Patent Reform Act of 2010: Proposed First-to-File Statute


35 USC 100 Definitions

    (g) The terms ‘joint inventor’ and ‘coinventor’ mean any 1 of the individuals who invented or discovered the subject matter of a joint invention. 

    (h) The term ‘joint research agreement’ means a written contract, grant, or cooperative agreement entered into by 2 or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

    (i)(1) The term ‘effective filing date’ of a claimed invention in a patent or application for patent means—

            (A) if subparagraph (B) does not apply, the actual filing date of the patent or the application for the patent containing a claim to the invention; or 

            (B) the filing date of the earliest application for which the patent or application is entitled, as to such invention, to a right of priority under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date under section 120, 121, or 365(c). 

        (2) The effective filing date for a claimed invention in an application for reissue or reissued patent shall be determined by deeming the claim to the invention to have been contained in the patent for which reissue was sought. 

    (j) The term ‘claimed invention’ means the subject matter defined by a claim in a patent or an application for a patent.

35 USC 102 Conditions for patentability; novelty

    (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.

    (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.

    (c) COMMON OWNERSHIP UNDER JOINT RESEARCH AGREEMENTS.—Subject matter disclosed and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of subsection (b)(2)(C) if—

        (1) the subject matter disclosed was developed and the claimed invention was made by, or on behalf of, 1 or more parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention; 

        (2) the claimed invention was made as a result of activities undertaken within the scope of the joint

research agreement; and (3) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

    (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— 

        (1) if paragraph (2) does not apply, as of the actual filing date of the patent or the application for

patent; or 

        (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.

35 USC 103. Conditions for patentability; nonobvious subject matter

A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.

35 USC 291. Derived patents

    (a) IN GENERAL.—The owner of a patent may have relief by civil action against the owner of another patent that claims the same invention and has an earlier effective filing date if the invention claimed in such other patent was derived from the inventor of the invention claimed in the patent owned by the person seeking relief under this section

    (b) FILING LIMITATION.—An action under this section may only be filed within 1 year after the first publication of a claim to an invention that is the same or substantially the same as the earlier applicant’s claimed invention.

35 USC 135. Derivation proceedings

    (a) INSTITUTION OF PROCEEDING.—An applicant for patent may file a petition to institute a derivation proceeding. The petition shall set forth with particularity the basis for finding that an earlier applicant derived the claimed invention from the petitioner and, without authorization, filed an application claiming such invention. Any such petition may only be filed within 1 year after the first publication of a claim to an invention that is the same or substantially the same as the earlier applicant’s claimed invention, shall be made under oath, and shall be supported by substantial evidence. Whenever the Director determines that a petition filed under this subsection demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding. The determination by the Director whether to institute a derivation proceeding shall be final and nonappealable.

    (b) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.—In a derivation proceeding instituted under subsection (a), the Patent Trial and Appeal Board shall determine whether the earlier applicant derived the claimed invention from the petitioner and, without authorization, filed an application claiming such invention. The Director shall prescribe regulations setting forth standards for the conduct of derivation proceedings.

    (c) DEFERRAL OF DECISION.—The Patent Trial and Appeal Board may defer action on a petition for a derivation proceeding until 3 months after the date on which the Director issues to the earlier applicant a patent that includes the claimed invention that is the subject of the petition. The Patent Trial and Appeal Board also may defer action on a petition for a derivation proceeding, or stay the proceeding after it has been instituted, until the termination of a proceeding under chapter 30, 31, or 32 involving the patent of the earlier applicant.

    (d) EFFECT OF FINAL DECISION.—The final decision of the Patent Trial and Appeal Board, if adverse to claims in an application for patent, shall constitute the final refusal by the Office on those claims. The final decision of the Patent Trial and Appeal Board, if adverse to claims in a patent, shall, if no appeal or other review of the decision has been or can be taken or had, constitute cancellation of those claims, and notice of such cancellation shall be endorsed on copies of the patent distributed after such cancellation

    (e) SETTLEMENT.—Parties to a proceeding instituted under subsection (a) may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct inventors of the claimed invention in dispute. Unless the Patent Trial and Appeal Board finds the agreement to be inconsistent with the evidence of record, if any, it shall take action consistent with the agreement. Any written settlement or understanding of the parties shall be filed with the Director. At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents or applications, and shall be made available only to Government agencies on written request, or to any person on a showing of good cause.

    (f) ARBITRATION.—Parties to a proceeding instituted under subsection (a) may, within such time as may be specified by the Director by regulation, determine such contest or any aspect thereof by arbitration. Such arbitration shall be governed by the provisions of title 9, to the extent such title is not inconsistent with this section. The parties shall give notice of any arbitration award to the Director, and such award shall, as between the parties to the arbitration, be dispositive of the issues to which it relates. The arbitration award shall be unenforceable until such notice is given. Nothing in this subsection shall preclude the Director from determining the patentability of the claimed inventions involved in the proceeding.


Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

199 thoughts on “Patent Reform Act of 2010: Proposed First-to-File Statute

  1. Ron, I am in your debt. Your response this morning, to my outburst of late yesterday, evening is very gracious. I am a drafter and prosecutor, more than a litigator. If one of my “cases” is well drafted, it is less likely, years later, to get into litigation. I see now that my choice of the word “case” was not helpful, and I apologize.

    Fact is though, that it has taken drafters in Europe a generation of adjustment to get in tune with the provisions of the EPC, as interpreted by the EPO and the various courts around Europe handling infringement and validity. Over the same period, all those courts have been hard at work, trying to understand the point of view of each of the brother (seldom sister) patent judges in the other EPC countries. They are doing a conscientious job, and making good progress, so I tend to spring to their defence. It is hard to point to any one of these cases you quote, and show in any one of them (except perhaps the EPO-TBA in DSS, while it was still an application) a decision that is palpably “wrong”. On tough cases, delicately balanced, it is inevitable that reasonable minds will differ (specially when some of those minds have observed key witnesses being cross-examined while others, elsewhere in Europe, are getting to their decision without the benefit of witness evidence).

    I agree, let’s move on. And I do hope we have more chances for civilised debate.

  2. But what about the patent backlog and the fact that the USPTO over the past decade has become antiquated and anemic? And we, the United State of America, are a world power? (See Obama’s illuminating observation about the USPTO at link to inventorinsights.com ). I see a lot of complaining, jawboning and pontificating in blogs but is anyone actually doing anything about this? Is anyone weighing on this? Is anyone stepping forward with some policy solutions?

  3. Cranky,
    I read the proposed statute with considerable unease.
    I was talking about Section 135(a), which provides “An applicant for patent may file a petition to institute a derivation proceeding.” You were talking about Section 291, which I read in the same way you do – cause of civil action is only available to patent owners on issued claims.

  4. MaxDrei,
    You said: Ron Katznelson’s parade of European horrors goes back to cases written more than 30 years ago.

    The European patent law or any proven changes and improvements in its interpretation was at issue. I read your comments very well. Every reader of your comments would understand you to have meant that “cases written” meant case law written by courts. Did you mean to say that the drafters of the patent applications are the ones writing the law and not the European courts?

    Max, it is you who should drop it. Move on. Your point about European patent law in comparison with U.S. patent law is not compelling.

    That, however, does not mean that you are wrong about S. 515’s inferiority. I agree with you that S. 515’s FTF provisions are far worse and that they do not have the internal consistency of European FTF. The one-year “springing disclosure” feature will not serve, as you surmise, as inventors’ safe-harbor for subject matter later filed in an application. This is because disclosures early in the invention process are unlikely to be enabling disclosures for supporting the desired claims, but are more likely to be sufficiently enabled to anticipate claims or provide a good obviousness reference under KSR to bar desired claims. Thus, I see very troubling perverse scenarios afoot: Companies will use preemptive disclosures describing results and motivation of inventions based on partial information and leaks, only to bar patents of other parties.

  5. You did not respond to the question about the basis for such an “entitlement.” My point was that this “entitlement” is in fact a property right…

    Sorry, Ron. I disagree with you, but not strongly enough to get into a big fight about it. In my view, the “entitlement” you refer to only comes into being when the derivation proceeding is concluded. It’s just a procedural posture. You can have your pre-existing “property right” if you like, but it’s certainly not a vested right and isn’t very secure, so I’m not sure what good it does you.

    Do you read this “general” preamble as limiting the derivation proceeding only to patent owners and not to application owners?

    My research on this is limited to reading Dennis’ post, but I don’t see any other way to read Section 291. I read it as providing a civil action for owners of granted patents, while Section 135 provides a PTO procedure for dealing with competing applications. The catch on 135 appears to be the provision that says that the PTO’s decisions are final and non-appealable.

    Do you read it differently?

  6. Cranky: “Actually, the civil cause of action is limited to an “owner of a patent,” so this section of the proposed statute does not support your contention.”

    My contention was not dependent on the proposed statute in all its terms. I simply contend that some entitlement or property right in an invention exists prior to filing. You argued that no such right exists, but did acknowledge that a first inventor from whom another derived his application is “entitled” to pursue the patent – that is the purpose of the derivation proceeding. You did not respond to the question about the basis for such an “entitlement.” My point was that this “entitlement” is in fact a property right, citing the fact that the first inventor can pursue a trade secret misappropriation action (even in state court) as evidence that it is a right. Do you still believe that inventors will have no rights to their invention prior to filing?

    As to the proposed derivation statute being limited to an “owner of a patent,” I find this narrow preamble rather curious. Do you read this “general” preamble as limiting the derivation proceeding only to patent owners and not to application owners?

  7. MaxDrei, agreed. I would rather adhere to the EPC than craft new a new statute sui generis with entirely new terms, such as “subject matter,” that have no clear definitions in US case law.

    FYI, I saw the original draft of the current legislation some years ago. It is the work of one Bob Armitage, as if most of us did not know that already.

  8. The facts Ron? Yes please, by all means. I wrote “written”. When was the Improver app “written”? You obligingly tell us that the patent issued 24 years ago but that’s no answer to my assertion when the f-ing priority document was actually “written”. Are you willfully ignoring what I wrote, or just not reading it?

    Actually, to tell the truth, I don’t actually know when the Improver prio doc was written and, you know, I can’t be arsed to find out, It’s about 30 years ago plus or minus a year or two, right?

    The EPC came into force in June 1978, that’s less than 32 years ago, right? How much EPC jurisprudence do you think had been laid down, at Supreme court level, when the Improver app was written. So, is the Improver case any indication at all how a mature EPC is currently functioning. I ask you.

    If I understand you right, you are now asserting that I claim that out of the 1978 egg sprang a fully formed European law of patent validity, over which nobody had any questions. Ned Heller will put you straight on that issue. Do me a favour, will you. Quote in full the words of mine on which you rely.

    Anything else?

    Ned, a personal “right of continued use” is part of the coherent corpus of European patent law. As to apocalyptic changes, the one you could seriously contemplate is into the EPC, lock, stock and barrel because, there, you have 30+ years of jurisprudence to clarify what the EPC means.

  9. Malcolm, interferences are reserved for two applicants (or patents) claiming the same invention, a rare situation — so rare as to not to be a problem.

    In contrast, IPMan complains about prior invention being prior art. Indeed, there is no good reason prior invention should be prior art as interferences and lost count obviousness could be pegged to section 101 instead of section 102/103 as a statutory basis for denying two patents on the same invention.

    I would favor a “mini” reform to the address the problem rather than a total revolution that uproots the entire system.

    We also have a problem with public use, IMHO. I think something should not be in public use unless it can, within reason, be reverse engineered. Rather that being prior art, I would grant prior users a personal right to continue using the patented invention.

    We have minor problems like these two in the current system that we should address. Each change should be done in isolation and only after full debate and agreement among all stakeholders. If the change remains controversial, then don’t do it at all is my recommendation.

    Wholesale, apocalyptic changes are normally to be avoided as they can and normally do lead to unexpected collateral effects that can be disastrous.

    Caution is the bye-word.

  10. MaxDrei said: “Ron Katznelson’s parade of European horrors goes back to cases written more than 30 years ago.”

    Max, you are wrong. I confined my list to the date range for which you asserted a “proven substantive law of validity” in Europe (“past 30+ years”):

    Angiotech EP0706376 patent litigation: 2005
    Document Security System EP0455750 patent litigation: 2005
    Sara Lee EP0904717 patent litigation: 2001
    Epilady EP0101656 patent litigation: 1989

    The top three were litigated in the last decade. The oldest patent in the list (Epilady) was issued in 1986, some 24 years ago, litigated only 21 years ago.

    Just the facts Max, just the facts.

  11. “It might depend on whether anybody in the involved industry bothers to monitor the flow of publications issuing from the PTO.”

    Step by step, like you’re into new kid.
    Inch by inch with the new solution.
    IPman hits, with no delusion.
    The feeling’s irresistible and that’s how we movin’.
    Everybody, everybody, let’s get into it.
    Get the Quo.

  12. I’m often very happy for my EP divisionals to pend for a long time. But the EPO calls that “abusive” or “gaming the system” (their words, not mine) because of the uncertainty for third parties. Hence their new rules.

    The point they miss is that if they examined them more quickly, I wouldn’t be able to keep them pending for a long time.

    People criticise the USPTO’s count system, which can lead to the superficial examination I referred to (yes, I know that Kappos is trying to address that).

    However, the EPO’s equivalent system is also open to criticism, in my view. Things either happen very quickly (if the Examiner is able to meet his deadline and get his points). Otherwise, if the Examiner has missed his deadline, they fall into a black hole and are not seen again for years. It makes more sense for the Examiner to get his points on something else.

    Thus, search reports on new direct EP applications are often done quickly. Supplementary EP searches on PCT applications entering the European phase, where the EPO was not the International Searching Authority, commonly fall into the black hole. So does the examination of divisional applications.

  13. Ha! Now I must jump to the defence of the EPO, Man.

    If you ask for expedition (PACE) you should get it (though, admittedly, in some art units they can’t find enough Examiners).

    At the EPO, their working supposition is that people file divisionals in order to “have something pending”. The EPO sees that these filers do it at the last moment and are content for the precautionary divisionals they have filed to languish, at least till after the end of the 9 month post-issue opposition period on the parent case. That’s what these filers really really want.

    The public doesn’t really need an EPO search on a divisional because the published EPO search report on the parent has already revealed the closest art anyway.

    The public good is better served, thinks the EPO, by devoting precious search resources instead to all those brand new apps, so that on them the search report can issue with their A publications and readers in industry can quickly decide whether their optimistically wide claims really do represent any threat.

    But tell me, do, how your divisionals have been hurt by the EPO.

  14. “IPman….. Faster than a speeding bullet. More powerful than a locomotive…….”

    Slower than the EPO’s examination of a divisional (but it’s still our fault that divisionals drag on for years and years, not theirs, so they have to introduce rules to stop us doing it)……

    More superficial than a FAOM from a US examiner, who doesn’t even read the specification until the second RCE…….

  15. Yes, that’s what I meant. Pegging the deadline to issuance makes sense, if the proceeding is limited to disputes between patent owners.

  16. Cranky, do you mean that one year from publication isn’t enough time? If you do, then I agree. This is a provision which is unworkable, from the get go. But wait. Perhaps that is the plan, to keep the number of derivation proceedings low. in that case, it will work just fine.

    In the UK, the cut-off date is two years after the patent issues. Derivation actions are rare but, even then, the two year period is sometimes missed. It might depend on whether anybody in the involved industry bothers to monitor the flow of publications issuing from the PTO. In Europe, many industries do watch PTO output. There are lots of good data and good ideas, in some of those A publications.

  17. That said, regardless of the Director’s decision whether to institute a derivation proceeding, first-inventor petitioners will have a cause of civil action challenging an alleged deriver for misappropriating trade secrets that were invented and developed prior to either parties’ filing dates. If these inventor’s rights aren’t rights that existed prior to any filing, what are they?

    Actually, the civil cause of action is limited to an “owner of a patent,” so this section of the proposed statute does not support your contention. But, having revisited the proposed statute, I’m curious about Section 291(b). That’s not going to work, is it?

  18. Even I know who IP man is. Think! He’s the best man for this out of control Train. The very same Train that Dennis has been told he has no control of! He is SUPERMAN Faster than a speeding bullet. More powerful than a locomotive…….

  19. “Malcolm notes, correctly, “Patents are irrelevant to the vast majority of businesses.””

    With all due respect Mr. Boundy, I would say that not only do nearly 100% of businesses make use of patented products, but a significant percentage of businesses owe there very existence in some way shape or form to the success of a patented product – even if its shining the shoes of a recently minted technology billionaire.

  20. Readers, I should add that Ron Katznelson’s parade of European horrors goes back to cases written more than 30 years ago. Improver (Remington/EPILADY) European patent has barely a six figure serial number. It was hot once, but that was twenty years ago. By now we are well above two million.

    Nobody disputes that there is still today no Supreme Court that resolves differences between the courts of England and those of Germany, on infringement issues. That’s the problem with the sovereign States of Europe: they tend to disagree. But the specialist patents judges sit together every two years, to iron out differences. If you don’t believe me, read the successive Protocols of these biennial meetings, available from the EPO, and appreciate that, for any given matrix of fact, the likelihood of opposing judgements is as likely between different courts of the same European country as between courts of different countries.

    I defy anybody to show me that progress in Europe is in any direction other than increasing legal certainty as to the meaning of the provisions of the EPC.

    I’m suggesting that the US might gain something if it were to make use of all that 30+ years of experience.

  21. Change one card in the house of cards, and the repercussive effects change every other card. Ned, your worry about “full” 112 disclosure in the provisional doesn’t impress me much because that is one of the things that wouldn’t stay the same, if ever FtF were to arrive.

    Ron, I’m glad you mentioned Improver, DSS, Angiotech and Sara Lee. You forgot the famous Spannschraube case, the best of the lot for comparing jurisdictions in Europe. You think they are evidence of deficiencies in Europe but I think the opposite. Each one of these cases is one where two courts in the same country could reasonably have taken opposite positions. The ensuing debate on each has enriched Europe and reduced the amount of disconfomity between sovereign States (By the way, your comparing independent European countries with States of the American Union is ridiculous, as Mooney points out. For you to resort to that argument reveals the paucity of your position).

    For a patent practitioner, the cases you quote are all delicious in their fine balance. The truly 50:50 cases are those that help to develop the law. So it is here. Take the most recent, Angiotech, and how it went in England. England’s Court of Appeal robustly confirms the Patents Court, revealing no doubts about Pumfrey’s fact-finding and application of European law on obviousness. Observers like me thought the case done and dusted. But no. Hoffmann in the House of Lords (our Supreme Court) takes it up (like KSR) and re-sets the law of obviousness. Shock, horror, on my part. it took me a long time to get used to his logic. Not so my Dutch friend, vindicated all along. Now, in Angiotech, England is in harmony with The Netherlands, which had tried the case strictly in line with EPO jurisprudence on obviousness. Chaos? I think not. Increasing harmony? I think so.

    So, where are we now? The UK much closer to harmony with mainland Europe on obviousness. And a lot of disgruntled, whingeing Pom patent lawyers, running round the USA complaining to anybody who wants to sup up stories of the horror of modern Europe.

    Ron, give it a rest, will you. The European caselaw does not support your propsition, OK?

    And as to trademarks, I’m surprised you accuse me of not getting it. I see from other contributors that they do, and I do, but you don’t.

    But Ron I’m grateful to you nonetheless, for prompting me to think about what would be a rational response to the Exceptions part of 102 in the Bill. It seems to me that as an inventor one would “publish” a year before filing, but as unobtrusively as possible, hoping that nobody notices, until such time as you need to produce that publication, like a rabbit out of a hat, to wipe out everybody else’s patent application but not your own.

    Could this be what happens? In whose interests is it, to put in place a system which encourages everybody to “publish” in a way that nobody notices, and then years later pull that publication out of its hidey hole to bring down patents that, up to that point, everybody had presumed to be valid?

    Or have I got that wrong too (I don’t have time to follow these threads properly).

    Somebody wrote above that an offer for sale prior to filing destroys novelty under FtF. Not so. at least, not under the EPC. Under EPC law, you could have been selling commercial quatities for ten years or more, prior to filing, with no taint to validity. You see, in Europe, the “state of the art” is confined to that which, before the filing date, had been “made available” to the public. We in Europe by now have a very clear idea what the law means by “made available” and “public”.

  22. Ron That said, regardless of the Director’s decision whether to institute a derivation proceeding, first-inventor petitioners will have a cause of civil action challenging an alleged deriver for misappropriating trade secrets that were invented and developed prior to either parties’ filing dates. If these inventor’s rights aren’t rights that existed prior to any filing, what are they?

    I believe they are called “trade secrets.”

  23. Ned 1) What compelling reason is there to move away from the present system that has served us so well for so long.

    Meet Ned Heller, proud member of the patent interference bar.

  24. Ned, I agree.

    Cranky: “the derivation proceeding is simply a procedural mechanism to determine who is entitled to pursue the patent right. Did you notice the part where the Director’s decision is final and nonappealable?”

    The Director’s decision to institute a derivation proceeding would be based on a statutory direction in Section 135 for finding whether an earlier applicant derived the claimed invention from the petitioner. As you point out, it is a procedural mechanism (called by statute) to determine who is “entitled” to pursue the patent. What is this “entitlement” that the Director is told to protect in a derivation proceeding? Is it not a “right”? Is it not the inventor’s property that existed prior to both parties’ application date that is secured from misappropriation by a deriver? Indeed, the entitlement of an inventor is based on Section 102(a) “A person shall be entitled to a patent unless—“ and on the inventor’s oath under Section 115(b) declaring himself or herself to be the original inventor.

    As to the Director’s decision, S. 515 does not say that once instituted, derivation proceeding determinations are non-appealable. As I understand, these fact-finding agency decisions would be subject to judicial review under the arbitrary and capricious standards of the APA.

    However, you have just alerted me to a change made in the last two weeks in S. 515, which had previously provided that upon proper showing by the petitioner, the Director shall institute a derivation proceeding. The Managers’ Amendment now provides that the Director may institute such proceeding and indeed weakens first-inventors’ rights by providing that “determination by the Director whether to institute a derivation proceeding shall be final and nonappealable.” (This is a further example of how the proponents of S. 515 use the “salami” method for cutting down first inventors’ rights and why it should be rejected).

    That said, regardless of the Director’s decision whether to institute a derivation proceeding, first-inventor petitioners will have a cause of civil action challenging an alleged deriver for misappropriating trade secrets that were invented and developed prior to either parties’ filing dates. If these inventor’s rights aren’t rights that existed prior to any filing, what are they?

  25. IP man has it mostly right, but ignores two problems:

    1) What compelling reason is there to move away from the present system that has served us so well for so long.

    2) In a pure FTF system, we have to have FULL section 112, p. 1 support in the priority document. If a later reference appears showing only what we disclose in the priority document, it may still be good prior art against a later-filed claim if the claim concerned, even a dependent claim, adds or relies upon any new disclosure. The reference does not need full Section 112, p. 1 support and need not show the entire claim to be effective prior art. But the application’s claim does.

    Today, in our “old fashioned” first-to-invent systems, we can still use a Section 131 declaration to swear behind a reference REGARDLESS of whether the priority document is sufficiently polished. All we have to show is that we invented what the reference shows first. That should be simple, as our own priority document describes what the reference discloses.

    It is little details like this that no one is talking about. In the brave new world of FTF, we lose the ability to show prior invention. Obviously, this should be unacceptable to all, but seemingly, it is not.

    Compared to FTF systems, we Americans have it really really good now. Our system, for all it faults, is relatively patent and inventor friendly. Why should we abandon such a good system? Why?

    No one argues any compelling need to abandon our system; yet the patent bill is labelled “reform.” This is the kind of reform we do not need.

  26. “shouldn’t the true inventor be given a way to complain”

    That’s what we need – more ways to complain.

  27. Ron, by “derivation” we have been referring loosely to the situation where an inventor has filed an application or been granted a patent, and some piece of prior art is applied against it. If that prior art was published within the grace period and is actually derived from the inventor himself, it won’t count.

    So a patent application has been filed, and possibly granted. No rights exist before an application has been filed that could be protected by any proceedings relating to such “derivation”.

    Strictly speaking, however, those are not the “derivation proceedings” referred to in S.515. The latter only apply where both parties have filed patent applications. They are the replacement for interference proceedings under the current law.

    Under first-to-invent, interference proceedings are primarily intended to determine priority between two inventors who independently invented the same thing. But they can also be instituted where it is alleged that one “inventor” didn’t really invent anything at all, but derived it from the other, and then wrongly filed an application.

    If you abolish first-to-invent, the primary purpose of interference proceedings no longer exists. But it is still desirable to have a procedure for determining if someone has wrongly filed on an invention derived from someone else.

    Indeed, shouldn’t the true inventor be given a way to complain even if he hasn’t filed an application of his own? He can in the UK, for example.

  28. If the rights of inventors to their invention do not arise before they file their application, what rights does S. 515’s derivation proceeding intended to protect?

    Who says that S. 515’s derivation proceeding is intended to protect a “right” at all? In fact, the derivation proceeding is simply a procedural mechanism to determine who is entitled to pursue the patent right. Did you notice the part where the Director’s decision is “final and nonappealable”?

  29. IANAE, “Trademarks confer rights at common law based on use, and the registration process is only a mechanism to formalize and extend those rights… A patent right is only created by the fact of registration.

    There is a flaw in your reasoning. If the rights of inventors to their invention do not arise before they file their application, what rights does S. 515’s derivation proceeding intended to protect?

  30. In pure FtF, prefiling offer for sale secures your trademark rights, while destroying your patent rights. Inconsistent? Asymmetrical?

    Are trademarks even patentable subject matter under 101?

  31. MaxDrei, I never cease to be amazed by calls such yours for Americans to align aspects of U.S. patent law, which are fully harmonized across 50 states, with those which are harmonized across none.

    Ron, you could make this argument 62.8 times more compelling by noting that US patent law is fully harmonized across 3,140 counties.

  32. In pure FtF, prefiling offer for sale secures your trademark rights, while destroying your patent rights. Inconsistent? Asymmetrical?

  33. if a country is to extend protection of IP rights based only on the earliest filing date,

    There’s the flaw in your reasoning. Trademark rights are not based only on filing. Trademarks confer rights at common law based on use, and the registration process is only a mechanism to formalize and extend those rights. The registrant should be the party entitled to use the mark, and not the first to file. A patent right is only created by the fact of registration, and its scope determined by the contents of the registration, and that registration theoretically applied for prior to public disclosure, so a race to the patent office is entirely appropriate.

    If you truly want to be consistent between patents and trademarks, you should give the right to the first person who positively asserts the right – by using a mark or filing before others have used it, or by applying for a patent.

  34. MaxDrei,
    In response to my trademark comment you argue that patent law and trademark law protect different rights. This is irrelevant and nonresponsive to the point of my comment. I’ll try again:
    Regardless of the right being protected, if a country is to extend protection of IP rights based only on the earliest filing date, why should rights of A, the first to use a mark be protected despite the fact that B has filed for the mark before A? Under what legal or public policy theory should first-use development and commercial investments made by trademark applicant A prior to filing an application be protected under law while not extending such protection to development and commercial investments made by a first-inventor patent applicant?

    You say:
    Europe has it sorted, at least up to issue…let a re-invigorated CAFC reform patent litigation on the shoulders of the substantive law of validity proven in Europe these past 30+ years?

    Here are some examples from various EPC contracting states of the “substantive law of validity proven in Europe these past 30+ years”:

    Angiotech EP0706376 patent’s validity was revoked by a British court but was upheld by a Dutch court and the EPO; Document Security System EP0455750 patent’s validity was revoked by British and French courts but was upheld by German and Dutch courts; Sara Lee EP0904717 patent’s validity was revoked by EPO but upheld by a Belgian court; and Remington’s shaving product marketed across Europe was found to infringe the Epilady EP0101656 patent by Belgian, German, Italian and Dutch courts but found non-infringing by Austrian, British and French courts.

    Patent law “up to issue” cannot be divorced from its construction after issue. Claim construction is central and is inextricably connected to validity determinations pre and post issue and for infringement determinations post issue. European patent law across contracting states is far from “proven.”

    MaxDrei, I never cease to be amazed by calls such yours for Americans to align aspects of U.S. patent law, which are fully harmonized across 50 states, with those which are harmonized across none.

  35. MaxDrei: My curiosity as to the identity of IPMan continues to grow. Could it be that he is a patents judge? Or is it, I wonder, our blogmaster himself, in person?

    No. Who are you, Max?

  36. OK Ping, let’s do EBay again.

    Inherent in the grant of a claim that turns out to be valid is that injunctive relief from infringement will follow. Deprive inventors of that and the incentive to make the enabling disclosure is blunted.

    EBay is a reaction to the impossibility in the USA for a competitor to “do” FTO, clearance, and meaningful validity opinions. It doesn’t have to be like that. The new Rules packages at the USPTO and the EPO are worthy attempts to prune back some of the burgeoning legal uncertainty, whether a new product will infringe anything.

    The “clear and convincing” standard is an obscenity. The use of juries to decide the facts in a high tech patents action is another obscenity. The different scope of claims in the PTO and in the courts is a third obscenity.

    Sub-contract your patent litigation to England, where validity is done properly.

    Don’t waste time with “patent reform” till the problems with civil litigation of patent rights have been fixed.

    There, off my chest, thanks.

  37. My curiosity as to the identity of IPMan continues to grow. He apparently has no vested interest, no axe to grind, and is driven purely by the US Constitutional “general welfare” (or whatever the words are) appertaining equally to inventors and those in fear of their monopoly rights.

    So refreshing. These days, such a contribution could only happen on a blog, under a pseudonym, because everybody else is sponsored by a biassed paymaster.

    Could it be that he is a patents judge, well aware of the deficiencies of the system as it is today, and trying to steer reform in the direction of sanity and common sense, but also well aware of the impossibility of outing himself?

    Or is it, I wonder, our blogmaster himself, in person?

  38. DB: You point out the problem with the bill – any disclosure by a third party bars a patent, unless the inventor can trace the disclosure back.

    Well, that’s what it should say, if it were a true first-inventor-to-file system. If they are not derived from the inventor, then third party disclosures are prior art. But the Bill isn’t true FITF, because of the proposed 102(b)(1)(B) “first-to-disclose” provision.

    Here are several possible patent systems:

    System 1. You could say that the patent applicant has an absolute 1 year grace period. Nothing disclosed by a third party in the 12 months before his application can hurt him. Doesn’t matter whether the third party derived it from the applicant or invented it independently himself – and most such disclosures, of course, are the result of independent work.

    That would be the situation under present section 102(b), if taken by itself. But it would be manifestly unfair to the third party. He invents something independently, before the date of the patent application, but then finds that he is deprived of it by someone who came along later.

    So here’s System 2. The present law ameliorates the above problem by having a second hurdle. Under section 102(a), the grace period doesn’t apply if the third party publication occurred before the applicant’s date of invention.

    So at present, if a third party publication occurs within the 12 month grace period, the applicant/patentee needs evidence to support his date of invention. Note that while the inventor should have the information available, it’s quite a bit more onerous than proving a date of publication, and he won’t always be able to fulfil the requirements set by the courts.

    Unfortunately, assuming the USPTO didn’t find the publication, the situation for the independent third party remains uncertain. He knows he has an intervening publication that might render the patent invalid. But he won’t know for certain until he gets sued and the patentee’s invention date comes out in discovery. He might still find that he is deprived of his idea, years later, and has to stop using it and pay damages.

    Thus, the difficulties of proving a date of invention, and the fact that the public don’t know what that date will turn out to be, give rise to uncertainties that are inherent in first-to-invent.

    So then there’s System 3. First-inventor-to-file, as implemented in most of the world. Ignore dates of invention. Ignore grace periods. Just compare the filing or priority date of the application with the date of the publication.

    That’s a simple test, and everyone knows where they stand.

    But the USA is firmly wedded to the idea that some inventors need a grace period, which standard FITF doesn’t provide.

    That gives rise to System 4. Bolt a grace period onto FITF. But to avoid the need to determine dates of invention, and the problems inherent with Systems 1 and 2, the grace period is only available for the inventor’s own work.

    This is the grace period implemented by proposed section 102(b)(1)(A), if taken alone. The majority of cases covered by this will be where the disclosure was made by the inventor himself, or by someone who had his permission. That’s easy to establish.

    But there will be a few rare cases according to DB’s scenario, where A told B, B told C,D,E and F, and something was published without A’s permission. Yes, there may be occasional difficulties proving that. Are they any more problematic than the difficulties which arise from determining dates of invention at present?

    The solution to such difficulties adopted by most of the world, of course, is to go for pure FITF – System 3. In Europe, there is a backstop for “evident abuse” – DB’s scenario where something is published without the applicant’s permission. But it’s rarely used because it rarely happens.

    Finally, there is System 5, which is what the Bill actually proposes. In addition to 102(b)(1)(A), add the “first-to-disclose” provision of 102(b)(1)(B). The applicant gets a grace period for all disclosures, irrespective of whether they were derived from himself. But only if he himself publicly discloses the invention first – perhaps in some obscure publication or website that most of the world doesn’t know about.

    To me, that just adds more problems than it solves. Yes, the applicant doesn’t need to establish that the disclosure was derived from him. But he does need to make a disclosure, which can be disadvantageous for reasons stated by DB and Ron K.

    And since the applicant may have disclosed the invention somewhere relatively obscure, then third parties are still uncertain about their position. Years later, they can find themselves deprived of something they developed and made public independently before the date of the patent application, just as with today’s System 2 when they don’t know the applicant’s date of invention.

    Thus, the Bill replaces the uncertainties of first-to-invent with new uncertainties instead.

    The reason it does so is because it attempts to provide a grace period for all third party disclosures, not just those that are derived from the inventor himself. Realising that that’s manifestly unfair (System 1 above), it then tries to limit it by saying that the inventor has to make a disclosure himself first.

    DB: I agree with both IPMan and MaxDrei that European law has an internal coherence that S.515 does not. The bill is a great step into the unknown, that harmonizes with no one.

    Right. So why not go for the tried and tested, internally coherent model instead?

    Your reason for not doing so is based on a fear about a situation where A tells B, B tells C,D,E and F, and something is published without A’s permission. Under the tried and tested system, that rarely arises in practice.

  39. Well David, I’m a bit peeved that you write that I “overlook” the investment angle. I had supposed that everybody took that as read, without having to read it from me.

    The “incentive”, the “price”, to get the all that early, progress-fostering publication of enabling disclosures is of course the 20 year monopoly. Why would anybody otherwise disclose anything? The patent monopoly, inherent in any patent system, is the incentive for the investors. It’s simply the other side of the coin, isn’t it. “One hand washes the other”, as one says in Germany. Both sides of the coin need a good wash, brush and polish.

    Please, please, nobody mention EBay. We’ve well flogged that three times dead horse already.

  40. JAOI,

    We have these things in the US called elections. The majority of the people voted for Obama and his vision.

    Surprisingly and disappointingly he has done quite a lot to accommodate the right wing rather than follow through on his campaign promises. He is at best a centrist.

    You should try reading the Declaration of Independence, the Federalist Papers, and the Declaration of Independence some time. You might learn something about the way our government works.

  41. IPMan –

    You point out the problem with the bill – any disclosure by a third party bars a patent, unless the inventor can trace the disclosure back.

    I agree with both IPMan and MaxDrei that European law has an internal coherence that S.515 does not. The bill is a great step into the unknown, that harmonizes with no one.

    One crucial point that MaxDrei overlooks – disclosure is indeed a worthy public policy goal, but it’s a distant second. The key benefit of the patent system is getting investment capital behind disruptive new ideas, to get those ideas off the blackboard and out of the lab into real products. Initial R&D is almost always far more expensive than reverse engineering by second-comers. Then the profits disappear. Until an investor sees some barrier to entry to keep competitors at bay and some rationale that shows sustainable profits, investors don’t invest in new radical R&D. In many markets, the patent system is the only barrier to entry available.

    Don’t let the disclosure tail wag the investment dog.

  42. Cranky’s right – the Commerce Clause is just so much more powerful than the Patent Clause.

    See what happens when you live on a diet of breadcrumbs – your mind cannot function.

  43. …shouldn’t the (US) public policy considerations be similar for trademarks as for patents, as both come from the same Constitutional place?

    Except that they don’t.

  44. MaxDrei,

    At the risk of invoking the Constitutional debate, shouldn’t the (US) public policy considerations be similar for trademarks as for patents, as both come from the same Constitutional place?

    Isn’t the palming that you refer to no less “bad” when what is palmed is either the indicator of the source of the product or the product itself?

  45. No name calling yet. Can we keep it up?

    Hey, where did IPM man come from? Great contributions.

    Ron, good point about trademarks, but easy to answer, I would say, by looking at public policy considerations. What is the point of trademark law, and what is the point of patent law. Why is a right in perpetuity good for the public when it’s a TM right but bad for the public when it’s a patent monopoly? Why should a trader with a distinctive mark enjoy some protection against palming off, even when he has failed to register that mark?

    For me, a good patent system is one that gets enabling disclosures (A publications as opposed to non-enabling teasers to whip up interest) out in the open in the minimum amount of time from reduction to practice, thereby to stimulate further technological progress, as fast as possible. Of course, to be fair to the inventors, they must be able to get to issue and to the service of proceedings for infringement, just as soon as infringement starts. For the Applicant who wants the patent to issue immediately after A publication, because of infringement, that’s possible, at least in Europe. Hardly any Applicant wants that though. They all prefer to keep their apps pending as long as possible, to retain amendment flexibility. That’s OK too, provided the laws on adding subject matter in a prosecution amendment are strict. Then, meaningful clearance opinions can be rendered, on the basis of the A1 publication, even before any examination on the merits starts.

    Europe has it sorted, at least up to issue. America, why not take Europe’s pre-issue regime, as is, lock, stock and barrel (but with suitable transitional provisions, like the UK did, when joining Europe), and let a re-invigorated CAFC reform patent litigation on the shoulders of the substantive law of validity proven in Europe these past 30+ years?

    In other words, just sign up to the EPC. As you know, post-issue, EPC Member States are still free to do just as they please.

  46. DB –

    You misunderstand my point. I’m not saying that US law on confidentiality is the same as the EPC’s “evident abuse” provision. For example, in English law, the mere expectation of non-disclosure is likely to create a legal obligation of confidentiality; see Coco v. A.N. Clark (Engineers) Ltd. I’m not surprised if that doesn’t apply in the US.

    What I am saying is that such situations where the inventor’s information is abused are as rare as hens’ teeth. That’s true even in Europe, where there is a legal mechanism for handling such situations. You would expect inventors to make lots of use of that mechanism if such abuse was a big problem. They don’t; it isn’t.

    You are making out that such abusive situations will happen every five minutes, so you are scaremongering that the new section 102 won’t cope with it easily. Relax. Take heart in the European experience. It’s not a big problem.

    DB, Ron –

    Actually I think that the 102(b)(1)(B) “first-to-disclose” provision is a terrible idea. If you are going to do first-inventor-to-file, you should do it properly, as in the rest of the world. I merely point out that that’s the way the Bill’s proponents are trying to allay your fears.

    Since the abusive situation where a third party wrongly publishes your invention is as rare as hens’ teeth, I wouldn’t worry about it. Go with 102(b)(1)(A) if you must for those rare occasions, and scrap 102(b)(1)(B).

    If there is a non-abusive third party publication, not derived from the inventor, then that’s legitimate prior art in a true first-inventor-to-file regime. First-to-disclose according to 102(b)(1)(B) just doesn’t fit.

  47. IPMan,
    Look at proposed Sections 102(b)(1)(A),(B) providing for exceptions to disclosures as prior art 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.”
    How do you think an inventor would be able to prove how the subject matter was “obtained” by another? I think this is what DB referred to.

    Your suggestion that inventors have control over publication priority by preemptively publishing before any third parties, is utterly divorced from reality. How many startups have you seen survive their publication of their inventions in detail to support patent claims right after they made them? Unfortunately, I have seen too many instances where information on a hot new technology developed by startups who do not desire publicity, finds its way into the public domain by trade news publications. These often appear as descriptions of the results and speculations as to how the new invention might be working. I have encountered this myself when reports of my first startup’s technology surfaced after we have had made our roadshows for potential investors and potential strategic partners. This is understandable and perhaps inevitable considering how investors perform their due diligence. They cannot keep it to themselves. They must ask experts and industry gurus.

    Remember that in the U.S., standards for enablement of a prior art reference for purposes of anticipation of a claim are much lower than those required to support the allowance of such a claim. [In re Hafner, 410 F.2d 1403, 1405 (C.C.P.A.1969)]. Trade publications based on rumors and leaks that describe results and motivation can be excellent 103 references under KSR obviousness for barring a whole chain of patents by the inventor whose invention was the source of such leaks. Even if one files a provisional application prior to private disclosures, substantial patent prosecution expenses and many improvements and developments that are disclosed in chains of subsequent non-provisionals can come about only after investments in the startup.

    Today, we can assume the risks of private disclosure to potential investors and strategic partners because we (and the disclosure recipients) know that corroborated evidence of our development records can protect our priority date. No springing publication can undermine such a record. In contrast, under the proposed legislation, our records would be irrelevant and we would likely be unable to risk any disclosure. We may not be able to obtain startup funding.

    Of course, large firms who fund their R&D internally would have no such problem.

  48. There’s no Butt’s about it.
    It’s time to Face the music,

    Trademark battles just don’t spin you around like Patent battles.

    North, South, East or West, everywhere you look, trademarks just don’t compare to the power of patents.

  49. IPMan –

    And if no appropriate document exists to make public?

    What if A discloses to B under circumstances where he doesn’t expect B to blab to C D E F and G? That is, B is a colleague with some expectation of non-disclosure but not a legal obligation? Typically this arises when the invention is brand new, and A is getting vetting from others.

    In a big company, A usually as a colleague B within the same firm. So F2F isn’t a big deal. But for small companies and individual inventors, A often has to discuss the invention with others who are not under obligations of confidentiality, mere expectation. It works under today’s law, it’s fatal under the new bill.

    For these small firms, your solution works great at no extra cost if every inventor A has an IP guardian angel with perfect foresight and who writes up and publishes disclosures for no cost living in his back pocket, and the disclosure and complete loss of confidentiality puts the inventor in no worse position than under today’s law.

    Yes, every problem under the new law has some kind of workaround. They are almost always very low cost for big firms, because all the conversations take place within the firm. But let’s not pretend they’re cost free for smalls who need financing and contract resources outside the firm.

  50. IPman: Section 291 has the only “derivation proceedings” specified in the Bill. They do not relate to DB’s scenario, but only to the case where B files an application.

    Correction: I meant to say sections 291 and 135. Both relate to the case where B files an application, not to DB’s scenario.

  51. To all those who favor a first-to-file priority system due to its administrative and judicial efficiency: How come we do not see you advocate the same thing for trademark law?

    Should we not also move to the first-to file in trademark protection and do away with any inquiry as to who was the first to use the mark in commerce?

    Trademark legal disputes outnumber patent disputes by more than an order of magnitude. The total costs of discovering and resolving evidence in “first-use in commerce” priority disputes far exceed those of patent first-inventor priority disputes. The savings would be staggering if we move to first-to-file in trademark law. Yet, this apparently concerns no one.

    Apparently, those who push for the first-to-file system have agendas other than improving judicial efficiency and reduction of priority-date uncertainty. If that were their agenda, they would have supported alternatives to first-to-file that do not “throw the baby with the bathwater,” such as a requirement that inventors file a declaration identifying their invention date – in a manner similar to that provided by “first-use in commerce” declarations in trademark law.

    The best indicators of their real agenda are the size and incumbency position of the corporations that make the first-to-file provisions their leading goal for patent reform. I know this because before starting up my own companies, I used to work for large corporations who looked to reduce the “annoyance” from small entity patentees by disproportionately elevating their patenting costs.

  52. Warning – off-topic subject matter below – Warning.

    Below is one of the best “sum-up” links I’ve seen.

    Please take time to watch it.
    It’s not very long,
    and it’s very well done.

    However, it definitely is not for pinheads.

    link to patriotsforamerica.ning.com

    How do you spell “I m p e a c h”?

  53. Ned Heller: …there is some question, even from the beginning, of whether a US provisional can provide a proper basis for a Paris Convention priority claim…
    Is the UK provisional materially different?

    As Max says, UK provisionals have been providing a good basis for Paris priority claims for a long time (actually over a century). There’s no reason why US provisionals shouldn’t also.

    However, note the earlier discussion about “same invention”. The way the case law has gone, your provisional (UK or US) needs to support the full breadth of the claim you will eventually make. An informal disclosure in a provisional might not do that.

    Provisionals don’t need claims, but for this reason UK patent attorneys usually draft them the same way they draft non-provisionals. That would include statement(s) of invention that reflect the likely eventual claim wording, even if there are no formal claims.

    On a minor matter, when the US first introduced provisionals, it was indeed impossible for them to issue as a patent. That led some to speculate that they weren’t a regular patent application as required by the Paris Convention. To clean this up, US law was subsequently amended. It is now possible to convert a US provisional into a regular application, rather than file a separate regular application and claim priority, though I can’t think of any sensible reason to do so.

  54. David Boundy: Derivation also arises under new 102 of S.515 where A invents, tells B, B tells C D E F G, none of B C D E F or G file, and A files within a year of telling B.

    Now B C D E F and G are all presumptively prior art to A, until A carries the burden of showing derivation by each and every one.

    New section 102 gives the inventor a very easy way round this problem. When he tells B, make a public disclosure at the same time. Then he gets the grace period under 102(b)(1)(B) instead of (A). All he needs to prove is what he made public. Dead easy.

    That’s why it’s being called “first to disclose” rather than “first to file”.

    Even in DB’s scenario, you don’t need an expensive and uncertain interference-style derivation procedure, with the need to prove conception, reduction to practice, diligence etc. In fact, it’s not clear to me that that would be required even under new section 291. (Section 291 has the only “derivation proceedings” specified in the Bill. They do not relate to DB’s scenario, but only to the case where B files an application).

    DB: Under current U.S. law and current EP law, derivations are rare as hens teeth, because both require that the later deriver file an application. Under S.515, they’ll be common, because an inventor needs to show derivation for every blog, Popular Mechanics article, and tweet.

    Not true. Where A discloses to B in confidence, but B then discloses in public before A files, the EPC has a 6 month grace period for so-called “evident abuse”. A can claim the benefit of this irrespective of whether B also files an application.

    The situations where this grace period is used are indeed rarer than hens’ teeth, and I predict that the same will be true in the USA. The reason is simply that the vast majority of blogs, Popular Mechanics articles and tweets are not derived from the patent applicant A, but are the result of B’s own independent work.

    Even where B files an application, then in the UK the true inventor A can launch proceedings claiming B is not entitled to the patent, without A having his own patent application.

  55. Ned, not that I can see. I had supposed that the US got the idea of the “provisional” from the UK. It borrowed a good idea, didn’t it?

    UK pro’s are at least 60 years old. as far as i know, nobody has ever suggested they do not constitute a valid basis for Paris priority claims.

  56. Max, well, the reason I ask is that there is some question, even from the beginning, of whether a US provisional can provide a proper basis for a Paris Convention priority claim. I know that other patent offices will recognize the claim, but the matter has never been litigated and decided by a court of law.

    A US provisional is informal, does not have claims, is not published and can never issue as a patent.

    Is the UK provisional materially different?

  57. Ned sorry, I don’t really understand the question. A UK provisional is an application for protection of an invention in a Convention country. Provided it is the FIRST such application (or, if not the first, then earlier ones were withdrawn before it was filed and did not deliver any priority rights) then it is a perfectly good deposit for founding a priority date valid under Paris. Also in the USA, I believe. The Brits have been relying on that, continuously, since at least as long ago as 1949.

    In the reverse direction, you could claim prio 1 on the application form for a UK provisional (prio 2) then declare both priorities in a PCT filed within one year of prio 1.

    Come again, if I haven’t answered your question.

  58. Thanks Ned. I think you and I are not far away from each other. Somewhere up-thread I mentioned the old provision in the UK Patents Act of 1949 (supplanted in 1978 by the EPC) that lifts out of the prior art such disclosures made by the inventor during the Paris year that follows filing of the provisional application, that go no further than what is in the pro. The thinking was that inventors need to publicise their pro, the moment they have filed it, and that the full application they will be filing at the end of the Paris year will contain a lot of obvious developments, modifications and improvements to the content of the provisional. It was always thought simply not fair (and not conducive to quick exploitation of the invention in the provisional) to apply those Paris year disclosures by the inventor as prior art against claims of the full application not entitled to the filing date of the pro.

    And, yes, the EPC swept that saving provision away.

    So that, since 1978, skimpy provisionals are not such a good idea, and nor is open publication during the Paris year.

    However, Europe is quick to reject inventor disclosures during the Paris year as not being public enough to get into the “state of the art” available to attack the validity of a claim not entitled to the pro filing date. See somewhere above, the Palmaz case. the receiver has to be a member of “the public”. It doesn’t take much to persuade the EPO that those who have received details of your invention are not properly to be regarded as members of “the public” to whom the invention has been “made available”.

    Of course, Europe is civil law territory, except for the British Isles. There are many, many areas where supplanting the UK Patents Act 1949 with the EPC has caused distress in England.

    Then again, patent litigation in England, these days, takes about one third of the time it used to, under the ’49 Act.

    Thanks for reminding me about G3/93.

  59. Max, there are earlier decisions on point, some going both ways on the issue. See, G 0003/93, for example. I will quote extensively:

    From paragraph 3:

    The following facts are assumed:
    – On 1 January 1990, an applicant files an application P1 containing the elements A + B;
    – On 1 February 1990, a document D is published containing the elements A + B;
    – On 1 March 1990, the same applicant files an application P2 containing the elements A + B + C;
    – On 1 June 1990, the same applicant files a European patent application with claim 1 containing the elements A + B, and claim 2 containing the elements A + B + C; priority is claimed from P1 and P2;
    – Claim 1 contains the same invention as disclosed in P1; claim 2 contains the same invention as disclosed in P2; the invention disclosed in P1 is not the same as the one disclosed in P2 (although there is unity of invention within the meaning of Article 82 EPC).

    According to decision T 301/87 the answer must be no, although claim 2 cannot derive priority from application P1; according to decision T 441/91 the answer must be yes, because claim 2 cannot derive priority from application P1. This means that, according to decision T 301/87, document D is not citable against claim 2, whereas, according to decision T 441/91, document D is citable against claim 2.

    From paragraph 8-10:

    8. Pursuant to Article 87 EPC, the coming into existence of a right of priority depends on the fulfilment of certain requirements, one of these being that the European patent application claiming the right of priority from an earlier application in a State party to the Paris Convention must be “in respect of the same invention” disclosed in the said earlier application. Article 89 deals with the effect of possessing a right to priority on the premise that the conditions precedent to having that right have been satisfied, including the requirement that the inventions be the same. If these preconditions are not met, no right to priority exists, consequently, in such case a claim to priority from a previous application has no effect, either under Article 87 EPC or under the Paris Convention.
    9. Where priority is claimed but cannot be allowed because the essential condition precedent, that the inventions are the same, is not met, there is no right to priority. In consequence, any publication of the contents of the priority document in the interval between the filing thereof as a patent application, and the filing of the European application claiming priority therefrom, constitutes prior art citable against elements of the European application which are not entitled to priority.
    The United States Court of Appeals for the Federal Circuit decided likewise (in re Gosteli, 10 USPQ 2d 1614 (1989); GRUR Int. 1990, p. 994).
    10. As to the example given in point 2, it follows from the above that document D forms part of the state of the art in respect of claim 2 and is citable against claim 2.

  60. Ned, go to http://www.epo.org and find your way to searching the caselaw of the Boards of Appeal. Input G_0001/98 (“same invention”) and see where in that Decision is any reference to any US case. Perhaps it is indirect. I’m curious.

  61. Ned now you have aroused my curiosity. Can you name that seminal mid 90’s US case that “Europe” followed? Which “Europe” do you mean? I suppose the Enlarged Board of Appeal of the EPO. So it must be a G Decision on “same invention”. I will take a look at the EPO’s “white book” of caselaw.

    Insider, I was imagining that US inventors, attorneys and applicants would come, over the next 20 years, dimly to perceive that blowing all rights, everywhere in the world except the USA, by publishing before filing at the PTO, is not necessarily a good business idea.

  62. “but I have a hunch that this is going to change, over the next 20 years.”

    The EPO is going to copy the USPTO law regarding First to Invent…?

  63. MaxDrei, I can elaborate more on the development of European law on priority, but let me just say this:

    Since the 1800’s, the effect of a priority document was thought to be that of a publication under the proposed legislation. It knocked out a subsequent publication of the same subject matter. Then in the mid ’90s, Europe adopted the US approach, citing a US case, just as I said. For many, this was highly unexpected and made the quick and dirty provisional a thing of the past.

    Since that time, Europe does seek to apply the law in a uniform manner, but runs into absurdities and inconsistent rulings on exactly the same facts. In bio, a priority document to substantially the same sequence, but not identical, is one day good for priority and the next not. In mechanical, the absurdity of giving priority to claim 1 to the car, but not to claim to the car + fender is recognized.

    I think many in Europe realize that adopting the US law on this topic without understanding why the US law is the way it is was a mistake.

    Now back to the US, as witnessed by this discussion, many in the US do not understand US law — else they would have amended the statutes to allow Section 119 priority claim to operate in much the same way as the proposed “publication” knock outs. But they did not, making publications far more effective at protecting one’s rights against future disclosures than a provisional application, which is nonsense.

    But however we fix US law to make it reasonable, we will also have to fix Europe, Japan and everyone else who have adopted the US nonsense on 119 (Paris Convention) priority. It is simply wrongheaded and nonsensical.

  64. Having sat here and defended it, I do believe this modified grace period is weak. I believe the US should adopt either (1) an absolute bar, or (2) an unqualified one year grace period. Either would be preferable.

  65. “Litigation over FTI would disappear.”

    Lionel,

    Ah, but litigation over the sloppy and ambiguous wording of modified S.515 will more than make up for it. Modidied S.515 still involves significant upheavel for no contervailing value to American small business and especially American small business innovation, in my opinion.

  66. The only potential problems I see with FTF are for patent attorneys/agents. All retention letters and/or jobs are going to have to require specific agreements on turnaround times.

  67. “Can anybody here in favor of S. 515’s first-to-file system and its weak grace period (including the unique “springing disclosure” feature) identify its actual advantages to American firms over the current system?”

    Litigation over FTI would disappear.

  68. Boundy writes:

    “Under S.515, the patent attorney becomes a roadblock, not an asset. The patent attorney has to repeatedly tell the business “NO. You cannot move, you cannot act, until I get a patent application filed.”

    which I suppose means that up to now the asset does refrain from acting as a roadblock and does let his client publish before filing at the PTO.

    Oh I do hope Boundy and pals keep up the good work of fostering innovation in the USA, so that, for the foreseeable future, there are in direct consequence of their helpful actions a steady stream of invalid patents being issued to Americans by the EPO, which my clients will pay me to defend, or to revoke.

    And yes, I know, the importance of ROW up to now has been zilch, but I have a hunch that this is going to change, over the next 20 years.

  69. “It worked “so well” relative to what?’

    …relative to wearing Birkenstocks, holding hands and dancing around mud huts, singing Kumbayah…

  70. Relative to the number of people that want to use the system, warts and all?

    Even with a humungous backlog and the worst economy in arguably a century or two, the number of patent filers still lining up and wanting to share their innovation says something.

  71. RK In other words, shouldn’t the burden of proof be on those who want to change a system that worked so well to protect American innovation?

    It worked “so well” relative to what?

  72. “Can anybody here in favor of S. 515’s first-to-file system and its weak grace period (including the unique “springing disclosure” feature) identify its actual advantages to American firms over the current system?”

    Ron,

    Thanks for stating clearly the “$64k” question that nobody in favor of modified S.515 has yet to answer in my opinion. As a “skeptical American” I remain skeptical of the value of modified S.515 to American innovation and businesses, and remain concerned that it will be an American innovation and jobs “killer.” For that reason alone, I’m still can’t and won’t support modified S.515.

    I’m also very concerned at the sheer upheavel modified S.515 will cause in terms of how novelty and obviousness will be determined. The language in modified S.515 is frankly “sloppy” in many areas, especially the one relatig to the residual “grace period” which is completely unclear as to whether it would cover, for example, traditional “on sale” situations. That a significant amount of litigation to just clarify what the language in modified S.515 means, which is itself extremely unsettling. For this amount of upheavel, there should be corresponding benefit to American innovation and American jobs creation, and I just don’t see that in modified S.515.

  73. Or maybe this is a tool for lawyers to say to business people:

    “You must put us first, it is no longer an option to think about your rights down the road. These intellectual property rights are the currency of the new economy and the law recognizes this by placing a higher premium on actions you must take to preserve your rights.

    Sure, this makes the process more expensive for you, but you get what you pay for. Don’t worry, this affects your competition at the same level and they also have to pay more. If it helps you to adjust, you can think of it as the government has stepped in and announced ‘We are the government and we are here to help, and in order to pay for this help, there is a small patent tax.’ ”

    Business should be thankful that they have our services to help them in the new economy.

  74. Inviting Body Punches | Mar 10, 2010 at 03:33 PM writes that he advises clients to “keep an absolute lid on it.”

    And that’s good legal advice, so long as the client has options. Under current law, patents are one factor among many that have to be considered by the business folks, but seldom an absolute barrier to business action. The lawyer tells the business folks what the risks are, and then the business folks balance the various opportunities, costs, and risks.

    Under S.515, the patent attorney becomes a roadblock, not an asset. The patent attorney has to repeatedly tell the business “NO. You cannot move, you cannot act, until I get a patent application filed.”

    Lawyers (and the law) should help the business function efficiently, they shouldn’t be roadblocks. S.515 puts the patent attorney in the position of obstructive business adversary, not the asset and advisor that good lawyers try to be.

  75. MaxDrei,
    The issue is sharper than asserting a negative – that the transition “ought not to be, in itself, harmful.” The burden on those who propose the shift is an affirmative burden to show advantages of the shift and to show that those outweigh any harm. Asserting “Ought not to be harmful” does not cut it.

    You are correct, however, that S. 515 FTF provisions have no counterpart in FTF provisions of the EPC, thus making this move even more uncertain, playing Russian roulette with American innovation.

  76. Ned, the way Europe addresses the Paris Convention’s “same invention” requirement is one thing. your hypothesising is quite another. Europe chooses to construe the disclosure content of a document always by the same consistent rules, regardless whether the document is a prior art reference, a priority document or an application document and it is being said that a prosecution amendment has added to its disclosure. Do you want it more complex than that?

    Ron, Bruno van Pottelsburghe is on about “fragmentation” of patent law in a Europe of 36 EPC Member States each with its own national patent law. and he’s on about global “patent warming” caused by the USPTO. I don’t see how any of that is relevant to this thread. As to evidence, I should have thought the issue is “What’s best for America” rather than “What’s best for American innovation” but, anyway, as I have argued above, moving to the EPC ought not to be, in itself, harmful to “American innovation”.

    Nobody’s suggesting (yet) moving the USA to the substantive law of the EPC, to join the rest of the world. Opportunity lost, I think.

  77. Can anybody here in favor of S. 515’s first-to-file system and its weak grace period (including the unique “springing disclosure” feature) identify its actual advantages to American firms over the current system?

    Identification must include a suggestion of tangible metric by which to evaluate these purported advantages and an identification of any supporting evidence suggesting that the advantages would outweigh the harm to small business. Citing administrative convenience or mere statement that it would lead to harmonization does not cut it. Specific items, patenting costs or other savings in legal fees associated with the resultant “harmonization” of S. 515 should be identified. In particular, identify which of the problematic features described by the think-tank Bruegel (link to bruegel.org ), and sometimes encountered by American firms seeking patent protection in Europe, would be improved for American firms by the U.S. adoption of S.515.

    In other words, shouldn’t the burden of proof be on those who want to change a system that worked so well to protect American innovation? Shouldn’t overcoming this burden require more than mere folklore?

  78. So yes, if Europe were to adopt the US system, including providing a European Supreme Court, European innovation would blossom.

    And you know what means: no more wondering when it’s your turn to go to the bathroom on a European flight!

  79. Max, yes.

    We have discussed all the details of why before. Europe has major problems of cost/benefit with respect to its patent system; and a FTF system inherently advantages the large company over the startup.

    So yes, if Europe were to adopt the US system, including providing a European Supreme Court, European innovation would blossom.

  80. Historically, the reason that a claim had to be 100% supported in a priority application was to prevent a US applicant from endlessly extending the monopoly of a basic invention by filing CIPs on obvious variations whose patents would expire 17 years from issuance. Terminal disclaimers and 20-years from filing have largely eliminated this “extension” problem with respect to obvious variations.

    At the same time, if a reference was less than a year old, the applicant was entitled to show prior invention of the reference in order to “remove” it. However, nominally, the same rule does not apply to priority claims, even with respect to references having an effective date subsequent to the priority date, because that would effectively permit the patenting of obvious improvements ad nauseum through CIPs.

    But Europe adopted the US view of 100% support for priority claims, actually citing a US Fed. Cir. case; while totally ignoring the reasons for the US law and the way one could prove prior invention when a reference was less than a year old. As a result, Europe found itself in a pickle. They are now slowly extricating themselves from the pickle by essentially recognizing the priority claim when the variations are “inconsequential.” One way that they are “inconsequential” is if the differences between the priority document and the non provisional are insignificant to one of ordinary skill.

    Since we are still in a first to file regime, these issues simply do not arise on a day-to-day basis. But as we move to a first to file system, they become important. But the bottom line is this:

    If the priority document discloses what is in the reference, it is removed, not only to claims to the subject matter of the reference, but as to insignificant variations, i.e., obvious variations.

    Note here, I am talking about Section 119 priority, which has a limit of one year. I am not talking about statutory bars. I think the historical law may continue to apply to references that are more than a year prior to the actual filing date of the claimed subject matter. But even here, since the rationale for the rule has been vitiated, the rule itself has no rational reason for its existence and may, at some time, itself be overruled.

  81. Ned you wrote:

    “a cesspool of uncertainty and chaos, a system that fundamentally favors the deep pockets over the inventor, a system that is rigged to prevent startups from encroaching on the established markets of the major corporations, a system that is certain to harm American innovation and to harm America.”

    What “system” are you alluding to, pray? FtF? So, the “cesspool” is the outside world, is it then?

    Or do you mean the “system” manifested by this Bill?

    I must say, I prefer arguing with Boundy.

    Imagine taking Europe’s patent system away, and giving Europe America’s patent system instead. Would a thousand European entrepreneurial flowers bloom that up to now have not? Would they heck. By the same token, give the USA the European patent system and its entreprenuerial spirit wouldn’t even break stride. There will be chaos in the ranks of its patent attorneys though.

  82. Boundy and others–

    I deal with small entities all the time, usually the type that would qualify as “micro-entities”.

    Boundy’s right, effectively there will be no grace period.

    What that does is effectively regularize the advice I generally already give these clients.

    I get them to keep an absolute lid on it, to have them notify me of any and all communications they intend to make regarding the subject-matter, to get confidentiality/NDA’s from everybody, etc..

    Such practice limits the commercial and business options available to these entities, for example JDA’s and funding sources. Often, if planned out in advance, routes can be navigated around these apparent roadblocks–e.g. angel investors before VC stage. But it really is difficult if you need to use university/public lab facilities and/or personnel.

    Yes, it is a royal pain, but it is worth it on the back end. Even under the current system it is the best way to go, given the possibility of interferences and actual fraud.

    Proving fraud, for example backdating, is every bit as difficult, and expensive, as is proving derivation, from the perspective of a small entity.

    Caveat: I do not work with public-sector inventors like universities, and I do believe that the new leg. will cause them serious problems. However, I don’t necessarily believe that they should be entitled to receive any patent rights at all (either the institutions OR the individual employee-inventors) if the IP output arose substantially from, or as a result of, public inputs (e.g. public $).

  83. I also correctly and soundly noted that business formation is much higher in the U.S

    Yes and my point is that it’s a non-sequitur. There are many differences between Europe and the US. Some of them are related to patents (like FTF) and some of them are not (higher business formation in the US).

  84. Malcolm, your view that patents are irrelevant to the vast majority of businesses, because the majority (by number) are corner stores, pizza shops, dry cleaners, bicycle messengers, and the like, to whom patents have no direct effect.

    I agreed with you (subject to ignoring indirect social welfare effects — which is a pretty big thing to ignore!). I also correctly and soundly noted that business formation is much higher in the U.S., though patents are not the entire cause and effect.

    The error in the thread was introduced when IANAE quote cropped and dropped the qualifier.

    Does that answer your question?

  85. “Patents are irrelevant to the vast majority of businesses.”

    No they aren’t

    Posted by: Adam Smith

    LOL. Keep working that angle, Adam.

  86. Ned I see Malcolm you do not attempt to answer the hypo about claim 2 (car + fender). I presume the reason is that you have no answer.

    You’re right. Can you please provide it?

  87. I see Malcolm you do not attempt to answer the hypo about claim 2 (car + fender). I presume the reason is that you have no answer.

    What does the MPEP say about this?

  88. MaxDrei, we have our own form of “derivation” under current law. It is called 102(f). It can be used to invalidate a patent where the invention (or something that would make the invention obvious) was disclosed to the applicant by a third party.

    But today, applicants do not face the horror of derivation proceedings in order to obtain a patent. All they need to do is show prior invention of what they claim. That is relatively simple as all the data is under one’s own control.

    Note well, that derivation proceedings will take place regardless of the grace period issue. The first filer is presumed to be the first inventor; and the second filer has the burden of proving derivation — an ugly, expensive and nigh on impossible task.

    The system that is being proposed takes a fundamentally good system that has evolved from Supreme Court case law and a wealth of experience, and tosses us instead headfirst into a cesspool of uncertainty and chaos, a system that fundamentally favors the deep pockets over the inventor, a system that is rigged to prevent startups from encroaching on the established markets of the major corporations, a system that is certain to harm American innovation and to harm America.

  89. And those businesses are irrelevant to today’s discussion.

    You thought they were very relevant just 45 minutes ago.

    “The rate of new business formation [is] about half in Europe as in the U.S.”

  90. Malcolm notes, correctly, “Patents are irrelevant to the vast majority of businesses.”

    And those businesses are irrelevant to today’s discussion. The only thing that’s interesting to talk about are cases where either a posteriori outcomes change, or a priori adaptive response changes. There’s no value in looking at stable points to evaluate a change.

  91. Max –

    Derivation also arises under new 102 of S.515 where A invents, tells B, B tells C D E F G, none of B C D E F or G file, and A files within a year of telling B.

    Now B C D E F and G are all presumptively prior art to A, until A carries the burden of showing derivation by each and every one. And does so without the benefit of any subpoena power to find out where C D E F or G learned of the invention.

    Under current U.S. law and current EP law, derivations are rare as hens teeth, because both require that the later deriver file an application. Under S.515, they’ll be common, because an inventor needs to show derivation for every blog, Popular Mechanics article, and tweet.

    I don’t have anything more than gut feel to go on, but that gut fee is its gonna be at least 10,000 in the first year before everybody gets the news, and 1,000 per year steady state.

  92. The rate of new business formation and investment in R&D are each about half in Europe as in the U.S.

    Obviously this isn’t all attributable the patent system, but it’s not a goal to harmonize toward.

    Patents are irrelevant to the vast majority of businesses.

  93. David, don’t understand your Palmaz point. The Palmaz patents were asserted in Europe and their validity challenged. Derivation proceedings are going to arise when A invents, doesn’t file but does tell B, and B files before A.

    More fool A, I would say. But then i would say that because i come from a culture in which nearly everybody is well aware of the fundamental rule that, as an inventor, you simply tell the PTO before you tell anybody else. For that reason, derivation proceedings here are as rare as hens’ teeth.

    But I realise that is too flippant for the USA and for a culture (and judges) that traditionally expect patent applications to be written after rather than before the invention has succeeded commercially, and then by a professional who is first and foremost an attorney at law (rather than a patent attorney).

    I see better now the earthquake that a switch from FtI to FtF will cause. My view is that, if you’re going to jump, then jump into a system that has been up and running for 30+ years and has been thoroughly explored, warts and all.

  94. How does the rest of the world manage with first-to-file? Do people just not bother ever starting a business?

    The rate of new business formation and investment in R&D are each about half in Europe as in the U.S.

    Obviously this isn’t all attributable the patent system, but it’s not a goal to harmonize toward.

  95. The “first inventor to file” provision of S.515 is bad for startups, small companies, individual inventors, and university spin-offs.

    How does the rest of the world manage with first-to-file? Do people just not bother ever starting a business?

  96. So call your senators. Ask your clients to call their senators. Call the tech transfer office at your state’s universities, and the offices of economic development in your state government.

    link to senate.gov

    The message to the senate is:

    The “first inventor to file” provision of S.515 is bad for startups, small companies, individual inventors, and university spin-offs.

    S.515 Section 2, first inventor to file, should be pulled out of the bill, and replaced with a request to the Patent Office and Small Business Administration to study economic effects on small business.

  97. Let’s just make this simple and repeal the patent code and close the Patent Office. That’s what they’re getting at anyway.

    Patent reform is a fraud on America. It is patently un-American.
    Please see link to truereform.piausa.org for a different/opposing view on patent reform.

  98. “We can avoid it by avoiding the patent bill. There is not other way at this point.”

    Ned,

    Amen to that. Besides, this modified version of S.515 is still an American innovation and job “killer.” Just look at the forces pushing for it strongly, and you know why.

  99. A grace period that costs that much to take advantage of is practically the same as no grace period at all.

    Maybe that’s the take-away here. If you want a patent on something previously unknown to the public, you should file an application while it’s still unknown to the public. You have the one year if the worst should happen, but don’t count on it.

    A grace period is a period during which you can still perform an act without penalty even though it’s past due. The date you’re “supposed” to formally assert an exclusive right in your invention is before you complete your well-developed internal corporate process of giving your invention to the public.

    I appreciate your concerns about the cost of getting all your filings done before the disclosure event, but many countries have no grace period at all, and no provisional applications, and they seem to do okay. Also, it would be less of a big deal if companies weren’t in such a rush to do the opposite of getting patent protection.

  100. The discussion about “derivation” illustrates that we do not ever want to go that route if we can avoid it. We can avoid it by avoiding the patent bill. There is not other way at this point.

  101. The U.S. inventor who needs to show derivation in a disclosure by another who did not file an application has the burden of proof, but the bill provides no subpoena power.

    The drafters of the bill lacked the legal sophistication to consider the practical realities of what has to be proved and how the evidence would be gathered.

  102. Max, re 11:11 and Palmaz –

    The bill is significantly different, but the Palmaz situation illustrates the analogous problem that arises under S.515, that will differentially burden U.S. small businesses.

    Dr. Palmaz’ stent patents are worth 10’s of billions. He had the money to see this procedure through, to show that every single one was derived from him.

    In an analogous fact setting under S.515, an average startup faced with a similar fact pattern of derived disclosures (even without the breach of confidentiality) would face costs analogous to Dr. Palmaz’.

    A grace period that costs that much to take advantage of is practically the same as no grace period at all.

  103. Malcolm or anybody, please take a shot at the hypo. I give you the hypo to illustrate a problem that the Germans seem to have solved in priority claims.

    The hypo:

    Claim 1 is to a car. Claim 2 depends from claim 1 and adds a fender.

    The priority application discloses a car but not a car with a fender. The subsequent reference discloses a car. Fenders are old.

    Claim 1 is patentable because the priority claim clearly is good.

    But, what about claim 2?

    (Hint: under standard US and Paris convention law, claim 2 does not benefit from the priority claim and the car is a good reference against the claim even though the car reference is not good against the parent claim.)

  104. Hss anyone considered whether an “on sale” situation by the inventor would fall within the “exceptions” paragraph (b) of 102? That’s a pretty big “trap door” to fall through if “exceptions” paragraph (b) of 102 doesn’t apply.

  105. Ah David, it is not the IDA case you need to read but, rather, all the EPO jurisprudence in which people tried to use inventor’s prior to filing disclosures to destroy the validity of the patent.

    Take for example Julio Palmaz, inventor of the balloon-expandable stent. He touted his invention around everywhere, even to companies where he had to sign a waiver of confidentiality. Still the EPO dismissed those disclosures as part of the state of the art. The Board of Appeal was able to find a tacit mutual understanding of confidentiality, and upheld the patent as valid.

    That’s European patent law for you, on measured disclosures by the inventor, before the filing date.

    But that’s not what’s in this Bill, right?

  106. Lionel –

    No, my concern is not theft. My concern is that ordinary conduct of business will destroy patent rights.

    Today, an inventor can talk to just about anybody, to assemble capital, to assemble strategic partners, to test. Those acts of ordinary business help to prove a date of invention sufficient to allow the applicant to defer a filing decision. (Not risk free, mind you, but within range of ordinary business risks.)

    In the S.515 world, every time you disclose the invention, you take a risk that the disclosee will further disclose, and that the further disclosure will be — at the very least — expensive to trace back to show derivation, and perhaps impossible.

    Even if the substantive law of S.515 were within the realm of reasonable alternatives, the procedural costs and substantive risks in relying on that substantive law are untenable.

    Thus, as a practical matter, a priori applicants will have to behave as if there were no grace period at all.

  107. David, the case is reported at 2006 EWCA Civ 145. The parties are IDA (and others) v. The University of Southampton (and others). See Jacob’s comment in the penultimate paragraph. I can’t put in here the link to the right page at http://www.bailii.org, but you can surely get there without my help.

  108. David,

    So you’re concern is theft? Do you really believe that’s a significant threat?

    Assume you are correct, how is the inventor worse off under FTF? If someone is dishonest enough to steal your client’s invention, wouldn’t they be dishonest enough to backdate some files?

  109. David, I’m glad your UK-based EPO prosecutor uses the difference between UK and EPO to his advantage. On business method patentability, I suppose. The tussle between the two Offices will sharpen clarity in both. I’m glad your UK wallah doesn’t opine about infringement in Germany. Probably he doesn’t read German or know the landmark cases. I wonder what you would get though from a pan-European patent litigator like Trevor Cook at Bird & Bird. The UK Statute declares (Section 130(7)) that its substantive legal provisions are supposed to mean the same as on mainland Europe. As I said, there are variations in the way nations in Europe interpret the pan-European 101, 102 103 and 112 provisions in the EPC. But look how the Supreme Court in Germany in the olanzapine case last year finally aligned its standard on novelty to the European norm. We are getting convergence.

    I will have a look tonight for the UK case. I will first go to http://www.bailii.org and input “Southampton University” into the search field. It is an EWCA case, with Robin Jacob giving the lead opinion. Subject matter: devices for killing flies in restaurant kitchens, if I remember right.

  110. Max –

    “Same substantive law” is simply not true. I am aware of an applicant that frequently uses the difference between U.K. law and EPO law to advantage.

    During prosecution, the differences are almost always (but not always always) small enough to gloss over. But post-issue, when my client needs to be RIGHT on validity or infringement, my outside counsel won’t give me a Europe-wide opinion. My EPO counsel (in UK) tells me I have to get country-by-country opinions.

    But we are in clear agreement on this much – a partial harmonization has almost no value to anyone, and imposes huge disruption costs.

    Can you identify the GB case on derivation proceedings? I’d like to look at that.

  111. Lionel –

    As a matter of substantive law, you’re right, the inventor’s own disclosures and disclosures derived therefrom don’t hurt (for a year).

    Now prove it.

    In a wonderful coincidence, Max answered your question just before you asked it.

  112. David Boundy,

    I’m sorry, I must have missed where you addresses the fact that an inventor’s own disclosures will not hurt him. How does the inventor lose his rights?

  113. I posted at 8.53 without having seen Boundy’s at 8.39. I can confirm that derivation proceedings are grotesquely, obscenely expensive and divisive, because that’s what the English court of appeal has recently observed, in the context of a squabble about inventorship in a University Research Dept. The interesting debate is about how to minimise such terrible disputes. One idea is to have inventors make written statements of what they think they have invented, and deposit those statements somewhere neutral and safe, before they start blabbing to the world. It’s an old principle, and it works. You can have a patent system without the grotesque boilerplate of a typical US filing. But I concede, getting from where the US is now, to where it ought to be in patent law, is so difficult as to be better not to start. Let ROW harmonise completely, and then join up, when the dust has settled.

  114. “If, and it’s a pretty big “if”, the PTO is about to embark on a large-scale hiring and training binge, isn’t it better to change the law before that than after it?”

    IANAE,

    My point is don’t change current law now, period. What so-called “patent law reform” proposes is similar to suggesting more drugs for what is a drug interaction problem. What will impact the U.S. patent system more effectively is better management, especially in the USPTO. I’m currently hopeful that the Kappos regime can do that, but they need time and no additional complications that this so-called “patent law reform” will certainly create. If you impose, for example, post-grant oppositions on the USPTO, you’re going to have “monumental grid-lock” in the USPTO, as demonstrated by the inability of the USPTO to keep up in the current reexamination system as Paul Morgan so correctly points.

    Changing the law will also not help new examiners coming on board. Until the courts sort through this so-called “patent law reform,” anything the USPTO does in response can be and will be questioned. Again, what we have here is an issue in management of the system. Statutory changes proposed by this so-called “patent law reform” simply don’t address that, but are simply a “knee jerk” reaction by select special interest groups who frankly don’t care if the current U.S. patent system collapses. In fact, those special interest groups relish harmonization with the ROW because it effectively weakens the ability of small players to compete not simply in the global market, but also in the U.S. market.

  115. Well sorry Mr Boundy but I still don’t follow all that you write. Europe is an area of sovereign States, each with their own procedural law. But those who are members of the EPC have the same substantive law on infringement and validity. There might be some shading, as a result of not having a supra-national common Court of Appeal, I grant you, but since mainland Europe is civil law which doesn’t “do” Binding Precedent, I’m not sure how much further forward such a court would get you. Consider the wobbly ECJ jurisprudence on European Union trademark rights, for example.

    You write: “The abandonment rate in Europe is far higher in Europe than the U.S., for exactly this reason”. I replied, that an abandonment rate of 67% corresponds to 100% efficiency, but I don’t see you responding to my reasoning. I simply don’t recognise the inefficiencies you think you detect, in drafting practices in Europe.

    To reiterate, I’m not a supporter of this Bill because it falls between two stools and the USA (attention: Briarpatch alert) is better off staying with its present law. At the same time, I defend the simplicity, elegance and clarity of the substantive law of the EPC, arrived at by compromising between English patent law and that of Germany (which means also Japan). The optimal “fix” for harmonising substantive patent law all over the world was put in place in 1973, and I resent anybody tinkering with it. Copy it, OK. But if you are going to rubbish it, at least find arguments that will stick. The only one that has some grip is that ignorant academics have to be protected from themselves. There’s another way: educate them (they are intelligent enough to get the message).

    Procedural law, and enforcement law, is still (inevitably, after all, this is Europe) a hotch-potch, and I’m glad that Boundy makes good use of that. So do I. The competition between jurisdictions in Europe, scrapping over the same substantive law, raises everybody’s standards.

  116. Folks,

    Face it, David Boundy speaks from experience and reality. Those who have crafted this so-called “patent law reform” do not. I’m going with experience and reality.

  117. Refinement — venture capitalists NEVER sign confidentiality agreements before hearing the first pitch. Once a funding deal is underway, yes. But at the point when the inventor is out shaking bushes to find money — the new bill puts the inventor at great risk of losing the patent entirely, and even greater risk of the immense cost of showing derivation.

    “Derivation” is one the very most expensive issues in all patent law to proove — and the bill thinks its a good idea to trigger 1000-30,000 derivation proceedings per year. Has anyone gathered data for a real estimate of how many, or evaluated or balanced the cost of these phenominally expensive proceedings against the savings? NO.

  118. Lionel –

    Re 5:47: Venture capitalists NEVER sign confidentiality agreements. Students and faculty do not sign confidentiality agreements – every univeristy invention is at risk.

    Re 6:04: read thru my posts above. Fully discussed.

    Also consider the aggrieved employee who posts an invention on an anonymous blog. I have heard (though I have not been able to confirm) that his has happened in other countries.

  119. David Boundy,

    Disclosures by the inventor within a year are OK. How does this eliminate the grace period for inventors to market their work? 102(f) will still be present.

  120. David Boundy,

    There are confidentiality agreements. I realize some large manufacturers/customers may not want to sign, but putting in a suitably short confidentiality period (3 years or less, should o it) will often help. I assume if the inventor is at the point of talking to VC’s the inventor would be able to file within three years.

  121. And yes, Max, I have an agenda. This bill is tremondously bad economics, bad policy.

    Call your senators, tell them that the “first inventor to file” provision is bad for startups, small companies, individual inventors, and university spin-offs. It should be pulled out of the bill, and replaced with a request to the Patent Office and Small Business Administration to study economic effects on small business formation.

    link to senate.gov

  122. Max

    Re 2:48: The EPC expressly remits almost all issues of validity and infringement to national law. Art (2), Art. 64(3). The “whole of substantive law” the same? Expressly not. EPO is only a procedural vehicle to individual national patents that have to be individually tested under each national law.

    Whenever real money is flowing in a deal where I am advising, and I need to KNOW the answer in two or more EP countries, I have to get opinions in each country. My company regularly takes advantage of differences among national law. Partial harmonization buys very little, and even the “increasingly close” harmonization among EP countries is the data point that proves my point.

    Re 2:52, Max makes my point perfectly. His factual disagreement is with the bill’s proponents, not with me.

    I absolutely agree with Max, that the kinds of “simultaneous independent invention” situations Max describes “happen all the time,” and will happen frequently under the new U.S. weak grace period. My best guess, extrapolating from European data, is 20-30%, selectively falling on small entities, university spin-offs, startups, and the like. Is it a nightmare? Well, it’s good for patent attorney incomes, because it forces applications to be filed that are not filed under today’s law. But for clients? An abandoned application is a wasted cost. The abandonment rate in Europe is far higher in Europe than the U.S., for exactly this reason. It’s a cost we avoid under current U.S. law, it’s a waste we will have often under the bill.

    Max’s point of disagreement is with proponents of the bill. They (not I) argue that the law will change outcome in only “.01 percent” of situtaions (according to Kappos’ blog). link to uspto.gov
    But with deft misdirection, proponents cite statistics only applicable where both file applications directed to the same invention, but don’t tell you that the bill bars patents in a far larger class of situations.

  123. And another thing. All those, including David Boundy, who suppose that contemporaneous independent invention of substantially the same subject matter is such a low probability that it can be ignored are due a rude awakening. Just look how often EPO prosecution hits an Article 54(3) novelty objection. Happens all the time, at least, it does in FtF country, because filing dates are all-important. A nightmare for US patent attorneys facing change, I agree. Is the EPC a nightmare for Applicants and Inventors? I think not.

  124. Despite David Boundy’s careful and cultured postings I have to take issue with him. i think he has an agenda. Perhaps I do too, but let the readers decide.

    Boundy says that patent law in individual countries in Europe is “quite similar”. It’s more than that. Read the EPC to find out what is common. The whole of substantive law. David laments that, from every patent attorney in Europe you approach, you get a different opinion, on infringement and validity. He’s right. But it’s just as true when those attorneys all come from the same European country as when they come from different European countries. Of course there are the famous cases where the outcome in the German litigation was the opposite of that in the parallel English litigation. Keep in mind that one country does discovery and cross-examination, the other not. What would any common law lawyer expect, under those conditions? But predictability of outcome? I think that by now is very good, in England and, increasingly in mainland Europe, “increasingly” being the key word.

  125. “This is my favorite anti-FTF argument yet.”

    Not an argument…just me complaining. Simple as that.

  126. “FTF sounds like that issue will be magnified exponentially (e.g., ruination of evenings, holidays, etc.).”

    This is my favorite anti-FTF argument yet. FTF is bad for America because it will be inconvenient for patent attorneys.

  127. Malcolm,

    Claim 1 is to a car. Claim 2 depends from claim 1 and adds a fender.

    The priority application discloses a car. The subsequent reference discloses a car.

    Claim 1 is patentable because the priority claim clearly is good.

    But, what about claim 2?

  128. Malcolm, I am sure you are familiar with In re Stempel, a CCPA case that can only be overturned by an en banc Fed. Cir. case or by the Supreme Court. The “basic concept” idea came from, I believe, a Fed. Cir. panel, but does not appear in Stempel.

    However, let’s go with the flow. If the claimed invention is to a car with a fender, the reference is to a car, and I show prior invention of a car, am I within confines of the same basic invention or not?

    Change the facts slightly. Let’s say the reference shows a fender. Could I not show prior invention of a fender? What is the “basic invention?”

    Stempel involved, IIRC, a genus, where a single prior species can anticipate the claim to the genus. However, the CCPA held that one can show prior invention of the species of the reference.

  129. It’s not an assumption, it’s experience with a number of international deals. I can’t opine on a non-U.S. patent without subjecting my client to exactly the kind of risk the client is paying me to attenuate. It’s also plenty of experience finding that a lawyer in one EPC member country will not opine on validity or infringement of a patent in another EPC member country. Prosecution, yes, but validity or infringement, no. A rough knowledge of German or U.K. law is pretty much useless when you’re advising a client on whether or not to invest — does your malpractice policy cover you when you practice outside your license?

    Partial harmonization doesn’t move any ball that matters more than a few inches.

  130. David, I think it’s not worth nitpicking this. Learning international patent law is more like learning a foreign language than moving a finger from ‘j’ to ‘h’ on a keyboard.

    Earlier I said the following: More harmonization equals less legal expertise required equals less money needed for lawyers and legal analysis.

    And you said the “argument” puzzled you, but as far as I can tell you aren’t puzzled by it all. You just believe that any reduction in money/time resulting from harmonization are insignificant and (I assume) therefore shouldn’t be used to justify harmonization.

    I remain sceptical of your position.

  131. Not all phenomena are analog, some are digital. As you move your finger left from the j key to the h key, you don’t get a progressive mixture or transition. Similarly, there’s no such thing as an intermediate or mixed jurisdiction that gives you expertise to opine on law where you’re not admitted.

    Just to take one example: U.S. claim construction rules are remarkably different than anywhere else in the world (so MaxDrei tells us), and that’s the single biggest issue in a patent opinion. This bill does absolutely nothing to harmonize that.

    If you need an opinion on a U.K. patent, you need to talk to a U.K. lawyer. You aren’t licensed to opine on a non-U.S. patent (I’m assuming you’re a U.S. lawyer), it’s malpractice to do so. Yes, a U.S. analysis gives the U.K. attorney a head start (I didn’t say no benefit at all), but this bill doesn’t make it a significantly bigger head start. At the end of the day, you still need a U.K. opinion, and that’s still going to cost almost identically the same.

  132. Ned: Thus, a provisional disclosing A is not good to eliminate a subsequent disclosure of A by another with respect to a claim to A + B.

    However, under the principles of In re Stempel, we can today swear behind the reference to show prior invention of A.

    Hmm. Does that alleged principle square with MPEP 715.02(1)?

    Applicant may overcome a 35 U.S.C. 103 rejection based on a combination of references by showing completion of the invention by applicant prior to the effective date of any of the references; applicant need not antedate the reference with the earliest filing date. However, as discussed above, applicant’s 37 CFR 1.131 affidavit must show possession of either the whole invention as claimed or something falling within the claim(s) prior to the effective date of the reference being antedated; it is not enough merely to show possession of what the reference happens to show if the reference does not teach the basic inventive concept.

  133. Boundy This argument has always puzzled me. You don’t get progressively more benefit as you incrementally harmonize

    Oh, please. Do you also believe that if you travel to a foreign country, you don’t get progressively more benefit as you learn a foreign language incrementally? Or is that also an “all or nothing” proposition?

  134. Bananas, you are way off base and woefully misguided about provisional applications. Today they are effective to antedate prior are with respect to claims in non provisional applications only to the extent the subject matter of the claims is fully supported under section 112, p. 1 in the provisional. If provisional does not have full written description support, or if the non provisional adds any subject matter to the claims, the provisional’s date cannot be used.

    Thus, a provisional disclosing A is not good to eliminate a subsequent disclosure of A by another with respect to a claim to A + B.

    However, under the principles of In re Stempel, we can today swear behind the reference to show prior invention of A. Under the new system as currently drafted, we cannot. This is going to catch a lot of people off guard.

    Which is why the new provisions about prior public disclosures of “subject matter” do not go far enough. If A were to be “publicly disclosed,” it would eliminate the A disclosure by another as prior art. It is absurd, therefor, that one does not have the same “grace period” with respect disclosure in prior patent applications.

    As an aside, the way the Paris Convention reads, one would assume that priority should work the same way as the new statute does with respect to public disclosures. But both the US and Europe both require full support for the claimed invention in the priority document. Thus if I file on A, disclose A, then claim A + B, my OWN public disclosure of A kills the claim to A + B. (With the caveat, that I can today show prior invention of A in the US.) This, I suggest, was not what was intended by the original drafters of the Paris convention.

  135. Malcom writes:

    > More harmonization equals less legal expertise required equals less
    > money needed for lawyers and legal analysis.

    This argument has always puzzled me. You don’t get progressively more benefit as you incrementally harmonize, it’s all or nothing (well, all or very very little). The reason a New York patent lawyer can analyze and opine on a California patent is because the patent law is identical. On the other hand, a New York lawyer simply is not licensed to opine on a California contract–even though the law is very similar, it’s not similar enough that the law and lawyers and analyses are fungible. Ya gotta send the contract to someone who knows.

    When I have advised a client where there’s a French, German and UK patent, even when the text is identical to the U.S. patent, I have to get an opinion from each country. Even though all three belong to the European convention, and the law is quite similar, the laws of validity and infringement are not identical. The U.K. attorney’s opinion simply doesn’t hold in Germany.

    I haven’t encountered a lawyer that does international deals that thinks that creating a new sui generis priority system, that harmonizes with no one (at least no one large), is going to save an amount of money that is significant compared to the incremental costs that this new hair-trigger grace period creates.

  136. In fact, I’ve advocated a “moratorium” on such statutes so the USPTO won’t be burdened with additional procedures it can’t deal with right now.

    If, and it’s a pretty big “if”, the PTO is about to embark on a large-scale hiring and training binge, isn’t it better to change the law before that than after it?

  137. “Did you expect the statute to address any of that?”

    IANAE,

    That’s exactly my point: these statutes don’t address the real issues in the PTO, incluidng money, management and training issues. Believe me, I’m sympathetic to how the Dudas regime mismanaged the USPTO, and used “smoke and mirrors” to make it look like they were doing something productive. In fact, I’ve advocated a “moratorium” on such statutes so the USPTO won’t be burdened with additional procedures it can’t deal with right now.

  138. The draft statute does not operate this way mainly because prior disclosure in a patent application, provisional or not, is not a “public disclosure.”

    You could always go ahead and publicly disclose your provisional.

  139. It might also be said that harmonization could have a freezing effect upon innovative efforts here in the US.

    Might the reason for that belief also be said? Because right now it doesn’t sound any more credible than the opposite of that statement, which might just as easily be said.

  140. Paul, see the parallel thread on “first to disclose” for actual language, but generally if the inventor makes a prior disclosure, publicly or in any patent application (provisional or not) to which priority is claimed, of subject matter that is the same as that of the subsequent disclosure by another (by any means, including in another patent application), and the other disclosure is not earlier than one year from your effective filing date (under currently law, that would make it a statutory bar), it should not be prior art.

    The draft statute does not operate this way mainly because prior disclosure in a patent application, provisional or not, is not a “public disclosure.”

  141. So Malcolm, we meet once again… I might have to take you to task for a few of the remarks that you made. It might also be said that harmonization could have a freezing effect upon innovative efforts here in the US. I very much disagree with your last statement, as nearly every extra value I have found in my efforts has been the result of being creative and/or inventive, when needs be. Probably somewhat different than your at times somewhat Ivory Tower sort of remarks. I sometimes can’t help but wonder why you seem to be spending apparently several hours a day writing your various missives to this very august venue.

    Perry Mason

    More harmonization equals less legal expertise required equals less money needed for lawyers and legal analysis.

    it’s not what we need to …to benefit American business, especially American small business.

    Patents are completely irrelevant to the vast majority of small businesses.

    Posted by: Malcolm Mooney | Mar 09, 2010 at 05:01 PM

  142. “If patents are so important to these companies, maybe they should spend less time meticulously planning the public disclosure of all their technology and more time actually attempting to get patents.”

    I’m sorry, I don’t think this is decipherable…

  143. FTF just might make being a patent practitioner truly painful. I already have too many clients wanting applications filed at the last minute because of trade shows, etc.

    If patents are so important to these companies, maybe they should spend less time meticulously planning the public disclosure of all their technology and more time actually attempting to get patents.

  144. EG: What is driving this so-called “patent law reform” are … large corporations in the computer/IT sector that could care less if the U.S. patent system benefits American business

    You are alleging that foreign-owned tech companies are driving US patent reform?

    This so-called “patent law reform” may look glitzy because it’s different (and allegedly harmonizes us with the ROW, as if that was a good idea),

    More harmonization equals less legal expertise required equals less money needed for lawyers and legal analysis.

    it’s not what we need to …to benefit American business, especially American small business.

    Patents are completely irrelevant to the vast majority of small businesses.

  145. FTF just might make being a patent practitioner truly painful. I already have too many clients wanting applications filed at the last minute because of trade shows, etc.

    FTF sounds like that issue will be magnified exponentially (e.g., ruination of evenings, holidays, etc.).

  146. For one thing, real reform would involve addressing directly what ails the USPTO in carrying out reasonably prompt and quality examination. Nothing in this current version of so-called “patent law reform” directly addresses any of that.

    Did you expect the statute to address any of that? Every complaint people have about the PTO seems to be about its internal procedures. The PTO needs money (among other things) to fix those problems, and the statute gives them that at least.

    (and allegedly harmonizes us with the ROW, as if that was a good idea)

    Is it a bad idea?

  147. “What I find galling in the Senate rationale document is that a couple Senate staffers state that they know better how to spend a startup’s money than the company management does.”

    David,

    Never were truer words said. What is driving this so-called “patent law reform” are the federal government and large corporations in the computer/IT sector that could care less if the U.S. patent system benefits American business, especially smaller American businesses which is where job creation now occurs.

    The $64k question is whether this so called “patent law reform” benefits American business, especially smaller American businesses. My answer to that has been an emphatic NO in the past, and nothing in this current version changes that view.

    For one thing, real reform would involve addressing directly what ails the USPTO in carrying out reasonably prompt and quality examination. Nothing in this current version of so-called “patent law reform” directly addresses any of that. This so-called “patent law reform” may look glitzy because it’s different (and allegedly harmonizes us with the ROW, as if that was a good idea), but it’s not what we need to make the U.S. patent system work better, especially in the USPTO, and to benefit American business, especially American small business.

  148. I tend to agree with Paul F. Morgan that many very important points have been investigated here, and thankfully in a very civilized manner. As David B. so aptly points out, if the FTF provision is allowed to pass, the one year grace period for US applicants will essentially be instantly Gone, probably forever, at least as far as the rest of the world is concerned. There is a place for provisional patent applications, mostly here in the US in my opinion, as the PCT application will not *see* the invention at all unless at least one claim is submitted. (FESTO decision circa 1989 or so as I seem to recall)

    Perry Mason

  149. Refreshingly good dialogues above.

    A personal idea to toss around:
    If this (b)(1)(B) were to be clairified/amended to equate the contents of the inventor’s provisional application [whether enabling or not] with the (b)(1)(B)[grace-saving] “disclosure” of the inventors prior to disclosures of others, would that address the above concerns?

  150. 6: A useful question. The “wait and see” option isn’t problematic (at least not very often, and never in my experience) on these grounds. Either the inventor already has a reduction to practice, in which case diligence doesn’t matter, or else the inventor is still making diligent efforts to get there.

    The risk of “wait and see” is that someone else did something early so that your § 102(b) year is shorter than you thought it was (measured from the disclosure of the third party, not from your own disclosure). That risk is low enough that it often makes business sense to run the risk (rather than face the certainty of cash starvation). Also, in this case, you have a year to find out about the third party’s disclosure, so it’s a risk with an acceptable contingency plan for most businesses.

    What’s totally perverse about the new § 102 weak grace period is that it never gives you time to duck a punch–even if you are lucky enough to find out about a disclosure on the day it’s made, you have only until midnight to file. Thus, as a practical matter, every inventor must assume there is no grace period, ever. Great for the patent attorneys, a huge cash drain on a startup business.

    Everybody makes better business decisions with time and information. That’s why we have the grace period! What I find galling in the Senate rationale document is that a couple Senate staffers state that they know better how to spend a startup’s money than the company management does, so they think its great to force an expensive decision on a cash-starved startup!

    The Senate rationale document, and Director Kappos’ two postings on the topic, both discuss a false issue, the strawman of two near-simultaneous filers. I agree, that’s too remote a possibility to worry about. Every business faces much larger risks, and this one just doesn’t get on the radar. The issues that do matter at a business-relevant level, and that proponents refuse to address are (a) disclosures by others who don’t intend to file or commercialize, and (b) disclosures by those who derived but don’t include an attribution.

  151. Ok…I believe I understand the intent of the proposed section 102, but I still don’t feel it’s worded well enough to stick to that intent.

    I agree that the “such disclosure” cannot be more than a year before the filing date, but there doesn’t seem to be a time limit for “the subject matter disclosed ha[ving]…been publicly disclosed”. In fact, if the “such disclosure” is exactly one year prior to the actual filing date, the only way for this section to be valid is to have the “publicly disclosed” action be more than a year from the filing date.

    If this passes, I can’t wait to see what kind of hell breaks loose around the PTO. I hope OPLA is ready for a few extra calls.

  152. “provisionals aren’t free”

    True, but shouldn’t your “I decided not to file” option already get knocked out by failure to show diligence?

    Even if I am on the fence about the substance of this amendment I like the wording. Furthermore, I think (j) should state that a claimed invention is an invention claimed as set forth under 112 just to be clear.

  153. I think it goes to specialization too. I see inventors that are bound and determined to figure out how to write a patent application. Some of them have written 10 or even 30 patent applications. But, it is not a good use of their time and a good attorney will almost always write better claims than they could. Invariably, these type of inventors are the most trouble. They end up costing me 4-12 hours of extra effort explaining things to them. And actually, I will say that I think that thier effort often results in a poorer patent application for the following reason. I often am capped at what I can charge whether explicitly or by the inventor’s expectation. When they cost time by forcing me to explain why I did things, then it cuts into my time to improve the application. They also often start at a place in the conceptualization of the invention that just isn’t the best way to claim it. It can take hours to explain to them why their claims or their conceptualization of the invention is wrong.

    On the other hand, I have written applications for some of the smartest people in the world that don’t get their fingers into it and the application is almost always better.

    The inventors should spend their time on inventing. And figuring out who to hire.

  154. Bananas,

    your comment at 01:28 was not up when I posted at 01:35. however, you state “If your disclosure isn’t at least potentially enabling then publishing it won’t impact patentability. If it is at least potentially enabling, you can use it for priority.”

    this is not correct as patentability impact is not limited to mere enabling, and potentially enabling is not enough for priority – the spot saver must enable and not just potentially enable.

    it seems that you should have stopped your backpedaling at “Ideally, you draft a full application and file it as a provisional,” rather than continue to give bad advice with “but you can be much more creative with the provisional system and still secure coverage.”

    coverage by quick and dirty filing is haphazard at best – and to steal a quote the recent Davis v. Brouse McDowell case, “This is certainly not standard or adequate patent attorney representation”

  155. David said:
    >>The view of so many commenters above (and >>Director Kappos in his “Inventors Eye” letter) >>that inventors’ time should be valued at zero >>is very troubling to me.

    I’ve worked for at least one large corporation that highly valued inventor time. They didn’t want us to spend more than a few hours of total time with the inventor. It really is disruptive to their work to have to deal with patent attorneys.

  156. My read of this is that they left out international applications in new 102(a)(2) which means that such applications are not subject to the exception in new 102(b)(2). Thus it seems that international applications (such as PCT publications) filed by the same company will now be prior art to the company’s subsequent applications (this is addressed in current 103(c)(1). If this statute is applied retroactively, it could really screw over some applicants.

  157. Correct. Thus “such disclosures” means the disclosure of a person other than yourself. The statute doesn’t say anything about a time limit as to when you should have made your prior disclosure.

    No, “such disclosures” means any disclosure made 1 year or less before the filing. “Such disclosure” is only a bar if made by someone else AND if made before you made a disclosure yourself. However, if your disclosure was made more than a year before your filing, then your disclosure is not a “such disclosure”, and doesn’t qualify for an exception to 102(a).

    broje:So, in effect, part b says that the public disclosure by another less than one year before filing is not prior art if the inventor disclosed it first less than one year before filing.
    AF: Where are you reading this in?

    I think that’s a correct summary of the combined effect of the proposed 102(a) and (b). If you and a competitor have each disclosed it before the filing date, you have to evaluate each disclosure separately under 102(b) to determine whether either is a bar. If your disclosure is more than a year old, it doesn’t qualify as an exception.

    But I think we’ve converged to the same place.

  158. Boundy In nearly 20 years of practice, I’ve had ONE inventor who had such a document. In every other case, I’ve had to take half a day or more of the inventor’s time, plus charge for my time (at least a day, usually more)

    I guess it depends on who your clients are. I’ve had several documents given to me and filed with less than two or three hours of attorney time (almost all of it spent drafting claims and pasting in boilerplate) in just the past few months. Basically what is happening is that the research scientists are summarizing their data and preparing presentations right up until the day before they are presented, after which they are handed to me to file as a precautionary measure, should a viewer of the presentation attempt to do “the unthinkable.”

    It’s not my favorite way to practice, by a long shot, but it’s not unusual by any means.

  159. Bananas wrote: If your disclosure isn’t at least potentially enabling then publishing it won’t impact patentability. If it is at least potentially enabling, you can use it for priority.

    Wouldn’t it affect foreign patentability — where your own disclosure can be used as a primary reference for obviousness and gaps in enablement/written description (which would defeat your priority claim) could be filled in by a secondary reference?

    Wouldn’t it likewise also affect US patentability in the same way so that you’d have to go through the derivation proceeding for “every single news story, anonymous blog, academic conference” as noted by Mr. Boundy above?

    Bananas indeed!

  160. Thank you, Mr. Boundy, for your wisdom on this issue.

    As to the “cheap provisional” notion, I have been confronted with an inventor’s paper, about to be published in a day or so, and a request that I do what I can to preserve the inventor’s patent rights. In such an instance, I have filed the paper as an initial provisional application, on the theory that if the paper is enabling, then the provisional is also enabling, and if the paper is not enabling, then it is not effective prior art anyway. So, I think as an emergency stopgap, it can be a useful strategy. BUT, on such occasions, we have immediately begun preparing a more typical and thorough follow-up application. You shouldn’t sit on the “cheap provisional” for a year and assume you are protected.

  161. David Boundy writes “The view of so many commenters above (and Director Kappos in his “Inventors Eye” letter) that inventors’ time should be valued at zero is very troubling to me.”

    The PTO is not hiring the inventor to get a patent. The inventor is the one who is demanding public resources from the PTO to examine the patent application. If the inventor does not care about the invention enough to devote time to providing an adequate disclosure, who else is going to care?

  162. bananas writes:

    > Cheap provisional:
    > Step 1: prepare whatever document you were going to
    > publish/share anyway
    > Step 2: File document from step 1 as a provisional

    If the document of step 1 exists, and it is good enough to satisfy s 112 p 1, then yes, that’s a great solution.

    In nearly 20 years of practice, I’ve had ONE inventor who had such a document. In every other case, I’ve had to take half a day or more of the inventor’s time, plus charge for my time (at least a day, usually more) to whip it into provisionable shape. Provisionals ain’t a cheap solution.

    The view of so many commenters above (and Director Kappos in his “Inventors Eye” letter) that inventors’ time should be valued at zero is very troubling to me.

  163. the spot in line is only saved as to the degree that the later application and the spot saver can be correlated and the spot saver section syou need to depend on meet all of the requirements for patentability.

    Clearly. Have I said anything to the contrary?

    more than as just visiting points out that this is a waste of money, wasting the spot in line can land you in malpractice land, especially if something in the intervening time frame kills your client’s patent.

    The choice here is between an enabling disclosure filed in a provisional and subsequently published and an enabling disclosure published without having filed a provisional. As I said before, preparing a non-provisional and filing it as a provisional before public disclosure is preferred. Disclosing without filing anything just kills your international protection without benefit in the U.S.

  164. IANAE: Your prior disclosure more than one year before your filing date would dismiss your competitor’s disclosure as prior art under (B), but it would itself be prior art because it does not benefit from the (b)(1) exception as a “disclosure made 1 year or less before the effective filing date”.

    This is a much more eloquent way of saying what I was thinking. Thank you.

  165. “IF it was also made before 1 year of filling” should read “IF it was also made within* 1 year of filling”

  166. Hobbes:Your logic is failing you at the “such disclosure” part. “Such disclosure” (in 102(b)(1)(B)) refers only to the disclosures in 102(b)(1), i.e., disclosures made less than 1 year before your filing date.

    Correct. Thus “such disclosures” means the disclosure of a person other than yourself. The statute doesn’t say anything about a time limit as to when you should have made your prior disclosure.

    broje:So, in effect, part b says that the public disclosure by another less than one year before filing is not prior art if the inventor disclosed it first less than one year before filing.

    Where are you reading this in?

    After further consideration, I think the way to look at it is: if you make a statement before another’s statement and “another’s statement” is before 1 year of filing, another’s statement is not prior art and neither is your statement IF it was also made before 1 year of filling. If however it was made more than 1 year from filing, your “another’s statement is still not prior art” but yours is.

  167. ******
    Now, the way I’m reading it, as long as you disclosed it BEFORE the competitor made his “less than 1 year from filing sale/disclosure”, you would not be barred. This includes publications that you made more than 1 year from filing.
    ******

    No. It says the disclosure made by the third party shall not be prior art if the inventor already disclosed it. It does not say that a disclosure by the inventor more than one year before the filing is not prior art. Just read it again.

  168. Now, the way I’m reading it, as long as you disclosed it BEFORE the competitor made his “less than 1 year from filing sale/disclosure”, you would not be barred. This includes publications that you made more than 1 year from filing.

    Your prior disclosure more than one year before your filing date would dismiss your competitor’s disclosure as prior art under (B), but it would itself be prior art because it does not benefit from the (b)(1) exception as a “disclosure made 1 year or less before the effective filing date”.

  169. I’m going to piggy back on pickles’ comment about 102(b)(1)(B) but take a slightly different interpretation.

    “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—
    […]
    (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.

    Doesn’t this abolish the current 102(b) rule of 1 year bar on publications/presentations ?
    The scenario I’m envisioning is competitor A offers the invention for sale/discloses the invention LESS THAN 1 YEAR before you file the application but you disclosed the invention BEFORE his disclosure. Now, the way I’m reading it, as long as you disclosed it BEFORE the competitor made his “less than 1 year from filing sale/disclosure”, you would not be barred. This includes publications that you made more than 1 year from filing.
    So the same publications that you make more than a year ago that would bar you under 102(b) under current law, would no longer bar you if you are able to wait till someone else makes a similar disclosure. Of course, in the real world, I doubt you’d want to wait too long for fear of other non-excludable prior art creeping in.

  170. “but if you’re tight on money a cheap provisional saves your spot in line.”

    this is exceedingly bad advice.

    the spot in line is only saved as to the degree that the later application and the spot saver can be correlated and the spot saver section syou need to depend on meet all of the requirements for patentability.

    more than as just visiting points out that this is a waste of money, wasting the spot in line can land you in malpractice land, especially if something in the intervening time frame kills your client’s patent.

  171. There’s no reason to make a disclosure that could potentially bar patentability without filing a provisional.

    Where does it say in the proposed statute that on-sale events have to be enabling now?

    I note also that it’s not so practical to box up your prototype and send it to the PTO as a provisional application.

  172. TINLA I don’t understand. Has somebody informed you that, under Paris, a priority document that lacks claims is of no effect? In that case, you have been misinformed.

    Perhaps your informer is thinking about the requirement in Paris that the priority application must be for the “same” invention to be valid as a giver of priority rights? But you don’t need claims to meet that requirement. A simple statement of invention, commensurate with the eventual claim, will do just as well.

  173. A provisional is no good unless it is enabling and meets written description as described under 112/p1 regarding the claims you file. If your power point slides or article does not present this level of detail, filing it as a provisional simply wastes money.

    If your disclosure isn’t at least potentially enabling then publishing it won’t impact patentability. If it is at least potentially enabling, you can use it for priority.

    Plainly one shouldn’t file a provisional for every email or press release, but should for any paper or presentation detailing the working of some aspect of one’s invention.

    There’s no reason to make a disclosure that could potentially bar patentability without filing a provisional. Ideally, you draft a full application and file it as a provisional, but you can be much more creative with the provisional system and still secure coverage.

  174. To whatever extent the “press release” is not enabling, it is not going to be prior art against your later filed claims. But, if the “press release” is actually enabling, but the provisional lacks claims, I am informed that a PCT claim of priority from it may be defective, rendering the press release enabled prior art against your foreign national stage apps. Am I misinformed?

  175. “but if you’re tight on money a cheap provisional saves your spot in line.”

    A provisional is no good unless it is enabling and meets written description as described under 112/p1 regarding the claims you file. If your power point slides or article does not present this level of detail, filing it as a provisional simply wastes money.

  176. pickles, the way I read that is that the public disclosure has a 1 year grace period as long as either (a) the inventor was the one who disclosed it; or (b) the inventor disclosed it before the non-inventor disclosed it.

    It does not say that a disclosure by the inventor more than one year before the filing does not count as prior art.

    So, in effect, part b says that the public disclosure by another less than one year before filing is not prior art if the inventor disclosed it first less than one year before filing.

    Does that make sense?

  177. Where is my logic failing me? How is this not just a gaping loophole that says as long as you disclose your invention twice (once within a year of filing), that none of the disclosures can be used as prior art?

    Your logic is failing you at the “such disclosure” part. “Such disclosure” (in 102(b)(1)(B)) refers only to the disclosures in 102(b)(1), i.e., disclosures made less than 1 year before your filing date.

    If anybody (including you) discloses more than a year before your filing date, you lose. If not, but if someone else discloses before you either disclose or file, then you lose. Otherwise, you’re good.

  178. If David Boundy is right, then someone on Capitol Hill has been looking out for the interests of America’s patent prosecutors.

    Also, who on the Hill actually drafts this stuff? Staffers with no experience in patent practice? Lobbyists? The same sort of folks who drafted the PTO’s proposed rules package in 2007? Would it violate any laws of nature or Man to draft patent laws that are models of clarity instead of being so obscure and foggy that no one can ever be certain of what it is being said?

  179. Ok, Boundy is great at spreading FUD, but there is something he said that makes sense: “As drafted, this does far more than convert from first-to-invent to first-to-file.”

    Why make such substantive changes to section 102? Who wrote these changes? And what is the reason to change the language so drastically?

    A specific problem I’m having is with section 102(b)(1)(B).

    From my dissection, you’re entitled to a patent, unless you (et al.) disclosed the invention more than 1 year before the EFD (sounds like good old 102(b))… EXCEPT that “a disclosure…shall not be prior art…if the subject matter disclosed had, before such disclosure, been publicly disclosed…” (I feel an aneurysm brewing).

    I’m certainly no lawyer, but it appears that as long as you “publicly disclosed” your invention before you “disclosed the invention”, “such disclosure” cannot be used as prior art.

    Where is my logic failing me? How is this not just a gaping loophole that says as long as you disclose your invention twice (once within a year of filing), that none of the disclosures can be used as prior art?

  180. Thanks Mr Boundy. You build a lot on that 50/20 statistic. You know what, I don’t accept that the 50% figure reveals anything wrong with the European system. I imagine an enormous amount of commonality between the text of the abandoned cases and those of the not abandoned cases. Thus, I file a UK provisional with 10 pages 10 drawings and 10 claims. Six months later I add a second embodiment. Six months after that I file PCT with two priorities, three embodiments and 15 claims, 15 pages and 15 drawing figures, 10 of which go back to a priority date 12 months ago.

    Rate of abandonment: 67% .

    Number of filings searched and examined: just the one PCT.

    Efficiency 100%.

    Legal certainty 100%

    Disclosure to the public after 18 months 100%

    Ability to deliver a clearance opinion after 18 months, 100%.

    So, what’s such a disaster about your 50% figure?

  181. Boundy: provisionals aren’t free. They take inventor time and attorney time. Today lots of provisionals don’t get filed, because of the one-year grace period, and the company conserves the resources to survive to the end of the grace period year, and then files.

    Cheap provisional:
    Step 1: prepare whatever document you were going to publish/share anyway
    Step 2: File document from step 1 as a provisional

    You can prepare a provisional as though it were a full application, but if you’re tight on money a cheap provisional saves your spot in line.

  182. Let me change that — not “abandonment rate in Europe of around 50%” to just “much higher abandonment rate.” I’m working from memory, and I don’t want to mislead.

  183. Malcolm: provisionals aren’t free. They take inventor time and attorney time. Today lots of provisionals don’t get filed, because of the one-year grace period, and the company conserves the resources to survive to the end of the grace period year, and then files.

    Max: Yes, that is exactly the point, the behavior in rest of world is quite different. We see it in abandonment rate in Europe of around 50%, and in the U.S. under 20%.

    “Option” not to file means exactly that – an option. Note that if one exercises the option to not file, one does not procure the 20 year right – and that’s the right result, because that invention was not worthwhile. Under current U.S. law, the risk of waiting is low enough (3% range) that for businesses facing the choice of making payroll or filing a patent application, the company can make payroll, and still be around at the end of the year to make a filing decision then.

  184. Boundy: It means that they’re in a “use it or lose it” world. No talking to venture capitalists, no testing – if your invention gets out there, and you can’t trace every single news story, anonymous blog, academic conference, etc. back to yourself, you lose.

    These people should be filing provisionals anyway.

  185. Oh now you’ve really upset me Mr Boundy. You mean that, up till now, nobody in the USA gave to the value of patent rights everywhere in the world except for the USA a value above zero? I write this because, if they had done, they would already have adapted their behaviour to a FtF world. I suspect that it is “only” the non-corporate filers who might have to modify their behaviour.

    Now I’ll sit back and let you folks tell me how the interests of corporate filers are of de minimis value, compared with the needs of academics and denizens of garages all over America.

    Having said that, I do agree that derivation proceedings are the biggest nightmare of all.

    Not unlike interference proceedings I suppose, except worse, in terms of what has to be proved.

    The sentence I like most is the one about “the option not to file” being lost. I’m intrigued by the idea of a patent system that includes an option not to file and yet, later, still procure a 20 year monopoly.

  186. Boundy What patent applications get filed under the new bill that aren’t filed today? The turkeys. The inventions that don’t survive one year of review. The ones that can’t mature into a valuable invention because, after a year, the inventor found there was nothing there.

    In other words, your typical provisional application. Surely you realize that these sorts of inventions are filed routinely under the present system.

    This provision is a disaster, because everyone advocating it has assumed that applicants will continue to behave exactly as they do today,

    See above.

    The poor PTO is going to have to examine these 40,000 to 100,000 applications per year for a $250 or $500 filing fee

    But provisional applications aren’t examined.

  187. And now you see why the opposition to this has not materialized in proportion to its economic effect – it’s absolutely opaque.

    As drafted, this does far more than convert from first-to-invent to first-to-file. What you get instead is a grace period that is so weak that, in practical effect, it is no grace period at all.

    What does this mean to small companies that only want U.S. patents? It means that they’re in a “use it or lose it” world. No talking to venture capitalists, no testing – if your invention gets out there, and you can’t trace every single news story, anonymous blog, academic conference, etc. back to yourself, you lose. To avoid that untenable position, every applicant has to file on every invention. The option to not file is lost.

    What does that mean? Several tens of thousands of applications that will be filed that are not filed today — easily 10%, perhaps 30% growth in filings. What’s the cost in diversion of key staff from running the business to ginning up patent applications? What’s the cost in attorney time to make sure the disclosure meets 112 p 1? Easily hundreds of millions of dollars.

    What patent applications get filed under the new bill that aren’t filed today? The turkeys. The inventions that don’t survive one year of review. The ones that can’t mature into a valuable invention because, after a year, the inventor found there was nothing there.

    What happens to the Patnet Office? The poor PTO is going to have to examine these 40,000 to 100,000 applications per year for a $250 or $500 filing fee, then the application goes abandoned with no issue or maintenance fee. You think you see a bad backlog today…

    This provision is a disaster, because everyone advocating it has assumed that applicants will continue to behave exactly as they do today, with no adaptive response. How naive.

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