

    This is going to dramatically drive up prosecution costs. Big time.

  18. simple, congress caught on that 273 was easily evaded. In the new statute they said,

    (d) Definition-
    (1) IN GENERAL- For purposes of this section, the term ‘covered business method patent’ means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

    Regardless, the mere fact that 273 has never been invoked actually does not mean that there were no prior users ever sued. It simply means that 273 was unreasonably limited to methods only.

  19. Don’t understand you. Sorry.

    Just a thought: at the EPO, 39% of oppositions result in extinction of the patent. That’s a measure of the difference between ex Parte pre-issue examination on the merits, and a “real” exploration of validity of a patent claim, in inter Partes proceedings.

    20% of patents issued by the EPO and then opposed come through opposition unscathed. 40% survive in amended form. Thus, a majority of opposed European patents acquire a mantle of enhanced presumption of validity. Great for patentees.

  20. I don’t know if this post is meant tongue-in-cheek, but it does not address the points made by “not so simple questions.”

  21. Daniel – The idea I was trying to get at was that, since Congress did not actually eliminate the best mode requirement, perhaps even if it was removed as a ground for invalidity during an infringement suit, perhaps perhaps failing to disclose the best mode with the intent to deceive the examiner might still be a basis for a finding of inequitable conduct – thus preserving the requirement via an unenforceability mechanism. However, the legislation seems to foreclose this option as well. Here is the specific language from H.R. 1249:

    (a) In General- Section 282 of title 35, United States Code, is amended in the second undesignated paragraph by striking paragraph (3) and inserting the following:

    ‘(3) Invalidity of the patent or any claim in suit for failure to comply with–

    ‘(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable;

  22. Good questions.

    I think this underscores that the entire “Business ____” patenting runs to a deeper philosophical battle.

    I will echo your question on methods, and place the context at a higher abstraction: If it be so easy to avoid 273 in the first place, then what actually are “Business ____” ?

  23. enter a golden era in the development of the law of Unintended Consequences.

    Or not.

    Let’s take a look at this “race to publish” and the concurrent “race to Secrecy”:

    Publication brings you the right to try to obtain a patent and prevents others from even bothering in those steps.

    With patent rights effectively watered down, the process of even obtaining a patent even more perilous and even after (if) obtaining a patent, the ability to wield that patent more fraught with uncertainty (with post grant review and other people’s extensive secret prior use escape hatches), the reward for publication is mixed at best, and subsequent publications are actually discouraged (why bother?).

    With the race to Secrecy, letting your competitor foot the bill in the sense of money put forth, trouble and fighting the system, and clearing the forest for you (the free-rider effect) is tremendous. The worst case is that you maintain your edge in secrecy, and the best case is that a schlub of a competitor clears the path for you and you take over the market after the other person does all the heavy lifting.

    And who can best afford this path? – Big business (the internationals, the ones who are not generating the jobs in the US).

  24. Best practice will likely develop where applicants first file a provisional (to protect OUS rights) and then very shortyly afterward publish an expanded version of the provisional to invoke the US grace period.

    Why?

    Why wait? Why not just publish the provisional? Anything not in the provisional will not protect OUS rights.

    It seems that provisionals are obsoleted with this new soon-to-be law. At least non-publication of them.

    I have never been a great fan of the academic model of “publish or perish,” as I believe that one unintended consequence of the model is the publication of a lot of tripe. Can we now expect similar tripe (lowered quality) in patent applications?

  25. Guess what (I think,scratch that) will now happen Other countries now being on the same footing will lower their fees making it that much easier and probably cheaper to secure a Patent in your lifetime that isn’t stolen.
    But maybe that will bring Them back to the table for the People instead of the Banksters. Congress should have considered what will now happen. Hindsight does not necessarily mean waiting for the Shoe to drop. it requires thinking. And another thing,although bathroom Art is not a good thing. Spread the word. Here you have a captive Audience. Tell them all about Him and his Buddies. Free Advertising, what more could you ask for. Save your Jobs, get more work.

  26. The legislative history confirms that Ned’s interpretation is correct. See Sen. Kyle’s statements in the Congressional Record:

    Under this bill, if a U.S. inventor publicly discloses his invention, no third party’s application filed after that date can be valid because the filing date is what will determine priority, not a purported date of conception. Nor can a third party easily contrive fake prior
    art to defeat the patent. Under the AIA, only those actions that made the invention publicly available will constitute prior art, and these are much
    harder to fake than are claims of having secretly made the invention in a private laboratory, again, say, in China. Under new section 102(b)(1)(B),
    once the U.S. inventor discloses his invention, no subsequent prior art can defeat the invention. The U.S. inventor does not need to prove that the third
    party disclosures following his own disclosures are derived from him. He can thus take full advantage of the grace period and disclose his invention in
    academic papers and at trade shows without worrying that such disclosures will lead to theft or fraudulent invalidation of his patent.
    Congressional Record, September 6, 2011, S5320.

    Best practice will likely develop where applicants first file a provisional (to protect OUS rights) and then very shortyly afterward publish an expanded version of the provisional to invoke the US grace period.

    Also, the early indications are that some of the Pacific Rim Patent Offices may be willing to adopt grace periods similar to the new 102(b).

  27. Still on this theme, it occurs to me that university research is, increasingly, paid for by the corporations. Thus, a regime where every other researcher publishes instantly, but you the corporation control publication timing for those university researchers in your own pocket, might be exactly the result the corporations were seeking.

    Of course, all the world’s brightest science and engineering boffins will increasingly flock to American universities with the best resources, where it will also be easiest to publish really early.

    Or not. Who knows?

  28. “…failure to disclose best mode may also not be a basis for holding a patent unenforceable – i.e.: no inequitable conduct on this ground.”

    Jason, I think you’ve confused best mode and i.c. Offhand I can think of plenty of cases where failure to disclose prior art or contrary arguments made in Europe were grounds for an inequitable conduct finding, but I can’t think of even one where failure to fulfill the best mode requirement yielded that result. Remember, as you yourself note best mode is statutory requirement under 112, so if you don’t fulfill it the patent’s dead, period, and there have been a few cases where invalidity for such failure per se, and not i.c., was the result. In contrast, i.c. is a judge-made doctrine which never enters the picture regarding best mode.

    “Rather than a race to invent, perhaps this will produce a race to engage in early public disclosures. Unfortunately, any such effects are likely to be largely limited to inventors who desire to only file in the United States due to the lack of a self-disclosure exception in many countries.” And here I thought this bill was about harmonization.

  29. Jason, first Unintended Consequence: abolition of Best Mode will raise the “quality” of disclosure in patent applications.

    That’s because the legal requirement for a disclosure that “enables” the invention is universal to all patent systems. The measure of “enabling” is now freed of its shackle to “Best Mode”. The ROW model, that the Inventor has to provide a specification that enables proportionate to the scope of the petitioner’s claim, will come in time to assume greater importance for the CAFC and for SCOTUS.

  30. Problems with clarity? Sure, but why so gloomy. This new “Race to Publish” patent system eliminates the bad feature of “First to File” that it is incompatible with the visceral instincts of academic science researchers, to publish before anybody else does. Now they can, yeah verily, now they are encouraged to do so, by the new AIA.

    And, with US science and engineering researchers racing to publish, American technological innovation will be turbo-boosted, to the great good fortune of mankind. Heck, we might just now survive into the 22nd century.

    The destruction of any possibility of obtaining valid patent rights anywhere else but the USA? A matter of no consequence whatsoever, I gather from these columns.

    Back to clarity though. Students of patent law are about to enter a golden era in the development of the law of Unintended Consequences.

  31. I think this has been debated on PatentlyO on the site before but there is at least some case law that a public sale is prior art (and not just a personal bar). Although you could rightfully question that precedent because there isn’t much on it.

    I agree in your interpretation that “trade secret use” will not be prior art. I do think public “on sale” will be similar to “pubic use” and be prior art. Most of the time that won’t matter because “public use” will be good enough. I’m trying to think if there would be a public “on sale” that isn’t a “public use” — it’s possible though you’d think the product would be demoed. I guess an exception would be where the the product is only conceived and not reduced to practice and put on sale. Should the non-enabling offer to sell a non-reduced to practice be prior art? I can see an argument for it. Perhaps, you could could bring in the “or otherwise available to the public” to argue that it’s not — because it wasn’t available until either reduced to practice for use or an enabling disclosure was provided.

    Lots of ambiguities for litigators to fight out. Hey, they promised that the bill would create jobs, right?

  32. Thank you for clarifying.

    So how obscure a publication does it need to be for it to be a “public disclosure”? Are we going back to IBM’s Technical Disclosure Bulletins? Blog posts on obscure websites? SCI3 library files?

    We know that a graduate thesis that is neither indexed nor searchable is considered a published piece of prior art.

    I think I’m going to establish the Judith_IP Library of Public Disclosure. Send me something, and I will file it (with indexing, of course), for a mere $100. Ill even put the titles on a website. Upon request, people may be provided access to this library. But they have to become members first.

  33. Ned, I said yes the German language makes a difference. What does this have to do with the new laws? Did you read my comment? Did you understand it? I was commenting on the fact that a reference with priority under 119 (foreign priority) now creates an earlier prior art date.

  34. not so simple, the position that Rich spoke of in Musgrave is a position long since advocated by IBM as the distinction between a patentable data processing invention and one that is not. You might want to check their briefs in the Bilksi appeals.

    Kappos probably suggested the language and also suggested that the PTO provide a working definition. Kappos is from IBM. So, one can see that IBM has now gained the initiative in defining 101 patentable subject matter via this legislation.

    Who’d thunk it?

    And do we care?

    Why should we be concerned when one company controls the definition of patentable subject matter and that company is also in the very business of patenting inventions in the data processing field. Seems to make some sort of twisted sense, and after all, what’s good for IBM is good for the USA!!

    Let’s all cheer!

  35. Not sure I understand the reply…

    Is the culprit then, not really Business methods, but also Business apparatus or Business systems or even Business Beauregard claims?

    What is a BMP if not a method?

  36. Two things:

    1) That’s not in the Bill.
    2) See Bilski about the definition of “useful arts.”

    Rich’s quote does not measure up to the state of the law. There is a mighty gulf between the constitutional “useful arts” and the “technological arts.”

    One more thing:
    3) Are the bold items above in GLwT a tautology, given that data processing, as the term of art is known, is technological? If a machine does the data processing, is that – on its face – enough?

  37. Lessons, actually 35 USC 273 is limited to “methods.” BMPs could use apparatus or system claims or even Beauregard claims and avoid 273. I don’t think patent owners of BMPs of well drafted patents would have been deterred even a bit by 273.

  38. “All that is necessary, in our view, to make a sequence of operational steps a statutory “process” within 35 U.S.C. § 101 is that it be in the technological arts so as to be in consonance with the Constitutional purpose to promote the progress of “useful arts.” Const. Art. 1, sec. 8.”

    Rich, J.

    Application of Musgrave link to scholar.google.com

    Check Baldwin’s dissent.

  39. Jules, you might be surprised to find that the Patent Office disagrees with you in part.  If the application is not published in English, the date is the actual filing date of the patent, not the earlier effective filing date of the grandparent 111(a) case filed in the US.

    link to uspto.gov

    Now, if you really want to know why this is, I can explain it to you.  But, I for one, think the PTO position is unsound.

  40. real crimp in future troll business.

    You are too clever by half Paul F. Morgan.

    Using your own logic, the prior user rights for business methods have been around for years and thus there should not be any such an evil item as TROLLS.

    Yet, here we are.

    What gives with that?

    If, as you indicate, TROLLS feed on the evil business method patent – BUT these same business method patents already have prior user rights,

    SO either

    - The TROLL problem will not be affected at all by this legislation (read that as TROLLS have nothing to do with business method patents, the prior user rights defense or both), or

    - You are just full of shtt. (the TROLL bogeyman is just a different kind of “sky is falling” at play)

  41. means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions

    and these terms are defines… where exactly…?

  42. Simple answers: the earliest US application, and yes. You’ll have to pay me to give you the rationale. What’s your point? To agree with me?

  43. Jules, let me ask you a simple question. Assume a patent issues on application that is a continuation of a PCT published in English, and that PCT in turn has a claim of priority to an earlier-filed Section 111(a) patent application filed in the United States.

    Which application’s filing date is the effective prior art date of that patent under today’s law?

    Change the facts and make the PCT language German.

    Any difference?

  44. Paul, 35 USC 273 was very limited in scope indeed, and it applied only to methods, and not to apparatus or systems. I suggest that many troll patentees could simply avoid 273 altogether by simply not asserting their method claims, to the extent they existed in the patent to begin with.

    No, seriously, the new prior user right really changes the game for real industrial processes. The need to patent to protect the process from later patents by others is gone. The industrialist can simply keep his trade secrets secret. Not to do so would be extremely foolish, indeed.

  45. See, section 18. link to thomas.loc.gov:./temp/~c1123P5IrR:e134494:

    g) Definition-
    (1) IN GENERAL- For purposes of this section, the term `covered business method patent’ means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.
    (2) REGULATIONS- To assist in implementing the transitional proceeding authorized by this subsection, the Director shall issue regulations for determining whether a patent is for a technological invention.
    (h) Rule of Construction- Nothing in this section shall be construed as amending or interpreting categories of patent-eligible subject matter set forth under section 101.

  46. Judith, (A) and (B) are independent of each other. Notice the connecting “or.”

    (A) applies when the “prior art” is a disclosure by the inventor or one deriving from the inventor; and

    (b) applies when the “prior art” is any subject matter disclosed by anybody.

    The net result of (A) is that the inventor’s disclosures, public or not, cannot be used against him.

    However according to (B), third party prior art can be removed if the inventor himself “publicly” disclosed.

    Public disclosure and disclosure are obviously intended to mean different things as well. Publicly disclosing something seems to be akin to “publicly known” under the current statute. In contrast, the whole concept of a private disclosure by the applicant is unknown in the current law except perhaps under circumstances of commercial exploitation otherwise known as “on sale.”

    But, whether private disclosure is intended to eliminate the “on sale” bar if the “on sale” bar was made within the year is not clear from the wording of the statute. Not clear at all.

    Hope this helps.

  47. “the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.”

    “The subject matter disclosed” must have been “obtained… directly or indirectly from the inventor or joint inventor.” I don’t see how that would apply to someone independently inventing something, and publishing it.

  48. So everyone is now going to keep every process or method a trade secret instead of patenting it? Like all business methods? Since that would mean that they cannot sue anyone for patent infringement, that will be a great relief to a great many people, and put a real crimp in the future troll business.
    Also, everyone can then just wait until someone else re-invents the method, or its “secret” leak out, when everyone then gets to use it for free. Even if the secret is stolen, only limited term protection may be available, and the thief [usually an employee] may be judgment-proof.

    As previously noted, in spite of already having a “prior user rights” statute covering all business methods for years, it has not even once ever been successfully used. The onerous proof limitations that make it so difficult to use will still be in it. Only the number of patents that can theoretically be used for that purely personal defense are being greatly increased, as a trade-off for the elimination of the existing 102(g) litigation defense [although even that has not been used that often].

  49. Judith

    The world of available prior art will get much larger by allowing foreign filing priority dates as prior art dates. Therefore, the allowance rate can be expected to decrease.

    Maybe someone can put together a draft correlating PTO allowance rates with unemployment rates throughout US history.

    Or patents granted/year with unemployment rates.

    LOL.

  50. What is the business method patent ‘transitional program? Is there a link to this text in the bill?

    Thanks

  51. simple, good question, thus my caution.

    Both “on sale” and “public use” are in the new statute. They were both in the old. If we do not expect any change in the interpretation of public use, should we expect any change in the interpretation of “on sale?”

  52. any differently than they construe it now.

    Why?

    There is obviously a statutory change and such a change cannot be for “no effect,” which is what you are saying the change will be. If no effect, then why the change? Am I missing a piece of the logic?

  53. “‘(d) Patents and Published Applications Effective as Prior Art- For purposes of determining whether a patent or application for patent is prior art to a claimed invention under subsection (a)(2), such patent or application shall be considered to have been effectively filed, with respect to any subject matter described in the patent or application–

    ‘(2) if the patent or application for patent is entitled to claim a right of priority under section 119, 365(a), or 365(b), or to claim the benefit of an earlier filing date under section 120, 121, or 365(c), based upon 1 or more prior filed applications for patent, as of the filing date of the earliest such application that describes the subject matter.’.”

    So it’s not simply “first-to-file” … it’s first-to-file-anywhere-in-the-world.

    The world of available prior art will get much larger by allowing foreign filing priority dates as prior art dates. Therefore, the allowance rate can be expected to decrease.

    I am probably way behind on making this observation. Haven’t been following this too closely up to this point.

  54. Jason, I personally "think," and this is only my opinion, that the courts will not construe "on sale" any differently than they construe it now.  It has a long history and well understood meaning.  Trade secret use has never been anything but a personal bar to the applicant.  

    But there was a lot of debate on this score in the legislative history.  I think Zoe Lofgren believed the new statute was intended to change "on sale" into prior art but only where the on sale was also a public disclosure of the invention.  But such "on sale" would also be prior art because it amounts to a public use due to its public disclosure aspects.  So, construed, "on sale" would mean the same thing as "public use" and would strip any meaning from "on
    sale."

    What the drafters had in mind by the language is not clearly revealed.  I think, as I opened, that "on sale" will remain a personal bar and not be prior art.  But I am not sure.

  55. Idris, I don't fully understand your point that "As far as prior use, I could only see this being used in narrow instances where the prior use was not commercial in nature. "

    Do you mean that it will be asserted only when a patent owner is
    suing a non commercial prior user?  I hardly think this will ever happen in real life.  I think the proponents of the prior user defenses wanted to protect prior trade secret use.

    But, why, if such prior trade secret use is prior art?

    From: TypePad

  56. Ned – If it came across that way, I didn’t mean to imply that the concept of “on sale” represented a significant departure from current law on sales/offers for sale as prior art. This is an aspect of the bill that I need to dig into further.

    Here’s the full text of the new Section 101(a):

    ‘(a) Novelty; Prior Art- A person shall be entitled to a patent unless–

    ‘(1) 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; or

    ‘(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.

  57. Thanks for the comments Idris. On your first point, that’s exactly the issue I was referring to in the last sentence of the discussion of 102. Note, however, that 102(b)(1)(B) effectively negates prior art disclosures (against US patents) as long as there’s been a public disclosure. As I read it, it doesn’t require derivation. The problem of dropping inventors is a real one though – especially when it comes to continuation practices.

    On the best mode issue, here is the specific language from H.R. 1249:

    (a) In General- Section 282 of title 35, United States Code, is amended in the second undesignated paragraph by striking paragraph (3) and inserting the following:

    ‘(3) Invalidity of the patent or any claim in suit for failure to comply with–

    ‘(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable;

    I read this language as precluding an inequitable conduct fail-safe for best mode.

  58. Ned,

    I agree. I don’t see why an inventor would be motivated to publicly disclose information not included in the patent application. Nor can I see why any such disclosure would be made prior to filing the application. In fact, even in a first to invent system, activity prior to filing is playing with fire.

    As far as prior use, I could only see this being used in narrow instances where the prior use was not commercial in nature. This would be something similar to intervening rights for traditional knowledge.

  59. Idris, a sufficient disclosure will eliminate the whole derivation issue. Think about it just a bit.

    I think “best mode” is done, and that IC will not step in to help it.

    Regarding prior user defense, we also need to understand if the new “on sale” is intended to make it prior art, as stated by Jasen. For if it is, there is no need at all for a prior user defense.

  60. Interesting perspective. But I think some questions remain unanswered. For example:

    The Prior User Defense is not the only aspect of the law likely limited to US-only filers. The inventor-disclosure exception to novelty will only exist in the US. In absolute-novelty jurisdictions (most of the world), an inventor would still be shooting him or herself in the foot through such disclosures. Furthermore, it’s extremely risky to rely on your own disclosures to cover the interim period before filing. Proving that a third-party discloser derived the information from an inventor is likely to be a steep burden to prove. And what’s the consequence if an inventor is dropped from an application due to a claim amendment or deletion during prosecution!? In general, I don’t plan to advise my clients to poison the well with inventor-disclosures within a year before filing. Instead, I will just file the application as early and completely as possible.

    Regarding best mode, has the law reconciled how rule 56 could act as a fail-safe for withholding the best mode? I don’t see why the best mode would fall outside of the realm of information material to patentability. Or at least, I don’t see why it wouldn’t be asserted in litigation as a fall-back to the current rule having its teeth taken away.

    In general, I think the law will do more to harmonize US law with most other developed countries than it will significantly impact innovation. But at the end of the day, I’d doubt we’ll see many new jobs unless the Patent Office can keep fees and hire more examiners. And the bill does nothing to affect the quality of many granted applications.

  61. Judith, I think you have it wrong. If one “publicly discloses the invention” prior to the “prior art date” of subject matter used as a reference, then that subject matter is “removed” as a reference. The subject matter is any subject matter, whether or not it may have originated from the inventor.

  62. (b)(1)(B) negates a prior art reference in the one year time period preceding application if the applicant had publicly disclosed the same subject matter before that prospective prior art reference…

    …so, yes, an inventor can create a one year safety window by being the first to publicly disclose that subject matter.

  63. Jason, if as you state “on sale” is now prior art (and never was before), and if the private commercial exploitation of the invention places that invention “on sale,” why is there a need for prior user defense at all? The private commercial exploitation of the invention will be prior art to any later patent.

    If the patent owner were stu–pid enough to actually sue a trade secret practitioner without knowing when a trade secret practitioner began his use, he would risk having that prior trade secret use be used to invalidate his patent.

    In fact, this whole risk that secret prior use will be prior art under the new statute should provide a major disincentive for anyone to patent processes at all. It would make no sense because as a practical matter they would be all but unenforceable.

    Think that through just a bit.

  64. Regarding 102(a) I read that to mean that the inventor’s own disclosures would not be considered prior art, if within the one year window. This is what it says exactly:

    ‘(b) Exceptions-
    ‘(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION- A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if–
    ‘(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
    ‘(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
    ‘(2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS- A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if–
    ‘(A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
    ‘(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
    ‘(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.

    This reads to me as saying if it’s the inventor’s own disclosure, or a republication of the inventor’s own disclosure, then it is not blocking. However, disclosures which are not originated by the inventor would remain 102(a) prior art.

    I think your statement In other words, inventors will have the ability to negate any prior art from the one-year period prior to filing by engaging in public disclosure. is incorrect.

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