In many ways, prior art is the core of the US patent system. Patentability requires that any invention-to-be-patented be “new” as defined by 35 U.S.C. §§ 101, 102, and 103. Prior art serves as the underlying evidence to prove that the invention is not new. As implied by its name, prior art has a temporal aspect in that the “prior art date” must come before (i.e., be prior-in-time to) the critical patentability date of the invention in question. Sometimes, the identical invention is found within a single prior art reference. In that case, the newness doctrine of “novelty” as defined by 35 U.S.C. § 102 will do the invalidating work. However, more often than not, a prior art reference will only teach a portion of the purported invention. In that case, the prior art may still serve a useful roll when applying the obviousness doctrine defined by 35 U.S.C. § 103.
We’ve talked about two key features of prior art: (1) being earlier in time and (2) teaching some aspect of the invention being claimed. Those two elements are never sufficient to satisfy the evidentiary requirements of prior art. Rather, the law always requires one additional element to take this information from being merely prior private knowledge to being prior art. As part of the America Invents Act move to a first-to-file regime, this additional step will always involve (3) transferring knowledge.
One argument favoring a first-to-file regime is its focus on publicly available information rather than privately held knowledge. And, in most cases, the step of transferring of knowledge highlighted above is a public act. Thus, prior art may be created through publication, patenting, or public use. 35 U.S.C. § 102(a)(1) (post-AIA). The AIA retains one form of temporally-secret prior art in that the prior filing of a patent application by “another inventor” will be deemed prior art as of its filing date. 35 U.S.C. § 102(a)(2) (post-AIA; formerly defined by § 102(e)). This is secret prior art because patent applications are typically kept secret by the USPTO for 18-months after they are filed. However, I term § 102(a)(2) prior-art-as-of-filing-date as only temporally (or temporarily) secret because such a reference cannot be used as prior art unless and until the prior-filed application is made public through either publication or patenting. Perhaps because of the unfairness of associated with its secrecy, most other countries besides the US only allow this type of prior art for novelty arguments and not for questioning obviousness (inventive step).
The AIA did eliminate several types of secret of prior art, including prior secret invention by another inventor under pre-AIA § 102(g) and prior knowledge transferred from another to the patent applicant under pre-AIA § 102(f). The individualized secrecy of these prior art references created two main problems: (1) that patentability could not be fully evaluated with going through the arduous process of obtaining additional information from interested parties and (2) that the secrecy gave interested parties more of an opportunity to fraudulently create (or destroy) documents after-the-fact. Making patentability based upon publicly available information can hypothetically lead to some unjust outcomes, but it has the enormous benefit of providing clear(er) notice to anyone who cares to look.
Two important secret prior art questions remain — namely whether either (1) secret commercial uses (by the patentee) or (2) secret on-sale activity (by anyone) create prior art that can invalidate a patent on novelty grounds and contribute to invalidation on obviousness grounds. The Patent Act never expressly authorized the first type of prior art and has arguably now rejected the second. Advocates for a transparent prior art system argue that the AIA should be interpreted as eliminating both.
Secret Sales: One type of prior art that is traditionally thought of as potentially secret is created by what is known as the on-sale bar. An invention that is on sale before the critical patenting date will result in prior art that renders any patent invalid. There are a few ways that a sale or offer-to-sell could be secret: for example, (1) it might be an offer between two individuals that is subject to a (formal or informal) confidentiality agreement or (2) it might be an offer that does not fully disclose the scope of the invention.
The AIA retains the identical language of its predecessor statute regarding on sale activity that occurs prior to the defined critical date. Compare 35 U.S.C. § 102(a)(1) (post-AIA) with 35 U.S.C. § 102(b) (pre-AIA). Although the “on sale” term itself is identical, the context of the new statute is arguably different. In particular, the new statute has added a catchall phrase “otherwise available to the public” that suggests that the on-sale activity must also be available to the public. The new statute reads as follows:
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 …
The open question is whether the language here creates a legally cognizable implication that the “on sale” activity must be available to the public as well.
Secret Commercialization by the Patentee: In his 1946 decision in Metallizing Engineering, Judge Learned Hand explained that a patentee’s commercial use of its process (even if done secretly behind factory walls) counted as a “public use” sufficient to invalidate the later-filed patent application. The court wrote “That it is a condition upon an inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or [a patent].” Under the rule, secret commercial uses of an invention by a third party does not count as a public use. This distinction is found nowhere in the patent statute, but has been judicially recognized for many years. While the new statute retains the “public use” language, many suggest that a strong congressional intent that the new statute eliminate the Metallizing rule.
USPTO Proposed Interpretation: In a set of proposed examination guidelines, the USPTO indicated its interpretations that the statute has altered these provisions in favor limiting the application of secret prior art. In particular, the USPTO’s position is that, while the statute is not entirely clear on these points, the legislative history indicates that that prefiling secret sales and commercial uses do not qualify as prior art under the revised Section 102. The PTO writes: “The legislative history of the AIA indicates that the inclusion of this clause in AIA 35 U.S.C. 102(a)(1) should be viewed as indicating that AIA 35 U.S.C. 102(a)(1) does not cover non-public uses or nonpublic offers for sale.
For the most part, patent attorneys appear to agree with the USPTO’s proposals. The American Bar Association’s IP Law Section writes:
ABA IPL respectfully submits that the passage “otherwise available to the public” reflects the touchstone of what constitutes prior art under the AIA under section 102(a)(1). This section requires availability to the public or public accessibility is an overarching requirement. Such accessibility is critical to provide a simpler, more predictable and fully transparent patent system. As such, for a “public use,” for a determination that an invention is “on sale,” as well as to assess whether an offer for sale has been made, the statutory requirements under the AIA require a public disclosure. Thus, non-public offers for sale (and non-public uses) would not qualify as prior art under the AIA.
The AIPLA agrees, writing:
AIPLA believes that an offer for sale needs to be public to qualify as “on sale” prior art under §102(a)(1). . . . AIA §102(a)(1), unlike pre-AIA 35 U.S.C. §102(b), contains the residual clause “or otherwise available to the public.” This is a major policy change achieved by the new legislation, which would further the goal of increasing objectivity in the identification of prior art. . . .
[T]he legislative history of the AIA indicates that the inclusion of this clause in §102(a)(1) should be viewed as indicating that §102(a)(1) does not cover non-public uses or non-public offers for sale. AIPLA believes that such an interpretation reflects the clear intent of Congress. It is also consistent with the broad goal of global harmonization under a first-inventor-to-file system.
The IPO agrees as well – arguing in its comments to the USPTO that the AIA “overrules Metallizing Engineering by excluding ‘secret’ commercial activity from the ‘on sale’ provision” and that the only on sale activity relevant to patentability under the AIA is when an invention is “publicly on sale.” LES is also on board with this interpretation.
Several individuals disagreed, including Lawrence Pope who wrote:
Certainly, any change in patent law which abandoned a long established policy and allowed inventors to engage in secret commercial exploitation of their inventions for as long as they liked without forfeiting their right to obtain valid patent protection on the same, would require quite explicit statutory language. In addition, it would be expected that any such major change would be reflected in a more extensive legislative history than the mere comments of two members. One would at least expect to see it reflected in the Committee Report reporting on the legislation to the House of Representatives.
Mark Lemley also argued that the PTO’s interpretation is quite problematic:
[T}he proposed Guidelines take the position that the AIA has reversed an unbroken line of precedent of both the Federal Circuit and the regional circuits tracing back to Judge Learned Hand’s decision in the Metallizing case. Those cases hold — for impeccable policy reasons — that the term “public use” in old section 102(b) should be interpreted to prevent an applicant from making a secret commercial use for more than a year while delaying the filing of a patent application. A contrary conclusion, as the PTO now proposes, will enable inventors to keep their process inventions secret for years or even decades, and then surface and file a patent application. That is directly contrary to the goals of first-inventor-to-file in the AIA, which encourage early filing of patent applications.
Concluding that Metallizing and the cases that follow it were abrogated will have another, even more pernicious effect. Metallizing, Gore v. Garlock, and other cases interpret the term “public use” in the old statute. One might reasonably conclude that those cases stretch the meaning of that term, but what the courts said they were doing was interpreting “public use.” The term “public use” appears unchanged in new section 102 under the AIA. For the PTO to conclude that the new law opens the door to reinterpretation of the settled meaning of terms present in both the old and new statutes opens a dangerous door. Parties and courts might be expected to try to revisit the meaning of “on sale,” “patented,” “printed publication,” and many other settled statutory provisions, creating enormous uncertainty. To take just one example, the inherency doctrine, like the Metallizing rule, is not articulated expressly in either the old or new statute. If the reenactment of the term “public use” opens the door to revisiting Metallizing, it also opens the door to revisiting inherency, the “ready for patenting” rule in on sale bar, and a host of other settled cases. The PTO, patent applicants, and litigants would be much better served by leaving existing precedent interpreting unchanged statutory terms in place.
Read more comments here: http://www.uspto.gov/patents/law/comments/. (Note, the equally major issue is the USPTO’s interpretation of the disclosure grace period that is also part of the commentary).
What’s the Big Deal?: The USPTO does not have substantive authority to shape the interpretation of 35 U.S.C. § 102. In the end, this issue will be resolved by the courts or else clarified by Congress in a technical amendment. In many ways, the arguments above are simply a preview for a Federal Circuit and Supreme Court ruling on the issue. One problem with the USPTO’s narrow view of the prior art is that it delays the eventual resolution of this issue since it gives patent applicants nothing to challenge. In any event, this is a debate that will continue for at least the next decade and likely beyond.