First-to-File Patent System

Important Changes to U.S. Patent Law: America Invents Act (AIA)

The United States has switched from a First-to-Invent system to a First-to-File system. That makes it important to file patent applications sooner rather than later.

The definition of prior art is expanded under the new system and can even include oral disclosures, as well as a lot more foreign prior art. Here is the new 35 U.S.C. 102:

1. 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.
2. 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—
      1. 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
      2. 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—
      1. the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
      2. 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
      3. 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.
3. 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.
4. 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.

The Definition Of Prior Art Has Been Changed To Be Measured From The Effective Filing Date Versus From The Invention Date. The Longer An Applicant Waits To File, The More Potential Prior Art There Will Be.

In addition, things that were in public use or on sale in foreign countries have been added to the pool of prior art. Anything otherwise available to the public anywhere in the world is also added to the pool of prior art. This could include oral disclosures.

It will take the courts years to more clearly define some of these terms. For example, it is unclear whether a secret sale would be considered to be prior art. If a third party publishes something similar to but different from an inventor’s publication, an expensive derivation proceeding may be required to prove the prior art disclosure was derived from the applicant’s claimed invention.

A U.S. patent or published U.S. or PCT application becomes available as prior art on the date that the U.S. patent or published application is “effectively filed.” The date that a U.S. patent or U.S. or PCT published application is “effectively filed” is the earlier of: (i) the actual filing date of the U.S. patent or U.S. or PCT published application; or (ii) the filing date of the earliest application to which the U.S. patent or U.S. or PCT published application is entitled to claim a right of foreign priority or domestic benefit which describes the subject matter.

A Japanese patent application publication has a prior art effect under AIA 35 U.S.C. 102(a)(1) as of its publication date. Prior art under 35 U.S.C. 102(a)(2), which becomes available as the basis for a rejection as of the date that it was “effectively filed,” is limited to U.S. patents, U.S patent application publications, and published PCT applications which designate the United States.

Interferences will no longer be required with the first-to-file system, but instead there will be “derivation proceedings.”

A derivation proceeding requires that an applicant for patent file a petition to institute the proceeding. The petition must set forth with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from the petitioner. The petition must be made under oath and supported by substantial evidence. The petition must be filed within 1 year of 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.

It is best not to rely on the supposed one year exception or grace period of part (b) and instead to maintain absolute novelty until after a patent application is filed.

Consider These Fact Patterns:

1. You make a new invention and start selling a product that embodies that invention. Relying on the grace period, almost a year after you started selling, you ask your patent attorney to prepare and file a patent application for you. The application is filed almost a year after your first sale. However, 6 months after you starting selling your product, a competitor filed a patent application covering it. You correctly suspect that they copied your idea. However, their application gets cited against your application during prosecution. What can you do when you receive this rejection? Derivation proceeding you say? The requirements for initiating a derivation proceeding include demonstrating that an invention was derived from an inventor named in the petitioner’s application and, without authorization, the earliest application claiming such invention was filed; and submission of substantial evidence, including at least one affidavit addressing communication of the derived invention and lack of authorization that, if unrebutted, would support a determination of derivation. The showing of communication must be corroborated. What evidence do you have? True, they are not an inventor and should not be able to obtain a valid patent, but will you be able to obtain a patent?
2. You disclose your invention under a non-disclosure agreement to a potential investor. Less than one year later, that investor writes an article describing something like your invention but adding more features. You file a patent application after that article and within a year of your first disclosure. As to the article published by the investor, it is not clear whether it falls under an exception to the prior art. To fall within the exceptions, it has to be a disclosure by another who obtained the subject matter disclosed from a joint inventor. In this case, there are elements in the article that were not obtained from the inventor. There is an open issue as to whether this article falls within the exception to prior art, partially falls within the exception, or is outside the exception. Expect to see litigation on this topic in the next few years. In the meantime, file your patent applications promptly.
3. Less than one year before you file your patent application, your co-inventor publicly discloses your invention to try to get a one year grace period before needing to file a patent application. A competitor sees the publication and, before you file your patent application, sells a product embodying your invention. The public disclosure by your co-inventor is an exception to the prior art under 35 U.S.C. 102(b)(1)(B). But whether the sale by the competitor qualifies as a disclosure is unclear. This is another issue for which litigation will be required before we know whether the activity by another, that is not under your control, will forever bar you from being able to obtain a patent.

This is why I strongly recommend not relying on the one year limited grace period. Assume that we have an absolute novelty system and do not disclose your invention to anyone before you file a patent application.