Sarnoff: Derivation and Prior Art Problems with the New Patent Act

In a new Patently-O Patent Law Journal essay, Professor Joshua Sarnoff (DePaul) highlights a set of important problems in the Leahy-Smith America Invents Act. The essay, titled Derivation and Prior Art Problems with the New Patent Act focuses primarily on the elimination of 35 U.S.C. § 102(f) and its implications regarding the patentability of material that was either wholly or partially derived from another source.

Professor Sarnoff writes: 

Legislation sometimes is enacted that obviously requires either immediate revision or creative administrative and judicial interpretation. The new Leahy-Smith America Invents Act's derivation and prior art provisions fall in that category. Whether or not the move from a first-to-invent to a first-inventor-to-file system is viewed as good policy and as authorized by the Constitution, the particular changes made to the prior art provisions may not prevent or invalidate patents on inventions derived from others, i.e., when the applicant has obtained knowledge of an invention from another, original inventor and then files for a patent on the same or a similar invention. In particular, obvious inventions made with unauthorized derived knowledge will now be patentable, given the elimination of prior art section § 102(f). Absent creative interpretations by the U.S. Patent and Trademark Office (PTO) and the courts, the new derivation proceedings will not prevent a first filer from obtaining a patent even if the first filer's invention is merely an obvious extension of information derived from another. Further, the new act adds a narrow and poorly understood category of prior art that may generate years of needless litigation to re-settle the currently well-understood boundaries of the public domain. I discuss these problems in detail below.

There is some hope that Congress and the Administration will take Professor Sarnoff's concerns to heart.

Read the article: Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Review 12 at /media/docs/2012/10/sarnoff.2011.derivation.pdf.

Prior Patently-O Patent Law Journal Articles include:

About Dennis Crouch

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

43 thoughts on “Sarnoff: Derivation and Prior Art Problems with the New Patent Act

  1. Pointless conspiracy theories?

    We know what they did to best mode. They did the same thing to inventorship.

    Regardless of conspiracy theory Malcolm, the intentional repeal of section 102(f) cannot be disregarded. It was not an oversight. Because of this deletion, proper inventorship is neither an issue of patentability or validity. That is what Congress said when the repealed 102 (f). This was an intentional act. It was not a mistake.

    The question is, given that the Constitution requires that patents be granted only to inventors, what does the intentional repeal of 102(f) mean? The answer to that question is obvious.

    Congress had better restore 102(f) pronto, or else.

  2. The conditions for invalidating a patent are set forth in section 282: in paragraph 2 (102 and 103) and paragraphs 4 (112 and 251). There are no other grounds except for the atextural Supreme Court exceptions relating to “laws of nature, natural phenomena, abstract ideas, lack of utility, and double patenting.” The statute has numerous “requirements.” These include, for example, the prohibition of adding new matter in section 132. But the mere addition of new matter in an application does not render the patent invalid under that section. Rather, the addition new matter must render invalid under section 112.

    Even when there is an apparent violation of section 101, a patent is not invalid unless it fails the substantive provisions of sections 102, 103, 112 or 251. For example, if a patent mixes two classes, it is indefinite under section 112.

    The Supreme Court “atextual” exceptions the patentabily may appear to have their authority in section 101. However, they long predate section 101 and were developed not based upon statutory law but based upon constitutional law. For example, I will discuss below double patenting.

    With regard to double patenting, the legal requirement is again atextual. The Supreme Court decided in Suffolk Co. v. Hayden, 70 US 315 (1866) that the second to issue of two patents claiming the same invention was void. The Supreme Court cited no statutory authority for this proposition. However the case was followed by subsequent Supreme Court cases, see, e.g., Miller v. Eagle Mfg. Co., 151 US 186 (1894).

    Miller, cited and discussed numbers of cases holding that a second patent to issue on the same invention was void. It ended with this rationale:

    “In Odiorne v. Amesbury Nail Factory, 2 Mason, 28, (1819) the reason for the rule since established by the above cited cases was stated to be that the power to create a monopoly is exhausted by the first patent; and for the further reason that a new and later patent for the same invention would operate to extend or prolong the monopoly beyond the period allowed by law.”

    One can see from this that the origin of double patenting law is the Constitution and not in the statutes.

    Now I would agree that the requirement that a patent issue to inventor is constitutional in nature. So it is perplexing why Congress removed section 102(f), thereby forcing the courts to rely on the Constitution rather than the statutes to avoid patents being issued to non inventors. It makes no sense.

  3. mmm, you do not seem to appreciate that 101 is not a “condition for patentability” and therefor provides no basis for invalidating a patent under Section 282.

    Inventorship, double patenting, and the like, were all substantively addressed by 102(f) and 102(g) and to some extent by 102(c); all of which have been repealed. Simply put, a patent is not invalid if it wrongly names any or all inventors.

    But, you ask, why are patents invalidated under 101 for lack of patentable subject matter? Well first of all, the atextual “laws of nature, natural phenomena, and abstract ideas” are just that: atextual. They long predated Section 101, and are rather constitutional in nature. Ditto utility.

    Section 101, among other sections, such as 132 (new matter), 111 (filing fee, etc.), set forth “requirements” for patentability. But failure to fulfill a requirement for patentability is not grounds for invalidating a patent. That is why Section 112 and 251 have to be separately addressed in 282 even though 282 states that an a patent is invalid for failure of any “condition” for patentability. The “conditions” are set forth only in Section 102 and 103. Period.

    Now, one might point out that inventorship is constitutional in nature. I agree with that. But where does that leave THIS statute? Is it unconstitutional or must we read 102(f) back into the statute because it is required to be there by the constitution?

    MMM, I ask you this simple question. If it is a constitutional requirement that an patents be granted only to inventors as opposed to pirates, for example, why did Congress delete 102(f), thereby removing the only substantive condition for patentability and invalidity related to inventorship?

  4. Malcolm, I for one did not realize the  problems caused by the deletion of 102(f) until a discussion I had with a David Jensen, IIRC his name, a few weeks back.  I too was incredulous that a patent could validly issue to a non inventor.  But now others have caught on as well.  Witness Sarnoff's article.

    I think the problem is serious enough to call for remedial legislation sooner rather than later.  We need to restore 102(f) to the statute.

    Regarding the mental steps, I am listening to you.  I always do, and I hope you listen to me as well.  Your gut instincts are usually spot on.  So don't think I have totally made up my mind on that issue.  

  5. Big, I hear you.  And thanks for the observations.  I think you are right that the "oath" requirement is not really a requirement at all.  It is another illusory requirement.  It appears to be there.  But the exception swallows the rule.

  6. Malcolm, I for one did not realize the  problems caused by the deletion of 102(f) until a discussion I had with a David Jensen, IIRC his name, a few weeks back.  I too was incredulous that a patent could validly issue to a non inventor.  But now others have caught on as well.  Witness Sarnoff's article.

    I think the problem is serious enough to call for remedial legislation sooner rather than later.  We need to restore 102(f) to the statute.

    Regarding the mental steps, I am listening to you.  I always do, and I hope you listen to me as well.  Your gut instincts are usually spot on.  So don't think I have totally made up my mind on that issue.
     

  7. mmm, we agree that a patent must only be validly granted to an inventor.  But the repeal of 102(f) undermines the constitutionality of the entire Act as it permits the impermissible.  It authorizes valid patents to issue to non inventors.  

    We have no recourse, I believe, but to fix this by putting 102(f) back into the statute.

  8. I recommend reading the annotated code surrounding Section 256. This section is not meant as a catch-all to inventors/non-inventors. For example, see Koehring Co. v E.D. Etnyre & Co. 254 F.Supp. 334.

  9. Ned,

    You may not even reach whether or not an actual inventor is involved, because the “out” of a corporation running with an application without a true inventor’s declaration is a loophole that swallows the discussion that you and MM are having. As you indicate, will the Big Corp fall guy-flunky really say anything against Big Corp? The obivous answer is “No, of course not.”

    It. Just. Won’t. Matter. Big Corp will have a valid patent and the inventor question will not reach.

    Don’t forget – the “without deceptive intent” has been eradicated from the law. – WHY?

  10. Now why was that? Was it because they didn’t think the deletion important? I doubt that sincerely. I think rather, they did not want to call attention to the obvious constitutional and other difficulties its deletion causes.

    Or they simply believed that whatever protections 102(f) provided to inventors was replaced by one (or more) of the other provisions of the act (e.g., the references to “obtained directly or indirectly”) and/or rendered moot by the other changes discussed in the article.

    Honestly, Ned, I can follow the argument about how the deletion of 102(f) might present an issue if an infringer/deriver wanted to press it but it’s not exactly the cut and dried “pirate giveaway” that you suggest it is. What’s especially ironic is how you and some other folks jump up and down about this “obviously” and allegedly disastrous flaw in the law that has not yet been enacted, but simultaneously have extreme difficulty recognizing ten-times-more-straightforward 101 issues in claims THAT HAVE ALREADY BEEN USED TO SUE PEOPLE WHO HAVE DONE NOTHING NEW EXCEPT FOR LOOKING AT THEIR OWN DATA. W t f is up with that?

  11. Ned: Malcolm, no doubt the drafters assumed that 102(f) was still present in the statute when they drafted 256. Perhaps it was at the time.

    The assumption seems to be that 102(f) is essential for invalidating an patent naming the wrong inventor(s). Is there some clear case law stating that 102(f) is the sole basis for such a step?

    However, Section 256 does not provide grounds for holding a patent invalid if the named inventor did not invent.

    It seems like it does.

    “The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section.”

    It doesn’t seem like a very big leap in reason to re-write this as:

    “If the error of omitting inventors can not be corrected as provided in this section, the error of omitting inventors shall invalidate the patent.”

  12. Ned – Having an Inventor is a Constitutional requirement and Section 101 certainly lays the Constitutional groundwork for patentability.

    So, I don’t see what you’re reading into the Sec. 282 that doesn’t make having (1) the inventor and (2) patentable subject matter elements of patentability.

    Nevertheless, my point was merely that this seems to be the most obvious answer to this AIA allows corporations to steal patents from inventors thing and it’s not really addressed in the above article.

  13. Well, Malcolm, I think that is why the drafters repealed 102(f).  They knew what it would mean, but kept silent.

    I just saw a description of the new 102 from the largest DC patent firm.  It listed every change in 102 but one and described their effects.  Guess which provision they did not discuss.

    Yes, you guessed it.

    102(f).

    Now why was that?  Was it because they didn't think the deletion important?  I doubt that sincerely.  I think rather, they did not want to call attention to the obvious constitutional and  other difficulties its deletion causes.

  14. Malcolm, no doubt the drafters assumed that 102(f) was still present in the statute when they drafted 256.   Perhaps it was at the time. However, Section 256 does not provide grounds for holding a patent invalid if the named inventor did not invent.  That grounds must be found elsewhere.  It was in 102(f), but 102(f) is now repealed.

    Everyone seems to assume that 102(f) is still present.  But it is not present.  If that was an oversight, let's fix it now, before the statute becomes effective.

  15. Removing 102(f) eliminates inventorship from US patent law. We now have “applicants,” just as most of the ROW.

    If only that were true, Ned! The case law regarding inventorship in the US is a sad joke, and I’m quite sure it always will be. I’d love for the US to move to ROW law in that regard. My fantasy.

  16. Section 256:

    The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.

    Section 256 appears to state that a patent listing erroneous inventors is invalid if the error is not corrected.

  17. mmm, you do not seem to appreciate that 101 is not a “condition for patentability” and therefor provides no basis for invalidating a patent under Section 282.

    Inventorship, double patenting, and the like, were all substantively addressed by 102(f) and 102(g) and to some extent by 102(c); all of which have been repealed. Simply put, a patent is not invalid if it wrongly names any or all inventors.

    But, you ask, why are patents invalidated under 101 for lack of patentable subject matter? Well first of all, the atextual “laws of nature, natural phenomena, and abstract ideas” are just that: atextual. They long predated Section 101, and are rather constitutional in nature. Ditto utility.

    Section 101, among other sections, such as 132 (new matter), 111 (filing fee, etc.), set forth “requirements” for patentability. But failure to fulfill a requirement for patentability is not grounds for invalidating a patent. That is why Section 112 and 251 have to be separately addressed in 282 even though 282 states that an a patent is invalid for failure of any “condition” for patentability. The conditions are set forth only in Section 102 and 103. Period.

    Now, one might point out that inventorship is constitutional in nature. I agree with that. But where does that leave THIS statute? Is it unconstitutional or must we read 102(f) back into the statute because it is required to be there by the constitution??

  18. invariably use asinine sockpuppet names?

    LOLZ, as opposed to asinine legal arguments or otherwise vacuous comments…

    Oh wait – that’s been cornered by MM.

    Don’t you have better threads to troll MM?

  19. Big Happy, “Inventors” refusing to sign you say? Why do they have to be inventors. They could be anybody management picks as the fall guy. He could even be a fictitious person, for all I know. Completely whole cloth and made up. Since inventorship will never be investigated, why not go whole hog and just identify Joe Blow on every patent application as the non signing inventor. Who cares?

    Removing 102(f) eliminates inventorship from US patent law. We now have “applicants,” just as most of the ROW.

    What a joke. First-“inventor”-to-file? Give me a break and sell you Kool Aid elsewhere.

  20. Why is it that, except for Ned, the commenter(s) who is/are shxttxng their pants over the AIA invariably use asinine sockpuppet names?

  21. The new law has green-lighted an easy way for Big Corp to steamroll through anything that the Big Corp thinks it should have a patent for

    Sure, as long as BigCo thinks its patent is novel and non-obvious, and it thinks it has a valid assignment from the applicant it thinks had a right to sell in the first place.

    Or are we perhaps missing the “not eligible” point here?

  22. Thus, you’re not eligible for a patent unless you are the one who does the inventing.

    As mentioned above, mmm, there is an easy and effective away around the 101 section – the Corporation can now prosecute applications and receive patents when the “inventor” refuses to sign a declaration.

    All the corporation has to do is say, with no penalty, that it acted in “good faith” to the best of its belief that it thought that the listed inventor was the actual inventor. There is nothing more required than that. It simply does not matter why an applicant would refuse to sign (like, the applicant knowing that he was not the true inventor). Of course, Big Corp knows better than the silly little inventor. That new tech must have been invented by an employee of Big Crop and of course, Big Corp owns that invention. Now run along.

    The new law has green-lighted an easy way for Big Corp to steamroll through anything that the Big Corp thinks it should have a patent for (that “thinks” is accompanied by a big ‘ol “wink wink nudge nudge”).

  23. Because I’ve read so many of these horrors of the AIA articles, I only scrolled through this one looking for the obvious problem. The AIA retained section 101 which says, “whoever invents…” Thus, you’re not eligible for a patent unless you are the one who does the inventing.

    Now I agree that you could have “derived” some parts of an invention and then made “obvious” or tangential additions to the invention thereby putting yourself into the “inventor” box, but avoiding invalidity under 102/103 since there’s no prior disclosure. But the resolution of that is clearly within in the hands of the first inventor. And, it does not (or should not) deprive the first inventor of his or her right to make his or her first invention (w/o the additional limitations added by “deriver”).

  24. And just let me add this. Because there no longer is any effective remedy against piracy, piracy has been legally authorized by Congress. Piracy will be the watchword of the future unless something is done.

    Anyone ever heard of industrial espionage?

    No?

    What about the common practice of vendor/vendees filing on inventions or obvious variations of they learned from the other party. This is now somewhat commonplace; but it is now authorized by Congress. Who cares the pirate did not invent? The patent is still valid.

    And the beat goes on.

    Receive a confidential report describing new technology? No problem, file on it naming yourself as an inventor. Your patent is valid.

    And the beat goes on.

    The simplest solution is to restore 102(f).

  25. inventorship issues will not be raised in court and pirates will have their patents.

    And those pirates will be the corporations that now can prosecute patents when inventors refuse to sign declarations (thus effectively removing the IC path of “declared wrong inventor”).

    The ship has sailed. The flag unfurled. That flag is the Jolly Roger.

  26. From FN 8, it is clear that Congress believed the new derivaton proceeding would prevent non inventors from obtaining patents; but as shown in the article, this is not the case at all.

    Lemley (and if he does, so do many others) apparently believes that incorrect inventorship can lead to invalidity. But how? Sarnoff correctly points out that 102(f) was the substantive basis for incorrect inventorship, but it is now gone.

    Next, how would the first inventor know that the invention disclosed in a earlier application was derived from himself? At times, one will know that he disclosed the invention to the first filier. But if the application is filed by someone completely unrelated to anyone the inventor had contact with, how would he know or have any basis for a derivation suit?

    Finally, derivation suits simply will not apply if the first filer derived the invention, but not from the second filer, but from a completely unrelated inventor who may or may not have filed a patent application.

    The most important takeaway though is this: The parties most likely to raise the issue at all (correct inventorship) are defendants in court. But the elminination of 102(f) now removes inventorship as a substantive ground for validity. Without a legal basis for invaliditing a patent on such grounds, inventorship issues will not be raised in court and pirates will have their patents.

  27. posting the Ten Commandments in their courtroom.

    You’d think posting the laws of a foreign jurisdiction in one’s courtroom would be grounds for immediate disqualification as a judge.

  28. the expectation of how things “should be”

    This is why we in the US have to continually smack down mxrxn judges in the swamps who insist on posting the Ten Commandments in their courtroom.

  29. Not about things in Europe? No? Funny then, that I see so many echoes of Europe in the AIA. Since 1973, Europe has had its go at construing things like “made available to the public”. Now it’s the turn of the USA, unencumbered by the slightest degree of attention to 30 years of experience in Europe (including the UK Supreme Court) with what such terminology might mean.

    So, I’m sure I’m in for plenty of surprises. Good so.

  30. Your “well here in Europe” carries little weight.

    Never underestimate the power of American ingenuity to make a complete mess of something that presents no great difficulty for other people.

  31. It has not presented any great difficulty

    Well that statement is entirely context-dependent, isn’t it?

    The context depends on
    a) the party involved (which side)
    b) the aim desired
    c) the expectation of how things “should be”
    d) the actual country and its laws – at the risk of shoehorning into others’ realm of reminding you – this is not about “things in Europe” – this is about US practice. Your “well here in Europe” carries little weight.

  32. Where? Well, here in Europe, we have had “made available to the public, by written or oral description, by use or in any other way” as the definition of “disclosure” or “published” or “publicly disclosed” or “publicly published” (or whatever you will) since 1973. It has not presented any great difficulty. Are you saying it will, in the USA?

  33. One professed intent of AIA was to get away from the “onerous” interference procedures and replace them with the derivation procedures.

    Will derivation procedures have “counts”? If not, then that alone was worth any headaches caused by the AIA.

    Goood riddance to interference practice. I can’t wait until the last one is over.

  34. But, hey, you tell me.

    See the definition of “disclosure.”

    because the materials on which such opinions will be based will be publications (patent and non-patent) rather than unpublished lab. notebooks and diligence logs.

    Yeah right, wherever did you get that idea?

  35. Well, I’m not sure about that, Con. I had supposed that the point of it all was to enable the creation of clearance opinions for Big Corp that carry weight. Valid and infringed, yes or no?

    Despite all this “derivation” hooh-haah, I suspect that that objective has been accomplished (because the materials on which such opinions will be based will be publications (patent and non-patent) rather than unpublished lab. notebooks and diligence logs.

    But, hey, you tell me. here, I’m an innocent abroad.

  36. Do you know what this article actually does?

    It pulls the curtain away from the man operating the Wizard of Oz booth. One professed intent of AIA was to get away from the “onerous” interference procedures and replace them with the derivation procedures.

    As can be plainly seen, this “switch” in truth effects nothing – the resulting procedure is anything but simplified or improved.

    Well at least plenty of corporate interest spending found its way into the pockets of our Representatives.

  37. Well, it has always been said that FtF is difficult to reconcile with a grace period, and here we see why. One has the feeling that the AIA is a cockleshell craft in a Force 10 gale in the middle of the Atlantic Ocean between the safe haven of FtI and that of the EPC. Will it sink, or capsize? Who knows?

    I see at footnote 12 of Sarnoff that the EPC, in denying obviousness attacks based on not yet published patent specifications, has two consequences, namely i) inventors publish straight after filing and ii) competitors “discover” what is in those unpublished apps and, having done so, then file on obvious variations. I’m curious. Where’s the evidence, Mr Morgan, that any of this actually happens? I for one don’t believe it till I see it.

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