Federal Circuit: Now is Not the Time to Judge the Constitutionality of the First-to-File Patent Regime

By Dennis Crouch

MadStad Enginering v. USPTO (Fed. Cir. 2014)

In 2012, MadStad and its owner Mark Stadnyk filed a declaratory judgment lawsuit against the USPTO alleging that the new first-to-file regime implemented by the America Invents Act of 2011 (AIA) was unconstitutional. See Crouch, Constitutional Challenge to the First-to-Invent Rule
(2012), and Crouch, Constitutionality Question Looms as USPTO Implements Regime that favors a “Filers” over “Inventors”
(2013). In discussing the case, I wrote:

MadStad’s basic argument is that when the U.S. Constitution speaks of exclusive rights for “inventors” it should be interpreted to mean “first and true inventor.” Under this analysis, the AIA fails because it purposefully rewards the first-to-file a patent application rather than the first-to-invent.

Further, MadStad argues that the new law allows non-inventors to obtain patents on inventions that they learned-of because the law no longer requires that the applicant be an inventor.

Rather than reaching the merits of MadStad’s allegations, the district court rejected the case for lack of standing. The Federal Circuit has now affirmed that decision — holding that MadStad’s potential injury due to the legal change is too speculative. MadStad’s alleged injuries due to the change are creative, but ultimately the court determined that they lacked sufficient concreteness. The alleged injury included increase cost of computer security to avoid hacking that – if not blocked – could result in stolen ideas that the thief could patent under the new regime. A second alleged injury is increased time and effort to file additional patent applications before the invention’s value is properly understood.

The key precedent relied upon by both the Federal Circuit and the District Court is the secret FISA court case of Clapper v. Amnesty International USA, __ U.S. __, 133 S. Ct. 1138 (2013). In that case Amnesty Int’l did not have proof that the NSA was tapping its conversations (because the activity is secret) and the Supreme Court held that the threat was too speculative. In my view, the direct applicability of Clapper here is somewhat attenuated because it is clear that MadStad’s new patent applications would be governed under the new regime and the separation-of-powers issues are not so great.

Next steps: Regardless of the merits of this decision, by now there should be at least some patent applications that have been rejected due under the new first-to-file regime that would not have arguably been patentable under the old regime. Applicants injured in that way would certainly have standing to bring this challenge.

= = = = =

The decision by Judge O’Malley also includes an interesting discussion of Federal Circuit Jurisdiction. The law provides that the Federal Circuit has jurisdiction over appeals that arise under the patent law statutes. Here, however, the claim is based upon the U.S. Constitution.

98 thoughts on “Federal Circuit: Now is Not the Time to Judge the Constitutionality of the First-to-File Patent Regime

  1. SOUTHERN SNOW MANUFACTURING v. SNOWIZARD HOLDINGS
    link to cafc.uscourts.gov

    The case is interesting on a number of points. First, the case once again invalidated a patent where a vendor, based on drawings of two different parts set to it by the patentee, offered, before the critical date, to make parts according to the drawings, and where, still before the critical date, the patentee placed an order for commercial quantities.

    However, the two parts were not delivered until after the critical date, and their assembly into a completed cam assembly did not occur until after. The patent covered the completed assembly, not the parts. Still, the court held the patented invention as a whole to be on sale.

    Comment: how could this be when the actual sale by the patentee of the two completed parts would not be an infringement until the parts were assembled by a direct infringer (there being no contributory infringement without a direct infringer).

    Comment: This whole series of cases needs to be taken en banc and overturned. The on sale bar clearly has to do with sales to the public by the patentee, not purchases made by the patentee. Alternatively, this is another case that has to be reviewed by the Supreme Court.

    The other aspect of the case that is worth mentioning is the issue of privity. The court held a distributor “without more” is not in privity with the manufacturer. Allegedly applying 5th Circuit law, the Federal circuit relied on one of its own cases involving an end user to hold,

    “The District Court found that Special T and Raggs are “in an express legal relationship with [Old Plaintiffs] by virtue of the distributorship.” Id.
    at 543.

    As we have held in Transclean, with regard to questions of intellectual property infringement and invalidity, the person who buys an allegedly infringing product is not considered to be in privity with the person who sells him the product. As distributors, Raggs and Special T are persons who bought the allegedly infringing goods from the Old Plaintiffs, and, without more, cannot be considered
    “in privity” with the Old Plaintiffs.”

    Could that “without more” have be met by showing that the distributor is using the manufacturer’s trademarks in the sale, just as an example? A distributorship requires a contract and is quite a bit different from simply buying a product and using it.

      1. anon, it seems you never tire of harassment. I just refuse to be harassed.

        Do you have a comment on this case?

        1. I would rather finish the first conversation – and your notion of “harass = proper notice of all the legal points offered” is odd, albeit not that surprising given your known posting in third party interests.

          You do have a say in controlling the “harassment” – all you have do to is engage the conversation and address the points I raise in an intellectually honest manner. That’s not all that difficult.

    1. “… how could this be when the actual sale by the patentee of the two completed parts would not be an infringement until the parts were assembled by a direct infringer (there being no contributory infringement without a direct infringer).”

      Thanks for your thoughts Ned. Read the opinion and wondered the same thing myself. The actual, as-claimed invention was never publically disclosed … though like some other cases I’ve seen, the dollar amounts involved are so small in relation to the litigation costs, I scratch my head over how someone could be so angry as to throw so much good money after bad.

      Anon — I’m one of your biggest supporters … agreeing with your viewpoints virtually always, but please allow Ned and others to make new / fresh observations / comments like these without referring back to unrelated differing (or ignored) viewpoints. Even if / when you’re correct.

      Other than MM; who clearly has a pre-set (and possibly paid) anti-patent agenda and is often intellectually dishonest in his (her?) efforts; there’s no one else who posts regularly here that I don’t enjoy and appreciate reading (even when I disagree).

      As we see in great marriages, spouses don’t keep bringing up past disagreements every time a new, unrelated disagreement arises. :-)

  2. On derivation, in Europe the balance between thief and public is struck by allowing only the true owner to ask for a correction in the registered proprietorship and putting on the petitioner the burden of proof.

    Ned wants accused infringers in the USA always to be able to challenge inventorship/ownership. Isn’t that a formula to encourage mischief-making, obfuscation, cost and delay?

    For attaining the over-riding objective of dispensing justice swiftly and fairly, Ned, I suggest it is superfluous and harmful.

    1. Max, I believe that is what Congress did here as well. An unnamed inventor might have an action by derivation or by seeking to be named as the or as a coinventor. But no one else has a right to complain about inventorship.

      While this might make sense in the point of view of efficiency, the question is whether it is constitutional. How can the government issue valid patents to named inventor’s who were not the inventors of the subject matter of the patent?

      1. But no one else has a right to complain about inventorship.

        Simply not so Ned.

        You are doing that “failing to recognize a valid counterpoint” thing again with your refusal to recognize the requirement of standing.

        Not just anyone has a right to enforce a valid patent. Known pirates certainly do not.

        A patent’s validity no longer rests on the procedural notion of getting the inventor’s name right. Congress has viewed that as a too-harsh penalty. But that does NOT mean what you keep on trying to say that it does mean.

        You are simply wrong and you refuse to engage in a reasonable discussion as to why.

        You don’t like being badgered? Then (as clearly indicated here), engage in a reasonable discussion of the points of law placed in front of you.

  3. You all keep using the word stolen, that word, it does not mean what you think it means.

    One can’t steal an un-applied for invention, as you have no property rights in it. It’s a choice one makes, they can either disclose and receive protection, or not and receive none. Yet the discussion here seems to suggest that people should be awarded some protection for things not disclosed. That is entirely backwards.

    I’m referring to the risk to the actual inventor of someone stealing the idea and getting a patent on it. This is greater under First-to-File.

    Your apparent bug is actually a feature. Either what was taken isn’t yet an invention (“stealing” the idea is a good example of that) or if it is, you rolled the dice, you lost, and you want society to come and bail you out at the expense of the person who benefitted them? I think the answer to that is hell no. The federal Constitution generally isn’t in the business of preventing information dissemination unless it’s a government actor working against privacy…

    MadStad’s basic argument is that when the U.S. Constitution speaks of exclusive rights for “inventors” it should be interpreted to mean “first and true inventor.”

    That seems like a bad argument for him, as all it suggests is that B can’t get a patent, not that A is owed it. Regardless, the court would say that Congress has leeway to determine what constitutes an inventor or else 103 would have been struck down. It should be pointed out that the new system is not first to file, but first inventor to file. It isn’t unreasonable to posit multiple inventors, nor to say that disclosure, even of a completely derivative act, is a necessity for being considered an protectable inventor.

    1. Random Examiner is (of course) wrong yet again.

      Brush up on trade secret theft my friend.

      (also see the new sui generis right of Prior User Rights)

      As for MadStad, yup – he argued poorly (as noted by the judges, it was not that his principle notion was necessarily incorrect, it was much more that he went about it faultily. I shared as much in the previous threads, available in the archives.

      as to “nor to say that disclosure, even of a completely derivative act, is a necessity for being considered an protectable inventor.” – not sure what you were trying to say.

    2. Criminy the mod filter blows.

      Random Examiner is (of course) wrong yet again.

      Brush up on trade secret theft my friend.

      (also see the new sui [SPONTANEOUS] right of Prior User Rights)

      As for MadStad, yup – he argued poorly (as noted by the judges, it was not that his principle notion was necessarily incorrect, it was much more that he went about it faultily. I shared as much in the previous threads, available in the archives.

      as to “nor to say that disclosure, even of a completely derivative act, is a necessity for being considered an protectable inventor.” – not sure what you were trying to say.

    3. Random, setting aside race between two inventors, do you think it constitutional not to allow a defense to infringement that the patent was granted to an inventive entity who, in the words of the words of the repealed the §102(f), did not invent the claimed subject matter?

    4. Random, why do you think congress included this in section 5 of the very first patent statute: “[I]f it shall appear that the patentee was not the first and true inventor or discoverer, judgment shall be rendered by such court for the repeal of such patent or patents.”

  4. I still believe the repeal of 102(f) has to have legal consequences. Recall, this statute denies a patent where the named inventive entity did not invent the subject matter of the patent.

    We think derivation solves the problem of stolen inventions. It does not, as the one must have his or her own patent or application to file a derivation suit.

    In a recent trade secret case we saw an example of the problem, where a third party disclosed the basic invention to an different company on an Obligation of confidentiality. The receiving company filed numerous patent applications naming their own inventors and not naming the inventors of the disclosing company. The prior work of the disclosing company inventors was disclosed in the patent applications and formed the basis for finding that the receiving company had disclosed the trade secrets of the disclosing company. Arguably, those patents would be invalid under §102(f) under the pre-AIA law but not under the post-AIA law as §102(f) is repealed.

    I think this change in the law is unconstitutional.

      1. Yeah, anon, an YOU ignore the statutes. Validity is governed by 282. 282 specifies 102/103/112/251. The oath is under 115. 115 is not a condition for patentability or of validity. Your insistence to the contrary is beyond belief.

          1. IPMan, not without overturning Therasense. Unenforceability critically depends upon whether the violation is a area that affects patentability and/or validity. Since the patent is not invalid because the inventorship is incorrect, failure to identify the correct inventors is not subject to an inequitable conduct defense.

            1. Why does unenforceability critically depend upon whether the violation is in an area that affects patentability and/or validity? I don’t read Therasense that way.

              While inequitable conduct is normally alleged to have arisen during arguments about patentability and/or validity, I don’t see that it’s limited to that.

              1. Well, consider that the current oath only requires that one claim that he or she is a co-inventor. No one has to attest that the inventorship is correct.

              2. You kind of missed the part of IC that is concerned with fraud on the Office (and as far as I know, lying to the Office that you invented when you have not is still fraud on the Office).

    1. We think derivation solves the problem of stolen inventions. It does not, as the one must have his or her own patent or application to file a derivation suit.

      In the UK, you can file entitlement proceedings in the Intellectual Property Office (Patent Office). They can be used to resolve derivation disputes (stolen inventions), and also other commercial disputes such as where people work together to develop and commercialise an invention but then fall out.

      A crucial point about such entitlement proceedings is that you don’t have to have your own patent or application to start them.

      In the US, Congress missed a trick when it modelled derivation proceedings on interference proceedings. Though I assume that you can still take legal action in court if you don’t have your own patent or application?

      1. IPMan, a missing inventor might file an action to correct inventorship. However, a third-party infringer has no defense except validity, and the only defense that he might have had has been removed by the AIA.

      2. In the US, Congress missed a trick when it modelled derivation proceedings on interference proceedings

        It’s worse than that – Congress attempted to use the excuse of difficulty, and then turned around and used the same protocols.

    2. Recall that Kappos issued a statement that a patent with incorrect inventorship is invalid under 101.

      Anyone agree?

        1. If the validity of a patent is unaffected by inventorship, the courts will not hold a patent unenforceable if the inventorship is incorrect.

          1. This merely reiterates that a court’s power to declare that a patent is unenforceable is limited to issues arising from the statutory definition of validity. I don’t believe that. The power stems from the equitable jurisdiction of the courts, not from the definition of validity.

            I see no reason why a court could not exercise its power if there is a failure to meet the 101 requirement that the person who may obtain a patent is “whoever invents” it. Sounds like egregious misconduct to me.

            1. IPMan,

              It’s actually more than one point at play.

              The point we both recognize: your label of “egregious misconduct” and my label of “fraud on the office,” and

              the point that the chain of title must be preserved back to the true inventor. A known pirate does not have proper chain of title and lacks standing. Standing is an irreducible requirement to enforce a patent (yes a valid patent) and the known pirate will lose on that issue quite aside from the listed defenses in 35 USC.

            2. IPman, then what was the effect and purpose of removing §102(f) from the statute as a condition for patentability and as a defense to infringement?

              You’re almost saying the same thing as I am saying, that the statute is unconstitutional.

              1. You’re almost saying the same thing as I am saying, that the statute is unconstitutional

                Not even close.

                First, you have made no link between what you say regarding §102(f) and a constitutional issue. What (precisely) is the constitutional issue that you are seeing? Let’s differentiate between the government issuing a patent in good faith to someone who falsely swears an oath and the government KNOWINGLY issuing a patent to a known pirate (you have never established the latter as an event or outcome of the AIA, for at least the part that I have shared with you that an oath is still required, and 1ying on that oath is still fraud on the office and fraud on the office is still inequitable conduct and that inequitable conduct will still prevent the 1iar from trying to enforce the (even valid) patent.

                You are still resting FAR too much emphasis on the lynchpin of validity and you are ignoring BASIC civil procedure and patent law rules.

              2. Anon, it is so difficult to prove that one l1ed.

                One can be an inventor but not the first inventor. What happens when a business, that invented and sold a machine for years (and most inventions are never patented), is hit with a cease and desist letter from an unquestionably later, but independent, inventor? The oath requirement doesn’t save that business.

              3. I am familiar with the carrot and stick analogy, and I know that the patent system is meant to encourage inventions that would not otherwise be invented.

                May I ask what argument are you trying to make here to my scenario?

              4. The carrot is the enticement to the inventor to come forth and share (that which could be decided not to be shared).

                The stick is for those who choose not to share and keep hidden.

                Up until the AIA’s super-empowering of Prior User Right’s, the stick to be wielded by those willing to share over those unwilling to share throws the concern you have for “a business, that invented and sold a machine for years” out the window.

                The answer to your ‘concern’ – the traditional answer – is too Fn bad.

                Of course, with the Infringers’ Rights movement, such “use the system and join in the promotion” themes have been steadily attacked.

              5. Ahh, but see, you have a false dichotomy. It is not a patent/trade-secret only system. My selling of a machine could be an informing use without the patent system!

                And if you think that prior-user rights are “super-empowering”… well, sadly mistaken. The prior-user rights are extremely weak. Good luck making Machine 2.0., or even Machine 1.2. So much for your hard work making that new invention.

              6. No dichotomy J – I am looking at the application of the law. The carrot and stick is STILL there – just as I provided – even if the world is more than just patents and trade secrets.

                It is you that do not grasp the fact that the adage already includes what you think to be a ‘surprising new twist.’
                So sorry, but your view is just not correct.

              7. It is not a surprising new twist I offer. Simply pointing out that, if the Constitution requires that the first inventor is the only one who can receive a patent, then your “oath” solution is not a solution at all. (I don’t know if it is a constitutional requirement or not.)

                Also, I’m pointing out that “first-to-file” might be administratively easy, and useful for interferences… but it is costly because we are giving patents away for inventions when the public could have had the invention for free!

    3. We think derivation solves the problem of stolen inventions. It does not, as the one must have his or her own patent or application to file a derivation suit.

      Leaving aside for the moment the question of whether or not its a desirable or necessary obstacle, it does seem like a minor technical hurdle at best. Just file the application and then file the derivation suit. Where’s the problem?

      1. Another problem could be theft and the proper use of the non-publication route of the thief – providing no notice to the one from whom theft occurred until too late.

      2. Malcolm, the problem is that the person from whom the invention is stolen may not recognize that it was stolen until it is too late to file a patent application to protect himself. He might also have prior user rights so as to not be harmed by the theft.

        This is why patents that do not have the correct inventive entity has traditionally been declared invalid in defense of infringement suits per §282. The person sued has every incentive to present a defense and could then discover the theft and prove that the invention was stolen. If that defense is removed, and it has been removed, one of the barriers to prevent theft has been removed. One can almost believe that people today have every incentive to steal inventions of others, sprinkle the specification with a few new ideas, claim co-inventorship so as not to violate §115 in making an oath, and then have a perfectly valid patent to which an infringement defendant has no defense.

        1. The Congressional record is more than clear Ned that Congress acted because it viewed that very same “traditional” response of declaring the property to be invalid as too draconian.

          Do you know of one particular “professor/active advocate” who had a hand in proselytizing this change?

          I do.

          Here’s a hint: His name begins with “Lem” and ends with “ley.”

          And as you continue to ignore, other barriers to theft remain fully in place without the draconian measure.

          Your dancing here to try to get around the oath issue FAILS – because if you in fact build off of someone else’s idea – even to the point of purloining that original idea, you have EVERY right – as a co-inventor – to a patent on the improvements. This is true for both pre-AIA and AIA controlled applications – your attempted point is a red herring.

          1. anon, all you are saying is that failure to name the proper inventors is still a defense even when congress removed it as a defense.

            1. No Ned I am not.

              You are not listening carefully enough.

              Try again (and please do as I have asked from the beginning, get out of your own way and put “validity” out of your mind as the lynchpin).

  5. ABBVIE DEUTSCHLAND GMBH & CO. v. JANSSEN BIOTECH, INC.
    link to cafc.uscourts.gov

    The Feds hold a functionally claimed composition invalid on written description grounds as the disclosed structure did not support the “genus” claimed.

    The patent owner also asserted a prior Board decision from an interference between the two parties was collateral estoppel to the defendant. That Board decision had held the claims valid.

    However, the Board decision was before the court on a 146 appeal and therefor was not final according to the Federal Circuit. (The court should also have held that collateral estoppel from a Board decision is literally impossible regardless of finality, as the Board is not a court. See, Stern v. Marshall.)

    O’Malley concurred because the only issue that should have been decided on appeal were contested jury instructions for which the patent owner thought he had a right to a new trial on validity. The instructions all discussed whether new evidence was before the Board or not, and that such new evidence should lower the burden.

    “AbbVie argues that the prejudicial effect of the contested evidentiary rulings was exacerbated by the jury instruction that new information
    presented at trial that was not considered by the PTO would make it easier for Centocor to carry its burden of proving invalidity by clear and convincing evidence. AbbVie weakly argues that the district court erroneously concluded that the Supreme Court decision in Microsoft v.
    i4i overruled Lindemann Maschinenfabrik GmbH v. American Hoist & Derrick Co., 730 F.2d 1452 (Fed. Cir. 1984) and erroneously refused to instruct the jury that the new information must be more relevant than information considered by the PTO. AbbVie maintains that a
    proper instruction would have required the jury to assess whether Centocor made the necessary comparison, which Centocor had failed to do. AbbVie also argues that the district court erred in interpreting the “materially new” phrase in Microsoft v. i4i and incorrectly instructed the jury on “materiality” using a “reasonable examiner” standard.

    “Here, because we substantively affirm the written description verdict, we need not decide whether the district court’s refusal to give instructions on the pertinence or cumulativeness of non considered art, such as the Meager article, resulted in prejudicial error in the jury’s obviousness verdict.”

    1. Ned, this is just the logical application of well-reasoned, old case law that the grown-up arts have been living with (thriving with, in fact) for over 15 years now (and Eli Lilly was, itself, based on well-reasoned older case law).

      When a patent claims a genus using functional language to define a desired result, “the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.” Id. at 1349. We have held that “a sufficient description of a genus . . . requires the
      disclosure of either a representative number of species
      falling within the scope of the genus or structural features common to the members of the genus so that one of skill in the art can ‘visualize or recognize’ the members of the genus.” Id. at 1350 (quoting Eli Lilly, 119 F.3d at 1568–69).

      What’s somewhat interesting is that the case concerns antibodies, which I’ve noted for many years were an infamous and ripe-for-the-axing “exception” to the general prohibitions against functional claiming at the point of novelty. The Federal Circuit just stuck another big nail in the coffin:

      Functionally defined genus claims can be inherently vulnerable to invalidity challenge for lack of written description support, especially in technology fields … where it is difficult to establish a correlation between structure and function for the whole genus or to predict what would be covered by the functionally
      claimed genus.

      Gee, can anybody think of another technology field where it is incredibly difficult if not impossible to establish a correlation between the described function (“configured to provide an advertisement”) and the novel structural features necessary for that described function?

      the ’128 and ’485 patents do not describe any common structural features of the claimed computers. The asserted claims attempt to claim every configured computer that would achieve a desired result, i.e., providing an ad to a user who desires to see copyrighted content, and covers admittedly very different software programs that run on completely different platforms, whereas the patent does not describe a single representative example of working software for any platform.

      Paraphrased from the CAFC’s concluding paragraph summarizing the written description failure on page 26 of the opinion.

      Like I said, folks: there is more to come!

          1. MM provided a model for a hypothetical fed circ decision to come:

            “the ’128 and ’485 patents do not describe any common structural features of the claimed computers. The asserted claims attempt to claim every configured computer that would achieve a desired result, i.e., providing an ad to a user who desires to see copyrighted content, and covers admittedly very different software programs that run on completely different platforms, whereas the patent does not describe a single representative example of working software for any platform.”

            He implies that such should be done already and hasn’t been being done but that it will be done at some point.

            I simply appended the argument as to why this hasn’t already been being done. Lawlyers arguing “but but but compooters!” Though I could have tossed in some stuff about imaginary men.

            In my opinion it’ll only happen when the Fed. Circ. stops focusing on the form of the claim rather than the substance of the claim. Or until someone takes the matter to the supremes to decide.

            1. As we all know, 6, business method claims are about business methods and not about the software. The phony war being conducted here by the advocates of business method patents is plain for all to see.

  6. Under First to File, it certainly happens from time to time that there are rival filings, on overlapping subject matter, and that the later filer (B) imagines that the earlier filer (A) stole it from the later filer.

    But, as far as I know, that happens just as much under First to Invent, if not more (see below).

    When it happens, evidence is needed, to prove the theft. In any jurisdiction, that is often a problem.

    Those in First to File jurisdictions are in the habit of filing sooner rather than later, particularly when they appreciate that there is a widening circle of those in the know. Filing sooner reduces the risk.

    So this debate about whether FtI or FtF is “better” in this regard strikes me as a bit sterile.

    1. On reading my own post, I see the point, that under FtI the evidence needed by the later filer is not evidence of theft but, rather of earlier conception and uninterrupted diligence.

      1. Exactly, so under First-to-Invent, a diligent inventor need not prove that his invention was stolen, which is difficult if even possible. He simply needs to prove that he invented first. Under First-to-File, the inventor must prove that the invention was stolen, which may not be possible. So, the risk to the thief is less and to the inventor is greater under First-to-File. For this reason, under First-to-File, inventors, especially independent inventors, must be much more secretive. This is making it harder for independent inventors to develop inventions. The change to First-to-File has made it harder for independent inventors to operate, causing them spend more time and effort on secrecy, be much more careful in outsourcing anything, and file provisional patent applications earlier and more often. All of this will result in less innovation in America.

        1. As to your “He simply needs to prove that he invented first”, I would respectfully suggest that the presence of the word “simply” is ludicrous.

          Inventor, have you ever tried? If you had, you would not use the word “simply”. There’s nothing simple about it!

        2. All of this will result in less innovation in America.

          We hear this same prediction every time there’s any change in the law that makes it makes it minutely more difficult for these “independent inventors” to cash in on the broken patent system. The reality? No detectable change in the overall amount of innovation.

          Meanwhile the rest of us with clients who file around the world have been dealing with a first to file system since pretty much forever. No big deal. There’s absolutely nothing about the “first inventor” system that is essential to promoting innovation.

          You really care about promoting innovation? Call your Congressperson up and ask them to spend less taxpayer money on pointless wars and more on providing a great education and excellent healthcare (including contraceptive care) to every citizen so more of us have the brains, the time and the money to innovate. That’s guaranteed to work.

          But how many of these “independent inventors” want that? Judging from the commenters here and elsewhere who pretend to speak for “independent inventors”, the answer is a small fraction of them.

          Go figure.

          1. Call your Congressperson

            LOL – coming from the biggest crybaby on the site about what Congress has actually done (b-b-b-but the Supremes need to act…), go figure indeed.

            1. what Congress has actually done

              The Supreme Court has already decided that question a number of times already. As far as I can tell, Congress is aware of and quite pleased with those decisions (as are nearly all of the people in this country who are represented by Congress).

              1. Your view on Congress take on Supreme Court cases is plainly errant, Malcolm.

                See link to patently.wpengine.com

                I suspect I know what it [AIA and CBM in relation to 101 patent eligible subject matter – hint: 3, the new 4 is still not 5] means – and Ned Heller won’t like it one little bit.

                Let me set the context: Stevens was slated to write a majority opinion in a patent case largely viewed to be the bookend to his career on the bench. The depth and structure of his “concurrence” is startling. But, one not so small problem. For his main thesis in his “concurrence” to hold – that business methods as a category are not a part of the Useful Arts and not patent eligible subject matter, he would have to explicitly rewrite the words of Congress. He lost his majority position on this very point.

                Now we know that a major overhaul in the wake of a Supreme Court decision can receive some pretty intense scrutiny. The majority in Bilski refused to hold that as a category business methods were eliminated as eligible subject matter. Congress – fully aware of this made a gesture for saving face by creating the CBM review section – but they did not want to disturb the holding that business methods as a category were patent eligible. Had they not included the section that explicitly said that they were leaving alone the existing meaning of patent eligibility for business methods as a category, they knew that a later court may take their action too far and claim that Congress was trying to eradicate business methods as a patent eligible item.

                Section (e) cements in place the defeat of Stevens and the anti-business method jihad as decided in Bilski. By explicitly stating that subject eligibility is to be left at the pre-AIA, post-Bilski understanding, the fact that a post grant review aimed at business methods could not be used by a later Court to pull a reverse-Stevens. Section (e) is an insurance against judicial activism.

              2. “Stevens was slated to write a majority opinion in a patent case largely viewed to be the bookend to his career on the bench. The depth and structure of his “concurrence” is startling. But, one not so small problem. For his main thesis in his “concurrence” to hold – that business methods as a category are not a part of the Useful Arts and not patent eligible subject matter, he would have to explicitly rewrite the words of Congress. He lost his majority position on this very point.

                Now we know that a major overhaul in the wake of a Supreme Court decision can receive some pretty intense scrutiny. The majority in Bilski refused to hold that as a category business methods were eliminated as eligible subject matter. Congress – fully aware of this made a gesture for saving face by creating the CBM review section – but they did not want to disturb the holding that business methods as a category were patent eligible. Had they not included the section that explicitly said that they were leaving alone the existing meaning of patent eligibility for business methods as a category, they knew that a later court may take their action too far and claim that Congress was trying to eradicate business methods as a patent eligible item.

                “Section (e) cements in place the defeat of Stevens and the anti-business method jihad as decided in Bilski. By explicitly stating that subject eligibility is to be left at the pre-AIA, post-Bilski understanding, the fact that a post grant review aimed at business methods could not be used by a later Court to pull a reverse-Stevens. Section (e) is an insurance against judicial activism.””

                What a fantastic story!

      2. MD under FtI the evidence needed by the later filer is not evidence of theft but, rather of earlier conception and uninterrupted diligence.

        If, in fact, the invention was stolen, it seems to me that proving that it was stolen can be just as easy (and far easier in some circumstances) as proving earlier conception of the idea followed by “uninterrupted diligence”, particularly when the true inventor had wished to keep the idea secret.

        under First-to-File, inventors, especially independent inventors, must be much more secretive. This is making it harder for independent inventors to develop inventions.

        I’ve had no problems inventing after the passage of the AIA. The time for your input has passed. We have a first-to-file system and that’s not going to change.

        You self-styled “independent inventors” really need to learn to appreciate a basic fact about our patent system: it’s not all about you. It never was. Get over yourself.

        1. MM is it your opinion that a patent that fails to name an or the inventor is invalid under 101? If not, no one has any grounds to contest incorrect inventorship after the repeal of 102(f), a statute that has been with us in substance since 1790. See, e.g., Section 5, “If it shall appear that the patentee was not the first and true inventor or discoverer, judgment shall be rendered by such court for the repeal of such patent or patents.”

          1. Ned, it seems to me that the AIA shifted the important “identification” question from correct inventorship to correct ownership. Maybe it did that imperfectly … seem easily fixed in any event.

            The US constitution limits the awarding of patents to inventors.

            It says that Congress has the power to create a system that rewards inventors with exclusive rights for limited times. There’s a lot of different ways to do that and I’m not sure that all of them require that the inventor be named on the application. What if the inventor does not want to be named? Why can’t he assign his exclusive rights to someone who does want to be named to file and prosecute the application?

            Who invented a patent that is being asserted against me or a member of my family is ultimately beside the point (unless, e.g., the inventor has a history of innovating jnk designed for tr0lling). I want to know who is actually pulling the strings behind the patent, what their theory of infringement and validity is, and what other theories of infringement and validity they are relying on for other patents in their portfolio. That’s why ownership needs to be transparent.

            1. MM, I agree with you that congress tried to remove the question of inventorship from the validity entirely. If there is an omitted inventor, that can be fixed through an action by the omitted inventor to correct inventorship.

              Thus we have see that defendants can find the omitted inventor, take a license, join him as a third party, prove he is a co- inventor, have the patent inventorship corrected, and then move to dismiss for lack of standing.

              But, assume the omitted inventor does not cooperate?

              Here, the patent is invalid under the current law. There seems to be no defense under the AIA.

              1. There seems to be no defense under the AIA.

                You mean, other than the ones listed here (and listed before) that for some odd reason you want to ignore…

              1. Why can’t he assign his exclusive rights to someone who does want to be named to file and prosecute the application?

                He can.

                And he could do this pre-AIA.

                The spin you impart is a bit of a misdirection though, as the critical element is still proper chain of title. See [TYPICALLY] Stanford v. Roche.

                The mod filter still needs updating…

            2. Why can’t he assign his exclusive rights to someone who does want to be named to file and prosecute the application?

              He can.

              And he could do this pre-AIA.

              The spin you impart is a bit of a misdirection though, as the critical element is still proper chain of title. See generally Stanford v. Roche.

  7. I’m referring to the risk to the actual inventor of someone stealing the idea and getting a patent on it. This is greater under First-to-File.

    Independent inventors often have to disclose information during the development of an invention. Under First-to-Invent, the inventor had some protection prior to filing. If he had sufficient documentation and diligence, it would be difficult for a thief to “prove” that he came up with it first. It would require the creation of back-dated documentation and probably the perjury of alleged witnesses to that documentation. This is a barrier to thievery that does not exist under First-to-File.

    Currently, someone who may even have signed a non-disclosure can pass the information to another party. That individual files and gets the patent. The protection the inventor has is limited to keeping the invention secret, which makes it harder for the independent inventor to develop an invention.

    1. I’ve practised in a first-to-file jurisdiction (the United Kingdom) for 35 years. In all that time, I’ve only once had to advise on a case where someone had simply stolen an idea. In that case, the thief’s employer filed a patent application naming the thief as the inventor. Under a first-to-invent system, they would have done exactly the same. And proving what had happened would have involved the same evidence, had my client wanted to challenge it. No difference in risk at all.

      I’ve much more commonly had to advise inventors who thought there was a huge risk of their ideas being stolen. But in reality, they had enormous difficulties in getting anyone interested at all. No-one would have wanted to steal them.

      Disputes as to who is entitled to a patent are comparatively rare. When they do happen, in my experience they are not usually simple theft. They are much more likely to be genuine commercial disputes between people who had agreed to work together to develop and commercialise an invention. But they didn’t sign a formal agreement, and subsequently they fell out with each other. The dispute is then about who owns what rights.

      1. IPMan, on the thief:

        Before AIA, the patent is invalid. After AIA, patent is valid. See, post number 11.

        Who owns the rights is not the only issue. The US constitution limits the awarding of patents to inventors. Thieves should not be able to obtain valid patents. Yet, post AIA, it is entirely irrelevant whether the named inventor is a thief, the patent is valid. This impossibility is now the law.

        1. Re-read our past discussions Ned (and note how in those discussions I had asked you to re-familiarize yourself with Chapter 22 of Chisum – and wouldn’t you know it, that chapter is still pertinent).

        2. Ned: Before AIA, the patent is invalid. After AIA, patent is valid.

          This is more a problem of the the way the US has implemented FtF, rather than an inherent fault in FtF itself.

          In the UK, the rightful owner can request that the patent be revoked, or transferred to the rightful owner. It’s easier if you apply either before the patent is granted, or within two years after. If you apply later, you have to prove that the registered proprietor knew he wasn’t entitled.

          It’s true that this doesn’t help a third party infringer, only the rightful owner.

  8. Correction – the risk of “patenting a stolen idea” is greater under the new regime – First-to-File, for the reason stated in my earlier comment.

    1. the risk of “patenting a stolen idea” is greater under the new regime – First-to-File, for the reason stated in my earlier comment.

      My earlier comment (6.1) was being written while you were writing this one and is directed, therefore, to a different issue.

      I don’t see how the “risk of patenting a stolen idea” is related to the change from “first to invent” to a “first to file” system. Either you stole the idea that you tried to patent, or you didn’t.

      Now, I can imagine where the likelihood of being accused of patenting a stolen idea might be affected by the regime change. Is that what you mean? If so, do you think that risk is increased, or is it decreased, by the regime change, and why?

  9. MM – The risk of “patenting a stolen idea” was greater under the old regime because there was always the chance that the inventor kept the kind of records and diligence that would allow him to prove that he invented first. The inventor had some protection prior to filing. Now, he has none, other than keeping his information totally secret. One wanting to steal an invention simply has less risk in doing so now.

    1. The risk of “patenting a stolen idea” was greater under the old regime

      I assume you mean that the risk of getting busted for patenting a stolen idea was greater under the old regime. I doubt that’s true. Why do you think it’s true? Recall that the old regime existed for well over a century and during that entire period it was nearly impossible for a person to know if some idea he/she had was “stolen” by some patent applicant somewhere. In any event, “greater risk” in this context seems insufficient to implicate the Constitution, which most people would understand to guarantee precisely nothing special to any “inventor”.

      there was always the chance that the inventor kept the kind of records and diligence that would allow him to prove that he invented first

      Pretty sure that the AIA includes derivation proceedings that would allow this exact evidence to be considered and which would tank an attempt to file a patent on a “stolen idea.”

  10. An argument that something would have been patentable under the old law that is not under the AIA would require a difficult “case within a case” proof in many cases, because so few allegations of prior invention used to overcome an earlier filing date of another inventor are actually successful when actually contested, either in attempted enforcement of such later-filed patents or in interferences. [Some folks are deluded into thinking that their uncontested ex parte Rule 131 declarations are binding, or will stand up, in court or in any contested PTO proceeding. They do not, as many interferences, court cases, and one IPR have already demonstrated. The Rule 131 user will lucky if their Rule 131 declarations do not also turn into IC ammunition, as the most recent Fed. Cir. case on that subject demonstrated.]
    The one common situation of AIA changed outcome that would be easier to prove is patent applications that would have been allowable over an earlier filing date foreign parent application before, but are not now. But how is that AIA statutory overruling of In re Hilmer even arguably a Constitutional issue?

  11. The alleged injury included increase cost of computer security to avoid hacking that – if not blocked – could result in stolen ideas that the thief could patent under the new regime.

    Because nobody ever patented a “stolen idea” under the old regime.

  12. “Upon consideration, we conclude that jurisdiction over
    this appeal lies properly in this court.”

    Looks like the fed circ. thinks they have juri for their isdiction.

  13. “Regardless of the merits of this decision, by now there should be at least some patent applications that have been rejected due under the new first-to-file regime that would not have arguably been patentable under the old regime. Applicants injured in that way would certainly have standing to bring this challenge.”

    Yeah how many decades will it take before one of these cases randomly trips up some defendant willing to fight? Centuries maybe?

    “Here, however, the claim is based upon the U.S. Constitution.”

    So does that mean they don’t have juri for their isdiction? Since you didn’t tell us now I gotta read the decision.

  14. … there should be at least some patent applications that have been rejected due under the new first-to-file regime that would not have arguably been patentable under the old regime.

    I think the “not” is a mistake, Dennis.

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