Guest Post by Jon E. Wright and Joseph E. Mutschelknaus of Sterne Kessler Goldstein & Fox, PLLC1
On September 16, 2011, the America Invents Act (“AIA”) changed the threshold standard for initiating inter partes reexamination. The new standard requires a requester to demonstrate that:
[T]he information presented in the request shows that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request.
America Invents Act – Sec. 6(c)(3)(A)(i)-(ii). We refer to the new standard as the “RLP” standard. The RLP standard is significant because it matches the future standard for initiating inter partes review under the AIA.
This post addresses the new RLP standard. First, we review case law surrounding the “reasonable likelihood” standard as it exists in other contexts such as preliminary injunctions. Next, based on our analysis of every single post-AIA inter partes reexamination the PTO has acted upon, we analyze how the Office has been applying the new RLP standard in reexamination orders. Finally, we consider how inter partes reexamination requests (and future petitions for inter partes review) should be structured for the best chance at meeting the RLP threshold.
The “Reasonable Likelihood” Standard
Patent practitioners are familiar with the “reasonable likelihood” standard in the context of preliminary injunctions. For a court to grant a preliminary injunction, a patentee must demonstrate four factors, one of which is a “reasonable likelihood of success on the merits.” Ranbaxy Pharm., Inc. v. Apotex, Inc., 350 F.3d 1235,1239 (Fed. Cir. 2003). This standard may be instructive in learning how the Office will deal with the new RLP standard for current inter partes reexamination requests and inter partes review petitions later this year.
According to the Federal Circuit, the reasonable likelihood of success standard for preliminary injunctions must be made “in light of the presumptions and burdens that will inhere at trial on the merits….” Id. In the context of inter partes patentability proceedings at the Office, claims do not enjoy the presumption of validity that they do before a district court. Rather, the standard of proof before the Office is the “preponderance of evidence” standard. MPEP § 706.I. The same is true for the new inter partes review proceedings. See AIA § 316(e). Therefore, Requesters (or Petitioners) must demonstrate a “reasonable likelihood” that they can invalidate at least one claim of the patent for which reexamination is sought under the preponderance of the evidence standard.
But what does this really mean? In the context of preliminary injunction proceedings, the Federal Circuit has stressed that “[a]t this preliminary stage, the trial court does not resolve the validity question….” New England Braiding Co., Inc. v. A.W. Chesterton Co., 970 F.2d 878, 882-83 (Fed. Cir. 1992). Rather, the decision maker “must … make an assessment of the persuasiveness of the challenger’s evidence, recognizing that it is doing so without all evidence that may come out at trial.” Id. This is just as true in inter partes reexamination (or review) because both parties to the proceeding are permitted to submit additional evidence in support of their positions, at least during the first round of replies and comments.
Moreover, in addition to recognizing that it may not have all the facts, the decision maker must also assess the persuasiveness of the evidence. This may include making credibility determinations. As the Federal Circuit stated in New England Braiding, “[a] credibility determination is well within the court’s province when ruling on a preliminary injunction motion.” Id.
If the preliminary injunction standard for determining a reasonable likelihood of success on the merits is any guide, we can thus surmise the following with respect to requests for inter partes reexamination (or future petitions for inter partes review):
The request or petition must be based on “evidence,” which at the initial stage will likely be limited to prior art patents or printed publications;
The request or petition must reviewed by the Office under the “preponderance of evidence” standard, with the burden placed on the requester or petitioner;
The request or petition need not conclusively demonstrate unpatentability;
The Examiner (or Board) may properly make credibility determinations; and
The Examiner (or Board) must make an assessment of the persuasiveness of the evidence and accompanying argument set forth by the requester or petitioner, recognizing that it does not have all the evidence.
As shown next, the Office appears to be adhering to these standards.
The Office’s Application of the RLP Standard
As of the date of this post, the Office has acted on forty-two (42) requests for inter partes reexamination that were filed on or after September 16, 2011. The authors analyzed each one to determine how the Office is implementing the new RLP standard. Anecdotal evidence suggests that the Central Reexamination Unit is still struggling with the new standard. But nonetheless, several observations can be made from these orders.
First, despite the change, early data suggests that the Office continues to be granting reexaminations at about the same rate under the new RLP standard as it was under the old “substantial new question” or “SNQ” standard. In fiscal year 2011, for example, the Office granted 342 inter partes reexamination requests out of 366 total decisions. That accounts for a 93% grant rate under the old SNQ standard. Of the 42 orders issued under the new RLP standard, 38 have been granted (at least in part), putting the current grant rate under the RLP standard at about 90%. Thus, while the sample set is still limited, the Office appears to be granting reexamination requests at about the same rate under the RLP standard as it had been under the SNQ standard. This runs contrary to the general belief among practitioners that the RLP standard would be stricter than the SNQ standard.
Second, in finding an RLP, the Office appears to be focusing on the persuasiveness of the requester’s evidence on the merits. The Office is also correctly placing the burden of establishing the reasonable likelihood prevail on the requester. In cases where RLPs are denied, the Office frequently uses language like, “Requester has failed to show the claim step is taught by the reference.” (See, e.g., 95/001,809, p. 6.) At the same time, the Office is not shying away from addressing the underlying legal issues presented in the request, such as claim construction. For example, in several cases, the Office explicitly construed claim terms, and then made a finding that the cited references do not teach claims under that construction. (See, e.g., 95/001,785, 95/001,792.) Thus, in establishing whether there is an RLP, the Office is considering the merits of the cited prior art against the claims on both factual and legal bases.
Third, while the importance of the art’s strength against the claims may have increased with the RLP standard, the importance of the art’s “newness” may have decreased. Under the SNQ standard, the Office would almost always take into account the prosecution history and discuss whether the cited prior art was presented a new light. In contrast, of the forty-two (42) orders issued under the RLP standard, only three (3) make any discussion of the prosecution history or cumulativeness of the art. And in no case did this appear to be dispositive. This is consistent with the AIA, which made the newness requirement effectively discretionary on the Office. See AIA codified at 35 U.S.C. § 325 (“In determining whether to … order a proceeding under [the inter partes reexamination/review chapter], the Director may take into account whether, and reject the … request because, the same or substantially the same prior art or arguments were previously were presented to the Office.”) (emphasis added). In sum, the weight given to the art’s newness appears to be waning.
Practice Tips
Given the above observations, drafting a strong, persuasive request supported by quality prior art references remains paramount under the new RLP standard, just as it was under the old SNQ standard. But in view of the Office’s tendency to now focus more intently on the merits of the individual rejections under the new standard, requesters may want to provide and justify claim constructions in their initial requests. Also, requesters may want to consider including expert declarations with their request, especially if the art upon which the reexamination is based is complicated and would benefit from expert clarification or explanation. Keep in mind, though, that reexaminations must still be based on patents and prior-art publications, not expert declarations.
At the same time, requesters may need less discussion in their requests of how their art is noncumulative or new with respect to what the Office has already considered. This could result in structural change to reexamination requests. For example, prior inter partes reexamination requests usually included two separate questions, one developing and showing the SNQ and a second section with the proposed rejections—i.e., the manner and pertinency of applying the prior-art references. Now, with the increased focus on the substantive merits of the proposed rejections and the decreased focus on newness or cumulativeness of the art, the second section becomes the most important section. Indeed, a fully developed set of proposed rejections would seem to be sufficient in proving up the RLP standard.
In sum, the authors believe it was a good idea for Congress to immediately implement the RPL standard for inter partes reexaminations. It gives patent practitioners a taste of what is to come for inter partes review under the AIA, and the ability to prepare for that change. It also appears as if the Office is adopting evaluation standards similar to those used the context of preliminary injunctions. We hope this post provide some new insight into the RLP standard—a standard with which we will have to live for the foreseeable future.
1Jon Wright is a Director and Joe Mutschelknaus is an Associate at Sterne Kessler Goldstein & Fox, PLLC www.skgf.com. The views expressed herein are the authors’ alone and should not be attributed to the firm or its clients.
Edited on 2/2/2012 to reflect that it was Congress's decision to immediately implement the RPL standard.
On January 5 the PTO proposed a new 37 CFR §1.290 in the Federal Register for third party pre-issuance submissions of prior art in patent applications of others. The new rule is needed to implement the new statutory provision – 35 U.S.C. §122(e) – found in Section 8 of the AIA [Leahy Smith America Invents Act]. 35 U.S.C. §122(e) will be effective as of September 16, 2012, and will be usable against any pending applications [including reissues but not reexaminations] filed before or after that date. It will permit anyone to submit patents, published patent applications, or other printed publications, to the USPTO for consideration and inclusion in the record of a patent application as long as the submission includes a "concise statement of relevance" and meets some other paperwork requirements, which need not be discussed here since they will be clearly spelled out in the final PTO rules. As discussed below, §122(e) includes a significant expansion of the time period for submitting prior art documents to be put into someone else's pending application. The statute also expands what you can say about the documents (accompanying explanations and arguments) well beyond the present limitations found in 37 CFR §1.99. The submission process will remain cheap and simple, but it will still present the same conundrums as to whether or not you should use it?
In the same Federal Register is the proposed PTO rulemaking for amending 37 CFR §1.501 to accommodate the amendment of 35 U.S.C. §301. This amendment will slightly expand what information anyone can submit to the USPTO for inclusion in an already issued patent file when accompanied by a written explanation regarding the "pertinency and manner of applying" the information to at least one patent claim. That expand [new] information which can be put into an issued patent file will include written statements made by the patent owner before a Federal court or the Office regarding the scope of any claim of the patent. But the Office's use of such written statements will be limited to determining the meaning of a patent claim in reexamination proceedings and post grant review proceedings. This provision is also effective on September 16, 2012.
The Present Situation [PRE AIA]
First keep in mind that the PTO considers it to be actionable unethical conduct to put any papers into anyone else's ex parte [normal] patent application file unless there is an express statutory basis for doing so. Furthermore, papers attempted to be filed in a reexamination in which you are not a party [other than just the initial request papers for an ex parte reexamination], will not be entered. Adverse prior art submissions for anything in the PTO are quite restricted.
37 CFR §1.291 "Protests by the public against pending applications" and 37 CFR §1.292 "Public use proceedings" have existed for many years, but have been rarely used, and I suspect that few PTO practitioners or PTO personnel have ever seen one. Some senior PTO officials I asked at a CLE meeting several years ago doubted if there had been more than a handful per year. The rare Rule 292 proceedings are mostly used in connection with a parallel interference. Rule 291's potential usage was significantly restricted when the statute providing for U.S. 18 month application publications went into effect, ending Rule 291 "protest" filing opportunities after an application publication date.
The PTO at that time also put severe rule constraints that were not statutorily required into a 37 CFR §1.99 limiting what could be submitted and when. Rule 99 has a short time limit of only two months following the application publication date. Rule 99 also expressly states at (d) that a "submission under this section shall not include any explanation of the patents or publications, or any other information. The Office will not enter such explanation or information if included in a submission under this section." There is also a limit of 10 submitted documents. The PTO even threatened to reject submitted prior art patent copies if they were merely marked or high-lined to show the examiner where the relevant teaching or disclosure was buried in the patent! It seemed obvious to me at that time that the PTO did not really want to be bothered with any extra examiner work from third party prior art submissions. [The AIA has now at least made it clear that that is not quite what Congress has in mind.] An English language translation must be provided for all relevant portions of any listed non-English language document to be considered by the examiner, and that requirement will continue under the proposed new rules. Some patent attorneys reportedly consider it preferable to just send prior art to an applicant's patent attorney by registered mail and rely on the inequitable conduct concerns of that patent attorney to get that patent attorney to file the prior art the application, or to set up an IC defense if they do not.
35 U.S.C. §301 above [with its original 37 CFR §1.501] was enacted years ago accompanying the first [ex parte] reexamination system. It is simply to allow people to place prior art in an issued patent file without having to initiate a reexamination, so that the art might hopefully be considered if anyone subsequently requested a reexamination. It is understood that §301 has rarely been used, and I am not aware of any PTO statistics to the contrary, even though §301 says that it can be done anonymously. My very limited experience was that the PTO clerical staff did not know what to do with the [rare] §301 submittal and it was not placed in the patent file until we made follow-up efforts. [A copy of the PTO submittal mailed to the patent owner was helpful for a licensing discussion, but I wouldn't count on that happening often.]
What's New?
New 35 U.S.C.122(e)(1) and its proposed new rule 37 CFR §1.290 will greatly expand when you can legally put prior art into someone else's pending application file. As shown below, that is awkwardly expressed as "before the earlier of .. or the later of" three events in an application. But clearly it will normally be available for a much longer time period than the mere 2 months after a patent application is published of present Rule 99. It may be submittable for several years for applications not yet having a first office action with a claim rejection, as long as there is as yet no notice of allowance. Nor can the present unreasonable Rule 99 prevention of any explanations or comments on the submitted art remain, since "a concise description of the asserted relevance of each submitted document" is specifically required by this new statute:
(e) Preissuance Submissions by Third Parties-
(1) IN GENERAL- Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of–
(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or
(B) the later of–
(i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or
(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent.
(2) OTHER REQUIREMENTS- Any submission under paragraph (1) shall–
(A) set forth a concise description of the asserted relevance of each submitted document;
(B) be accompanied by such fee as the Director may prescribe; and
(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.
As noted, the proposed amended 37 CFR §1.501 for the AIA amendment of 35 U.S.C. §301 will just slightly add totheinformation can be submitted to the PTO to merely put into an issued patent file. That information can now comprise or include written statements made by the patent owner before a Federal court or the Office regarding the scope of any claim of the patent, and that information can supposedly be used in subsequent actual reexaminations. However, even if that made sense tactically or strategically in some situation, perhaps in anticipation of a potential ex parte reexamination initiated by the patent owner itself, I fail to see how that kind of material can affect that many reexaminations? The Fed. Cir. requirement that claim scope in a reexamination apply a "broadest reasonable interpretation" test is not the same as claim interpretation in patent litigation.
But Do You Really Want To Do It & How Likely Is the Overall Usage?
How likely is it that this somewhat increased opportunity to cite prior art in applications or patent files of others will be used? That depends largely on whether you think doing so is really a good idea or not. That obviously includes guessing how likely is a regular examiner in normal ex parte patent examination [not a reexamination] going to consider and apply that prior art to reject claims? A prior statistical study published by Prof. Crouch on his Patently-O blog of a low examiner usage rate of prior art cited by the applicants themselves is not encouraging. But perhaps a novel third party submission is more likely to get an examiner's attention and claim rejections than routine applicant IDS dumps?
Even if that effectiveness was predictable, there is clearly a serious risk in third party submissions of art into applications of others under any system. It will case the application owner to think that someone else thinks their patent application is important enough be worth attacking its claim scope. That is logically going to cause the patent application owner to put extra effort into getting that application allowed, with broad and variable scope claims, including possible RCE's and appeals if necessary, and possibly filing and keeping divisionals and continuations pending. Furthermore, the claims can be amended to distinguish the third party cited art without incurring "intervening rights" as would be the case in a reexamination. While the third parties citing the prior art do not face dangerous estoppels [as in inter partes reexaminations or PGR] they do risk greatly strengthening the enforceability of the resultant patent against that or similar prior art if not all potentially infringed claims are finally rejected.
The rare use of any of the present third party prior art submission systems does not suggest their likely future use, [unlike the increasing use of reexaminations]. The PTO has apparently never kept statistics on the number of prior art filings in other peoples patent applications under present 37 CFR 1.99 (in force since 2000), or otherwise. But I was cognizant of a docketing operation that was handling thousands of pending patent applications, and only one such third party prior art submission was ever identified as being filed against any of those thousands of U.S. applications [excluding those in interferences] and it was not successful in getting any claims rejected.
Perhaps there will be somewhat higher usage and success rates for the new 35 U.S.C.122(e)(1) and 37 CFR §1.290 because it will allow attached explanations of the relevance of the cited art. But until that is demonstrated, the conservative tendency of patent attorneys to save prior art defenses until they think they can be used more effectively later, especially in an inter partes reexamination [where the patent owner cannot make completely unchallenged ex parte arguments against the cited art] seems likely to prevail.
There is of course an academic myth, supported by some companies presumably for its PR value, that was at play in the lead-up to these AIA changes. Namely a strange inherent assumption that large numbers of the public have nothing better to do with their time and money than to undertake the tens of thousands of prior art searches and claim-relevant submissions that would be needed to have any significant effect on patent examination quality for the more than 500,000 patent applications a year, even though they are not aware of any that could ever threaten any of their products. A mere couple of hundred patent applications were provided with prior art submissions under a pilot "Peer to Patent" system, despite all its publicity, of which only a minority resulted in claims being rejected using the submitted prior art.
As usual, I would appreciate comments from others with relevant information on these subjects.
Time is flying and the newly revamped host of USPTO administrated post-grant patent procedures is on its way. As we speak, the USPTO is continuing to develop its rules and internal operating procedures for handling the new options. This post focuses on the new post-grant review (A.K.A. opposition proceeding), which is being created by splitting the current inter partes reexamination system into two parts: post-grant review and inter partes review. Current reexamination practice focuses solely on questions of novelty and obviousness based upon prior art in the form of printed publications. The new post-grant review system broadens the bases for review to virtually any validity challenge. However, post-grant reviews will only be available during a 9–month window following patent issuance.
Full implementation of the post-grant review system will not be until 2013 & 2014 because the review is only available for patents with a priority date on or after March 16, 2013. The 2013 date is also the implementation date of the new Filing-Date-Priority rules. We will, however, get a preview of the PGR system once it becomes available to go against Business Method patents beginning September 16, 2012.
EPO Opposition Popularity: Europe has a popular opposition system and there is a natural comparison between our new post-grant review and their oppositions. Around 5% to 7% of EPO-issued patents are opposed during the 9–month post-grant window. This figures are an order-of-magnitude greater than the proportion of US patents that go through the inter partes reexamination system.
Obstacles to US Post-Grant Popularity: I do not expect that the US system will see the same level of utilization – at least for some time. The major legal impediment to filing a post-grant review is the tough new threshold that requires a showing “that there is a reasonable likelihood that the petitioner will prevail with respect to at least one claim challenged.” If the threshold is not met, the petition for review will be rejected. This threshold is substantially greater than the USPTO’s historic standard requiring a “substantial new question of patentability.” The EPO does not have a similar threshold. Rather, so long as certain formalities are met, the opposition proceeds with a full review with opportunity for appeal, etc. That said, the EPO opposition proceeding results in cancellation or at least amendment in about 75% of cases.
The other major roadblock to popularity for US post-grant review will be cost. Current behind-the-scenes discussion peg the USPTO filing fees at over $40,000 for a post-grant review. The equivalent fee for an EPO opposition is under $1,000 (€705). The availability of limited discovery suggest that the legal fees for post-grant oppositions will also be fairly high.
The newly revised 35 U.S.C. § 102 states that no patent shall issue if “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…” 35 U.S.C. §102(a).
My question for the hour is whether (or not) the word “patented” in this fundamental provision is entirely superfluous. In other words, when is a claimed invention “patented” but not described in a printed publication? I should note at this point that the pre AIA Section 102 also includes the statement that an invention is not patentable if it was already “patented or described in a printed publication.”
Patented but not Published: It is largely safe to assume that patents are published and, therefore, any disclosure found in a patent should also be considered to be “described in a printed publication.” A narrow exception to this aforementioned assumption can be derived from regular SNAFUs that occur in patent offices around the world that allow for patents to issue without actually being published. Historically, some countries also granted patentee’s a period of post-grant secrecy. US courts have ruled that these foreign patents still count as patented under the statute so long as the secrecy is only temporary and the patent is eventually and meaningfully “laid open for public inspection.” See In re Kathawala, 9 F.3d 942, 28 USPQ2d 1789 (Fed. Cir. 1993) and In re Carlson, 983 F.2d 1032 (Fed. Cir. 1992). The statute covers patents issued in any country and because the US has no direct control over how any particular country publishes its patents, the “patented” clause has the potential of potentially becoming meaningful if countries decide to again limit publication.
Patented but not Described?: There is also some potential that, even when a patent is published, a particular element in the prior art will covered by the patent claims but not sufficiently described to qualify under the “printed publication” leg of the clause. The enablement and written description requirements of 35 U.S.C. § 112 (as well as their worldwide equivalents) largely eliminate this possibility. However, the truth is that patents regularly issue that are directed to particular inventions but that are not fully enabled by the specification. In those cases it is quite possible that an invention be “patented” without being “described in a printed publication.” (Of course, this may be unlikely because US courts have placed such a low enablement requirement on prior art).
In our newest Patently-O Patent Law Journal article, former Xerox patent counsel Paul Morgan highlights two important ambiguities in the new 35 U.S.C. § 102(a)(1) as defined by the Leahy-Smith America Invents Act. This provision replaces Sections 102(a) and 102(b) and, beginning in March 2013 will serve as the fundamental definition of prior art in the US patent system. Under the new statute, no patent can issue if “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.” The language “otherwise available to the public” is new to the patent statute. Morgan makes the counterintuitive case that the catchall phrase actually serve the purpose of limiting limit the scope of prior art under the statute. In particular, the language suggests that the other types of art identified in the statute are also “available to the public.” If so, this statutory change could be seen to overrule doctrines that bar patent rights based upon secret commercialization by the patentee. See, for example, Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F. 2d 516, 520 (2nd Cir. 1946).
Read the article: Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29. Download Morgan.2011.AIAAmbiguities
In our newest Patently-O Patent Law Journal article, former Xerox patent counsel Paul Morgan highlights two important ambiguities in the new 35 U.S.C. § 102(a)(1) as defined by the Leahy-Smith America Invents Act. This provision replaces Sections 102(a) and 102(b) and, beginning in March 2013 will serve as the fundamental definition of prior art in the US patent system. Under the new statute, no patent can issue if “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.” The language “otherwise available to the public” is new to the patent statute. Morgan makes the counterintuitive case that the catchall phrase actually serve the purpose of limiting limit the scope of prior art under the statute. In particular, the language suggests that the other types of art identified in the statute are also “available to the public.” If so, this statutory change could be seen to overrule doctrines that bar patent rights based upon secret commercialization by the patentee. See, for example, Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F. 2d 516, 520 (2nd Cir. 1946).
Read the article: Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29. Download Morgan.2011.AIAAmbiguities
Typhoon Touch Tech. v. Dell, Lenovo, Toshiba, Fujitsu, Sand Dune Ventures, Panasonic, Apple, HTC, and Palm (Fed. Cir. 2011)
Touch screen technology has taken-off as an important element of consumer electronics. Typhoon’s US Patent Nos. 5,379,057 and 5,675,362 cover various embodiments of a “portable keyboardless computer system” with a “touch-sensitive screen.”
Typhoon appealed an E.D. Texas ruling that its patents were invalid and not infringed. The appeal focused on the claim construction that served as the basis for both invalidity and non-infringement. The appellate decision is notable for the detached process that the court used to consider claims elements at issue. The opinion never discussed the crux of the invention or its contribution to the art and instead simply looked to the disputed claim terms and the relation of those terms in the specification (as required by Phillips v. AWH).
This week, I participated in a roundtable discussion at Yale Law School sponsored by the Kauffman foundation and by Yale’s Information Society Project (ISP). A substantial amount of the discussion focused on problems stemming from our current claim construction process and our ongoing focus on claim language as opposed to invention or its contribution to the art.
For patent attorneys prosecuting patents, the claims are often seen as equivalent to the invention. The new patent act supports that definition by shifting focus away from the invention and instead onto the “claimed invention.” Thus, the new § 102(a)(1) asks whether “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.” The new statute’s sole focus on invention as claimed is largely just a codification of fairly well accepted Federal Circuit precedent without much thought of the consequences. Of course, broad subject matter eligibility described in State Street Bank and the TSM test for obviousness were, until quite recently, well accepted Federal Circuit precedents as well. In the past few years, the Supreme Court rolled-back the clock on those issues – returning focus to pre-1982 case law. For “invention” however, the new statute appears to lock-in the claimed-invention as the ongoing focus of patent law.
Judge Kimberly Moore highlighted this issue in her recent dissent from the court’s denial of en banc rehearing of Retractable Technologies, Inc. v. Becton, Dickinson and Company (Fed. Cir. 2011). In that opinion, Judge Moore noted that the approach of the panel decision in Retractable is evident of a major divide amongst Federal Circuit judges as to whether the inventor’s contribution to the art – “what the inventor actually invented” – should be considered in the claim construction process.
This week, my patent law students each argued a mock-Markman hearing – revisiting the facts of Nystrom v. Trex and arguing over whether Ron Nystrom’s claimed decking “board” should be limited to cover only to wood cut from a log. That litigation was interesting because it involved five different court decisions on the proper construction of the term. The final appellate decision narrowed the term’s meaning in a way that allowed Trex’s composite planking to avoid infringement.
Claim construction has become a fundamental aspect of every patent case – even to the extent that Section 101 patentable subject matter decisions turn on the meaning bestowed upon particular claim terms. For patent attorneys, all of this focus on claim meaning puts more pressure on the drafting of the claims and the specification. The sad thing about Nystrom’s patent is that he would have easily won the case if the patent attorney who drafted the application had thrown-in language indicating that a “board” could be made of various materials, not just wood cut from a log. This counterfactual conclusion is sad for Nystrom as the inventor, but it is also sad that such a major weight is placed on non-inventive boilerplate language. In my mind, the importance of claim construction should push the USPTO to do a better job of ensuring that the terms of issued patents are well defined.
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The Typhoon decision is also notable in the way that the court narrowly interpreted functional claim limitations. As background, Typhoon’s claim was directed to a “computer” that included various elements including a “memory for storing [a] data collection application.” Typhoon argued its claimed invention only required that the memory be capable of storing the data collection application. However, the District Court Judge Davis and Federal Circuit agreed that the proper construction required that memory actually be used for storing the data collection application. In so holding, the courts looked to the specification and found that the described embodiments all had memories that actually included the application rather than just the capability.
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Finally, the court looked at Typhoon’s “Means for cross-referencing” limitation. The district court held that limitation invalid as indefinite under 35 U.S.C. § 112 because the specification did not include an algorithm adequate to provide sufficient structure for the means-plus-function limitation, citing Aristocrat Technologies Australia PTY Ltd. v. International Game Technology, 521 F.3d 1328, 1334 (Fed Cir. 2008). On appeal, the Federal Circuit rejected that conclusion – finding that the specification did disclose a cross-referencing algorithm in plain language in the text of the specification. The court went on to write that “computer code is not required to be included in the patent specification.” Rather, what is required is disclosure so that one of ordinary skill in the art would recognize the structure as linked to the claimed function.
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Judge Newman wrote the court opinion and was joined by Chief Judge Rader and Judge Prost;
The Appellant-Patentee is represented on appeal by Charles Wolfe (Blank Rome);
Ed Reines (Weil Gotshal) and Joe Re (Knobbe) were co-lead-counsel for all the appellee-defendants. Briefs were also signed by attorneys at K&L Gates, Baker Botts, Amster Rothstein, Perkins Coie, Covington & Burling, and Malloy & Malloy, as well as Eric Albritton from the Albritton firm.
As a site for referral and contemplation, I wanted to include the text of the newly drafted statute 35 U.S.C. § 102.
Sec. 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) {CREATE ACT Save for later}
(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 102 is the statutory section that, in effect, legally defines 'prior art.' 'Prior art' is, of course, a key consideration affecting whether to file for a patent, whether a patent will ultimately be secured, and whether, if issued, the patent will be legally enforceable. Furthermore, if patent protection is ultimately sought, 'prior art' will affect how best to draft the patent claims so that all of these are more likely to be accomplished successfully.
Understanding the ins and outs of what constitutes 'prior art 'is largely the domain of the patent attorney. One might expect this term to have a common sense understanding; the reality is that it is far from common sense.
Changes that the Leahy Smith Act makes to what is considered 'prior art' will have far reaching implications. With this in mind, the following is intended as a short list of changes so that the patent practitioner is alerted to potential impact(s) on his or her practice.
Rather than totally rewrite section 102, Congress has retained some features that are well-understood under current law.
"Invention" has been changed to "claimed invention," now defined in section 100. The new statute also refers to "the effective filing date" of the claimed invention, now defined in section 100. Also, "inventor" and "joint inventor" are now defined terms in section 100.
The "claimed invention" is not novel if "patented," "described in a printed publication," "in public use," or "on sale." Therefore, for these events there is no grace period under the new statute – current law has a one year grace period.
"On sale" and "in public use" activities are no longer limited to the United States – current law requires these events to be "in this country."
If the claimed invention was "otherwise available to the public" before its effective filing date, it is not novel. However, "disclosures made one year or less before the effective filing date" appear to be intended as an exception. In summary, if one of these disclosures is made by an inventor or joint inventor or "another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor"(called "another" below), the disclosure will not be considered 'prior art.' Also, the disclosure will not be considered 'prior art,' if before it, the subject matter was publicly disclosed by an inventor, joint inventor, or "another."
Section 102(e) type prior art is now codified as section 102(a)(2), but with different language – for example, "by another" has been changed to "names another inventor." A new subsection (d) defines the date at which "subject matter described" becomes 'prior art.' An exception, however, is referred to as "disclosures appearing in applications and patents." In summary, if the subject matter of one of these disclosures was obtained directly or indirectly from an inventor or joint inventor, then it will not be considered to be 'prior art.' Also, the disclosure will not be considered 'prior art,' if before the effective filing date of the patent or application, the subject matter was publicly disclosed by an inventor, joint inventor, or "another." Finally, if the subject matter disclosed and the claimed invention are owned by the same person (or subject to an obligation to assign to the same person), then the disclosure will not be considered 'prior art.'
Current subsections (c), (d), and (g) no longer exist. Subsection (g) is what, in effect, made the United States a first to invent system. Therefore, removing it makes the United States, in effect, a first to file system.
The bill is yet to be signed. However, the changes to section 102 (and section 100) go into effect 18 months after enactment, which would be the date the President signs the bill.
Howard Skaist is the founder of Berkeley Law & Technology Group, LLP (BLTG), an intellectual property law firm based in Oregon and, before that, he was the Director of Patents for Intel Corp. Ted Karr P.C. is a BLTG partner and Ted was responsible for patent licensing at Intel Corp. before joining BLTG.
(Note: Given the almost certain passage of H.R. 1249 by the Senate, this analysis refers to that version of the pending patent legislation. It is available here.).
The principal justification for the impending changes to patent law is that they will promote technological progress in the United States (and thus create jobs). The questions relating to whether this intended result will be realized are numerous, and in this analysis I focus on just one important issue: the effects the America Invents Act may have on the disclosure of technological information. I conclude that while the new patent laws have the potential to encourage at least one category of disclosures, they may also negatively impact other types of information disclosures.
At least three aspects of the Act are likely to impact the quantity and quality of disclosures: the changes to the novelty rules of 35. U.S.C. § 102, the creation of a prior user defense, and the effective elimination of the best mode requirement. Changes to the effectiveness of the inequitable conduct doctrine are also likely to have an impact, perhaps good, perhaps bad, an issue I will discuss at a later time. Below, I offer a preliminary analysis of the effects of these changes with respect to two categories of disclosures: (1) the mandatory disclosures in the patent document itself, and (2) peripheral disclosures, which I define as the dissemination of information that would not occur but for the existence of a patent system.
Changes to Novelty Rules: The shift to a first to file system is central to the America Invents Act. Along with that change comes a revamped set of novelty rules – a complete rewrite of Section 102. Gone is 102(a), and the concept that prior art must precede the date of invention. Gone too is 102(b) and the one-year statutory bar. Instead, we will soon (i.e.: in eighteen months) have a new 102(a) under which a variety of things (i.e.: patents, printed publications, public uses, invention being on sale, etc.) that predate the patent's effective filing date constitute prior art, a much more potent statutory bar than presently exists.
This new rule comes with a major exception, however: prior art does not include disclosures (which I interpret as referring to any of the categories of prior art discussed in the new 102(a)) made within one year of filing if "the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor." (proposed language of 102(b)(1)(B)) (The section also contains an exception for disclosures by the inventor or another who obtained the subject matter from the inventor). In other words, inventors will have the ability to negate any prior art from the one-year period prior to filing by engaging in public disclosure.
This provision has the potential to encourage early disclosures of information by the inventor. Although on the surface it seems to provide no more ability for inventors to engage in disclosures than the existing one-year statutory bar, under which an inventor was free to disclose whatever it wanted for the one-year period prior to filing, it perhaps may result in more disclosures than under the present structure. A disclosure race may be encouraged. If, as Gideon Parchomovsky has suggested, inventors involved in a patent race sometimes engage in strategic disclosures to stymie their competitors, the new 102(b)(1)(B) has the potential to fuel this behavior. Through early disclosure, inventors who are racing to develop a new technology can not only block their rivals from obtaining a patent—because the disclosure would operate as prior art against the rival's patenting attempts—but can also negate any subsequent attempt by the rival to disclose patent-blocking information of equivalent content. Rather than a race to invent, perhaps this will produce a race to engage in early public disclosures. Unfortunately, any such effects are likely to be largely limited to inventors who desire to only file in the United States due to the lack of a self-disclosure exception in many countries.
Creation of a Prior User Defense: Even as the changes to the novelty rules seem to encourage early peripheral disclosures of technological information, at least for US-only inventors, the creation of a prior user defense pushes towards less disclosure, albeit through different mechanisms. I see the creation of a prior user defense in Section 5 of H.R. 1249 as impacting the disclosure of technological information in two ways: it may reduce the quantity of patent applications filed, and thus the number of mandatory disclosures that accompany those applications, and it has the potential to shift investment in invention away from self-disclosing inventions to those that can be protected through secrecy mechanisms.
The types of inventions that the prior user defense most applies to are those with the capability of being protected through secrecy. A prior user defense is less important for inventions whose workings are readily understandable once they are placed on the market because these products already represent potentially invalidating prior art; thus, this type of defense has most relevance for non-self disclosing inventions, a category that includes many processes. Under the current law, inventors who develop non-self disclosing inventions are faced with a difficult choice: maintain the process as a trade secret, and run the risk of being blocked later by an inventor who obtains a patent, or file for a patent and disclose the process to the public. Both options have significant costs associated with their selection but the patent and disclose option is hardly foreclosed.
A prior user defense reweights this decision in favor of maintaining secrecy because it reduces the risk of being blocked by a later inventor. The directional effect of this change is to reduce the number of patents that are filed on secret inventions, and thus reduce the number of mandatory disclosures that accompany those patents.
Of course, not everyone accepts that these mandatory disclosures provide useful technological information. Consider, however, the effects on peripheral disclosures – specifically, the impact on investment in self-disclosing inventions. The creation of a prior user defense re-calibrates the scale as between secret inventions and self-disclosing inventions. By making secrecy a more valuable protection strategy for inventors to pursue, inventors are likely to focus their efforts towards the creation of such inventions as opposed to self-disclosing inventions, at least when the social utility that the inventor can monetize is otherwise equal. But self-disclosing inventions are inherently valuable for the information that they provide to the public and future inventors – a spillover that inventors cannot fully capture. The directional result may be the creation of fewer of these valuable inventions.
Elimination of Best Most Requirement: Section 15 of H.R. 1249 effectively eliminates the best mode requirement by amending the list of invalidity defense to exclude best mode While the best mode requirement remains in 35. U.S.C. 112, and thus theoretically could be used by a patent examiner to reject an application, failure to disclose best mode may also not be a basis for holding a patent unenforceable – i.e.: no inequitable conduct on this ground.
Although the best mode requirement has been subjected to substantial criticism on the grounds that it represents a trap for the unwary independent inventor while being wholly ineffective for disclosure purposes, the actual impact of the abolition of this requirement may be far broader than expected. From a directional standpoint, the only effect of this change is to weaken the mandatory disclosure obligations imposed on the applicant, and thus a decrease in the quality of individual disclosures should be predicted. How great a decrease, and whether the elimination of this requirement will result in more disclosure-providing applications being filed, will be an area to monitor.
(1) DIRECTOR.—The term “Director” means the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.
(2) OFFICE.—The term “Office” means the United States Patent and Trademark Office.
(3) PATENT PUBLIC ADVISORY COMMITTEE.—The term “Patent Public Advisory Committee” means the Patent Public Advisory Committee established under section 5(a) of title 35, United States Code.
(4) TRADEMARK ACT OF 1946.—The term “Trademark Act of 1946” means the Act entitled “An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes”, approved July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to as the “Trademark Act of 1946” or the “Lanham Act”).
(5) TRADEMARK PUBLIC ADVISORY COMMITTEE.—The term “Trademark Public Advisory Committee” means the Trademark Public Advisory Committee established under section 5(a) of title 35, United States Code.
SEC. 3. FIRST INVENTOR TO FILE.
(a) Definitions.—Section 100 of title 35, United States Code, is amended—
(1) in subsection (e), by striking “or inter partes reexamination under section 311”; and
(2) by adding at the end the following:
“(f) The term ‘inventor’ means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.
“(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’ for 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.”.
(b) Conditions For Patentability.—
(1) IN GENERAL.—Section 102 of title 35, United States Code, is amended to read as follows:
Ҥ 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.”.
(2) CONTINUITY OF INTENT UNDER THE CREATE ACT.—The enactment of section 102(c) of title 35, United States Code, under paragraph (1) of this subsection is done with the same intent to promote joint research activities that was expressed, including in the legislative history, through the enactment of the Cooperative Research and Technology Enhancement Act of 2004 (Public Law 108–453; the “CREATE Act”), the amendments of which are stricken by subsection (c) of this section. The United States Patent and Trademark Office shall administer section 102(c) of title 35, United States Code, in a manner consistent with the legislative history of the CREATE Act that was relevant to its administration by the United States Patent and Trademark Office.
(3) CONFORMING AMENDMENT.—The item relating to section 102 in the table of sections for chapter 10 of title 35, United States Code, is amended to read as follows:
“102. Conditions for patentability; novelty.”.
(c) Conditions For Patentability; Nonobvious Subject Matter.—Section 103 of title 35, United States Code, is amended to read as follows:
Ҥ 103. Conditions for patentability; non-obvious 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.”.
(d) Repeal Of Requirements For Inventions Made Abroad.—Section 104 of title 35, United States Code, and the item relating to that section in the table of sections for chapter 10 of title 35, United States Code, are repealed.
(e) Repeal Of Statutory Invention Registration.—
(1) IN GENERAL.—Section 157 of title 35, United States Code, and the item relating to that section in the table of sections for chapter 14 of title 35, United States Code, are repealed.
(2) REMOVAL OF CROSS REFERENCES.—Section 111(b)(8) of title 35, United States Code, is amended by striking “sections 115, 131, 135, and 157” and inserting “sections 131 and 135”.
(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect upon the expiration of the 18-month period beginning on the date of the enactment of this Act, and shall apply to any request for a statutory invention registration filed on or after that effective date.
(f) Earlier Filing Date For Inventor And Joint Inventor.—Section 120 of title 35, United States Code, is amended by striking “which is filed by an inventor or inventors named” and inserting “which names an inventor or joint inventor”.
(g) Conforming Amendments.—
(1) RIGHT OF PRIORITY.—Section 172 of title 35, United States Code, is amended by striking “and the time specified in section 102(d)”.
(2) LIMITATION ON REMEDIES.—Section 287(c)(4) of title 35, United States Code, is amended by striking “the earliest effective filing date of which is prior to” and inserting “which has an effective filing date before”.
(3) INTERNATIONAL APPLICATION DESIGNATING THE UNITED STATES: EFFECT.—Section 363 of title 35, United States Code, is amended by striking “except as otherwise provided in section 102(e) of this title”.
(4) PUBLICATION OF INTERNATIONAL APPLICATION: EFFECT.—Section 374 of title 35, United States Code, is amended by striking “sections 102(e) and 154(d)” and inserting “section 154(d)”.
(5) PATENT ISSUED ON INTERNATIONAL APPLICATION: EFFECT.—The second sentence of section 375(a) of title 35, United States Code, is amended by striking “Subject to section 102(e) of this title, such” and inserting “Such”.
(6) LIMIT ON RIGHT OF PRIORITY.—Section 119(a) of title 35, United States Code, is amended by striking “; but no patent shall be granted” and all that follows through “one year prior to such filing”.
(7) INVENTIONS MADE WITH FEDERAL ASSISTANCE.—Section 202(c) of title 35, United States Code, is amended—
(A) in paragraph (2)—
(i) by striking “publication, on sale, or public use,” and all that follows through “obtained in the United States” and inserting “the 1-year period referred to in section 102(b) would end before the end of that 2-year period”; and
(ii) by striking “prior to the end of the statutory” and inserting “before the end of that 1-year”; and
(B) in paragraph (3), by striking “any statutory bar date that may occur under this title due to publication, on sale, or public use” and inserting “the expiration of the 1-year period referred to in section 102(b)”.
(h) Derived Patents.—
(1) IN GENERAL.—Section 291 of title 35, United States Code, is amended to read as follows:
Ҥ 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 be filed only before the end of the 1-year period beginning on the date of the issuance of the first patent containing a claim to the allegedly derived invention and naming an individual alleged to have derived such invention as the inventor or joint inventor.”.
(2) CONFORMING AMENDMENT.—The item relating to section 291 in the table of sections for chapter 29 of title 35, United States Code, is amended to read as follows:
“291. Derived patents.”.
(i) Derivation Proceedings.—Section 135 of title 35, United States Code, is amended to read as follows:
Ҥ 135. Derivation proceedings
“(a) Institution Of Proceeding.—An applicant for patent may file a petition to institute a derivation proceeding in the Office. The petition shall set forth with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s application and, without authorization, the earlier application claiming such invention was filed. Any such petition may be filed only within the 1-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the 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 an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner’s application and, without authorization, the earlier application claiming such invention was filed. In appropriate circumstances, the Patent Trial and Appeal Board may correct the naming of the inventor in any application or patent at issue. The Director shall prescribe regulations setting forth standards for the conduct of derivation proceedings, including requiring parties to provide sufficient evidence to prove and rebut a claim of derivation.
“(c) Deferral Of Decision.—The Patent Trial and Appeal Board may defer action on a petition for a derivation proceeding until the expiration of the 3-month period beginning on the date on which the Director issues 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.”.
(j) Elimination Of References To Interferences.—(1) Sections 134, 145, 146, 154, and 305 of title 35, United States Code, are each amended by striking “Board of Patent Appeals and Interferences” each place it appears and inserting “Patent Trial and Appeal Board”.
(2)(A) Section 146 of title 35, United States Code, is amended—
(i) by striking “an interference” and inserting “a derivation proceeding”; and
(ii) by striking “the interference” and inserting “the derivation proceeding”.
(B) The subparagraph heading for section 154(b)(1)(C) of title 35, United States Code, is amended to read as follows:
“(C) GUARANTEE OF ADJUSTMENTS FOR DELAYS DUE TO DERIVATION PROCEEDINGS, SECRECY ORDERS, AND APPEALS.—”.
(3) The section heading for section 134 of title 35, United States Code, is amended to read as follows:
“§ 134. Appeal to the Patent Trial and Appeal Board”.
(4) The section heading for section 146 of title 35, United States Code, is amended to read as follows:
“§ 146. Civil action in case of derivation proceeding”.
(5) The items relating to sections 134 and 135 in the table of sections for chapter 12 of title 35, United States Code, are amended to read as follows:
“134. Appeal to the Patent Trial and Appeal Board.
“135. Derivation proceedings.”.
(6) The item relating to section 146 in the table of sections for chapter 13 of title 35, United States Code, is amended to read as follows:
“146. Civil action in case of derivation proceeding.”.
(k) Statute Of Limitations.—
(1) IN GENERAL.—Section 32 of title 35, United States Code, is amended by inserting between the third and fourth sentences the following: “A proceeding under this section shall be commenced not later than the earlier of either the date that is 10 years after the date on which the misconduct forming the basis for the proceeding occurred, or 1 year after the date on which the misconduct forming the basis for the proceeding is made known to an officer or employee of the Office as prescribed in the regulations established under section 2(b)(2)(D).”.
(2) REPORT TO CONGRESS.—The Director shall provide on a biennial basis to the Judiciary Committees of the Senate and House of Representatives a report providing a short description of incidents made known to an officer or employee of the Office as prescribed in the regulations established under section 2(b)(2)(D) of title 35, United States Code, that reflect substantial evidence of misconduct before the Office but for which the Office was barred from commencing a proceeding under section 32 of title 35, United States Code, by the time limitation established by the fourth sentence of that section.
(3) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply in any case in which the time period for instituting a proceeding under section 32 of title 35, United States Code, had not lapsed before the date of the enactment of this Act.
(l) Small Business Study.—
(1) DEFINITIONS.—In this subsection—
(A) the term “Chief Counsel” means the Chief Counsel for Advocacy of the Small Business Administration;
(B) the term “General Counsel” means the General Counsel of the United States Patent and Trademark Office; and
(C) the term “small business concern” has the meaning given that term under section 3 of the Small Business Act (15 U.S.C. 632).
(2) STUDY.—
(A) IN GENERAL.—The Chief Counsel, in consultation with the General Counsel, shall conduct a study of the effects of eliminating the use of dates of invention in determining whether an applicant is entitled to a patent under title 35, United States Code.
(B) AREAS OF STUDY.—The study conducted under subparagraph (A) shall include examination of the effects of eliminating the use of invention dates, including examining—
(i) how the change would affect the ability of small business concerns to obtain patents and their costs of obtaining patents;
(ii) whether the change would create, mitigate, or exacerbate any disadvantages for applicants for patents that are small business concerns relative to applicants for patents that are not small business concerns, and whether the change would create any advantages for applicants for patents that are small business concerns relative to applicants for patents that are not small business concerns;
(iii) the cost savings and other potential benefits to small business concerns of the change; and
(iv) the feasibility and costs and benefits to small business concerns of alternative means of determining whether an applicant is entitled to a patent under title 35, United States Code.
(3) REPORT.—Not later than the date that is 1 year after the date of the enactment of this Act, the Chief Counsel shall submit to the Committee on Small Business and Entrepreneurship and the Committee on the Judiciary of the Senate and the Committee on Small Business and the Committee on the Judiciary of the House of Representatives a report on the results of the study under paragraph (2).
(m) Report On Prior User Rights.—
(1) IN GENERAL.—Not later than the end of the 4-month period beginning on the date of the enactment of this Act, the Director shall report, to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives, the findings and recommendations of the Director on the operation of prior user rights in selected countries in the industrialized world. The report shall include the following:
(A) A comparison between patent laws of the United States and the laws of other industrialized countries, including members of the European Union and Japan, Canada, and Australia.
(B) An analysis of the effect of prior user rights on innovation rates in the selected countries.
(C) An analysis of the correlation, if any, between prior user rights and start-up enterprises and the ability to attract venture capital to start new companies.
(D) An analysis of the effect of prior user rights, if any, on small businesses, universities, and individual inventors.
(E) An analysis of legal and constitutional issues, if any, that arise from placing trade secret law in patent law.
(F) An analysis of whether the change to a first-to-file patent system creates a particular need for prior user rights.
(2) CONSULTATION WITH OTHER AGENCIES.—In preparing the report required under paragraph (1), the Director shall consult with the United States Trade Representative, the Secretary of State, and the Attorney General.
(n) Effective Date.—
(1) IN GENERAL.—Except as otherwise provided in this section, the amendments made by this section shall take effect upon the expiration of the 18-month period beginning on the date of the enactment of this Act, and shall apply to any application for patent, and to any patent issuing thereon, that contains or contained at any time—
(A) a claim to a claimed invention that has an effective filing date as defined in section 100(i) of title 35, United States Code, that is on or after the effective date described in this paragraph; or
(B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim.
(2) INTERFERING PATENTS.—The provisions of sections 102(g), 135, and 291 of title 35, United States Code, as in effect on the day before the effective date set forth in paragraph (1) of this subsection, shall apply to each claim of an application for patent, and any patent issued thereon, for which the amendments made by this section also apply, if such application or patent contains or contained at any time—
(A) a claim to an invention having an effective filing date as defined in section 100(i) of title 35, United States Code, that occurs before the effective date set forth in paragraph (1) of this subsection; or
(B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim.
(o) Sense Of Congress.—It is the sense of the Congress that converting the United States patent system from “first to invent” to a system of “first inventor to file” will promote the progress of science and the useful arts by securing for limited times to inventors the exclusive rights to their discoveries and provide inventors with greater certainty regarding the scope of protection provided by the grant of exclusive rights to their discoveries.
(p) Sense Of Congress.—It is the sense of the Congress that converting the United States patent system from “first to invent” to a system of “first inventor to file” will improve the United States patent system and promote harmonization of the United States patent system with the patent systems commonly used in nearly all other countries throughout the world with whom the United States conducts trade and thereby promote greater international uniformity and certainty in the procedures used for securing the exclusive rights of inventors to their discoveries.
SEC. 4. INVENTOR’S OATH OR DECLARATION.
(a) Inventor’s Oath Or Declaration.—
(1) IN GENERAL.—Section 115 of title 35, United States Code, is amended to read as follows:
“§ 115. Inventor’s oath or declaration
“(a) Naming The Inventor; Inventor’s Oath Or Declaration.—An application for patent that is filed under section 111(a) or commences the national stage under section 371 shall include, or be amended to include, the name of the inventor for any invention claimed in the application. Except as otherwise provided in this section, each individual who is the inventor or a joint inventor of a claimed invention in an application for patent shall execute an oath or declaration in connection with the application.
“(b) Required Statements.—An oath or declaration under subsection (a) shall contain statements that—
“(1) the application was made or was authorized to be made by the affiant or declarant; and
“(2) such individual believes himself or herself to be the original inventor or an original joint inventor of a claimed invention in the application.
“(c) Additional Requirements.—The Director may specify additional information relating to the inventor and the invention that is required to be included in an oath or declaration under subsection (a).
“(d) Substitute Statement.—
“(1) IN GENERAL.—In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide a substitute statement under the circumstances described in paragraph (2) and such additional circumstances that the Director may specify by regulation.
“(2) PERMITTED CIRCUMSTANCES.—A substitute statement under paragraph (1) is permitted with respect to any individual who—
“(A) is unable to file the oath or declaration under subsection (a) because the individual—
“(i) is deceased;
“(ii) is under legal incapacity; or
“(iii) cannot be found or reached after diligent effort; or
“(B) is under an obligation to assign the invention but has refused to make the oath or declaration required under subsection (a).
“(3) CONTENTS.—A substitute statement under this subsection shall—
“(A) identify the individual with respect to whom the statement applies;
“(B) set forth the circumstances representing the permitted basis for the filing of the substitute statement in lieu of the oath or declaration under subsection (a); and
“(C) contain any additional information, including any showing, required by the Director.
“(e) Making Required Statements In Assignment Of Record.—An individual who is under an obligation of assignment of an application for patent may include the required statements under subsections (b) and (c) in the assignment executed by the individual, in lieu of filing such statements separately.
“(f) Time For Filing.—A notice of allowance under section 151 may be provided to an applicant for patent only if the applicant for patent has filed each required oath or declaration under subsection (a) or has filed a substitute statement under subsection (d) or recorded an assignment meeting the requirements of subsection (e).
“(g) Earlier-Filed Application Containing Required Statements Or Substitute Statement.—
“(1) EXCEPTION.—The requirements under this section shall not apply to an individual with respect to an application for patent in which the individual is named as the inventor or a joint inventor and who claims the benefit under section 120, 121, or 365(c) of the filing of an earlier-filed application, if—
“(A) an oath or declaration meeting the requirements of subsection (a) was executed by the individual and was filed in connection with the earlier-filed application;
“(B) a substitute statement meeting the requirements of subsection (d) was filed in connection with the earlier filed application with respect to the individual; or
“(C) an assignment meeting the requirements of subsection (e) was executed with respect to the earlier-filed application by the individual and was recorded in connection with the earlier-filed application.
“(2) COPIES OF OATHS, DECLARATIONS, STATEMENTS, OR ASSIGNMENTS.—Notwithstanding paragraph (1), the Director may require that a copy of the executed oath or declaration, the substitute statement, or the assignment filed in connection with the earlier-filed application be included in the later-filed application.
“(h) Supplemental And Corrected Statements; Filing Additional Statements.—
“(1) IN GENERAL.—Any person making a statement required under this section may withdraw, replace, or otherwise correct the statement at any time. If a change is made in the naming of the inventor requiring the filing of 1 or more additional statements under this section, the Director shall establish regulations under which such additional statements may be filed.
“(2) SUPPLEMENTAL STATEMENTS NOT REQUIRED.—If an individual has executed an oath or declaration meeting the requirements of subsection (a) or an assignment meeting the requirements of subsection (e) with respect to an application for patent, the Director may not thereafter require that individual to make any additional oath, declaration, or other statement equivalent to those required by this section in connection with the application for patent or any patent issuing thereon.
“(3) SAVINGS CLAUSE.—A patent shall not be invalid or unenforceable based upon the failure to comply with a requirement under this section if the failure is remedied as provided under paragraph (1).
“(i) Acknowledgment Of Penalties.—Any declaration or statement filed pursuant to this section shall contain an acknowledgment that any willful false statement made in such declaration or statement is punishable under section 1001 of title 18 by fine or imprisonment of not more than 5 years, or both.”.
(2) RELATIONSHIP TO DIVISIONAL APPLICATIONS.—Section 121 of title 35, United States Code, is amended by striking “If a divisional application” and all that follows through “inventor.”.
(3) REQUIREMENTS FOR NONPROVISIONAL APPLICATIONS.—Section 111(a) of title 35, United States Code, is amended—
(A) in paragraph (2)(C), by striking “by the applicant” and inserting “or declaration”;
(B) in the heading for paragraph (3), by inserting “OR DECLARATION” after “AND OATH”; and
(C) by inserting “or declaration” after “and oath” each place it appears.
(4) CONFORMING AMENDMENT.—The item relating to section 115 in the table of sections for chapter 11 of title 35, United States Code, is amended to read as follows:
“115. Inventor’s oath or declaration.”.
(b) Filing By Other Than Inventor.—
(1) IN GENERAL.—Section 118 of title 35, United States Code, is amended to read as follows:
Ҥ 118. Filing by other than inventor
“A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient.”.
(2) CONFORMING AMENDMENT.—Section 251 of title 35, United States Code, is amended in the third undesignated paragraph by inserting “or the application for the original patent was filed by the assignee of the entire interest” after “claims of the original patent”.
(c) Specification.—Section 112 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking “The specification” and inserting “(a) In General.—The specification”; and
(B) by striking “of carrying out his invention” and inserting “or joint inventor of carrying out the invention”;
(2) in the second undesignated paragraph—
(A) by striking “The specification” and inserting “(b) Conclusion.—The specification”; and
(B) by striking “applicant regards as his invention” and inserting “inventor or a joint inventor regards as the invention”;
(3) in the third undesignated paragraph, by striking “A claim” and inserting “(c) Form.—A claim”;
(4) in the fourth undesignated paragraph, by striking “Subject to the following paragraph,” and inserting “(d) Reference In Dependent Forms.—Subject to subsection (e),”;
(5) in the fifth undesignated paragraph, by striking “A claim” and inserting “(e) Reference In Multiple Dependent Form.—A claim”; and
(6) in the last undesignated paragraph, by striking “An element” and inserting “(f) Element In Claim For A Combination.—An element”.
(d) Conforming Amendments.—
(1) Sections 111(b)(1)(A) of title 35, United States Code, is amended by striking “the first paragraph of section 112 of this title” and inserting “section 112(a)”.
(2) Section 111(b)(2) of title 35, United States Code, is amended by striking “the second through fifth paragraphs of section 112,” and inserting “subsections (b) through (e) of section 112,”.
(e) Effective Date.—The amendments made by this section shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent application that is filed on or after that effective date.
SEC. 5. DEFENSE TO INFRINGEMENT BASED ON PRIOR COMMERCIAL USE.
(a) In General.—Section 273 of title 35, United States Code, is amended to read as follows:
Ҥ 273. Defense to infringement based on prior commercial use
“(a) In General.—A person shall be entitled to a defense under section 282(b) with respect to subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process, that would otherwise infringe a claimed invention being asserted against the person if—
“(1) such person, acting in good faith, commercially used the subject matter in the United States, either in connection with an internal commercial use or an actual arm’s length sale or other arm’s length commercial transfer of a useful end result of such commercial use; and
“(2) such commercial use occurred at least 1 year before the earlier of either—
“(A) the effective filing date of the claimed invention; or
“(B) the date on which the claimed invention was disclosed to the public in a manner that qualified for the exception from prior art under section 102(b).
“(b) Burden Of Proof.—A person asserting a defense under this section shall have the burden of establishing the defense by clear and convincing evidence.
“(c) Additional Commercial Uses.—
“(1) PREMARKETING REGULATORY REVIEW.—Subject matter for which commercial marketing or use is subject to a premarketing regulatory review period during which the safety or efficacy of the subject matter is established, including any period specified in section 156(g), shall be deemed to be commercially used for purposes of subsection (a)(1) during such regulatory review period.
“(2) NONPROFIT LABORATORY USE.—A use of subject matter by a nonprofit research laboratory or other nonprofit entity, such as a university or hospital, for which the public is the intended beneficiary, shall be deemed to be a commercial use for purposes of subsection (a)(1), except that a defense under this section may be asserted pursuant to this paragraph only for continued and noncommercial use by and in the laboratory or other nonprofit entity.
“(d) Exhaustion Of Rights.—Notwithstanding subsection (e)(1), the sale or other disposition of a useful end result by a person entitled to assert a defense under this section in connection with a patent with respect to that useful end result shall exhaust the patent owner’s rights under the patent to the extent that such rights would have been exhausted had such sale or other disposition been made by the patent owner.
“(e) Limitations And Exceptions.—
“(1) PERSONAL DEFENSE.—
“(A) IN GENERAL.—A defense under this section may be asserted only by the person who performed or directed the performance of the commercial use described in subsection (a), or by an entity that controls, is controlled by, or is under common control with such person.
“(B) TRANSFER OF RIGHT.—Except for any transfer to the patent owner, the right to assert a defense under this section shall not be licensed or assigned or transferred to another person except as an ancillary and subordinate part of a good-faith assignment or transfer for other reasons of the entire enterprise or line of business to which the defense relates.
“(C) RESTRICTION ON SITES.—A defense under this section, when acquired by a person as part of an assignment or transfer described in subparagraph (B), may only be asserted for uses at sites where the subject matter that would otherwise infringe a claimed invention is in use before the later of the effective filing date of the claimed invention or the date of the assignment or transfer of such enterprise or line of business.
“(2) DERIVATION.—A person may not assert a defense under this section if the subject matter on which the defense is based was derived from the patentee or persons in privity with the patentee.
“(3) NOT A GENERAL LICENSE.—The defense asserted by a person under this section is not a general license under all claims of the patent at issue, but extends only to the specific subject matter for which it has been established that a commercial use that qualifies under this section occurred, except that the defense shall also extend to variations in the quantity or volume of use of the claimed subject matter, and to improvements in the claimed subject matter that do not infringe additional specifically claimed subject matter of the patent.
“(4) ABANDONMENT OF USE.—A person who has abandoned commercial use (that qualifies under this section) of subject matter may not rely on activities performed before the date of such abandonment in establishing a defense under this section with respect to actions taken on or after the date of such abandonment.
“(5) UNIVERSITY EXCEPTION.—
“(A) IN GENERAL.—A person commercially using subject matter to which subsection (a) applies may not assert a defense under this section if the claimed invention with respect to which the defense is asserted was, at the time the invention was made, owned or subject to an obligation of assignment to either an institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)), or a technology transfer organization whose primary purpose is to facilitate the commercialization of technologies developed by one or more such institutions of higher education.
“(B) EXCEPTION.—Subparagraph (A) shall not apply if any of the activities required to reduce to practice the subject matter of the claimed invention could not have been undertaken using funds provided by the Federal Government.
“(f) Unreasonable Assertion Of Defense.—If the defense under this section is pleaded by a person who is found to infringe the patent and who subsequently fails to demonstrate a reasonable basis for asserting the defense, the court shall find the case exceptional for the purpose of awarding attorney fees under section 285.
“(g) Invalidity.—A patent shall not be deemed to be invalid under section 102 or 103 solely because a defense is raised or established under this section.”.
(b) Conforming Amendment.—The item relating to section 273 in the table of sections for chapter 28 of title 35, United States Code, is amended to read as follows:
“273. Defense to infringement based on prior commercial use.”.
(c) Effective Date.—The amendments made by this section shall apply to any patent issued on or after the date of the enactment of this Act.
SEC. 6. POST-GRANT REVIEW PROCEEDINGS.
(a) Inter Partes Review.—Chapter 31 of title 35, United States Code, is amended to read as follows:
“(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. The Director shall establish, by regulation, fees to be paid by the person requesting the review, in such amounts as the Director determines to be reasonable, considering the aggregate costs of the review.
“(b) Scope.—A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.
“(c) Filing Deadline.—A petition for inter partes review shall be filed after the later of either—
“(1) the date that is 9 months after the grant of a patent or issuance of a reissue of a patent; or
“(2) if a post-grant review is instituted under chapter 32, the date of the termination of such post-grant review.
Ҥ 312. Petitions
“(a) Requirements Of Petition.—A petition filed under section 311 may be considered only if—
“(1) the petition is accompanied by payment of the fee established by the Director under section 311;
“(2) the petition identifies all real parties in interest;
“(3) the petition identifies, in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim, including—
“(A) copies of patents and printed publications that the petitioner relies upon in support of the petition; and
“(B) affidavits or declarations of supporting evidence and opinions, if the petitioner relies on expert opinions;
“(4) the petition provides such other information as the Director may require by regulation; and
“(5) the petitioner provides copies of any of the documents required under paragraphs (2), (3), and (4) to the patent owner or, if applicable, the designated representative of the patent owner.
“(b) Public Availability.—As soon as practicable after the receipt of a petition under section 311, the Director shall make the petition available to the public.
Ҥ 313. Preliminary response to petition
“If an inter partes review petition is filed under section 311, the patent owner shall have the right to file a preliminary response to the petition, within a time period set by the Director, that sets forth reasons why no inter partes review should be instituted based upon the failure of the petition to meet any requirement of this chapter.
Ҥ 314. Institution of inter partes review
“(a) Threshold.—The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.
“(b) Timing.—The Director shall determine whether to institute an inter partes review under this chapter pursuant to a petition filed under section 311 within 3 months after—
“(1) receiving a preliminary response to the petition under section 313; or
“(2) if no such preliminary response is filed, the last date on which such response may be filed.
“(c) Notice.—The Director shall notify the petitioner and patent owner, in writing, of the Director’s determination under subsection (a), and shall make such notice available to the public as soon as is practicable. Such notice shall include the date on which the review shall commence.
“(d) No Appeal.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.
Ҥ 315. Relation to other proceedings or actions
“(a) Infringer’s Civil Action.—
“(1) INTER PARTES REVIEW BARRED BY CIVIL ACTION.—An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.
“(2) STAY OF CIVIL ACTION.—If the petitioner or real party in interest files a civil action challenging the validity of a claim of the patent on or after the date on which the petitioner files a petition for inter partes review of the patent, that civil action shall be automatically stayed until either—
“(A) the patent owner moves the court to lift the stay;
“(B) the patent owner files a civil action or counterclaim alleging that the petitioner or real party in interest has infringed the patent; or
“(C) the petitioner or real party in interest moves the court to dismiss the civil action.
“(3) TREATMENT OF COUNTERCLAIM.—A counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of this subsection.
“(b) Patent Owner’s Action.—An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).
“(c) Joinder.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.
“(d) Multiple Proceedings.—Notwithstanding sections 135(a), 251, and 252, and chapter 30, during the pendency of an inter partes review, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the inter partes review or other proceeding or matter may proceed, including providing for stay, transfer, consolidation, or termination of any such matter or proceeding.
“(e) Estoppel.—
“(1) PROCEEDINGS BEFORE THE OFFICE.—The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
“(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.—The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
Ҥ 316. Conduct of inter partes review
“(a) Regulations.—The Director shall prescribe regulations—
“(1) providing that the file of any proceeding under this chapter shall be made available to the public, except that any petition or document filed with the intent that it be sealed shall, if accompanied by a motion to seal, be treated as sealed pending the outcome of the ruling on the motion;
“(2) setting forth the standards for the showing of sufficient grounds to institute a review under section 314(a);
“(3) establishing procedures for the submission of supplemental information after the petition is filed;
“(4) establishing and governing inter partes review under this chapter and the relationship of such review to other proceedings under this title;
“(5) setting forth standards and procedures for discovery of relevant evidence, including that such discovery shall be limited to—
“(A) the deposition of witnesses submitting affidavits or declarations; and
“(B) what is otherwise necessary in the interest of justice;
“(6) prescribing sanctions for abuse of discovery, abuse of process, or any other improper use of the proceeding, such as to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding;
“(7) providing for protective orders governing the exchange and submission of confidential information;
“(8) providing for the filing by the patent owner of a response to the petition under section 313 after an inter partes review has been instituted, and requiring that the patent owner file with such response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response;
“(9) setting forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d) to cancel a challenged claim or propose a reasonable number of substitute claims, and ensuring that any information submitted by the patent owner in support of any amendment entered under subsection (d) is made available to the public as part of the prosecution history of the patent;
“(10) providing either party with the right to an oral hearing as part of the proceeding;
“(11) requiring that the final determination in an inter partes review be issued not later than 1 year after the date on which the Director notices the institution of a review under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section 315(c);
“(12) setting a time period for requesting joinder under section 315(c); and
“(13) providing the petitioner with at least 1 opportunity to file written comments within a time period established by the Director.
“(b) Considerations.—In prescribing regulations under this section, the Director shall consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter.
“(c) Patent Trial And Appeal Board.—The Patent Trial and Appeal Board shall, in accordance with section 6, conduct each inter partes review instituted under this chapter.
“(d) Amendment Of The Patent.—
“(1) IN GENERAL.—During an inter partes review instituted under this chapter, the patent owner may file 1 motion to amend the patent in 1 or more of the following ways:
“(A) Cancel any challenged patent claim.
“(B) For each challenged claim, propose a reasonable number of substitute claims.
“(2) ADDITIONAL MOTIONS.—Additional motions to amend may be permitted upon the joint request of the petitioner and the patent owner to materially advance the settlement of a proceeding under section 317, or as permitted by regulations prescribed by the Director.
“(3) SCOPE OF CLAIMS.—An amendment under this subsection may not enlarge the scope of the claims of the patent or introduce new matter.
“(e) Evidentiary Standards.—In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.
Ҥ 317. Settlement
“(a) In General.—An inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the inter partes review is terminated with respect to a petitioner under this section, no estoppel under section 315(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner’s institution of that inter partes review. If no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a).
“(b) Agreements In Writing.—Any agreement or understanding between the patent owner and a petitioner, including any collateral agreements referred to in such agreement or understanding, made in connection with, or in contemplation of, the termination of an inter partes review under this section shall be in writing and a true copy of such agreement or understanding shall be filed in the Office before the termination of the inter partes review as between the parties. 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, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause.
Ҥ 318. Decision of the Board
“(a) Final Written Decision.—If an inter partes review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 316(d).
“(b) Certificate.—If the Patent Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal has expired or any appeal has terminated, the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.
“(c) Intervening Rights.—Any proposed amended or new claim determined to be patentable and incorporated into a patent following an inter partes review under this chapter shall have the same effect as that specified in section 252 for reissued patents on the right of any person who made, purchased, or used within the United States, or imported into the United States, anything patented by such proposed amended or new claim, or who made substantial preparation therefor, before the issuance of a certificate under subsection (b).
“(d) Data On Length Of Review.—The Office shall make available to the public data describing the length of time between the institution of, and the issuance of a final written decision under subsection (a) for, each inter partes review.
Ҥ 319. Appeal
“A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.”.
(b) Conforming Amendment.—The table of chapters for part III of title 35, United States Code, is amended by striking the item relating to chapter 31 and inserting the following:
“31. Inter Partes Review …………………………………………………………………….. 311”.
(c) Regulations And Effective Date.—
(1) REGULATIONS.—The Director shall, not later than the date that is 1 year after the date of the enactment of this Act, issue regulations to carry out chapter 31 of title 35, United States Code, as amended by subsection (a) of this section.
(2) APPLICABILITY.—
(A) IN GENERAL.—The amendments made by subsection (a) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date.
(B) GRADUATED IMPLEMENTATION.—The Director may impose a limit on the number of inter partes reviews that may be instituted underchapter 31 of title 35, United States Code, during each of the first 4 1-year periods in which the amendments made by subsection (a) are in effect, if such number in each year equals or exceeds the number of inter partes reexaminations that are ordered under chapter 31 of title 35, United States Code, in the last fiscal year ending before the effective date of the amendments made by subsection (a).
(3) TRANSITION.—
(A) IN GENERAL.—Chapter 31 of title 35, United States Code, is amended—
(i) in section 312—
(I) in subsection (a)—
(aa) in the first sentence, by striking “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request,” and inserting “the information presented in the request shows that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request,”; and
(bb) in the second sentence, by striking “The existence of a substantial new question of patentability” and inserting “A showing that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request”; and
(II) in subsection (c), in the second sentence, by striking “no substantial new question of patentability has been raised,” and inserting “the showing required by subsection (a) has not been made,”; and
(ii) in section 313, by striking “a substantial new question of patentability affecting a claim of the patent is raised” and inserting “it has been shown that there is a reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request”.
(B) APPLICATION.—The amendments made by this paragraph—
(i) shall take effect on the date of the enactment of this Act; and
(ii) shall apply to requests for inter partes reexamination that are filed on or after such date of enactment, but before the effective date set forth in paragraph (2)(A) of this subsection.
(C) CONTINUED APPLICABILITY OF PRIOR PROVISIONS.—The provisions of chapter 31 of title 35, United States Code, as amended by this paragraph, shall continue to apply to requests for inter partes reexamination that are filed before the effective date set forth in paragraph (2)(A) as if subsection (a) had not been enacted.
(d) Post-Grant Review.—Part III of title 35, United States Code, is amended by adding at the end the following:
“(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute a post-grant review of the patent. The Director shall establish, by regulation, fees to be paid by the person requesting the review, in such amounts as the Director determines to be reasonable, considering the aggregate costs of the post-grant review.
“(b) Scope.—A petitioner in a post-grant review may request to cancel as unpatentable 1 or more claims of a patent on any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim).
“(c) Filing Deadline.—A petition for a post-grant review may only be filed not later than the date that is 9 months after the date of the grant of the patent or of the issuance of a reissue patent (as the case may be).
Ҥ 322. Petitions
“(a) Requirements Of Petition.—A petition filed under section 321 may be considered only if—
“(1) the petition is accompanied by payment of the fee established by the Director under section 321;
“(2) the petition identifies all real parties in interest;
“(3) the petition identifies, in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim, including—
“(A) copies of patents and printed publications that the petitioner relies upon in support of the petition; and
“(B) affidavits or declarations of supporting evidence and opinions, if the petitioner relies on other factual evidence or on expert opinions;
“(4) the petition provides such other information as the Director may require by regulation; and
“(5) the petitioner provides copies of any of the documents required under paragraphs (2), (3), and (4) to the patent owner or, if applicable, the designated representative of the patent owner.
“(b) Public Availability.—As soon as practicable after the receipt of a petition under section 321, the Director shall make the petition available to the public.
Ҥ 323. Preliminary response to petition
“If a post-grant review petition is filed under section 321, the patent owner shall have the right to file a preliminary response to the petition, within a time period set by the Director, that sets forth reasons why no post-grant review should be instituted based upon the failure of the petition to meet any requirement of this chapter.
Ҥ 324. Institution of post-grant review
“(a) Threshold.—The Director may not authorize a post-grant review to be instituted unless the Director determines that the information presented in the petition filed under section 321, if such information is not rebutted, would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.
“(b) Additional Grounds.—The determination required under subsection (a) may also be satisfied by a showing that the petition raises a novel or unsettled legal question that is important to other patents or patent applications.
“(c) Timing.—The Director shall determine whether to institute a post-grant review under this chapter pursuant to a petition filed under section 321 within 3 months after—
“(1) receiving a preliminary response to the petition under section 323; or
“(2) if no such preliminary response is filed, the last date on which such response may be filed.
“(d) Notice.—The Director shall notify the petitioner and patent owner, in writing, of the Director’s determination under subsection (a) or (b), and shall make such notice available to the public as soon as is practicable. Such notice shall include the date on which the review shall commence.
“(e) No Appeal.—The determination by the Director whether to institute a post-grant review under this section shall be final and nonappealable.
Ҥ 325. Relation to other proceedings or actions
“(a) Infringer’s Civil Action.—
“(1) POST-GRANT REVIEW BARRED BY CIVIL ACTION.—A post-grant review may not be instituted under this chapter if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.
“(2) STAY OF CIVIL ACTION.—If the petitioner or real party in interest files a civil action challenging the validity of a claim of the patent on or after the date on which the petitioner files a petition for post-grant review of the patent, that civil action shall be automatically stayed until either—
“(A) the patent owner moves the court to lift the stay;
“(B) the patent owner files a civil action or counterclaim alleging that the petitioner or real party in interest has infringed the patent; or
“(C) the petitioner or real party in interest moves the court to dismiss the civil action.
“(3) TREATMENT OF COUNTERCLAIM.—A counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of this subsection.
“(b) Preliminary Injunctions.—If a civil action alleging infringement of a patent is filed within 3 months after the date on which the patent is granted, the court may not stay its consideration of the patent owner’s motion for a preliminary injunction against infringement of the patent on the basis that a petition for post-grant review has been filed under this chapter or that such a post-grant review has been instituted under this chapter.
“(c) Joinder.—If more than 1 petition for a post-grant review under this chapter is properly filed against the same patent and the Director determines that more than 1 of these petitions warrants the institution of a post-grant review under section 324, the Director may consolidate such reviews into a single post-grant review.
“(d) Multiple Proceedings.—Notwithstanding sections 135(a), 251, and 252, and chapter 30, during the pendency of any post-grant review under this chapter, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the post-grant review or other proceeding or matter may proceed, including providing for the stay, transfer, consolidation, or termination of any such matter or proceeding. In determining whether to institute or order a proceeding under this chapter, chapter 30, or chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.
“(e) Estoppel.—
“(1) PROCEEDINGS BEFORE THE OFFICE.—The petitioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.
“(2) CIVIL ACTIONS AND OTHER PROCEEDINGS.—The petitioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that post-grant review.
“(f) Reissue Patents.—A post-grant review may not be instituted under this chapter if the petition requests cancellation of a claim in a reissue patent that is identical to or narrower than a claim in the original patent from which the reissue patent was issued, and the time limitations in section 321(c) would bar filing a petition for a post-grant review for such original patent.
Ҥ 326. Conduct of post-grant review
“(a) Regulations.—The Director shall prescribe regulations—
“(1) providing that the file of any proceeding under this chapter shall be made available to the public, except that any petition or document filed with the intent that it be sealed shall, if accompanied by a motion to seal, be treated as sealed pending the outcome of the ruling on the motion;
“(2) setting forth the standards for the showing of sufficient grounds to institute a review under subsections (a) and (b) of section 324;
“(3) establishing procedures for the submission of supplemental information after the petition is filed;
“(4) establishing and governing a post-grant review under this chapter and the relationship of such review to other proceedings under this title;
“(5) setting forth standards and procedures for discovery of relevant evidence, including that such discovery shall be limited to evidence directly related to factual assertions advanced by either party in the proceeding;
“(6) prescribing sanctions for abuse of discovery, abuse of process, or any other improper use of the proceeding, such as to harass or to cause unnecessary delay or an unnecessary increase in the cost of the proceeding;
“(7) providing for protective orders governing the exchange and submission of confidential information;
“(8) providing for the filing by the patent owner of a response to the petition under section 323 after a post-grant review has been instituted, and requiring that the patent owner file with such response, through affidavits or declarations, any additional factual evidence and expert opinions on which the patent owner relies in support of the response;
“(9) setting forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d) to cancel a challenged claim or propose a reasonable number of substitute claims, and ensuring that any information submitted by the patent owner in support of any amendment entered under subsection (d) is made available to the public as part of the prosecution history of the patent;
“(10) providing either party with the right to an oral hearing as part of the proceeding;
“(11) requiring that the final determination in any post-grant review be issued not later than 1 year after the date on which the Director notices the institution of a proceeding under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section 325(c); and
“(12) providing the petitioner with at least 1 opportunity to file written comments within a time period established by the Director.
“(b) Considerations.—In prescribing regulations under this section, the Director shall consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter.
“(c) Patent Trial And Appeal Board.—The Patent Trial and Appeal Board shall, in accordance with section 6, conduct each post-grant review instituted under this chapter.
“(d) Amendment Of The Patent.—
“(1) IN GENERAL.—During a post-grant review instituted under this chapter, the patent owner may file 1 motion to amend the patent in 1 or more of the following ways:
“(A) Cancel any challenged patent claim.
“(B) For each challenged claim, propose a reasonable number of substitute claims.
“(2) ADDITIONAL MOTIONS.—Additional motions to amend may be permitted upon the joint request of the petitioner and the patent owner to materially advance the settlement of a proceeding under section 327, or upon the request of the patent owner for good cause shown.
“(3) SCOPE OF CLAIMS.—An amendment under this subsection may not enlarge the scope of the claims of the patent or introduce new matter.
“(e) Evidentiary Standards.—In a post-grant review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.
Ҥ 327. Settlement
“(a) In General.—A post-grant review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the post-grant review is terminated with respect to a petitioner under this section, no estoppel under section 325(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner’s institution of that post-grant review. If no petitioner remains in the post-grant review, the Office may terminate the post-grant review or proceed to a final written decision under section 328(a).
“(b) Agreements In Writing.—Any agreement or understanding between the patent owner and a petitioner, including any collateral agreements referred to in such agreement or understanding, made in connection with, or in contemplation of, the termination of a post-grant review under this section shall be in writing, and a true copy of such agreement or understanding shall be filed in the Office before the termination of the post-grant review as between the parties. 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, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause.
Ҥ 328. Decision of the Board
“(a) Final Written Decision.—If a post-grant review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 326(d).
“(b) Certificate.—If the Patent Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal has expired or any appeal has terminated, the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.
“(c) Intervening Rights.—Any proposed amended or new claim determined to be patentable and incorporated into a patent following a post-grant review under this chapter shall have the same effect as that specified in section 252 of this title for reissued patents on the right of any person who made, purchased, or used within the United States, or imported into the United States, anything patented by such proposed amended or new claim, or who made substantial preparation therefor, before the issuance of a certificate under subsection (b).
“(d) Data On Length Of Review.—The Office shall make available to the public data describing the length of time between the institution of, and the issuance of a final written decision under subsection (a) for, each post-grant review.
Ҥ 329. Appeal
“A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 328(a) may appeal the decision pursuant to sections 141 through 144. Any party to the post-grant review shall have the right to be a party to the appeal.”.
(e) Conforming Amendment.—The table of chapters for part III of title 35, United States Code, is amended by adding at the end the following:
(1) REGULATIONS.—The Director shall, not later than the date that is 1 year after the date of the enactment of this Act, issue regulations to carry out chapter 32 of title 35, United States Code, as added by subsection (d) of this section.
(2) APPLICABILITY.—
(A) IN GENERAL.—The amendments made by subsection (d) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and, except as provided in section 18 and in paragraph (3), shall apply only to patents described in section 3(n)(1).
(B) LIMITATION.—The Director may impose a limit on the number of post-grant reviews that may be instituted under chapter 32 of title 35, United States Code, during each of the first 4 1-year periods in which the amendments made by subsection (d) are in effect.
(3) PENDING INTERFERENCES.—
(A) PROCEDURES IN GENERAL.—The Director shall determine, and include in the regulations issued under paragraph (1), the procedures under which an interference commenced before the effective date set forth in paragraph (2)(A) is to proceed, including whether such interference—
(i) is to be dismissed without prejudice to the filing of a petition for a post-grant review under chapter 32 of title 35, United States Code; or
(ii) is to proceed as if this Act had not been enacted.
(B) PROCEEDINGS BY PATENT TRIAL AND APPEAL BOARD.—For purposes of an interference that is commenced before the effective date set forth in paragraph (2)(A), the Director may deem the Patent Trial and Appeal Board to be the Board of Patent Appeals and Interferences, and may allow the Patent Trial and Appeal Board to conduct any further proceedings in that interference.
(C) APPEALS.—The authorization to appeal or have remedy from derivation proceedings in sections 141(d) and 146 of title 35, United States Code, as amended by this Act, and the jurisdiction to entertain appeals from derivation proceedings in section 1295(a)(4)(A) of title 28, United States Code, as amended by this Act, shall be deemed to extend to any final decision in an interference that is commenced before the effective date set forth in paragraph (2)(A) of this subsection and that is not dismissed pursuant to this paragraph.
(g) Citation Of Prior Art And Written Statements.—
(1) IN GENERAL.—Section 301 of title 35, United States Code, is amended to read as follows:
Ҥ 301. Citation of prior art and written statements
“(a) In General.—Any person at any time may cite to the Office in writing—
“(1) prior art consisting of patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent; or
“(2) statements of the patent owner filed in a proceeding before a Federal court or the Office in which the patent owner took a position on the scope of any claim of a particular patent.
“(b) Official File.—If the person citing prior art or written statements pursuant to subsection (a) explains in writing the pertinence and manner of applying the prior art or written statements to at least 1 claim of the patent, the citation of the prior art or written statements and the explanation thereof shall become a part of the official file of the patent.
“(c) Additional Information.—A party that submits a written statement pursuant to subsection (a)(2) shall include any other documents, pleadings, or evidence from the proceeding in which the statement was filed that addresses the written statement.
“(d) Limitations.—A written statement submitted pursuant to subsection (a)(2), and additional information submitted pursuant to subsection (c), shall not be considered by the Office for any purpose other than to determine the proper meaning of a patent claim in a proceeding that is ordered or instituted pursuant to section 304, 314, or 324. If any such written statement or additional information is subject to an applicable protective order, such statement or information shall be redacted to exclude information that is subject to that order.
“(e) Confidentiality.—Upon the written request of the person citing prior art or written statements pursuant to subsection (a), that person’s identity shall be excluded from the patent file and kept confidential.”.
(2) CONFORMING AMENDMENT.—The item relating to section 301 in the table of sections for chapter 30 of title 35, United States Code, is amended to read as follows:
“301. Citation of prior art and written statements.”.
(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date.
(h) Reexamination.—
(1) DETERMINATION BY DIRECTOR.—
(A) IN GENERAL.—Section 303(a) of title 35, United States Code, is amended by striking “section 301 of this title” and inserting “section 301 or 302”.
(B) EFFECTIVE DATE.—The amendment made by this paragraph shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date.
(2) APPEAL.—
(A) IN GENERAL.—Section 306 of title 35, United States Code, is amended by striking “145” and inserting “144”.
(B) EFFECTIVE DATE.—The amendment made by this paragraph shall take effect on the date of the enactment of this Act and shall apply to any appeal of a reexamination before the Board of Patent Appeals and Interferences or the Patent Trial and Appeal Board that is pending on, or brought on or after, the date of the enactment of this Act.
SEC. 7. PATENT TRIAL AND APPEAL BOARD.
(a) Composition And Duties.—
(1) IN GENERAL.—Section 6 of title 35, United States Code, is amended to read as follows:
Ҥ 6. Patent Trial and Appeal Board
“(a) In General.—There shall be in the Office a Patent Trial and Appeal Board. The Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges shall constitute the Patent Trial and Appeal Board. The administrative patent judges shall be persons of competent legal knowledge and scientific ability who are appointed by the Secretary, in consultation with the Director. Any reference in any Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to the Board of Patent Appeals and Interferences is deemed to refer to the Patent Trial and Appeal Board.
“(b) Duties.—The Patent Trial and Appeal Board shall—
“(1) on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a);
“(2) review appeals of reexaminations pursuant to section 134(b);
“(3) conduct derivation proceedings pursuant to section 135; and
“(4) conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32.
“(c) 3-Member Panels.—Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director. Only the Patent Trial and Appeal Board may grant rehearings.
“(d) Treatment Of Prior Appointments.—The Secretary of Commerce may, in the Secretary’s discretion, deem the appointment of an administrative patent judge who, before the date of the enactment of this subsection, held office pursuant to an appointment by the Director to take effect on the date on which the Director initially appointed the administrative patent judge. It shall be a defense to a challenge to the appointment of an administrative patent judge on the basis of the judge’s having been originally appointed by the Director that the administrative patent judge so appointed was acting as a de facto officer.”.
(2) CONFORMING AMENDMENT.—The item relating to section 6 in the table of sections for chapter 1 of title 35, United States Code, is amended to read as follows:
“6. Patent Trial and Appeal Board.”.
(b) Administrative Appeals.—Section 134 of title 35, United States Code, is amended—
(1) in subsection (b), by striking “any reexamination proceeding” and inserting “a reexamination”; and
(2) by striking subsection (c).
(c) Circuit Appeals.—
(1) IN GENERAL.—Section 141 of title 35, United States Code, is amended to read as follows:
Ҥ 141. Appeal to Court of Appeals for the Federal Circuit
“(a) Examinations.—An applicant who is dissatisfied with the final decision in an appeal to the Patent Trial and Appeal Board under section 134(a) may appeal the Board’s decision to the United States Court of Appeals for the Federal Circuit. By filing such an appeal, the applicant waives his or her right to proceed under section 145.
“(b) Reexaminations.—A patent owner who is dissatisfied with the final decision in an appeal of a reexamination to the Patent Trial and Appeal Board under section 134(b) may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.
“(c) Post-Grant And Inter Partes Reviews.—A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) or 328(a) (as the case may be) may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.
“(d) Derivation Proceedings.—A party to a derivation proceeding who is dissatisfied with the final decision of the Patent Trial and Appeal Board in the proceeding may appeal the decision to the United States Court of Appeals for the Federal Circuit, but such appeal shall be dismissed if any adverse party to such derivation proceeding, within 20 days after the appellant has filed notice of appeal in accordance with section 142, files notice with the Director that the party elects to have all further proceedings conducted as provided in section 146. If the appellant does not, within 30 days after the filing of such notice by the adverse party, file a civil action under section 146, the Board’s decision shall govern the further proceedings in the case.”.
(2) JURISDICTION.—Section 1295(a)(4)(A) of title 28, United States Code, is amended to read as follows:
“(A) the Patent Trial and Appeal Board of the United States Patent and Trademark Office with respect to a patent application, derivation proceeding, reexamination, post-grant review, or inter partes review under title 35, at the instance of a party who exercised that party’s right to participate in the applicable proceeding before or appeal to the Board, except that an applicant or a party to a derivation proceeding may also have remedy by civil action pursuant to section 145 or 146 of title 35; an appeal under this subparagraph of a decision of the Board with respect to an application or derivation proceeding shall waive the right of such applicant or party to proceed under section 145 or 146 of title 35;”.
(3) PROCEEDINGS ON APPEAL.—Section 143 of title 35, United States Code, is amended—
(A) by striking the third sentence and inserting the following: “In an ex parte case, the Director shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all of the issues raised in the appeal. The Director shall have the right to intervene in an appeal from a decision entered by the Patent Trial and Appeal Board in a derivation proceeding under section 135 or in an inter partes or post-grant review under chapter 31 or 32.”; and
(B) by striking the last sentence.
(d) Conforming Amendments.—
(1) ATOMIC ENERGY ACT OF 1954.—Section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182) is amended in the third undesignated paragraph—
(A) by striking “Board of Patent Appeals and Interferences” each place it appears and inserting “Patent Trial and Appeal Board”; and
(B) by inserting “and derivation” after “established for interference”.
(2) TITLE 51.—Section 20135 of title 51, United States Code, is amended—
(A) in subsections (e) and (f), by striking “Board of Patent Appeals and Interferences” each place it appears and inserting “Patent Trial and Appeal Board”; and
(B) in subsection (e), by inserting “and derivation” after “established for interference”.
(e) Effective Date.—The amendments made by this section shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to proceedings commenced on or after that effective date, except that—
(1) the extension of jurisdiction to the United States Court of Appeals for the Federal Circuit to entertain appeals of decisions of the Patent Trial and Appeal Board in reexaminations under the amendment made by subsection (c)(2) shall be deemed to take effect on the date of the enactment of this Act and shall extend to any decision of the Board of Patent Appeals and Interferences with respect to a reexamination that is entered before, on, or after the date of the enactment of this Act;
(2) the provisions of sections 6, 134, and 141 of title 35, United States Code, as in effect on the day before the effective date of the amendments made by this section shall continue to apply to inter partes reexaminations that are requested under section 311 of such title before such effective date;
(3) the Patent Trial and Appeal Board may be deemed to be the Board of Patent Appeals and Interferences for purposes of appeals of inter partes reexaminations that are requested under section 311 of title 35, United States Code, before the effective date of the amendments made by this section; and
(4) the Director’s right under the fourth sentence of section 143 of title 35, United States Code, as amended by subsection (c)(3) of this section, to intervene in an appeal from a decision entered by the Patent Trial and Appeal Board shall be deemed to extend to inter partes reexaminations that are requested under section 311 of such title before the effective date of the amendments made by this section.
SEC. 8. PREISSUANCE SUBMISSIONS BY THIRD PARTIES.
(a) In General.—Section 122 of title 35, United States Code, is amended by adding at the end the following:
“(e) Preissuance Submissions By Third Parties.—
“(1) IN GENERAL.—Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of—
“(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or
“(B) the later of—
“(i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or
“(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent.
“(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—
“(A) set forth a concise description of the asserted relevance of each submitted document;
“(B) be accompanied by such fee as the Director may prescribe; and
“(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.”.
(b) Effective Date.—The amendments made by this section shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent application filed before, on, or after that effective date.
SEC. 9. VENUE.
(a) Technical Amendments Relating To Venue.—Sections 32, 145, 146, 154(b)(4)(A), and 293 of title 35, United States Code, and section 21(b)(4) of the Trademark Act of 1946 (15 U.S.C. 1071(b)(4)), are each amended by striking “United States District Court for the District of Columbia” each place that term appears and inserting “United States District Court for the Eastern District of Virginia”.
(b) Effective Date.—The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to any civil action commenced on or after that date.
SEC. 10. FEE SETTING AUTHORITY.
(a) Fee Setting.—
(1) IN GENERAL.—The Director may set or adjust by rule any fee established, authorized, or charged under title 35, United States Code, or the Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for any services performed by or materials furnished by, the Office, subject to paragraph (2).
(2) FEES TO RECOVER COSTS.—Fees may be set or adjusted under paragraph (1) only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (in the case of patent fees) and trademarks (in the case of trademark fees), including administrative costs of the Office with respect to such patent or trademark fees (as the case may be).
(b) Small And Micro Entities.—The fees set or adjusted under subsection (a) for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 50 percent with respect to the application of such fees to any small entity that qualifies for reduced fees under section 41(h)(1) of title 35, United States Code, and shall be reduced by 75 percent with respect to the application of such fees to any micro entity as defined in section 123 of that title (as added by subsection (g) of this section).
(c) Reduction Of Fees In Certain Fiscal Years.—In each fiscal year, the Director—
(1) shall consult with the Patent Public Advisory Committee and the Trademark Public Advisory Committee on the advisability of reducing any fees described in subsection (a); and
(2) after the consultation required under paragraph (1), may reduce such fees.
(d) Role Of The Public Advisory Committee.—The Director shall—
(1) not less than 45 days before publishing any proposed fee under subsection (a) in the Federal Register, submit the proposed fee to the Patent Public Advisory Committee or the Trademark Public Advisory Committee, or both, as appropriate;
(2)(A) provide the relevant advisory committee described in paragraph (1) a 30-day period following the submission of any proposed fee, in which to deliberate, consider, and comment on such proposal;
(B) require that, during that 30-day period, the relevant advisory committee hold a public hearing relating to such proposal; and
(C) assist the relevant advisory committee in carrying out that public hearing, including by offering the use of the resources of the Office to notify and promote the hearing to the public and interested stakeholders;
(3) require the relevant advisory committee to make available to the public a written report setting forth in detail the comments, advice, and recommendations of the committee regarding the proposed fee; and
(4) consider and analyze any comments, advice, or recommendations received from the relevant advisory committee before setting or adjusting (as the case may be) the fee.
(e) Publication In The Federal Register.—
(1) PUBLICATION AND RATIONALE.—The Director shall—
(A) publish any proposed fee change under this section in the Federal Register;
(B) include, in such publication, the specific rationale and purpose for the proposal, including the possible expectations or benefits resulting from the proposed change; and
(C) notify, through the Chair and Ranking Member of the Committees on the Judiciary of the Senate and the House of Representatives, the Congress of the proposed change not later than the date on which the proposed change is published under subparagraph (A).
(2) PUBLIC COMMENT PERIOD.—The Director shall, in the publication under paragraph (1), provide the public a period of not less than 45 days in which to submit comments on the proposed change in fees.
(3) PUBLICATION OF FINAL RULE.—The final rule setting or adjusting a fee under this section shall be published in the Federal Register and in the Official Gazette of the Patent and Trademark Office.
(4) CONGRESSIONAL COMMENT PERIOD.—A fee set or adjusted under subsection (a) may not become effective—
(A) before the end of the 45-day period beginning on the day after the date on which the Director publishes the final rule adjusting or setting the fee under paragraph (3); or
(B) if a law is enacted disapproving such fee.
(5) RULE OF CONSTRUCTION.—Rules prescribed under this section shall not diminish—
(A) the rights of an applicant for a patent under title 35, United States Code, or for a mark under the Trademark Act of 1946; or
(B) any rights under a ratified treaty.
(f) Retention Of Authority.—The Director retains the authority under subsection (a) to set or adjust fees only during such period as the Patent and Trademark Office remains an agency within the Department of Commerce.
(g) Micro Entity Defined.—
(1) IN GENERAL.—Chapter 11 of title 35, United States Code, is amended by adding at the end the following new section:
Ҥ 123. Micro entity defined
“(a) In General.—For purposes of this title, the term ‘micro entity’ means an applicant who makes a certification that the applicant—
“(1) qualifies as a small entity, as defined in regulations issued by the Director;
“(2) has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under section 111(b), or international applications filed under the treaty defined in section 351(a) for which the basic national fee under section 41(a) was not paid;
“(3) did not, in the calendar year preceding the calendar year in which the applicable fee is being paid, have a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; and
“(4) has not assigned, granted, or conveyed, and is not under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census.
“(b) Applications Resulting From Prior Employment.—An applicant is not considered to be named on a previously filed application for purposes of subsection (a)(2) if the applicant has assigned, or is under an obligation by contract or law to assign, all ownership rights in the application as the result of the applicant’s previous employment.
“(c) Foreign Currency Exchange Rate.—If an applicant’s or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s or entity’s gross income exceeds the threshold specified in paragraphs (3) or (4) of subsection (a).
“(d) Institutions Of Higher Education.—For purposes of this section, a micro entity shall include an applicant who certifies that—
“(1) the applicant’s employer, from which the applicant obtains the majority of the applicant’s income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); or
“(2) the applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular applications to such an institution of higher education.
“(e) Director’s Authority.—In addition to the limits imposed by this section, the Director may, in the Director’s discretion, impose income limits, annual filing limits, or other limits on who may qualify as a micro entity pursuant to this section if the Director determines that such additional limits are reasonably necessary to avoid an undue impact on other patent applicants or owners or are otherwise reasonably necessary and appropriate. At least 3 months before any limits proposed to be imposed pursuant to this subsection take effect, the Director shall inform the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate of any such proposed limits.”.
(2) CONFORMING AMENDMENT.—Chapter 11 of title 35, United States Code, is amended by adding at the end the following new item:
“123. Micro entity defined.”.
(h) Electronic Filing Incentive.—
(1) IN GENERAL.—Notwithstanding any other provision of this section, an additional fee of $400 shall be established for each application for an original patent, except for a design, plant, or provisional application, that is not filed by electronic means as prescribed by the Director. The fee established by this subsection shall be reduced by 50 percent for small entities that qualify for reduced fees under section 41(h)(1) of title 35, United States Code. All fees paid under this subsection shall be deposited in the Treasury as an offsetting receipt that shall not be available for obligation or expenditure.
(2) EFFECTIVE DATE.—This subsection shall take effect upon the expiration of the 60-day period beginning on the date of the enactment of this Act.
(i) Effective Date; Sunset.—
(1) EFFECTIVE DATE.—Except as provided in subsection (h), this section and the amendments made by this section shall take effect on the date of the enactment of this Act.
(2) SUNSET.—The authority of the Director to set or adjust any fee under subsection (a) shall terminate upon the expiration of the 7-year period beginning on the date of the enactment of this Act.
(3) PRIOR REGULATIONS NOT AFFECTED.—The termination of authority under this subsection shall not affect any regulations issued under this section before the effective date of such termination or any rulemaking proceeding for the issuance of regulations under this section that is pending on such date.
SEC. 11. FEES FOR PATENT SERVICES.
(a) General Patent Services.—Subsections (a) and (b) of section 41 of title 35, United States Code, are amended to read as follows:
“(a) General Fees.—The Director shall charge the following fees:
“(1) FILING AND BASIC NATIONAL FEES.—
“(A) On filing each application for an original patent, except for design, plant, or provisional applications, $330.
“(B) On filing each application for an original design patent, $220.
“(C) On filing each application for an original plant patent, $220.
“(D) On filing each provisional application for an original patent, $220.
“(E) On filing each application for the reissue of a patent, $330.
“(F) The basic national fee for each international application filed under the treaty defined in section 351(a) entering the national stage under section 371, $330.
“(G) In addition, excluding any sequence listing or computer program listing filed in an electronic medium as prescribed by the Director, for any application the specification and drawings of which exceed 100 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium), $270 for each additional 50 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium) or fraction thereof.
“(2) EXCESS CLAIMS FEES.—
“(A) IN GENERAL.—In addition to the fee specified in paragraph (1)—
“(i) on filing or on presentation at any other time, $220 for each claim in independent form in excess of 3;
“(ii) on filing or on presentation at any other time, $52 for each claim (whether dependent or independent) in excess of 20; and
“(iii) for each application containing a multiple dependent claim, $390.
“(B) MULTIPLE DEPENDENT CLAIMS.—For the purpose of computing fees under subparagraph (A), a multiple dependent claim referred to in section 112 or any claim depending therefrom shall be considered as separate dependent claims in accordance with the number of claims to which reference is made.
“(C) REFUNDS; ERRORS IN PAYMENT.—The Director may by regulation provide for a refund of any part of the fee specified in subparagraph (A) for any claim that is canceled before an examination on the merits, as prescribed by the Director, has been made of the application under section 131. Errors in payment of the additional fees under this paragraph may be rectified in accordance with regulations prescribed by the Director.
“(3) EXAMINATION FEES.—
“(A) IN GENERAL.—
“(i) For examination of each application for an original patent, except for design, plant, provisional, or international applications, $220.
“(ii) For examination of each application for an original design patent, $140.
“(iii) For examination of each application for an original plant patent, $170.
“(iv) For examination of the national stage of each international application, $220.
“(v) For examination of each application for the reissue of a patent, $650.
“(B) APPLICABILITY OF OTHER FEE PROVISIONS.—The provisions of paragraphs (3) and (4) of section 111(a) relating to the payment of the fee for filing the application shall apply to the payment of the fee specified in subparagraph (A) with respect to an application filed under section 111(a). The provisions of section 371(d) relating to the payment of the national fee shall apply to the payment of the fee specified in subparagraph (A) with respect to an international application.
“(4) ISSUE FEES.—
“(A) For issuing each original patent, except for design or plant patents, $1,510.
“(B) For issuing each original design patent, $860.
“(C) For issuing each original plant patent, $1,190.
“(D) For issuing each reissue patent, $1,510.
“(5) DISCLAIMER FEE.—On filing each disclaimer, $140.
“(6) APPEAL FEES.—
“(A) On filing an appeal from the examiner to the Patent Trial and Appeal Board, $540.
“(B) In addition, on filing a brief in support of the appeal, $540, and on requesting an oral hearing in the appeal before the Patent Trial and Appeal Board, $1,080.
“(7) REVIVAL FEES.—On filing each petition for the revival of an unintentionally abandoned application for a patent, for the unintentionally delayed payment of the fee for issuing each patent, or for an unintentionally delayed response by the patent owner in any reexamination proceeding, $1,620, unless the petition is filed under section 133 or 151, in which case the fee shall be $540.
“(8) EXTENSION FEES.—For petitions for 1-month extensions of time to take actions required by the Director in an application—
“(A) on filing a first petition, $130;
“(B) on filing a second petition, $360; and
“(C) on filing a third or subsequent petition, $620.
“(b) Maintenance Fees.—
“(1) IN GENERAL.—The Director shall charge the following fees for maintaining in force all patents based on applications filed on or after December 12, 1980:
“(A) Three years and 6 months after grant, $980.
“(B) Seven years and 6 months after grant, $2,480.
“(C) Eleven years and 6 months after grant, $4,110.
“(2) GRACE PERIOD; SURCHARGE.—Unless payment of the applicable maintenance fee under paragraph (1) is received in the Office on or before the date the fee is due or within a grace period of 6 months thereafter, the patent shall expire as of the end of such grace period. The Director may require the payment of a surcharge as a condition of accepting within such 6-month grace period the payment of an applicable maintenance fee.
“(3) NO MAINTENANCE FEE FOR DESIGN OR PLANT PATENT.—No fee may be established for maintaining a design or plant patent in force.”.
(b) Delays In Payment.—Subsection (c) of section 41 of title 35, United States Code, is amended—
(1) by striking “(c)(1) The Director” and inserting:
“(c) Delays In Payment Of Maintenance Fees.—
“(1) ACCEPTANCE.—The Director”; and
(2) by striking “(2) A patent” and inserting:
“(2) EFFECT ON RIGHTS OF OTHERS.—A patent”.
(c) Patent Search Fees.—Subsection (d) of section 41 of title 35, United States Code, is amended to read as follows:
“(d) Patent Search And Other Fees.—
“(1) PATENT SEARCH FEES.—
“(A) IN GENERAL.—The Director shall charge the fees specified under subparagraph (B) for the search of each application for a patent, except for provisional applications. The Director shall adjust the fees charged under this paragraph to ensure that the fees recover an amount not to exceed the estimated average cost to the Office of searching applications for patent by Office personnel.
“(B) SPECIFIC FEES.—The fees referred to in subparagraph (A) are—
“(i) $540 for each application for an original patent, except for design, plant, provisional, or international applications;
“(ii) $100 for each application for an original design patent;
“(iii) $330 for each application for an original plant patent;
“(iv) $540 for the national stage of each international application; and
“(v) $540 for each application for the reissue of a patent.
“(C) APPLICABILITY OF OTHER PROVISIONS.—The provisions of paragraphs (3) and (4) of section 111(a) relating to the payment of the fee for filing the application shall apply to the payment of the fee specified in this paragraph with respect to an application filed under section 111(a). The provisions of section 371(d) relating to the payment of the national fee shall apply to the payment of the fee specified in this paragraph with respect to an international application.
“(D) REFUNDS.—The Director may by regulation provide for a refund of any part of the fee specified in this paragraph for any applicant who files a written declaration of express abandonment as prescribed by the Director before an examination has been made of the application under section 131.
“(2) OTHER FEES.—
“(A) IN GENERAL.—The Director shall establish fees for all other processing, services, or materials relating to patents not specified in this section to recover the estimated average cost to the Office of such processing, services, or materials, except that the Director shall charge the following fees for the following services:
“(i) For recording a document affecting title, $40 per property.
“(ii) For each photocopy, $.25 per page.
“(iii) For each black and white copy of a patent, $3.
“(B) COPIES FOR LIBRARIES.—The yearly fee for providing a library specified in section 12 with uncertified printed copies of the specifications and drawings for all patents in that year shall be $50.”.
(d) Fees For Small Entities.—Subsection (h) of section 41 of title 35, United States Code, is amended to read as follows:
“(h) Fees For Small Entities.—
“(1) REDUCTIONS IN FEES.—Subject to paragraph (3), fees charged under subsections (a), (b), and (d)(1) shall be reduced by 50 percent with respect to their application to any small business concern as defined under section 3 of the Small Business Act, and to any independent inventor or nonprofit organization as defined in regulations issued by the Director.
“(2) SURCHARGES AND OTHER FEES.—With respect to its application to any entity described in paragraph (1), any surcharge or fee charged under subsection (c) or (d) shall not be higher than the surcharge or fee required of any other entity under the same or substantially similar circumstances.
“(3) REDUCTION FOR ELECTRONIC FILING.—The fee charged under subsection (a)(1)(A) shall be reduced by 75 percent with respect to its application to any entity to which paragraph (1) applies, if the application is filed by electronic means as prescribed by the Director.”.
(e) Technical Amendments.—Section 41 of title 35, United States Code, is amended—
(1) in subsection (e), in the first sentence, by striking “The Director” and inserting “Waiver Of Fees; Copies Regarding Notice.—The Director”;
(2) in subsection (f), by striking “The fees” and inserting “Adjustment Of Fees.—The fees”;
(3) by repealing subsection (g); and
(4) in subsection (i)—
(A) by striking “(i)(1) The Director” and inserting the following:
“(i) Electronic Patent And Trademark Data.—
“(1) MAINTENANCE OF COLLECTIONS.—The Director”;
(B) by striking “(2) The Director” and inserting the following:
“(2) AVAILABILITY OF AUTOMATED SEARCH SYSTEMS.—The Director”;
(C) by striking “(3) The Director” and inserting the following:
“(3) ACCESS FEES.—The Director”; and
(D) by striking “(4) The Director” and inserting the following:
“(4) ANNUAL REPORT TO CONGRESS.—The Director”.
(f) Adjustment Of Trademark Fees.—Section 802(a) of division B of the Consolidated Appropriations Act, 2005 (Public Law 108–447) is amended—
(1) in the first sentence, by striking “During fiscal years 2005, 2006, and 2007,”, and inserting “Until such time as the Director sets or adjusts the fees otherwise,”; and
(2) in the second sentence, by striking “During fiscal years 2005, 2006, and 2007, the” and inserting “The”.
(g) Effective Date, Applicability, And Transition Provisions.—Section 803(a) of division B of the Consolidated Appropriations Act, 2005 (Public Law 108–447) is amended by striking “and shall apply only with respect to the remaining portion of fiscal year 2005 and fiscal year 2006”.
(h) Prioritized Examination Fee.—
(1) IN GENERAL.—
(A) FEE.—
(i) PRIORITIZED EXAMINATION FEE.—A fee of $4,800 shall be established for filing a request, pursuant to section 2(b)(2)(G) of title 35, United States Code, for prioritized examination of a nonprovisional application for an original utility or plant patent.
(ii) ADDITIONAL FEES.—In addition to the prioritized examination fee under clause (i), the fees due on an application for which prioritized examination is being sought are the filing, search, and examination fees (including any applicable excess claims and application size fees), processing fee, and publication fee for that application.
(B) REGULATIONS; LIMITATIONS.—
(i) REGULATIONS.—The Director may by regulation prescribe conditions for acceptance of a request under subparagraph (A) and a limit on the number of filings for prioritized examination that may be accepted.
(ii) LIMITATION ON CLAIMS.—Until regulations are prescribed under clause (i), no application for which prioritized examination is requested may contain or be amended to contain more than 4 independent claims or more than 30 total claims.
(iii) LIMITATION ON TOTAL NUMBER OF REQUESTS.—The Director may not accept in any fiscal year more than 10,000 requests for prioritization until regulations are prescribed under this subparagraph setting another limit.
(2) REDUCTION IN FEES FOR SMALL ENTITIES.—The Director shall reduce fees for providing prioritized examination of nonprovisional applications for original utility and plant patents by 50 percent for small entities that qualify for reduced fees under section 41(h)(1) of title 35, United States Code.
(3) DEPOSIT OF FEES.—All fees paid under this subsection shall be credited to the United States Patent and Trademark Office Appropriation Account, shall remain available until expended, and may be used only for the purposes specified in section 42(c)(3)(A) of title 35, United States Code.
(4) EFFECTIVE DATE AND TERMINATION.—
(A) EFFECTIVE DATE.—This subsection shall take effect on the date that is 10 days after the date of the enactment of this Act.
(B) TERMINATION.—The fee imposed under paragraph (1)(A)(i), and the reduced fee under paragraph (2), shall terminate on the effective date of the setting or adjustment of the fee under paragraph (1)(A)(i) pursuant to the exercise of the authority under section 10 for the first time with respect to that fee.
(i) Appropriation Account Transition Fees.—
(1) SURCHARGE.—
(A) IN GENERAL.—There shall be a surcharge of 15 percent, rounded by standard arithmetic rules, on all fees charged or authorized by subsections (a), (b), and (d)(1) of section 41, and section 132(b), of title 35, United States Code. Any surcharge imposed under this subsection is, and shall be construed to be, separate from and in addition to any other surcharge imposed under this Act or any other provision of law.
(B) DEPOSIT OF AMOUNTS.—Amounts collected pursuant to the surcharge imposed under subparagraph (A) shall be credited to the United States Patent and Trademark Appropriation Account, shall remain available until expended, and may be used only for the purposes specified in section 42(c)(3)(A) of title 35, United States Code.
(2) EFFECTIVE DATE AND TERMINATION OF SURCHARGE.—The surcharge provided for in paragraph (1)—
(A) shall take effect on the date that is 10 days after the date of the enactment of this Act; and
(B) shall terminate, with respect to a fee to which paragraph (1)(A) applies, on the effective date of the setting or adjustment of that fee pursuant to the exercise of the authority under section 10 for the first time with respect to that fee.
(j) Effective Date.—Except as otherwise provided in this section, this section and the amendments made by this section shall take effect on the date of the enactment of this Act.
SEC. 12. SUPPLEMENTAL EXAMINATION.
(a) In General.—Chapter 25 of title 35, United States Code, is amended by adding at the end the following:
Ҥ 257. Supplemental examinations to consider, reconsider, or correct information
“(a) Request For Supplemental Examination.—A patent owner may request supplemental examination of a patent in the Office to consider, reconsider, or correct information believed to be relevant to the patent, in accordance with such requirements as the Director may establish. Within 3 months after the date a request for supplemental examination meeting the requirements of this section is received, the Director shall conduct the supplemental examination and shall conclude such examination by issuing a certificate indicating whether the information presented in the request raises a substantial new question of patentability.
“(b) Reexamination Ordered.—If the certificate issued under subsection (a) indicates that a substantial new question of patentability is raised by 1 or more items of information in the request, the Director shall order reexamination of the patent. The reexamination shall be conducted according to procedures established by chapter 30, except that the patent owner shall not have the right to file a statement pursuant to section 304. During the reexamination, the Director shall address each substantial new question of patentability identified during the supplemental examination, notwithstanding the limitations in chapter 30 relating to patents and printed publication or any other provision of such chapter.
“(c) Effect.—
“(1) IN GENERAL.—A patent shall not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent. The making of a request under subsection (a), or the absence thereof, shall not be relevant to enforceability of the patent under section 282.
“(2) EXCEPTIONS.—
“(A) PRIOR ALLEGATIONS.—Paragraph (1) shall not apply to an allegation pled with particularity in a civil action, or set forth with particularity in a notice received by the patent owner under section 505(j)(2)(B)(iv)(II) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(2)(B)(iv)(II)), before the date of a supplemental examination request under subsection (a) to consider, reconsider, or correct information forming the basis for the allegation.
“(B) PATENT ENFORCEMENT ACTIONS.—In an action brought under section 337(a) of the Tariff Act of 1930 (19 U.S.C. 1337(a)), or section 281 of this title, paragraph (1) shall not apply to any defense raised in the action that is based upon information that was considered, reconsidered, or corrected pursuant to a supplemental examination request under subsection (a), unless the supplemental examination, and any reexamination ordered pursuant to the request, are concluded before the date on which the action is brought.
“(d) Fees And Regulations.—
“(1) FEES.—The Director shall, by regulation, establish fees for the submission of a request for supplemental examination of a patent, and to consider each item of information submitted in the request. If reexamination is ordered under subsection (b), fees established and applicable to ex parte reexamination proceedings under chapter 30 shall be paid, in addition to fees applicable to supplemental examination.
“(2) REGULATIONS.—The Director shall issue regulations governing the form, content, and other requirements of requests for supplemental examination, and establishing procedures for reviewing information submitted in such requests.
“(e) Fraud.—If the Director becomes aware, during the course of a supplemental examination or reexamination proceeding ordered under this section, that a material fraud on the Office may have been committed in connection with the patent that is the subject of the supplemental examination, then in addition to any other actions the Director is authorized to take, including the cancellation of any claims found to be invalid under section 307 as a result of a reexamination ordered under this section, the Director shall also refer the matter to the Attorney General for such further action as the Attorney General may deem appropriate. Any such referral shall be treated as confidential, shall not be included in the file of the patent, and shall not be disclosed to the public unless the United States charges a person with a criminal offense in connection with such referral.
“(f) Rule Of Construction.—Nothing in this section shall be construed—
“(1) to preclude the imposition of sanctions based upon criminal or antitrust laws (including section 1001(a) of title 18, the first section of the Clayton Act, and section 5 of the Federal Trade Commission Act to the extent that section relates to unfair methods of competition);
“(2) to limit the authority of the Director to investigate issues of possible misconduct and impose sanctions for misconduct in connection with matters or proceedings before the Office; or
“(3) to limit the authority of the Director to issue regulations under chapter 3 relating to sanctions for misconduct by representatives practicing before the Office.”.
(b) Conforming Amendment.—The table of sections for chapter 25 of title 35, United States Code, is amended by adding at the end the following new item:
“257. Supplemental examinations to consider, reconsider, or correct information.”.
(c) Effective Date.—The amendments made by this section shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that effective date.
(1) by striking “75 percent” and inserting “15 percent”;
(2) by striking “25 percent” and inserting “85 percent”; and
(3) by striking “as described above in this clause (D);” and inserting “described above in this clause;”.
(b) Effective Date.—The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to any patent issued before, on, or after that date.
SEC. 14. TAX STRATEGIES DEEMED WITHIN THE PRIOR ART.
(a) In General.—For purposes of evaluating an invention under section 102 or 103 of title 35, United States Code, any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art.
(b) Definition.—For purposes of this section, the term “tax liability” refers to any liability for a tax under any Federal, State, or local law, or the law of any foreign jurisdiction, including any statute, rule, regulation, or ordinance that levies, imposes, or assesses such tax liability.
(c) Exclusions.—This section does not apply to that part of an invention that—
(1) is a method, apparatus, technology, computer program product, or system, that is used solely for preparing a tax or information return or other tax filing, including one that records, transmits, transfers, or organizes data related to such filing; or
(2) is a method, apparatus, technology, computer program product, or system used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor.
(d) Rule Of Construction.—Nothing in this section shall be construed to imply that other business methods are patentable or that other business method patents are valid.
(e) Effective Date; Applicability.—This section shall take effect on the date of the enactment of this Act and shall apply to any patent application that is pending on, or filed on or after, that date, and to any patent that is issued on or after that date.
SEC. 15. BEST MODE REQUIREMENT.
(a) In General.—Section 282 of title 35, United States Code, is amended in the second undesignated paragraph by striking paragraph (3) and inserting the following:
“(3) Invalidity of the patent or any claim in suit for failure to comply with—
“(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or
“(B) any requirement of section 251.”.
(b) Conforming Amendment.—Sections 119(e)(1) and 120 of title 35, United States Code, are each amended by striking “the first paragraph of section 112 of this title” and inserting “section 112(a) (other than the requirement to disclose the best mode)”.
(c) Effective Date.—The amendments made by this section shall take effect upon the date of the enactment of this Act and shall apply to proceedings commenced on or after that date.
SEC. 16. MARKING.
(a) Virtual Marking.—
(1) IN GENERAL.—Section 287(a) of title 35, United States Code, is amended by striking “or when,” and inserting “or by fixing thereon the word ‘patent’ or the abbreviation ‘pat.’ together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when,”.
(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to any case that is pending on, or commenced on or after, the date of the enactment of this Act.
(3) REPORT.—Not later than the date that is 3 years after the date of the enactment of this Act, the Director shall submit a report to Congress that provides—
(A) an analysis of the effectiveness of “virtual marking”, as provided in the amendment made by paragraph (1) of this subsection, as an alternative to the physical marking of articles;
(B) an analysis of whether such virtual marking has limited or improved the ability of the general public to access information about patents;
(C) an analysis of the legal issues, if any, that arise from such virtual marking; and
(D) an analysis of the deficiencies, if any, of such virtual marking.
(b) False Marking.—
(1) CIVIL PENALTY.—Section 292(a) of title 35, United States, Code, is amended by adding at the end the following: “Only the United States may sue for the penalty authorized by this subsection.”.
(2) CIVIL ACTION FOR DAMAGES.—Subsection (b) of section 292 of title 35, United States Code, is amended to read as follows:
“(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.”.
(3) EXPIRED PATENTS.—Section 292 of title 35, United States Code, is amended by adding at the end the following:
“(c) The marking of a product, in a manner described in subsection (a), with matter relating to a patent that covered that product but has expired is not a violation of this section.”.
(4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to all cases, without exception, that are pending on, or commenced on or after, the date of the enactment of this Act.
SEC. 17. ADVICE OF COUNSEL.
(a) In General.—Chapter 29 of title 35, United States Code, is amended by adding at the end the following:
Ҥ 298. Advice of counsel
“The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.”.
(b) Conforming Amendment.—The table of sections for chapter 29 of title 35, United States Code, is amended by adding at the end the following:
“298. Advice of counsel.”.
SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS METHOD PATENTS.
(a) Transitional Program.—
(1) ESTABLISHMENT.—Not later than the date that is 1 year after the date of the enactment of this Act, the Director shall issue regulations establishing and implementing a transitional post-grant review proceeding for review of the validity of covered business method patents. The transitional proceeding implemented pursuant to this subsection shall be regarded as, and shall employ the standards and procedures of, a post-grant review under chapter 32 of title 35, United States Code, subject to the following:
(A) Section 321(c) of title 35, United States Code, and subsections (b), (e)(2), and (f) of section 325 of such title shall not apply to a transitional proceeding.
(B) A person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent.
(C) A petitioner in a transitional proceeding who challenges the validity of 1 or more claims in a covered business method patent on a ground raised under section 102 or 103 of title 35, United States Code, as in effect on the day before the effective date set forth in section 3(n)(1), may support such ground only on the basis of—
(i) prior art that is described by section 102(a) of such title of such title (as in effect on the day before such effective date); or
(ii) prior art that—
(I) discloses the invention more than 1 year before the date of the application for patent in the United States; and
(II) would be described by section 102(a) of such title (as in effect on the day before the effective date set forth in section 3(n)(1)) if the disclosure had been made by another before the invention thereof by the applicant for patent.
(D) The petitioner in a transitional proceeding that results in a final written decision under section 328(a) of title 35, United States Code, with respect to a claim in a covered business method patent, or the petitioner’s real party in interest, may not assert, either in a civil action arising in whole or in part under section 1338 of title 28, United States Code, or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337), that the claim is invalid on any ground that the petitioner raised during that transitional proceeding.
(E) The Director may institute a transitional proceeding only for a patent that is a covered business method patent.
(2) EFFECTIVE DATE.—The regulations issued under paragraph (1) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any covered business method patent issued before, on, or after that effective date, except that the regulations shall not apply to a patent described in section 6(f)(2)(A) of this Act during the period in which a petition for post-grant review of that patent would satisfy the requirements of section 321(c) of title 35, United States Code.
(3) SUNSET.—
(A) IN GENERAL.—This subsection, and the regulations issued under this subsection, are repealed effective upon the expiration of the 8-year period beginning on the date that the regulations issued under to paragraph (1) take effect.
(B) APPLICABILITY.—Notwithstanding subparagraph (A), this subsection and the regulations issued under this subsection shall continue to apply, after the date of the repeal under subparagraph (A), to any petition for a transitional proceeding that is filed before the date of such repeal.
(b) Request For Stay.—
(1) IN GENERAL.—If a party seeks a stay of a civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a transitional proceeding for that patent, the court shall decide whether to enter a stay based on—
(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date has been set;
(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.
(2) REVIEW.—A party may take an immediate interlocutory appeal from a district court’s decision under paragraph (1). The United States Court of Appeals for the Federal Circuit shall review the district court’s decision to ensure consistent application of established precedent, and such review may be de novo.
(c) ATM Exemption For Venue Purposes.—In an action for infringement under section 281 of title 35, United States Code, of a covered business method patent, an automated teller machine shall not be deemed to be a regular and established place of business for purposes of section 1400(b) of title 28, United States Code.
(d) Definition.—
(1) IN GENERAL.—For purposes of this section, the term “covered business method patent” means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.
(2) REGULATIONS.—To assist in implementing the transitional proceeding authorized by this subsection, the Director shall issue regulations for determining whether a patent is for a technological invention.
(e) Rule Of Construction.—Nothing in this section shall be construed as amending or interpreting categories of patent-eligible subject matter set forth under section 101 of title 35, United States Code.
SEC. 19. JURISDICTION AND PROCEDURAL MATTERS.
(a) State Court Jurisdiction.—Section 1338(a) of title 28, United States Code, is amended by striking the second sentence and inserting the following: “No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights. For purposes of this subsection, the term ‘State’ includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands.”.
(b) Court Of Appeals For The Federal Circuit.—Section 1295(a)(1) of title 28, United States Code, is amended to read as follows:
“(1) of an appeal from a final decision of a district court of the United States, the District Court of Guam, the District Court of the Virgin Islands, or the District Court of the Northern Mariana Islands, in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection;”.
(c) Removal.—
(1) IN GENERAL.—Chapter 89 of title 28, United States Code, is amended by adding at the end the following new section:
Ҥ 1454. Patent, plant variety protection, and copyright cases
“(a) In General.—A civil action in which any party asserts a claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights may be removed to the district court of the United States for the district and division embracing the place where the action is pending.
“(b) Special Rules.—The removal of an action under this section shall be made in accordance with section 1446, except that if the removal is based solely on this section—
“(1) the action may be removed by any party; and
“(2) the time limitations contained in section 1446(b) may be extended at any time for cause shown.
“(c) Clarification Of Jurisdiction In Certain Cases.—The court to which a civil action is removed under this section is not precluded from hearing and determining any claim in the civil action because the State court from which the civil action is removed did not have jurisdiction over that claim.
“(d) Remand.—If a civil action is removed solely under this section, the district court—
“(1) shall remand all claims that are neither a basis for removal under subsection (a) nor within the original or supplemental jurisdiction of the district court under any Act of Congress; and
“(2) may, under the circumstances specified in section 1367(c), remand any claims within the supplemental jurisdiction of the district court under section 1367.”.
(2) CONFORMING AMENDMENT.—The table of sections for chapter 89 of title 28, United States Code, is amended by adding at the end the following new item:
“1454. Patent, plant variety protection, and copyright cases.”.
(d) Procedural Matters In Patent Cases.—
(1) JOINDER OF PARTIES AND STAY OF ACTIONS.—Chapter 29 of title 35, United States Code, as amended by this Act, is further amended by adding at the end the following new section:
Ҥ 299. Joinder of parties
“(a) Joinder Of Accused Infringers.—With respect to any civil action arising under any Act of Congress relating to patents, other than an action or trial in which an act of infringement under section 271(e)(2) has been pled, parties that are accused infringers may be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, or counterclaim defendants only if—
“(1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and
“(2) questions of fact common to all defendants or counterclaim defendants will arise in the action.
“(b) Allegations Insufficient For Joinder.—For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.
“(c) Waiver.—A party that is an accused infringer may waive the limitations set forth in this section with respect to that party.”.
(2) CONFORMING AMENDMENT.—The table of sections for chapter 29 of title 35, United States Code, as amended by this Act, is further amended by adding at the end the following new item:
“299. Joinder of parties.”.
(e) Effective Date.—The amendments made by this section shall apply to any civil action commenced on or after the date of the enactment of this Act.
SEC. 20. TECHNICAL AMENDMENTS.
(a) Joint Inventions.—Section 116 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph, by striking “When” and inserting “(a) Joint Inventions.—When”;
(2) in the second undesignated paragraph, by striking “If a joint inventor” and inserting “(b) Omitted Inventor.—If a joint inventor”; and
(3) in the third undesignated paragraph—
(A) by striking “Whenever” and inserting “(c) Correction Of Errors In Application.—Whenever”; and
(B) by striking “and such error arose without any deceptive intention on his part,”.
(b) Filing Of Application In Foreign Country.—Section 184 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking “Except when” and inserting “(a) Filing In Foreign Country.—Except when”; and
(B) by striking “and without deceptive intent”;
(2) in the second undesignated paragraph, by striking “The term” and inserting “(b) Application.—The term”; and
(3) in the third undesignated paragraph, by striking “The scope” and inserting “(c) Subsequent Modifications, Amendments, And Supplements.—The scope”.
(c) Filing Without A License.—Section 185 of title 35, United States Code, is amended by striking “and without deceptive intent”.
(d) Reissue Of Defective Patents.—Section 251 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking “Whenever” and inserting “(a) In General.—Whenever”; and
(B) by striking “without any deceptive intention”;
(2) in the second undesignated paragraph, by striking “The Director” and inserting “(b) Multiple Reissued Patents.—The Director”;
(3) in the third undesignated paragraph, by striking “The provisions” and inserting “(c) Applicability Of This Title.—The provisions”; and
(4) in the last undesignated paragraph, by striking “No reissued patent” and inserting “(d) Reissue Patent Enlarging Scope Of Claims.—No reissued patent”.
(e) Effect Of Reissue.—Section 253 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph, by striking “Whenever, without any deceptive intention,” and inserting “(a) In General.—Whenever”; and
(2) in the second undesignated paragraph, by striking “In like manner” and inserting “(b) Additional Disclaimer Or Dedication.—In the manner set forth in subsection (a),”.
(f) Correction Of Named Inventor.—Section 256 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking “Whenever” and inserting “(a) Correction.—Whenever”; and
(B) by striking “and such error arose without any deceptive intention on his part”; and
(2) in the second undesignated paragraph, by striking “The error” and inserting “(b) Patent Valid If Error Corrected.—The error”.
(g) Presumption Of Validity.—Section 282 of title 35, United States Code, is amended—
(1) in the first undesignated paragraph—
(A) by striking “A patent” and inserting “(a) In General.—A patent”; and
(B) by striking the third sentence;
(2) in the second undesignated paragraph—
(A) by striking “The following” and inserting “(b) Defenses.—The following”;
(B) in paragraph (1), by striking “uneforceability,” and inserting “unenforceability.”; and
(C) in paragraph (2), by striking “patentability,” and inserting “patentability.” ; and
(3) in the third undesignated paragraph—
(A) by striking “In actions involving the validity or infringement of a patent” and inserting “(c) Notice Of Actions; Actions During Extension Of Patent Term.—In an action involving the validity or infringement of a patent”; and
(B) by striking “Claims Court” and inserting “Court of Federal Claims”.
(h) Action For Infringement.—Section 288 of title 35, United States Code, is amended by striking “, without deceptive intention,”.
(i) Reviser’s Notes.—
(1) Section 3(e)(2) of title 35, United States Code, is amended by striking “this Act,” and inserting “that Act,”.
(2) Section 202 of title 35, United States Code, is amended—
(A) in subsection (b)(3), by striking “the section 203(b)” and inserting “section 203(b)”; and
(B) in subsection (c)(7)(D), by striking “except where it proves” and all that follows through “small business firms; and” and inserting: “except where it is determined to be infeasible following a reasonable inquiry, a preference in the licensing of subject inventions shall be given to small business firms; and”.
(3) Section 209(d)(1) of title 35, United States Code, is amended by striking “nontransferrable” and inserting “nontransferable”.
(4) Section 287(c)(2)(G) of title 35, United States Code, is amended by striking “any state” and inserting “any State”.
(5) Section 371(b) of title 35, United States Code, is amended by striking “of the treaty” and inserting “of the treaty.”.
(j) Unnecessary References.—
(1) IN GENERAL.—Title 35, United States Code, is amended by striking “of this title” each place that term appears.
(2) EXCEPTION.—The amendment made by paragraph (1) shall not apply to the use of such term in the following sections of title 35, United States Code:
(A) Section 1(c).
(B) Section 101.
(C) Subsections (a) and (b) of section 105.
(D) The first instance of the use of such term in section 111(b)(8).
(E) Section 161.
(F) Section 164.
(G) Section 171.
(H) Section 251(c), as so designated by this section.
(I) Section 261.
(J) Subsections (g) and (h) of section 271.
(K) Section 287(b)(1).
(L) Section 289.
(M) The first instance of the use of such term in section 375(a).
(k) Additional Technical Amendments.—Sections 155 and 155A of title 35, United States Code, and the items relating to those sections in the table of sections for chapter 14 of such title, are repealed.
(l) Effective Date.—The amendments made by this section shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to proceedings commenced on or after that effective date.
SEC. 21. TRAVEL EXPENSES AND PAYMENT OF ADMINISTRATIVE JUDGES.
(a) Authority To Cover Certain Travel Related Expenses.—Section 2(b)(11) of title 35, United States Code, is amended by inserting “, and the Office is authorized to expend funds to cover the subsistence expenses and travel-related expenses, including per diem, lodging costs, and transportation costs, of persons attending such programs who are not Federal employees” after “world”.
(b) Payment Of Administrative Judges.—Section 3(b) of title 35, United States Code, is amended by adding at the end the following:
“(6) ADMINISTRATIVE PATENT JUDGES AND ADMINISTRATIVE TRADEMARK JUDGES.—The Director may fix the rate of basic pay for the administrative patent judges appointed pursuant to section 6 and the administrative trademark judges appointed pursuant to section 17 of the Trademark Act of 1946 (15 U.S.C. 1067) at not greater than the rate of basic pay payable for level III of the Executive Schedule under section 5314 of title 5. The payment of a rate of basic pay under this paragraph shall not be subject to the pay limitation under section 5306(e) or 5373 of title 5.”.
SEC. 22. PATENT AND TRADEMARK OFFICE FUNDING.
(a) In General.—Section 42(c) of title 35, United States Code, is amended—
(1) by striking “(c)” and inserting “(c)(1)”;
(2) in the first sentence, by striking “shall be available” and inserting “shall, subject to paragraph (3), be available”;
(3) by striking the second sentence; and
(4) by adding at the end the following:
“(2) There is established in the Treasury a Patent and Trademark Fee Reserve Fund. If fee collections by the Patent and Trademark Office for a fiscal year exceed the amount appropriated to the Office for that fiscal year, fees collected in excess of the appropriated amount shall be deposited in the Patent and Trademark Fee Reserve Fund. To the extent and in the amounts provided in appropriations Acts, amounts in the Fund shall be made available until expended only for obligation and expenditure by the Office in accordance with paragraph (3).
“(3)(A) Any fees that are collected under sections 41, 42, and 376, and any surcharges on such fees, may only be used for expenses of the Office relating to the processing of patent applications and for other activities, services, and materials relating to patents and to cover a share of the administrative costs of the Office relating to patents.
“(B) Any fees that are collected under section 31 of the Trademark Act of 1946, and any surcharges on such fees, may only be used for expenses of the Office relating to the processing of trademark registrations and for other activities, services, and materials relating to trademarks and to cover a share of the administrative costs of the Office relating to trademarks.”.
(b) Effective Date.—The amendments made by this section shall take effect on October 1, 2011.
SEC. 23. SATELLITE OFFICES.
(a) Establishment.—Subject to available resources, the Director shall, by not later than the date that is 3 years after the date of the enactment of this Act, establish 3 or more satellite offices in the United States to carry out the responsibilities of the Office.
(b) Purposes.—The purposes of the satellite offices established under subsection (a) are to—
(1) increase outreach activities to better connect patent filers and innovators with the Office;
(2) enhance patent examiner retention;
(3) improve recruitment of patent examiners;
(4) decrease the number of patent applications waiting for examination; and
(5) improve the quality of patent examination.
(c) Required Considerations.—
(1) IN GENERAL.—In selecting the location of each satellite office to be established under subsection (a), the Director—
(A) shall ensure geographic diversity among the offices, including by ensuring that such offices are established in different States and regions throughout the Nation;
(B) may rely upon any previous evaluations by the Office of potential locales for satellite offices, including any evaluations prepared as part of the Office’s Nationwide Workforce Program that resulted in the 2010 selection of Detroit, Michigan, as the first satellite office of the Office;
(C) shall evaluate and consider the extent to which the purposes of satellite offices listed under subsection (b) will be achieved;
(D) shall consider the availability of scientific and technically knowledgeable personnel in the region from which to draw new patent examiners at minimal recruitment cost; and
(E) shall consider the economic impact to the region.
(2) OPEN SELECTION PROCESS.—Nothing in paragraph (1) shall constrain the Office to only consider its evaluations in selecting the Detroit, Michigan, satellite office.
(d) Report To Congress.—Not later than the end of the third fiscal year that begins after the date of the enactment of this Act, the Director shall submit a report to Congress on—
(1) the rationale of the Director in selecting the location of any satellite office required under subsection (a), including an explanation of how the selected location will achieve the purposes of satellite offices listed under subsection (b) and how the required considerations listed under subsection (c) were met;
(2) the progress of the Director in establishing all such satellite offices; and
(3) whether the operation of existing satellite offices is achieving the purposes under subsection (b).
SEC. 24. DESIGNATION OF DETROIT SATELLITE OFFICE.
(a) Designation.—The satellite office of the United States Patent and Trademark Office to be located in Detroit, Michigan, shall be known and designated as the “Elijah J. McCoy United States Patent and Trademark Office”.
(b) References.—Any reference in a law, map, regulation, document, paper, or other record of the United States to the satellite office of the United States Patent and Trademark Office to be located in Detroit, Michigan, referred to in subsection (a) shall be deemed to be a reference to the “Elijah J. McCoy United States Patent and Trademark Office”.
SEC. 25. PRIORITY EXAMINATION FOR IMPORTANT TECHNOLOGIES.
Section 2(b)(2) of title 35, United States Code, is amended—
(1) in subparagraph (E), by striking “and” after the semicolon;
(2) in subparagraph (F), by inserting “and” after the semicolon; and
(3) by adding at the end the following:
“(G) may, subject to any conditions prescribed by the Director and at the request of the patent applicant, provide for prioritization of examination of applications for products, processes, or technologies that are important to the national economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization, notwithstanding section 41 or any other provision of law;”.
SEC. 26. STUDY ON IMPLEMENTATION.
(a) PTO Study.—The Director shall conduct a study on the manner in which this Act and the amendments made by this Act are being implemented by the Office, and on such other aspects of the patent policies and practices of the Federal Government with respect to patent rights, innovation in the United States, competitiveness of United States markets, access by small businesses to capital for investment, and such other issues, as the Director considers appropriate.
(b) Report To Congress.—The Director shall, not later than the date that is 4 years after the date of the enactment of this Act, submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the results of the study conducted under subsection (a), including recommendations for any changes to laws and regulations that the Director considers appropriate.
SEC. 27. STUDY ON GENETIC TESTING.
(a) In General.—The Director shall conduct a study on effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist.
(b) Items Included In Study.—The study shall include an examination of at least the following:
(1) The impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing and diagnoses.
(2) The effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test.
(3) The impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to: the interpretation of testing results and performance of testing procedures.
(4) The role that cost and insurance coverage have on access to and provision of genetic diagnostic tests.
(c) Confirming Genetic Diagnostic Test Activity Defined.—For purposes of this section, the term “confirming genetic diagnostic test activity” means the performance of a genetic diagnostic test, by a genetic diagnostic test provider, on an individual solely for the purpose of providing the individual with an independent confirmation of results obtained from another test provider’s prior performance of the test on the individual.
(d) Report.—Not later than 9 months after the date of enactment of this Act, the Director shall report to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives on the findings of the study and provide recommendations for establishing the availability of such independent confirming genetic diagnostic test activity.
SEC. 28. PATENT OMBUDSMAN PROGRAM FOR SMALL BUSINESS CONCERNS.
Using available resources, the Director shall establish and maintain in the Office a Patent Ombudsman Program. The duties of the Program’s staff shall include providing support and services relating to patent filings to small business concerns and independent inventors.
SEC. 29. ESTABLISHMENT OF METHODS FOR STUDYING THE DIVERSITY OF APPLICANTS.
The Director shall, not later than the end of the 6-month period beginning on the date of the enactment of this Act, establish methods for studying the diversity of patent applicants, including those applicants who are minorities, women, or veterans. The Director shall not use the results of such study to provide any preferential treatment to patent applicants.
SEC. 30. SENSE OF CONGRESS.
It is the sense of Congress that the patent system should promote industries to continue to develop new technologies that spur growth and create jobs across the country which includes protecting the rights of small businesses and inventors from predatory behavior that could result in the cutting off of innovation.
SEC. 31. USPTO STUDY ON INTERNATIONAL PATENT PROTECTIONS FOR SMALL BUSINESSES.
(a) Study Required.—The Director, in consultation with the Secretary of Commerce and the Administrator of the Small Business Administration, shall, using the existing resources of the Office, carry out a study—
(1) to determine how the Office, in coordination with other Federal departments and agencies, can best help small businesses with international patent protection; and
(2) whether, in order to help small businesses pay for the costs of filing, maintaining, and enforcing international patent applications, there should be established either—
(A) a revolving fund loan program to make loans to small businesses to defray the costs of such applications, maintenance, and enforcement and related technical assistance; or
(B) a grant program to defray the costs of such applications, maintenance, and enforcement and related technical assistance.
(b) Report.—Not later than 120 days after the date of the enactment of this Act, the Director shall issue a report to the Congress containing—
(1) all findings and determinations made in carrying out the study required under subsection (a);
(2) a statement of whether the determination was made that—
(A) a revolving fund loan program described under subsection (a)(2)(A) should be established;
(B) a grant program described under subsection (a)(2)(B) should be established; or
(C) neither such program should be established; and
(3) any legislative recommendations the Director may have developed in carrying out such study.
SEC. 32. PRO BONO PROGRAM.
(a) In General.—The Director shall work with and support intellectual property law associations across the country in the establishment of pro bono programs designed to assist financially under-resourced independent inventors and small businesses.
(b) Effective Date.—This section shall take effect on the date of the enactment of this Act.
SEC. 33. LIMITATION ON ISSUANCE OF PATENTS.
(a) Limitation.—Notwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing a human organism.
(b) Effective Date.—
(1) IN GENERAL.—Subsection (a) shall apply to any application for patent that is pending on, or filed on or after, the date of the enactment of this Act.
(2) PRIOR APPLICATIONS.—Subsection (a) shall not affect the validity of any patent issued on an application to which paragraph (1) does not apply.
SEC. 34. STUDY OF PATENT LITIGATION.
(a) GAO Study.—The Comptroller General of the United States shall conduct a study of the consequences of litigation by non-practicing entities, or by patent assertion entities, related to patent claims made under title 35, United States Code, and regulations authorized by that title.
(b) Contents Of Study.—The study conducted under this section shall include the following:
(1) The annual volume of litigation described in subsection (a) over the 20-year period ending on the date of the enactment of this Act.
(2) The volume of cases comprising such litigation that are found to be without merit after judicial review.
(3) The impacts of such litigation on the time required to resolve patent claims.
(4) The estimated costs, including the estimated cost of defense, associated with such litigation for patent holders, patent licensors, patent licensees, and inventors, and for users of alternate or competing innovations.
(5) The economic impact of such litigation on the economy of the United States, including the impact on inventors, job creation, employers, employees, and consumers.
(6) The benefit to commerce, if any, supplied by non-practicing entities or patent assertion entities that prosecute such litigation.
(c) Report To Congress.—The Comptroller General shall, not later than the date that is 1 year after the date of the enactment of this Act, submit to the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate a report on the results of the study required under this section, including recommendations for any changes to laws and regulations that will minimize any negative impact of patent litigation that was the subject of such study.
SEC. 35. EFFECTIVE DATE.
Except as otherwise provided in this Act, the provisions of this Act shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued on or after that effective date.
SEC. 36. BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled “Budgetary Effects of PAYGO Legislation” for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
SEC. 37. CALCULATION OF 60-DAY PERIOD FOR APPLICATION OF PATENT TERM EXTENSION.
(a) In General.—Section 156(d)(1) of title 35, United States Code, is amended by adding at the end the following flush sentence:
“For purposes of determining the date on which a product receives permission under the second sentence of this paragraph, if such permission is transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted on a day that is not a business day, the product shall be deemed to receive such permission on the next business day. For purposes of the preceding sentence, the term ‘business day’ means any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any legal holiday under section 6103 of title 5.”.
(b) Applicability.—The amendment made by subsection (a) shall apply to any application for extension of a patent term under section 156 of title 35, United States Code, that is pending on, that is filed after, or as to which a decision regarding the application is subject to judicial review on, the date of the enactment of this Act.
Passed the House of Representatives June 23, 2011.
Attest:
Karen L. Haas,
Clerk.
Calendar No. 87
112th CONGRESS 1st Session
H. R. 1249
AN ACT
To amend title 35, United States Code, to provide for patent reform.
Guest Post by Ted Sichelman, University of San Diego School of Law
As any avid reader of Patently-O knows, the pending patent reform bills all contain a shift from a primarily "first to invent" to a primarily "first to file" approach. Previous posts have described many of the differences between the present and proposed approaches (see, e.g., here and here). In this post, I focus on the treatment in the bills of an inventor's sale and use of a claimed invention in the one-year period just prior to filing. I argue that the bills' language does not effectuate Congress's intent to keep the inventor grace period intact, and I propose suitable language to do so at the end of the post.
Under the Patent Act now in effect, an inventor's disclosure of a claimed invention in a previously filed patent or application, or an inventor's use, sale, or offer for sale of the invention can only count as prior art or a bar to patenting (if at all) if those events occurred more than one year before the effective filing date of the application claiming the invention. This one year limitation on prior art is commonly referred to as the "grace period."
Apparently, the Senate meant to carry over the grace period for an inventor's disclosure, use, or sale of a claimed invention—as well as exclude potential prior art derived from the inventor—in the bill it recently passed. As Senator Patrick Leahy exclaimed in a colloquy with Senator Orrin Hatch, if the inventor's invention is "described in a printed publication, or in public use, on sale, or otherwise [made] available to the public" by the inventor (or one who derives from the inventor) less than one year before filing, then "there is absolutely no situation in which" this activity would bar patentability.
Unfortunately—as Dennis Crouch, Hal Wegner, and others have recognized—the plain language of the relevant provisions in the recently passed Senate bill, as well as the pending House bill, does not appear as broad as Senator Leahy believes. In particular, the relevant provisions only exclude from prior art "disclosures" by inventors (and derivers) made less than one year before filing ("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 …") (emphasis added).
A plain language interpretation of "disclosure" would refer to printed material, such as patents and publications—as well as oral disclosures, such as at a trade show—but not necessarily uses, sales, or offers for sale of the invention. Moreover, an actual "disclosure" of the invention would presumably require that the disclosed material be "enabling" in the prior art sense—namely, that description, use, sale, etc., disclose to one of the ordinary skill in the art how to make (or perform the steps of) the invention (see, e.g., Perricone v. Medicis Pharm. Corp. (Fed. Cir. 2005) (holding that a "disclosure is prior art to the extent of its enabling disclosure"); In re Donohue (Fed. Cir. 1985) ("[E]ven if the claimed invention is disclosed in a printed publication, that disclosure will not suffice as prior art if it is not enabling.")).
Yet, the Federal Circuit has routinely held that "non-informing" uses or sales of the claimed invention made more than one year before filing—namely, ones which would not inform one of ordinary skill how to make the invention—may count as prior art under the current statute (see, e.g., See In re Epstein (Fed. Cir. 1994) ("Beyond this 'in public use or on sale' finding, there is no requirement for an enablement-type inquiry.").). Moreover, the Federal Circuit has held that secret use of a claimed method by an inventor to make a product that is sold to the public may count as prior art (see Gore v. Garlock (Fed. Cir. 1983)). Thus, a plain language reading of "disclosure" arguably would not—contrary to Senator Leahy's intention—exclude from prior art non-informing or secret uses and sales made within the grace period.
Senator Hatch asserts there is no problem with the "disclosure" language because "[i]f a disclosure resulting from the inventor's actions is not one that is enabled … then such a disclosure would not constitute patent-defeating prior art … in the first place." Yet, nothing in the Senate bill points towards such a reading. Specifically, the provision in the bill enumerating what counts as prior art states:
Sec. 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 ….
Granted, this provision appears to require that sale and use prior art be made "available to the public." Yet, under Federal Circuit doctrine, sale and use art need not be enabling in order to be available to the public. In particular—as I just mentioned—"non-informing" and "secret" uses and sales may count as prior art. Thus, a plain language reading of the pending bills would arguably include as prior art sales and uses that are clearly not "disclosures" in the ordinary sense of the term.
And because courts of late—particularly the Supreme Court (see, e.g., Bilski)—have used plain language interpretations of the Patent Act, it is not prudent drafting to hope courts will look to the legislative history to fix the situation. Moreover, as Hal Wegner has noted, the Leahy-Hatch statements actually post-date the passage of the Senate bill, potentially negating their value as probative legislative history—especially in view of some seemingly contrary statements in the pre-passage legislative history (see, e.g., 157 Cong. Rec. 1348, 1355-56 (Mar. 9, 2011) ("An inventor who publishes his invention retains an absolute right to priority if he files an application within one year of his disclosure.") (emphasis added)).
The policy problem with treating (at least many) sales and uses made during the one-year grace period as prior art is that it forces inventors to forgo a wide range of commercial activity prior to filing for a patent. This would impose a particularly heavy burden on independent inventors, as well as startup and early-stage companies, who simply cannot afford to file patent applications on every invention before getting a sense of the invention's commercial viability. (See here and here for data on startup patenting costs.)
In order to remedy the problem, the bills' proposed provision can be easily revised. Just this morning, a Manager's amendment (Download Managers_Amendment_to_HR1249) was introduced in the House that would remove "in public use, on sale, or otherwise available to the public" from the prior art provision of Section 102(a)(1) and replace it with "otherwise disclosed to the public." This change would presumably mandate that only sales and uses, whether made by the inventor or a third party, that are enabling would ever count as prior art—and not just for grace period purposes. This legislative change would effectively overrule many years of well-established judicial precedent that non-informing uses and sales by inventors and third parties, as well as a secret use of a claimed method by an inventor to manufacture products then sold to the public, count as bars to patenting.
Such a shift would be unwise, because it would allow inventors to commercially benefit from their inventions (without disclosing them) for an indefinite period of time before filing for a patent. As Judge Learned Hand explained in Metallizing Engineering (2d Cir. 1946) (emphasis added), "It is indeed true that an inventor may continue for more than a year to practice his invention for his private purposes of his own enjoyment and later patent it. But that is, properly considered, not an exception to the doctrine, for he is not then making use of his secret to gain a competitive advantage over others; he does not thereby extend the period of his monopoly."
Instead, the provisions enumerating prior art should be left intact, and the exclusionary clause revised to make it absolutely clear that all inventor sales, uses, or other activities that make the invention available to the public less than one year before filing would be excluded as prior art (added material underlined):
SEC. 2. FIRST INVENTOR TO FILE.
* * *
`(b) Exceptions-
`(1) DISCLOSURES, USES, OR SALES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION- A disclosure, use, offer for sale, or sale made 1 year or less before the effective filing date of a claimed invention, or making the claimed invention available to the public 1 year or less before the effective filing date of the claimed invention, shall not be prior art to the claimed invention under subsection (a)(1) if–
`(A) the disclosure, use, offer for sale, or sale of the claimed invention, or the making of the claimed invention available to the public, was made by the inventor or joint inventor or by another who obtained the subject matter disclosed, used, offered for sale, sold, or made available to the public, directly or indirectly from the inventor or a joint inventor; or
`(B) the subject matter disclosed, used, offered for sale, sold, or made available to the public had, before such disclosure, use, offer for sale, or sale of the claimed invention, or the making available to the public of the claimed invention, been publicly disclosed by the inventor or a joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
Ted Sichelman is an Assistant Professor at the University of San Diego School of Law, where he teaches patent law and other intellectual property courses. Charles Coover provided helpful research assistance for this post.
Earlier today, I testified in Congress before the House of Representatives Judiciary Committee’s Subcommittee on Intellectual Property, Competition, and the Internet. [Link] The IP subcommittee will have jurisdiction over any patent reform measures introduced to the House. The other two witnesses were Professor Dan Burk (UC Irvine) and Andrew Pincus (Mayer Brown, representing BSA). The focus of today’s hearing was on the changes that have occurred in patent law since the patent reform process began in 2004. I.e., what is left for Congress to reform? Our written and recorded testimony is available online here: http://judiciary.house.gov/hearings/hear_03102011_2.html.
Questioning was extensive and included questions from subcommittee Chairman Goodlatte (R-VA), Vice-Chairman Watt (D-NC), and Representatives Conyers (D-Mich), Nadler (D-NY), Chu (D-CA), Reed (R-NY), and Adams (R-FL). Representatives Coble (R-NC) and Quayle were also in attendance.
My written Testimony Follows:
Committee on the Judiciary< ?xml:namespace prefix ="" o />
United States House of Representatives
Subcommittee on Intellectual Property, Competition and the Internet
Hearing
“Review of Recent Judicial Decisions on Patent Law”
We are likely nearing a turning point in a decade-long process of patent reform.Although there is still clearly a strong demand for legislative measures, much has changed since the landmark FTC and NAS point-by-point criticisms of the patent law system were released in 2003 and 2004 respectively.[1] Likewise, much has changed in the six years since the Patent Reform Act of 2005 was introduced in the House of Representatives.[2]Perhaps in response to these external pressures, the Federal Courts have taken a more active role in shaping patent policy from the bench and have particularly addressed many of the concerns raised by the various patent reform initiatives.
In most areas of law, court-developed doctrines mature quite slowly.Over the past decade, however, patent law has been a dramatic counter-example.The courts have substantially altered many longstanding patent doctrines in the course of a few short years.[3]Several factors combine to explain this phenomenon.First, unlike most other federal legal questions appealed to regional Circuit Courts of Appeal, virtually all patent law related appeals from across the country are heard by the Court of Appeals for the Federal Circuit (the “Federal Circuit”).The national reach of the Federal Circuit means that a ruling by the court has an automatic nationwide impact in much the same way that decisions by the United States Supreme Court have a nationwide impact.However, unlike the Supreme Court, the Federal Circuit hears hundreds of patent cases each year.Over the past ten years, the funneling of patent appeals to the Federal Circuit has resulted in the court hearing over four thousand patent infringement appeals in addition to its review of patent decisions from the United States Patent and Trademark Office (the “Patent Office”) and the International Trade Commission.[4]The large number of cases provides the court with the opportunity to rapidly shift the law, even when each case presents only an incremental change. In addition to the means to effect change, it is apparent that both the Federal Circuit and the Supreme Court have taken an interest in shaping patent law policy.[5]Finally, unlike many Federal statutes, the Patent Act as codified in Title 35 of the United States Code is a relatively sparse statute that leaves tremendous leeway for interpretation.
Over the past six years, the Supreme Court granted certiorari and issued a number of important patent decisions that:
·Make it easier to invalidate (or reject) a patent on obviousness grounds, KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (eliminating technical hurdles for proving an invention obvious and instead applying a “common sense” analysis for assessing patentability);
·Make it more difficult for a patent holding company to obtain injunctive relief to stop ongoing infringement, eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (holding that even an adjudged infringer should not be automatically enjoined from continuing to infringe; rather an injunction should only issue after consideration of the traditional four-factor test for equitable injunctive relief);
·Make it easier for a manufacturer to obtain a declaratory judgment of non-infringement, MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) (holding that declaratory judgment (“DJ”) jurisdiction may exist even if the patent holder could not have sued the DJ plaintiff for infringement; apprehension that patentee will sue for infringement is not a necessary element for Article III jurisdiction);
·Solidify our understanding of the scope of patentable subject matter available for business method patents, Bilski v. Kappos, 130 S. Ct. 3218 (2010) (invalidating Bilski’s claimed invention – a method of hedging against the occurrence of bad weather – as an unpatentable abstract idea);
·Limit the doctrine of export infringement under 35 U.S.C. § 271(f), Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) (holding that Microsoft could not be held liable for exporting software code because the exported source code does not qualify as a “component” under the statute); and
·Provide roadmaps for stronger patent licensing agreements, see Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008) (patent “exhausted” under first sale doctrine because patentee did not restrict licensee’s sales to third party purchasers) and Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28 (2006) (holding that in antitrust tying cases, courts should not presume that a patent confers market power).
During this time, the Federal Circuit has also actively addressed patent reform issues with decisions that:
·Attempt to implement venue reform in a way that limits unreasonable forum shopping, In re TS Tech United States Corp., 551 F.3d 1315 (Fed. Cir. 2009) (on writ of mandamus, ordering case transferred out of venue that had no meaningful ties to the patent infringement case);[6]
·Rationalize patent damage awards, Uniloc USA, Inc. v. Microsoft Corp., ___ F.3d ___, 2011 U.S. App. LEXIS 11 (Fed. Cir. 2011) (holding that the 25% Rule for calculating patent damages is “fundamentally flawed” and that total product revenue cannot be considered in the reasonable royalty analysis unless the Entire Market Value Rule applies.) and Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009) (requiring a proof that purported “comparable” licenses used for calculating a royalty rate are, in fact, comparable); Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308 (Fed. Cir. 2010).
·Limit enhanced damages, In re Seagate, 497 F. 3d 1360 (Fed. Cir. 2007) (limiting the potential for treble damages to cases where the adjudged infringer’s actions were at least “objectively reckless”) (see Chart 1);
·Expand the false marking doctrine, Forest Group Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009);
·Limit inequitable conduct pleadings, Exergen Corporation v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) (requiring that inequitable conduct pleadings include “specific who, what, when, where, and how of [any] material misrepresentation or omission”); and
As we sit here today, the courts also have a number of important cases pending resolution. Among others, these include:
·A challenge to the presumption of validity associated with issued patents, Microsoft Corp. v. I4I Ltd. P’ship, 131 S. Ct. 647 (2010) (certiorari granted on the issue of whether the presumption of validity associated with an issued patent must always be overcome with clear and convincing evidence);
·A challenge to the patentability of genetic material, See Ass’n for Molecular Pathology v. United States PTO, 2010 U.S. Dist. LEXIS 35418 (S.D.N.Y. 2010) (holding BRCA gene patents invalid for being directed to a law of nature);
·A Constitutional challenge to the False Marking provisions of the Patent Act, Unique Prod. Solutions, Ltd. v. Hy-Grade Valve, Inc., 2011 U.S. Dist. LEXIS 18237 (N.D. Ohio 2011) (holding the False Marking statute unconstitutional) and United States ex rel. FLFMC, LLC v. Wham-O, Inc., Fed. Cir. App. No. 2011-1067 (pending appeal challenging Constitutionality of the statute);[8]
·A question regarding the mens rea requirement for inducing infringement under 35 U.S.C. § 271(b), Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 458 (2010) (grant of certiorari);
·A major challenge to the implementation of the judge made law of inequitable conduct, TheraSense, Inc. v. Becton, Dickinson & Co., 374 Fed. Appx. 35 (Fed. Cir. April 26, 2010) (en banc order requesting briefing); and
·A challenge to patent ownership rights under the Bayh-Dole Act, Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 131 S. Ct. 502 (2010) (grant of certiorari).
For better or worse, the courts have substantially shifted the playing field over the past six years. And, the cases currently pending and in the pipeline appear poised to continue this process.Of course, the courts have limited power and cannot make statutory amendments or offer funding to the Patent Office. It is safe to say, however, that the courts have addressed (or are addressing) virtually all of the legitimately raised patent reform issues that fall squarely within their purview. Within this dynamic, an important ongoing role of Congress is at least to ensure that the courts are making the right policy choices.
Patent Office Backlog: A key issue of patent law policy that has not been adequately addressed in the past six years is the growing backlog of patent applications pending at the Patent Office.Although the current Patent Office management team is quite focused on reducing the backlog, their efforts have not been overwhelmingly successful to-date.As seen in Chart 2 (below), the overall backlog of patent applications pending at the USPTO has increased more than 30% since 2005.The forced delay is troubling for patent applicants because the exclusive patent right is only enforceable once the patent issues, and typically only against post-issuance infringement.The multi-year prosecution delay is also troubling for potential competitors and customers because the patent right may eventually spring-forth to re-capture exclusive rights that had been in public use for years.
Even more dramatic, is the twenty seven fold (~2700%) increase in the backlog of cases awaiting decision at the Board of Patent Appeals and Interferences (BPAI). (Chart 3).The long and growing backlog of appeals more than doubles the expected duration of the patent prosecution process for the almost 50% of patent applicants that achieve at least a partial victory on appeal.
These backlogs likely cannot be directly corrected by the courts. Instead, every effort must be made to ensure that the Patent Office is enabled and encouraged to right its own ship.In the short term, the Patent Office will need to hire more examiners; re-work its failing information technology system; and apply effective negotiation theories to the examination process.In the longer term, world patent offices must work-share when examining duplicate patent applications that have been filed in multiple countries.[9]In addition, there are some relatively easy steps that can be taken to help ensure that patent applications are filed in a way that make them easier to examine.This may include (1) requiring applicants to better delineate their invention and its purposes and (2) more rigorously enforcing the requirement that claims be clearly drafted in a way that relates to the invention as disclosed.
Obviousness and the Backlog: The bulk of time spent in the patent examination process and in appeals to the BPAI revolves around the issue of obviousness.[10]In other words, the backlogs can be largely attributed to time spent arguing the difficult issue of obviousness. Unfortunately, nothing in the proposed legislation does anything directly to alleviate this burden.Although the process of examining patents for obviousness may seem to be one best left to the administrative agency, the Patent Office is bound to follow the examination processes laid out by the courts in KSR v. Teleflex[11] and Graham v. John Deere Co.[12]Because so much time and energy is spent on this issue during the examination process, it may be one where increased substantive rulemaking authority would allow the Patent Office to create a more manageable approach to the statutory question.
Foreign Inventor Influence on the US Patent System: Through a number of reciprocal international agreements such as Paris Convention, the US has promised citizens of other countries access to the US patent system.[13]Under these agreements, an innovative Japanese company seeking exclusive rights in the US market could obtain US patent protection and enforce those rights in US courts against US competitors.Despite this offer of rights, the bulk of issued US patent have always been based on US originated inventions.This practical statistic meant that, historically, US patent reform primarily impacted US companies and US inventors.Over the past six years, the statistic changed, and for the first time in history, the majority of US patents are now being issued on foreign-originated inventions. (Chart 4).
For some, this decline in US-centric dominance of the US patent system will serve as a sign that US innovation could use additional encouragement. In addition, however, the decline may signal a need to change our outlook on the role of patent rights in US policy. Certainly, the offer of patent rights encourages innovation and disclosure of new inventions.However, this incentive is felt around the world – encouraging companies in Australia or Germany to innovate in their home countries in order to capture an exclusive slice of the US market.[14]In this framework, patent reform is much more than a domestic policy issue. Rather, it becomes an issue of rooted in international trade and international relations.This is not a new concept, but one that should be kept in mind as the legislation moves forward.
Rise in Patent Reexamination Filings: The US has two primary post-grant opposition processes already in place: (1) inter partes reexamination and (2) third-party requested (or prompted) ex parte reexamination.Prior to 2005, it appeared that many potential defendants and accused infringers were reluctant to use the post-grant opposition processes.That reluctance has largely evaporated – in part because of the USPTO’s successful implementation of a Central Reexamination Unit (CRU) composed of elite and highly trained patent examiners in sufficient quantity to have a high response rate.[15]In addition, patent law professionals have seen that reexamination can be an effective and relatively inexpensive alternative to litigation.At this point, high-dollar patent infringement lawsuits are usually associated with a parallel reexamination of the patents in-suit – so long as the defendant has a credible obviousness argument based on published materials.Table 1, shows the rise in popularity of reexaminations over the past few years.
Percent Change in Number of Reexamination Requests
Inter Partes Reexamination Requests
53
903
1704%
Ex Parte Reexamination Requests
1,719
3,272
190%
A notable limitation of the current reexamination system is that reexaminations are only allowed to consider certain invalidity arguments (obviousness and anticipation) and apply a limited set of prior art (patents and printed publications).Many countries offer broader latitude in their opposition proceedings, although some of those countries completely divide duties between the administrative agency (handling invalidity issues) and the court (handling infringement).[17]The dramatic shift in usage of available post grant options gives me pause to consider whether the proposed reforms in 2005 offered a permanent solution to what was merely a temporary problem.
A more straightforward approach to issues now before the Committee is to identify elements of prior patent reform measures that have not been addressed by the courts. These include:
(1)Easing the USPTO’s ability to set fees for its services and to retain all fees collected;
(2)Moving from a “first-to-invent” system to a “first-to-file” system;
(3)Expanding prior-user rights;
(4)Requiring that all patent applications be published by the USPTO;
(5)Allowing pre-issuance protests (or prior art submissions) by third parties;
(6)Expanding the scope of post-grant reexamination or adding an additional post-grant opposition proceedings;
(7)Eliminating the “best mode” requirement; and
(8)Easing the rules for assignee submission of patent filings without the inventor’s express permission.
Each of these reform measures have their own potential benefits and detriments that vary according to the implementation approach chosen.
Thank you for this opportunity to present my remarks.
Dennis Crouch
March 10, 2011
[1] Federal Trade Commission, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, A Report by the Federal Trade Commission, October 2003; Nat’l Res. Council of the Nat’l Acads., A Patent System for the 21st Century (Stephen A. Merrill et al. eds., National Academies Press).
[3] See William C. Rooklidge & Alyson G. Barker, Reform of a Fast-Moving Target: The Development of Patent Law Since fee 2004 National Academies Report, 91 J. Pat. & Trademark Off. Soc’y 153 (2009).
[4] Federal Circuit Statistics, Filings of Patent Infringement Appeals from the U.S. District Courts at http://www.cafc.uscourts.gov.
[5] Polk Wagner & Lee Petherbridge, Is the Federal Circuit Succeeding? An Empirical Assessment of Judicial Performance, 152 U. Pa. L. Rev. 1105 (2004) (“since its inception, the [Federal Circuit]—with some assistance from the Supreme Court—has moved aggressively in support of its widely perceived mandate”); Paul R. Michel, Assuring Consistency and Uniformity of Precedent and Legal Doctrine in the Areas of Subject Matter Jurisdiction Entrusted Exclusively to the U.S. Courts of Appeals for the Federal Circuit: A View from the Top, 58 AM. U. L. REV. 699, 702 (2009); Craig Allen Nard & John F. Duffy, Rethinking Patent Law’s Uniformity Principle, 101 Nw. U. L. Rev. 1619 (2007); Dan L. Burk & Mark A. Lemley, The Patent Crisis and How the Courts Can Solve It (2009)
[6] The TS Tech decision appears to have had a major impact on patent venue jurisprudence. In the two years since the case was decided, its analysis has been followed by almost four dozen different courts.See, for example, Promote Innovation LLC v. Leviton Mfg. Co., 2011 U.S. Dist. LEXIS 16294 (E.D. Tex. Feb. 17, 2011) (granting accused infringer’s motion to transfer venue from the Eastern District of Texas to the Eastern District of New York).
[7] The Tafas decision was vacated pending rehearing en banc and eventually dropped after the USPTO retracted its planned implementation of rules that would limit both the number of claims that an applicant could file per patent application and the number of continuation applications an applicant could file based on a single invention disclosure. See also, Arti K. Rai, Growing Pains in the Administrative State: The Patent Office’s Troubled Quest for Managerial Control, 157 U. PA. L. REV. 2051 (2009).
[10] Dennis Crouch, Understanding the Role of the Board of Patent Appeals: Ex Parte Rejection Rates on Appeal, University of Missouri School of Law Legal Studies Research Paper No. 2009-16 (2009) at http://ssrn.com/abstract=1423922. (90% of BPAI appeals involve a question of obviousness).
[12] 383 U.S. 1 (1966) (setting out the process of the obviousness inquiry as used in both courts and the Patent Office).
[13]Paris Convention for the Protection of Industrial Property, art. 2.
[14] See Commonwealth Sci. & Indus. Research Organisation v. Buffalo Tech., 542 F.3d 1363 (Fed. Cir. 2008) (Australian government entity suing on its US software related patent in the Eastern District of Texas).
[15] Gregory Novak, Concurrent Reexaminations as a Strategic Patent Litigation Defense Tool, 1020 PLI/Pat 797 (2010) (“since the inception of the Central Reexamination Unit (CRU), reexamination proceedings are producing favorable results [for the third-party] in a more timely manner”).
[17] To my knowledge, no one has studied the potential impact of increasing the scope of US reexamination practice or adding a broader layer of post grant opposition.
Earlier this week, the Senate overwhelmingly passed (95–5) the America Invents Act (S.23 or AIA) which represents a major patent reform initiative. Many are saying this is the largest patent reform measure since the 1952 Patent Act. I would argue that two reforms from the 1980’s are at least as important as the AIA: Federal Courts Improvement Act of 1982 (establishing the Court of Appeals for the Federal Circuit) and the 1984 Hatch-Waxman Act (establishing the modern generic drug system).
Of course, neither of those 1980’s reforms rewrote the core patent law fundamentals of novelty and nonobviousness. In this post, I look at how the AIA re-defines these doctrines.
Filing Date Prior Art: Under the new law, Sections 102 and 103 of the patent act would be largely rewritten. The new Section 102(a) defines novelty and eliminates invention-date rights (with the exceptions noted below). The new focus a patent applicant’s “effective filing date” and whether prior art existed before that date. As a general matter, this shift expands the scope of potential prior art and therefore should make it more difficult to obtain patent protection. In addition to the date change, the statute adds a new catch-all phrase to the scope of prior art. Courts will be asked to consider what it means to be “otherwise available to the public.” Under the new provision classifies prior art as items “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public.” Section 102(a)(1). In addition, a third-party application on file at the PTO will count as prior art as of its effective filing date once that application is published or patented. Section 102(a)(2). Of course, the effective filing date allows for priority claims
Narrow Grace Period: The new law would substantially narrow the current one-year pre-filing grace period so that that it only applies to negate pre-filing disclosures (1) by the inventor, (2) derived from the inventor, or (3) after the inventor had already publicly disclosed. A technical problem with the new Section 102(b) provision is that the key term – “disclosure” – is left undefined. The grace period provision is written as an exception to the filing-date prior art provision discussed above. However, it is unclear whether the exception applies to all types of prior art including “on sale” activities.
Patent Races and First-to-File: In a patent race with two or more entities seeking protection for the same invention, the patent would be awarded to the first-to-file a patent application rather than the first-to-invent. This eliminates current Section 102(g), interferences, and questions of conception, diligence, reduction to practice, abandonment, suppression, and concealment. Except that the new law would allow for a derivation action (court) or proceeding (USPTO) when the first-filer “derived” their claimed invention from another. An oddity of the statute is that the derivation action may only be filed when the patent office issues two patents that claim the same invention. An important aspect of the derivation proceedings before the USPTO is that they allow the parties to settle their case.
One problem with the derivation provision that will be left to the PTO and courts is that the key term – “derived” – is not defined. If given a broad meaning, the derivation proceedings could offer inventors something akin to the copyright doctrine of derivative works.
This invention-date focus will likely drive more provisional patent application filings for US entities. The prior-disclosure grace period limitation may drive a revival in formal invention disclosure publications. However, because this narrowed grace period is still broader than that available in most countries, a pre-filing disclosure may negate foreign patent rights.
No Prior User Rights: The Senate Bill does not include any provision for prior user rights. Although current law only has limited prior user rights, a prior user who is sued for infringement may be able to invalidate that patent by claiming prior invention under Section 102(g). That option is eliminated in a first-to-file system leaving a prior user potentially liable for infringement.
Nonobvious Subject Matter: The new law would rewrite Section 103 as follows
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.
One shift in the nonobviousness statute merely codifies the current law’s focus on “claims” rather than the “subject matter sought to be patented.” We’ll hope that courts will not interpret the phrase “the claimed invention as a whole” as requiring the courts to examine the entire claim-set as a whole.
The most important change is that the new provision considers obviousness as of the “effective filing date” of the patent claims being considered rather than “at the time the invention was made.” Of course, the courts already ignore the language of the statute and allow post-invention 102(b) prior art to be used for obviousness analysis.
[Update] A vote on S.23 is expected this evening, March 2, 2011. Before becoming law, the bill would need to also be approved by the House of Representatives.
I want to thank Professor McCrackin and her students for providing a useful analysis that compares the patent-race issues involved with the move to a first-to-file system.
I have long maintained that pressure to move to first-to-file has very little to do with these patent races. Interferences are extremely rare. And, as we all know, if it is difficult to prove prior dates of conception and reduction to practice, it is all-but-impossible to prove diligence at the level required by caselaw. Thus, in the words of Paul Morgan, analyzing the change in terms of the patent race is a "truly academic exercise."
For this reason, in my 2010 article on anticipation I decided to move the nomenclature away from first-to-invent and first-to-file systems and instead talk about whether the patent system is filing-date-focused or invention-date-focused and also to query the type of grace period allowed by the various systems.
What few are talking about with the proposed legislation is that it would increase the scope of prior art available to invalidate a patent – even when no competing patent application is filed.
In particular, the proposed legislation severely restricts the one-year grace period currently available to a patent applicant. Under the new legislation, a prior inventor could only antedate a pre-filing disclosure if that disclosure was (1) derived from the inventor or (2) made public after the inventor publicized her invention. Under the current rules, the one-year grace period operates without regard to the source of the putative prior art.
Even more, under current law, sales and offers-to-sell only constitute prior art if those sales occurred more than one year before the patent application filing date. 35 U.S.C. § 102(b). In those circumstances, no "swearing behind" is necessary against sales activities because they only qualify as prior art if they occurred outside of the grace period. It appears from the language of the bill, that no grace period would be allowed for pre-filing sales activities. Rather, the grace period language in the proposed bill only relates to "disclosures" and on sale activity is typically not seen as a disclosure.
From a practical standpoint, these elements involving the grace period are much more likely to impact patent applicants than any potential interference issue.
Guest Post By Prof. Ann McCrackin, Stephen Brodsky, and Amrita Chiluwal. Prof. McCrackin is Director of the Patent Prosecution Program at the Univ. of New Hampshire School of Law (formerly Franklin Pierce Law Center). Mr. Brodsky and Ms. Chiluwal are both 2011 JD Candidates at the Univ. of New Hampshire School of Law.
The Patent Reform Act of 2011 ("S.23") is now being considered by the full U.S. Senate. One of the provisions of S.23 would replace the current first-to-invent ("FTI") system with a first-inventor-to-file ("FITF") system. Some of the differences between these two systems are outlined below in order to help understand the changes in Sec. 2 of the S.23 Bill. For simplified illustrative purposes, Parties ("A" and "B") and their invention ("Widget") will be used below.
First-to-Invent
The current U.S. system is a first-to-invent ("FTI") system. Under the FTI system, the first party to invent is entitled a patent on that invention upon filing for a patent application (as long as all of the other patentability requirements are met). Even if the first party to invent is not the first to file, that party could still be entitled to the patent rights. In situations where there are multiple inventors of the same invention, the determination as to who is entitled to the patent rights is made during an interference proceeding. Interference proceedings are administrative proceedings held at the USPTO that legally determine the first inventor. However, there are time constraints on interference proceedings, e.g., typically a party cannot bring an interference proceeding on an invention after a patent has issued on that patent. Therefore, the first person to file would get the patent unless another person is able to prove prior invention in an interference proceeding.
The following examples involve two parties who claim the same invention in an FTI system:
The Patent Reform Act of 2011 (S. 23) was introduced on January 25, 2011 by Senator Leahy (D-VT) who was joined by eight co-sponsors (all from the Judiciary Committee) that include Senators Coons (D-DE), Franken (D-MN), Grassley (R-IA), Hatch (R-UT), Klobuchar (D-MN), Kyl (R-AZ), Lieberman (I-CT), and Sessions (R-AL). The bill was referred to the Senate Judiciary Committee which unanimously approved the bill. The House of Representatives will likely move more slowly. Although House Judiciary Committee chair Rep. Smith (R-TX) co-sponsored the similar Patent Reform Act of 2009, Rep. Issa (R-CA) is the “patent expert of Congress” and has only tentatively supported the reform bills in the past. [UPDATE – Most Recent Version of S. 23 2/11/11]
First-Inventor-to-File: The reform measure would move the US further toward a first-to-file system. Each patent application would be given an “effective filing date,” and the patentability will be judged on whether any prior art was available prior to the filing date. One-year grace period would remain in effect, but only for the inventor’s own disclosures (and disclosures derived from the inventor). Obviousness will also be judged as of the effective filing date. Inventors will no longer be able to swear behind prior art nor will they be able to establish priority in an interference proceeding. A new creation in the bill is a “derivation proceeding” that would operate only in times where an original inventor alleges that a patent applicant derived the invention from the original inventor’s work.
Damages: Patent defendants have argued that courts often treat damages issues as afterthoughts with little procedural control. The proposed amendment would add specific procedures and checks on how a judge manages the damages portion of a case. The amended statute would require that a court “identify methodologies and factors that are relevant to the determination of damages” and that “only those methodologies and factors” be considered when determining the damage award. In addition, prior to the introduction of damages evidence, the court would be required to consider either party’s contentions that the others damage case lacks a legally sufficient evidentiary base. In addition, the statute would require a judge to bifurcate the damages portion of a trial if requested “absent good cause to reject the request, such as the absence of issues of significant damages or infringement and validity.” Oddly, the proposed statute seemingly bars a judge from amending the discovery schedule or any “other matters” based upon the trial sequencing.
Enhanced Damages: Although we often discuss enhanced damages for willful infringement, the current Patent Act is not explicitly limited to situations involving willful infringement. Rather, Section 284 simply states that “the court may increase the damages up to three times the amount found or assessed.” Over the years, Federal Circuit precedent has limited the statute to only situations where the infringer’s actions were at least objectively reckless. The amended statute would codify that holding with the words “Infringement is not willful unless the claimant proves by clear and convincing evidence that the accused infringer’s conduct with respect to the patent was objectively reckless. [I.e., that] the infringer was acting despite an objectively high likelihood that his actions constituted infringement of a valid patent, and this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer.” The statute also makes clear that accusations of willful infringement must be pled with particularity (following FRCP 9(b)); that proof of knowledge of patent is insufficient to establish willful infringement; that a pre-lawsuit notice of infringement cannot itself establish willfulness unless the notification is fact specific in explaining the infringement; that the failure to obtain the advice of counsel (or to present that advice to the jury) “may not be used” to prove willull infringement or inducement of infringement; and that damages subject to trebling are only those accrued after the infringement became willful; and that in a “close case” there will be no willful infringement (here, the statute requires a judge to “explain its decision” and to make a decision prior to the issue being tried by the jury).
Third-Party Challenges to Patent Rights: The bill includes three expanded ways that a third party can use the USPTO to challenge a patent: Pre-Issuance Third-Party Submissions; Third-Party Requested Post-Grant Review; and Inter Partes Post Grant Review.
Pre-Issuance Third-Party Submissions: Under the amendment, third parties would be allowed to submit any printed publication along with a description of the relevance to the USPTO to be considered during the examination of a pending patent application.
Third-Party Requested Post Grant Review: A post grant review proceeding would be created (similar to our current reexamination proceeding) that could be initiated by any party. The review would allow a third party to present essentially any legal challenge to the validity of at least one clam. A major limitation on the post grant review is the request for review must be filed within nine-months of issuance.
Inter Partes Review Proceedings: Once the nine-month window for post grant review is expired, a party may then file for “inter partes review.” This new system would replace inter partes reexamination and would be limited to consideration of novelty & obviousness issues based on prior art patents and printed publications. (It appears that third-party requested ex parte reexamination would remain a viable option as well).
False Marking: A large number of false patent marking cases have been filed in the past year. The bill would eliminate those lawsuits except for ones filed by the US government or filed by a competitor who can prove competitive injury.
Oath: The bill would make it easier for a corporation to file a substitute inventor’s oath when the inventor is non-cooperative.
Best Mode: Although an inventor will still be required to “set forth” the best mode for accomplishing the invention, the statute would be amended to exclude failure of disclose a best mode from being used as a basis for invalidating an issued patent. The PTO will still have a duty to only issue patents where the best mode requirement has been satisfied.
Fee Setting Authority: The PTO would be given authority to adjust its fees, but only in a way that “in the aggregate” recover the estimated costs of PTO activities. Along this line, a new “micro” entity would be created that would have additional fee reductions.
Orion sued Hyundai and twenty other automobile manufacturers for infringement of its patent covering a “computer-assisted parts sales method.” The invention took computer and database technology available in 1988 and applied that technology to a specific solution. All of the defendants settled except Hyundai who was stuck with a $34+ million verdict jury. On appeal, the Federal Circuit reversed — holding that the asserted patent is invalid as anticipated by a promotional publication for an electronics parts catalog. Note, this post deals with the anticipation issues. I will discuss inequitable conduct in a separate post.
The asserted prior art is a brochure for the IDB2000 system that was distributed by Bell & Howell at least one year prior to the Orion priority date.* [DTX133.pdf (5979 KB)] The brochure does not specifically state that the system generates a customer proposal as required by claim 1 of Orion’s patent. However, at trial, Hyundai presented evidence that the IDB2000 system was “designed to, and did” generate customer proposals. The Federal Circuit latched-onto this testimony regarding the prior art system and used it to expand the coverage of the prior art brochure — holding that the “testimonial and documentary evidence regarding the Electronic Parts Catalog reference establish that the Electronic Parts Catalog reference anticipates claim 1 of the ’627 patent.”
I have genuine problems with the analysis in this opinion. The appellate panel expanded the scope of the asserted anticipatory prior art reference by relying on testimonial evidence of how the associated system was used at the time. There are two separate problems. First, the scope of a “printed publication” should be examined for what it disclosed to one of skill in the art rather rather than to how underlying prior art systems were used at the time. Contemporaneous use would be important for an analysis of whether the invention was “in public use” more than one year before the filing date. However, this decision’s doctrinal focus is solely on anticipation by the prior art brochure as a printed publication. If the IDB2000 system itself anticipated the patent then the defendants should have presented evidence under the public use prong of 102(b). The second problem with the court’s decision is that the oral testimony relied on here opens the door to potentially self-serving testimony that is not ordinarily allowed in invalidity/priority proceedings because it does not satisfy the clear and convincing standard.
* The asserted prior art reference was apparently printed after the Orion filing date. However, Hyundai presented oral testimony that a very similar brochure had been distributed earlier.
(g)Theterms ‘joint inventor’ and ‘coinventor’ mean any1 of the individuals who invented or discovered the subject matter of a joint invention.
(h)Theterm ‘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 inventionin 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)Theeffective filing date for a claimed invention in an applicationfor 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)Theterm ‘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 entitledto a patent unless—
(1) the claimed invention was patented, describedin 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 patentissued under section 151, or in an application for patent published or deemed published under section122(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)DISCLOSURESMADE 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 inventionshall not be prior art to the claimed inventionunder subsection (a)(1) if—
(A) the disclosure was made by the inventoror joint inventor or by another who obtained the subject matter disclosed directly or indirectlyfrom the inventor or a joint inventor; or
(B) the subject matter disclosedhad,beforesuch 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.—Adisclosure shall not be prior art to a claimed invention under subsection (a)(2) if—
(A) the subject matter disclosed was obtaineddirectly or indirectly from the inventor or a joint inventor;
(B) the subject matter disclosedhad,beforesuch 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 directlyor 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 inventionshall be deemed to have been owned by the same person or subject to an obligation of assignment to the samepersonin 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.—Forpurposes 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 filingdateunder 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 applicationthat describes the subject matter.
35 USC 103.Conditions for patentability;nonobvioussubjectmatter
Apatent 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 differencesbetween 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 inventionto 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.—Theowner of a patent may have reliefby 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.—Anaction under this sectionmay only be filed within 1 year after the first publicationof a claim to an invention that is the same or substantiallythe same as the earlier applicant’s claimed invention.
35 USC 135.Derivation proceedings
(a) INSTITUTION OF PROCEEDING.—Anapplicant 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 supportedby substantial evidence. Whenever the Director determinesthat a petition filed under this subsection demonstratesthat the standards for instituting a derivation proceeding are met, the Director may institute a derivationproceeding. The determination by the Director whetherto institute a derivation proceeding shall be final and nonappealable.
(b) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.—Ina 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 standardsfor the conduct of derivation proceedings.
(c) DEFERRAL OF DECISION.—ThePatent Trial and Appeal Board may defer action on a petition for a derivationproceeding 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.—Thefinal decisionof 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 decisionof 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 cancellationof those claims, and notice of such cancellationshall be endorsed on copies of the patent distributed after such cancellation
(e) SETTLEMENT.—Parties to a proceeding institutedunder 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 inventionin dispute. Unless the Patent Trial and Appeal Board findsthe 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 understandingshall 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 personon a showing of good cause.
(f) ARBITRATION.—Parties to a proceeding institutedunder 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 arbitrationshall be governed by the provisions of title 9, to the extentsuch 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 precludethe Director from determining the patentability of the claimed inventions involved in the proceeding.
Iovate & University of Florida Research Foundation v. Bio-Engineered Supplements & Nutrition (BSN) (Fed. Cir. 2009) (Download 09-1018)
Iovate is the exclusive licensee of UF's patented method for "enhancing muscle performance or recovery from fatigue." Pat. No. 6,100,287. The method includes the single step of administering a coposition that contains a ketoacid and either a cationic or dibasic amino acid. Eschewing their home-state courts, the patentee filed suit in the Eastern District of Texas — alleging that BSN was selling infringing supplements.
On summary judgment, district court judge Ron Clark held the patent invalid as anticipated under 35 U.S.C. 102(b). The most relevant prior art was a series of advertisements found in Flex Magazine.
Each ad includes a list of ingredients, directions for administering the dietary supplement orally to humans, and marketing claims and testimonials from bodybuilders extolling the virtues of the product. . . . The ad also describes how the product is made, including the four steps used to isolate the protein components from milk whey; lists a price of $24.99; states that the product is available at GNC and other health food stores or by phone; instructs the user on the amount to take; and offers a manufacturer’s rebate of $5.00 for mailing in a coupon with proof of purchase before July 31, 1996.
Judge Clark ruled that the advertising served as proof that the invention public use and on sale under § 102(b) based on the fact that the ads "show an actual product and state that it is available for purchase in health food stores, gyms, or by catalog." The district court also held that the ads explicitly disclose "all of the limitations of the asserted claims, including each of the claimed chemical components as well as the stated function of oral administration to a human to speed muscle recovery."
Under § 102(b) a patent is invalid if "the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States."
On appeal, the Federal Circuit affirmed, but narrowed its grounds to focus only on the prior art as a "printed publication." Writing in a concurring opinion, Judge Mayer indicated that he would have found that the ads place the products "on sale" as well.
Iovate raised two arguments regarding the prior art. First, the patentee argued that the ads did not disclose each element in the claims because the preamble included the goal of "enhancing muscle performance" and while the ad merely touted promotion of "muscle synthesis and growth." The appellate panel not only rejected that argument, but also found that it "borders on the frivolous" since the specification and Iovate's briefs at the district court suggested that muscle growth was a proxy for enhancing muscle performance.
Iovate also argued that the ad was not sufficiently enabling as prior art. In rejecting that suggestion, the appellate panel held that "all one of ordinary skill in the art would need to do to practice an embodiment of the invention is to mix together the known ingredients listed in the ad and administer the composition as taught by the ad."
Affirmed.
This case leave open the question of when an advertisement would be evidence of public use or on sale.
The Patent Reform Act of 2011 (S. 23) was introduced on January 25, 2011 by Senator Leahy (D-VT) who was joined by eight co-sponsors (all from the Judiciary Committee) that include Senators Coons (D-DE), Franken (D-MN), Grassley (R-IA), Hatch (R-UT), Klobuchar (D-MN), Kyl (R-AZ), Lieberman (I-CT), and Sessions (R-AL). The bill was referred to the Senate Judiciary Committee which unanimously approved the bill. The House of Representatives will likely move more slowly. Although House Judiciary Committee chair Rep. Smith (R-TX) co-sponsored the similar Patent Reform Act of 2009, Rep. Issa (R-CA) is the “patent expert of Congress” and has only tentatively supported the reform bills in the past. [UPDATE – Most Recent Version of 
First-Inventor-to-File: The reform measure would move the US further toward a first-to-file system. Each patent application would be given an “effective filing date,” and the patentability will be judged on whether any prior art was available prior to the filing date. One-year grace period would remain in effect, but only for the inventor’s own disclosures (and disclosures derived from the inventor). Obviousness will also be judged as of the effective filing date. Inventors will no longer be able to swear behind prior art nor will they be able to establish priority in an interference proceeding. A new creation in the bill is a “derivation proceeding” that would operate only in times where an original inventor alleges that a patent applicant derived the invention from the original inventor’s work. 
Damages: Patent defendants have argued that courts often treat damages issues as afterthoughts with little procedural control. The proposed amendment would add specific procedures and checks on how a judge manages the damages portion of a case. The amended statute would require that a court “identify methodologies and factors that are relevant to the determination of damages” and that “only those methodologies and factors” be considered when determining the damage award. In addition, prior to the introduction of damages evidence, the court would be required to consider either party’s contentions that the others damage case lacks a legally sufficient evidentiary base. In addition, the statute would require a judge to bifurcate the damages portion of a trial if requested “absent good cause to reject the request, such as the absence of issues of significant damages or infringement and validity.” Oddly, the proposed statute seemingly bars a judge from amending the discovery schedule or any “other matters” based upon the trial sequencing. 
Enhanced Damages: Although we often discuss enhanced damages for willful infringement, the current Patent Act is not explicitly limited to situations involving willful infringement. Rather, Section 284 simply states that “the court may increase the damages up to three times the amount found or assessed.” Over the years, Federal Circuit precedent has limited the statute to only situations where the infringer’s actions were at least objectively reckless. The amended statute would codify that holding with the words “Infringement is not willful unless the claimant proves by clear and convincing evidence that the accused infringer’s conduct with respect to the patent was objectively reckless. [I.e., that] the infringer was acting despite an objectively high likelihood that his actions constituted infringement of a valid patent, and this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer.” The statute also makes clear that accusations of willful infringement must be pled with particularity (following FRCP 9(b)); that proof of knowledge of patent is insufficient to establish willful infringement; that a pre-lawsuit notice of infringement cannot itself establish willfulness unless the notification is fact specific in explaining the infringement; that the failure to obtain the advice of counsel (or to present that advice to the jury) “may not be used” to prove willull infringement or inducement of infringement; and that damages subject to trebling are only those accrued after the infringement became willful; and that in a “close case” there will be no willful infringement (here, the statute requires a judge to “explain its decision” and to make a decision prior to the issue being tried by the jury). 
Oath: The bill would make it easier for a corporation to file a substitute inventor’s oath when the inventor is non-cooperative. 
(BSN) (Fed. Cir. 2009) (