Representatives Lamar Smith, Bob Goodlatte, and Darrell Issa have introduced their version of the America Invents Act (AIA) to the House of Representatives. H.R. 1249. [AIA.pdf] The AIA closely tracks the Senate’s bill on comprehensive patent reform (S. 23) that was passed in the Senate earlier this year on a 95-5 vote. Parallel changes include a switch to a first-to-file system (with the retention of a limited one-year grace period); establishment of a modified inter partes reexamination and post grant opposition system; providing USPTO with fee-setting authority; neutering of the false marking provision; allowing pre-issuance submissions by third-parties; creating a supplemental examination system to correct inequitable conduct; and elimination of best mode failure as an invalidity defense.
The statute continues to include a substantial error in its codification of the grace period. Namely, the grace period only applies to “disclosures” and not to other commercialization activities such as sales and offers for sale. In addition, it is unclear whether the grace period would apply situations such as the original public use case of Pennock v. Dialogue, 27 U.S. 1, 23, 7 L. Ed. 327 (1829). In that case, the Supreme Court ruled that the inventor could not obtain a patent on its hose-making process because the inventor had sold the product (hoses) for several years before filing for patent protection.
Some key differences from the Senate version that will lead to substantial debate include:
- Details of the Post Grant Opposition Provisions…
- Prior User Rights: Whether “prior user rights” should be expanded to accompany the switch to a first-to-file regime. This issue arises when, for instance, a manufacturing company is using a particular process as a trade secret before another party invented and patented the process. Under our current first-to-invent regime if the prior-user was sued for infringement, the patent would likely be invalidated under Section 102(g). See Dunlop Holdings Ltd v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 1975). The invention-date priority contests of Section 102(g) are eliminated in a first-to-file system, raising the question of whether a non-patent-filing manufacturer should be given some prior user rights that would continue to allow these trade-secret uses. Currently, the patent statute also has a prior user right codified in Section 273. That section, however, is limited purely to business method patents. The proposed legislation would expand Section 273 to cover all patents.
- Special Business Method Proceedings, venue restrictions, interlocutory appeals, and attorney fee shifting.
- Automatic stay of litigation for inter partes reviews.
- Elimination of Tax Strategy patents (by considering the subject matter within the prior art).
- Codification of Knorr Bremse (failure to present advice of counsel cannot be used as evidence of willful infringement).
Read the Bill: File Attachment: 033011_America Invents Act.pdf (266 KB)