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U.S. Senate passes Patent Reform Legislation

3/16/2011

    On March 8, 2011, the United States Senate passed Senate Bill S. 23 entitled “The America Invents Act.”  This bill, if later passed by the House of Representatives, will be the first major reform of the patent laws since the 1952 Patent Act.  This bill has been long awaited in the patent field and was passed by an overwhelming, bi-partisan majority of 95 to 5.  The America Invents Act includes 26 sections.  A summary of the most important aspects of S. 23 are as follows.

 

    (1) First Inventor to File.  Under current law, patent eligibility is based on “first to invent.”  Changing to a “first inventor to file” system will place U.S. practice in harmony with the rest of the patent world.  Moreover, S. 23 has expanded the on-sale bar and public use bars to activity throughout the world, not just activities within the United States.  Likewise, the effective filing date of prior art U.S. patents and pre-grant applications claiming foreign priority will be the foreign filing date.  

 

    (2) Post-Grant Review Proceedings.  Under current law, there is no post grant review other than in reexamination proceedings, which are limited to issues of patentability relating to prior art patents or printed publications that establish a substantial new question of patentability.  S. 23 has significantly expanded options for post-grant review. 

 

    Under S. 23, a petition for post-grant review may be based on almost any ground of invalidity, including the on-sale bar, enablement, indefiniteness, etc.  Petitions for post-grant review must be filed within nine months from the grant of a patent or reissue of a patent.   The petition for post-grant review will not be granted unless the information provided, if not rebutted, “would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.”  S .23 also provides for inter partes review based on prior art patents or publications.  A petition for inter partes review may be filed after  the later of  (a) nine months from the grant of a patent, or (b)  after the termination of a post-grant review discussed below.   The standard for granting inter partes review is that “there is a reasonable likelihood that petitioner would prevail with respect to at least 1 of the claims.”

 

    (3) Pre-Issuance Submissions By Third Parties.  Under current US Patent and Trademark Office procedure, third party submissions of prior art patents and publications must be filed within two months of the date of publication of the application or prior to mailing of a notice of allowance, whichever is earlier.  Under S. 23, the time period for third party submissions has been expanded.  A third party may submit any patent or publication of potential relevance to the examination of the application if the submission is made in writing before the earlier of a) the date the notice of allowance is mailed to applicant, or b) the later of six months after the date on which the application for patent is first published  or the date of first rejection of any claim during the examination of an application. 

 

    (4) Fee Setting Authority.  Under current law, Congress may divert fees collected by the PTO for government operations.  This has been an ongoing source of concern to the patent community.  It has been estimated that about $800 million in collected patent fees have been diverted over the past two decades. S. 23 eliminates fee diversion by amending 35 U.S.C. § 42(c).

 

    (5) Supplemental Examination.  A patent owner may request supplemental examination of a patent to consider, reconsider or correct information believed to be relevant to the patent.   If a substantial new question of patentability is raised by one or more items in the request, the Director will order reexamination.  Nothing in this section will be construed to limit the authority of the Director to investigate issues of possible misconduct in connection with matters or proceedings before the PTO.

 

    (6) Best Mode Requirement.  The best mode requirement will remain a condition for patentability under 35 U.S.C. §112.  However, the best mode requirement shall not be a basis from which any claims for patenting may be canceled, held invalid or otherwise held to be  unenforceable.

 

    (7) Transitional Program for Covered Business-Method Patents.   This section of S.23 provides for the implementation of a transitional post-grant review of the validity of covered business-method patents.   Under this section, a person may not file a petition for the transitional proceeding unless the real party in interest has been sued for patent infringement or has been charged with patent infringement.  This transitional procedure is repealed effective 4 years from the date that the PTO issues regulations relating to this section of S.23.

 

    (8) Priority Examination for Technologies Important to American Competitiveness.  This section provides for the prioritization of examination of application of products, processes or technology that are important to the national economy or national competitiveness, without recovering the extra cost of providing such prioritization.

 

    (9) False marking.  In this section, the current law allowing anyone to sue, is changed to limit the parties eligible to sue to be the U.S. government or a person who has suffered competitive injury.  

 

    (10) Derivation proceedings.  Under this section, 35 U.S.C. § 135 is amended to allow an applicant to file a petition to institute a derivation proceeding.  The purpose of a derivation proceeding is to provide cancellation of any claim that (a) an inventor named in an earlier application derived from the inventor named in the petitioner’s application, and (b) was filed without authorization.  The petition must be filed within one year after the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim.