America Invents Act September 19, Matt Rainey Vice President/Chief IP Policy Counsel

Transcription

1 America Invents Act September 19, 2011 Matt Rainey Vice President/Chief IP Policy Counsel

2 Leahy-Smith America Invents Act (AIA) Text is available at: 2

3 History of AIA Latest in a series of patent bills dating back to 2005 September 16, Enacted H.R.1249 signed into law by President Obama as Leahy-Smith America Invents Act January 25, 2011 S.23 Introduced into Senate March 30, 2011 H.R.1249 introduced in House March 8, 2011 Amended version of S.23 passed by Senate Ultimately supplanted by H.R.1249 June 23, 2011 Amended version of H.R.1249 passed by House September 8, 2011 H.R.1249 passed (without further amendment) by Senate Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

4 AIA Enacted September 16, 2011 Photo used by permission of the USPTO 4

5 AIA What s Not in the Act Things that were fought about (or thought about) Damages Court as gatekeeper for evidence going to jury Injunctions Interlocutory appeals from Markman rulings Estoppels for ex parte or inter partes reexaminations Willfulness: limited changes Venue: limited changes 5

6 AIA Topics Timeline of Effective Dates Prosecution Post-Grant Proceedings Litigation USPTO Structures and Processes Studies 6

7 Timeline of Effective Dates

8 Immediately SEC. 3(l): Small Business Study (due 9/16/12) SEC. 5: SEC. 6(c): SEC. 6(h)(2): SEC. 7(e): SEC. 9: SEC. 10: SEC. 11 (a)-(g): SEC. 13: SEC. 14: SEC. 15: SEC. 16: SEC. 19: Prior User Rights Inter Partes Reexam Threshold Modified Elimination of 145 (district court) avenue for ex parte reexams. Appeals to CAFC Venue USPTO Fee-Setting Authority Specific USPTO Fees Funding agreements for small businesses Tax strategies: deemed in prior art Best mode Marking (Virtual & False) Jurisdiction, including joinder SEC. 26: Study on AIA implementation (due 9/16/2015) SEC. 27: Study on genetic testing (due 6/16/2012) SEC. 29: Study on diversity of applicants (due 3/16/2012) SEC. 31: SEC. 32: SEC. 33: Study on international patent protection for small businesses (due 1/14/2012) Pro bono program for small inventors No patents on human organism SEC. 34: Study on patent litigation (due 9/16/2012) AIA Timeline of Effective Dates 10 Days 9/26/11 SEC. 11(h): Fees for prioritized examination (see AIA SEC. 25) SEC. 11(i): 15% Surcharge 15 Days 10/1/11 SEC. 22: Reserve Fund Established 60 Days 11/15/11 SEC. 10(h): Electronic filing incentive 12 Months SEC. 4: SEC. 6(a) and (d): SEC. 7: SEC. 8: SEC. 12: SEC. 17: SEC. 18: SEC. 20: SEC. 21: SEC. 25: SEC. 28: 18 Months Inventor s oath Inter Partes and Post-grant review Patent Trial and Appeal Board 3 rd Party Submissions Supplemental examination Advice of counsel Transitional Program for business method patents Technical amendments Travel expenses Priority examination for important technologies Patent Ombudsman SEC. 3: First to File and Related Provisions 35 USC 102: First to file 35 USC 103: Amended 35 USC 135: Derivation proceedings 35 USC 157: SIR repealed SEC. 23 & 24: 3 Years 9/16/14 Satellite offices SEC. 37: Patent term extension (MedCo) End of SEC. 18 Transitional Program 9/16/11 9/26 10/1 11/15/11 9/16/12 3/16/13 9/16/14 9/16/2020 8

9 Effective upon date of enactment (DOE): examples September 16, 2011 SEC. 3(l): Small Business Study (due 9/16/12) SEC. 16: Marking (Virtual & False) SEC. 5: Prior User Rights SEC. 19: Jurisdiction, including joinder SEC. 6(c): Inter Partes Reexam Threshold Modified SEC. 26: Study on AIA implementation (due 9/16/2015) SEC. 6(h)(2): Elimination of 145 (district court) avenue for ex parte reexams. SEC. 27: Study on genetic testing (due 6/16/2012) SEC. 7(e): Appeals to CAFC SEC. 29: Study on diversity of applicants (due 3/16/2012) SEC. 9: Venue SEC. 31: Study on international patent protection for small businesses (due 1/14/2012) SEC. 10: USPTO Fee-Setting Authority SEC. 32: Pro bono program for small inventors SEC. 11 (a)-(g): Specific USPTO Fees SEC. 33: No patents on human organism SEC. 13: Funding agreements for small businesses SEC. 34: Study on patent litigation (due 9/16/2012) SEC. 14: Tax strategies: deemed in prior art SEC. 37: Patent term extension (MedCo) SEC. 15: Best mode SEC. 16: Marking (Virtual & False) 9

10 Effective 10, 15, 60 days after DOE 10 days after September 26, 2011 SEC. 11(h): Fees for prioritized examination (see AIA SEC. 25) SEC. 11(i): 15% Surcharge 15 days after October 1, 2011 SEC. 22: Reserve Fund Established 60 days after November 15, 2011 SEC. 10(h): Electronic filing incentive 10

11 Effective 12, 18, 36 months after DOE SEC. 4: SEC. 6(a) & (d): Inter Partes and Post-grant reviews 35 USC 102: First to file SEC. 7: SEC. 8: SEC. 12: SEC. 17: SEC. 18: SEC. 20: SEC. 21: SEC. 25: SEC. 28: 12 months after 18 months after September 16, 2012 March 16, 2013 Inventor s oath SEC. 3: First to File and Related Provisions Patent Trial and Appeal Board 35 USC 103: Amended 3 rd Party Submissions 35 USC 135: Derivation proceedings Supplemental examination 35 USC 157: SIR repealed Advice of counsel Transitional Program for business method patents 36 months after Technical amendments September 16, 2014 Travel expenses SEC. 23 & 24: Satellite offices Priority examination for important technologies Patent Ombudsman 11

12 Prosecution Issues in AIA

13 First to File AIA SEC. 3 rewrites 35 USC 102 Effective 18 months after DOE (March 16, 2013) Will apply to Applications with effective filing dates on or after that date Applications that (ever) include any claims with effective dates after that date Invention date no longer available to establish inventive priority Eliminates interferences in favor of derivation proceedings Eliminates current grace periods Creates first to publish grace period 13

14 102 Prior Art 35 USC 102(a) Following events before effective filing date destroy patentability 102(a)(1): Before effective filing date, the claimed invention was: Patented Described in a printed publication In public use On sale Otherwise available to the public 102(a)(2): The claimed invention was described in an issued patent or published application, which: Names another inventor; and Was filed before applicant s effective filing date No geographical limitation 14

15 102 Prior Art Exceptions 35 USC 102(b)(1) A disclosure <1 year before effective filing date does not count as prior art under 102(a)(1) if: The disclosure was made by inventor (or joint inventor) or another who obtained subject matter from inventor (or joint inventor) [Let s call this the inventor or obtainer or IOO ]; or The disclosure in question was made by another (not the IOO), but it was itself preceded by a disclosure by the IOO This creates a first to publish priority for the inventor Publishing destroys most international patent rights ( absolute novelty ) Japan is expanding its grace period basis will other countries follow? Must file within 1 year after publication Open question whether a sale or public use creates the grace period 15

16 102 Prior Art Exceptions 35 USC 102(b)(2) A disclosure appearing in a patent or application does not count as prior art under 102(a)(2) if: Subject matter was obtained from inventor (or joint inventor); Before the effective filing date of the disclosure, the subject matter had been publicly disclosed by IOO; or The disclosed subject matter and the claimed invention were owned by (or subject to obligation of assignment to) same person, no later than effective filing date of the claimed invention Disclosure by IOO must still be <1 year before effective filing date, per 102(a)(1) interacting with 102(b)(1) Again creates a first to publish priority 16

17 102 Prior Art Abolishment of Hilmer Doctrine 35 USC 102(d) Patents and applications are available as prior art under 35 USC 102(a)(2) as of filing date or priority date This abolishes the doctrine under In re Hilmer, 359 F.2d 859 (CCPA 1966), under which a foreign-priority patent or application has a 102(e) prior art effect only as of its U.S. filing date 17

18 Derivation: Civil Actions and USPTO Proceedings Apply where another derived the invention from an inventor AIA SEC. 3(h): amends 35 USC 291 Allows civil action against patent owner of derived patent Must be filed <1 year after issue date of allegedly derived patent AIA SEC. 3(i): amends 35 USC currently defines interference proceedings Amendment provides derivation proceedings for inventions derived from the inventor Must be filed <1 year after publication date of allegedly derived application Effective 18 months after DOE (March 16, 2013) AIA SEC. 3(n)(2): Interferences will still apply to applications with claims having effective filing dates <18 months after DOE 18

19 103 Prior Art Determines obviousness of prior art as of the effective filing date of the claimed invention This will broaden available prior art Current 103 determines obviousness of prior art as of the time the invention was made 19

20 Prior Art Submissions by Third Parties AIA SEC. 8 Any third party may submit: Patents Published applications Other printed publications Must be submitted before: An allowance has issued If no allowance has issued, then the later of: 6 months after publication The date of the first rejection Must be accompanied by concise description of the asserted relevance of each submitted document No requirement to associate specific prior art text or figures with identified claim elements Cf. current 37 CFR 1.99 (Submission shall not include any explanation ) 20

21 Tax Strategies AIA SEC. 14: Any strategy for reducing, avoiding or deferring tax liability shall be deemed insufficient to differentiate a claimed invention from the prior art Effective upon DOE Applies to any patent application pending or filed on or after that date, and to any patent issued after DOE Excludes: Computer program products and systems used solely for preparing tax returns, including data recording, transmitting, etc. Financial management methods, systems, etc. to the extent severable from use of any tax strategy 21

22 USPTO Fees and Fee-Setting Effective on DOE (September 16, 2011) AIA SEC. 11 Numerous fees specified AIA SEC. 10(a) At the same time, the Director may set or adjust any fees Director s fee-setting authority terminates in 7 years (September 16, 2018) 22

23 USPTO Fee Surcharges AIA SEC. 11(i) 15% surcharge on fees Effective 10 days after DOE Applies to: Filing fees Search fees Examination fees Maintenance fees New fees are listed at 23

24 No Patents on Human Organisms AIA SEC. 33 No patent may issue on a claim directed to or encompassing a human organism Effective immediately Applies to any application pending or filed on or after DOE Does not apply retroactively to issued patents Definitions needed: human organism directed to How about (e.g.) a method for generating stem cells? 24

25 Post-Grant Proceedings Under AIA

26 Various Post-Grant Proceedings Under AIA Ex parte reexamination Modified by AIA SEC. 6(h)(2) Continue to be available under AIA Inter partes reexamination Modified by AIA SEC. 6(c) Phasing out Inter partes review New under AIA SEC. 6(a) Will replace inter partes reexams, but there will be overlap for years Post-grant review (PGR) New under AIA SEC. 6(d) Transitional program for business method patents New under AIA SEC. 18 Supplemental examination New under AIA SEC

27 Ex Parte Reexamination AIA SEC. 6(h)(2) eliminates district court remedy currently provided by 35 USC 145 for ex parte reexams Effective on DOE Applies to any BPAI or PTAB appeal pending on, or brought on or after, DOE 27

28 Inter Partes Reexamination (Transition) SEC. 6(c) of AIA Effective on DOE AIA SEC. 6(c)(3)(B)(ii): Apply only to reexams filed on or after DOE New threshold for requests filed on or after DOE Reasonable likelihood that the requester would prevail with respect to at least 1 of the claims challenged in the request Old threshold ( substantial new question of patentability ) will continue to apply to inter partes reexam requests filed before DOE Estoppel unchanged Current 35 USC 315(c) Raised or could have raised estoppel applies to civil actions Does not apply to ITC proceedings 28

29 Inter Partes Review Created by AIA SEC. 6(a) of AIA Effective 1 year after DOE (September 16, 2012) New threshold 35 USC 314(a) Reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the request New estoppel 35 USC 315(e) Raised or reasonably could have raised (RORCHR) estoppel applies to: Other USPTO proceedings May not request or maintain the proceeding on that basis Civil action and ITC proceedings May not assert that the claim is invalid on that basis Estoppel attaches only upon final written decision 29

30 Inter partes Review Interaction with DJs 35 USC 315(a): An inter partes review will not be instituted if petitioner has already filed a civil action (e.g. a DJ) challenging the patent Counterclaim does not count If petitioner files action after petitioning for inter partes review, the action will be stayed until one of the following events: Patent owner moves to lift the stay Patentee files infringement action or counterclaim Petitioner moves to dismiss the action 30

31 Inter partes Review Timing and Process 35 USC 315(b): An inter partes review must be filed less than 1 year after petitioner is sued for infringement 35 USC 316: Mandates regulations for detailed processes Including discovery, oral hearing, etc. 35 USC 316(a)(11): Review must be completed within 1 year Can be extended 6 months for good cause shown 35 USC 316(d): No claim amendments as of right At least 1 motion to amend allowed Additional motions Upon joint request To materially advance settlement 31

32 Three simultaneous regimes for Inter Partes Reexams and Reviews Filed before 9/16/2011 Old inter partes reexam Filed on or after 9/16/11 and Before 9/16/12 New inter partes reexam Filed on or After 9/16/2012 New inter partes review Sept. 16, 2011 Sept. 16,

33 Post-Grant Review (PGR) Created by AIA SEC. 6(d) of AIA: New proceeding under new 35 USC Regulations due from USPTO September 16, 2012 Provides challenge to issuance of patent at PTAB Petition must be filed within 9 months after patent issue date Basis Any ground for invalidity under 35 USC 282(b)(2) or (3) Any novel or unsettled legal question that is important to other patents or patent applications Needs defining Petition requirements: 35 USC 322 Evidence must be submitted supporting the challenge to each claim 33

34 Post-Grant Review Threshold & Estoppel Threshold 35 USC 324 More likely than not that at least 1 of the claims challenged in the petition is unpatentable Estoppel 35 USC 325(e) Raised or reasonably could have raised (RORCHR) estoppel applies to: Other USPTO proceedings May not request or maintain the proceeding on that basis Civil action and ITC proceedings May not assert that the claim is invalid on that basis Estoppel attaches only upon final written decision 34

35 Post-Grant Review (PGR) Interaction with DJs 35 USC 325(a): A PGR will not be instituted if petitioner has already filed a civil action (e.g. a DJ) challenging the patent Counterclaim does not count If PGR petitioner files action after petitioning for PGR, the action will be stayed until one of the following events: Patent owner moves to lift the stay Patentee files infringement action or counterclaim Petitioner moves to dismiss the action 35

36 Post-Grant Review (PGR) cont d 35 USC 325(b): Preliminary Injunctions If civil action is filed within 3 months after patent issue date: Court may not stay consideration of patentee s motion for preliminary injunction on basis that PGR petition has been filed at USPTO 35 USC 326(d): No claim amendments as of right Amendments to claims may be made pursuant to motion Additional motions may be made: Upon joint request by patentee and petitioner; or Upon the request of the patentee for good cause shown 35 USC 328(a): Intervening Rights Adopts intervening rights effects of 252 (for reissue) 36

37 Post-Grant Review Timing 35 USC 324(c): Time to institute PGR The Director shall determine whether to institute a PGR within 3 months after later of: Patentee files written response Time for filing response has passed 35 USC 326(a)(11): Time to decide PGR A final determination of a PGR shall be issued within 1 year The Director may extend the time up to 6 months for good cause shown 37

38 Post-Grant Review Appeals Created by AIA 35 USC 329: Appeal to CAFC District court remedy under 145 is not available Any party to PGR may appeal 38

39 SEC. 18 Proceeding: Transitional Program for Covered Business Method Patents (BMPs) Created by AIA AIA SEC. 18: Provides challenges to covered business method patents (BMPs) Effective 1 year from DOE (September 16, 2012) Applies to any patent issued on, before or after that date AIA SEC. 18(a)(1)(b) Petition may be filed if the petitioner (or real party in interest, or privy) has been: Sued for infringement Charged with infringement Charged with infringement needs defining 39

40 SEC. 18 Proceeding: BMP Definition AIA SEC. 18(d) BMP is defined as: Method or corresponding apparatus For performing data processing or other operations Used in the practice, administration or management of a financial product or service Excludes technological inventions Director to issue regulations to determine whether patent is for a technological invention 40

41 SEC. 18 Proceeding: Stay of Litigation AIA SEC. 18(b): Court must consider, upon motion to stay where there is a related BMP challenge, whether: Stay will simplify issues and streamline trial Discovery is complete and trial date has been set Issuance (or denial) of stay would: Unduly prejudice nonmoving party Present clear tactical advantage for moving party Reduce the burden of litigation on the parties and the court Immediate interlocutory appeal is allowed from court s decision on stay De novo review by CAFC 41

42 SEC. 18 Proceeding Basis, Threshold and Estoppel Basis same as PGR (but with BMP filter as to patented subject matter) Any ground for invalidity under 35 USC 282(b)(2) or (3) Any novel or unsettled legal question that is important to other patents or patent applications Petition requirements: 35 USC 322 Evidence must be submitted supporting the challenge to each claim Threshold same as PGR 35 USC 324 More likely than not that at least 1 of the claims challenged in the petition is unpatentable AIA SEC. 18(a)(1)(D) Estoppels for BMP challenges Raised estoppel applies to civil action and ITC proceedings Cf. RORCHR estoppels for PGR under 35 USC 325(e)(2) May not assert the basis Eliminates estoppel as to petitioner s privy RORCHR applies to other USPTO proceedings Same as PGR, under 35 USC 325(e)(1) May not request or maintain the basis 42

43 SEC. 18 Proceeding Threshold and Estoppel Threshold same as PGR 35 USC 324 More likely than not that at least 1 of the claims challenged in the petition is unpatentable AIA SEC. 18(a)(1)(D) Estoppels for BMP challenges Raised estoppel applies to civil action and ITC proceedings Needs defining: presumably means the ground was actually raised Raised needs clarification (does similar ground count?) Cf. RORCHR estoppels for PGR under 35 USC 325(e)(2) May not assert the basis for invalidity Assert needs clarification Eliminates estoppel as to petitioner s privy RORCHR applies to other USPTO proceedings Same as PGR, under 35 USC 325(e)(1) May not request or maintain a later proceeding upon the same basis 43

44 Differences between SEC. 18 Challenge and PGR Proceeding PGR (SEC. 6) SEC (c): 9-month deadline to petition for PGR after issuance of patent Eliminated for SEC. 18 proceedings (See SEC. 18(a)(1)(A)) 325(b): Prohibits stay of injunction based on PGR if suit is filed within 3 months after patent grant date 325(e)(2) Estoppels for civil actions and ITC proceedings Estoppel as to issues that petitioner raised or reasonably could have raised (RORCHR) Estoppel applies to petitioner; any real party in interest; or privy 325(f): Bars PGR proceedings for nonbroadened reissue claims Eliminated for SEC. 18 proceedings (See SEC. 18(a)(1)(A)) Substitutes SEC. 18(a)(1)(D) in place of PGR s 325(e)(2) for civil actions and ITC proceedings Estoppel only as to issues raised Eliminates privy estoppel for SEC. 18 proceedings Eliminated for SEC. 18 proceedings (See SEC. 18(a)(1)(A)) 44

45 Threshold and Estoppel in AIA Post-Grant Processes Ex Parte Reexam (current statute) Inter Partes Reexam (rev.) Inter Partes Review (new) Post-Grant Review (PGR) (new) SEC. 18 Proceeding (new) Threshold & Pleading 35 USC 303(a) (current law): Substantial new question of patentability (SNQ) Reasonable likelihood of prevailing (RLP) SNQ continues to apply to pre-9/16/11 requests 35 USC 314(a): RLP 35 USC 315(a): Has not filed a civil action challenging validity 35 USC 324(a): More likely than not (MLTN) that at least 1 claim is unpatentable 325(a): Must not have filed a civil action challenging validity SEC. 18(a)(1)(B) : must be sued or charged with infringement Otherwise same as PGR Estoppel: Civil actions ITC proceedings None 35 USC 315(c) (current law): Raised or could have raised Applies to civil actions, not ITC 35 USC 315(e)(2) Raised or reasonably could have raised (RORCHR) May not assert issue Final written decision Civil actions & ITC 35 USC 325(e)(2) RORCHR May not assert issue Final written decision Civil actions & ITC SEC. 18(a)(1)(D) Any ground raised (not RORCHR) Otherwise same as PGR Estoppel: Later USPTO proceedings None None 35 USC 315(e)(1) RORCHR May not request or maintain proceeding based on issue 35 USC 325(e)(1) RORCHR May not request or maintain proceeding based on issue SEC. 18(a)(1)(A) excludes 325(f), i.e. reissue claims may be challenged at any time Otherwise same as PGR Scope, Grounds, Bases 35 USC 302 and 301 (current law): Patents and printed publications 35 USC 311(a) and 301 (current law): Patents and printed publications 35 USC 311(b): Patents or printed publications 35 USC 312(a)(3)(B): Can be supported by expert opinions, affidavits, etc. 35 USC 321(b): Issues relating to invalidity under 282(b)(2) or (3) 35 USC 324(b): Novel or unsettled question important to other patents or patent applications (does not require MLTN) SEC. 18(a)(1)(A) & (d) Covered business method patents Not technological inventions Otherwise same as PGR When Any time Any time 35 USC 311(c) After later of: 9 months after issuance (reissuance); or PGR is terminated 35 USC 321(c): 9 months after issuance (or reissuance) 35 USC 325(f): No challenge to non-broadened reissue claims after original 9-month PGR period SEC. 18(a)(1)(B) Any time after suit or charge of infringement Statutory references are to sections of 35 USC as modified by AIA, unless otherwise specified 45

46 Supplemental Examination Created by AIA AIA SEC. 12(b): New 35 USC 257 Allows patentee to request supplemental examination To consider or correct relevant information Director will conduct supplemental examination within 3 months If there is a substantial new question of patentability, reexam is ordered Same process as ex parte reexam, except no patent owner statement 46

47 Supplemental Examination Effects on Enforcement AIA SEC. 12(c)(1): Patent cannot be held unenforceable based on conduct relating to information considered, reconsidered or corrected during supplemental examination AIA SEC. 12(c)(2): Exceptions bar against unenforceability does not apply if: Allegation has been pled with particularity under Food, Drug & Cosmetic Act before supplemental examination request was filed Supplemental examination and resultant reexam were not complete before civil action or ITC proceeding was brought AIA SEC. 12(e): Fraud is not curable by this process Director is required to refer fraud to Attorney General 47

48 Patent Life Cycle with Post-Grant Challenges under AIA Not all available post-grant proceedings may occur for a given patent Patent Application Filed Patent Issues Potential Inter Partes Review or Ex Parte Reexam Possible Post-Grant Review Process & Appeal Potential Inter Partes Review or Ex Parte Reexam Patentee Files Suit SEC. 18 Petition Filed Potential Section 18 Proceeding for BMPs Motion to Stay (Note 1) Petition Process Ends; Appeal begins Appeal Ends Patent Suit Restarts Possible additional Ex Parte Reexams, Inter Partes Reviews and SEC. 18 Processes Patent Expires (See Note 2) (See Note 3) No USPTO proceeding pending USPTO proceeding pending Enforcement stayed Note 1: There is an immediate right to interlocutory appeal to CAFC from district court decision on Motion to Stay for a Section 18 proceeding. Note 2: There is a range of possible pendencies for a Section 18 proceeding: shorter if the USPTO can meet the statutory deadlines, and longer if not. This may depend on the USPTO receiving sufficient funding to properly carry out Section 18 proceedings. Note 3: Completion date depends upon pendencies in the Section 18 proceeding. 48

49 Litigation-Specific Issues Under AIA

50 Joinder AIA SEC. 19(d) adds new 35 USC 299 Allows joinder of defendants in patent cases only in cases: Arising out of the same transaction, occurrence or series of transactions or occurrences; Tracks Rule 20(a) of Federal Rules of Civil Procedure Relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and Supersedes MyMail, Ltd. v. America Online, Inc., 223 F.R.D. 455 (E.D. Tex. 2004) Where questions of fact will arise that are common to all defendants or counterclaim defendants Tracks Rule 20(b) of Federal Rules of Civil Procedure Effective upon DOE Applies to any civil action commenced on or after DOE 50

51 Prior User Rights AIA SEC. 5 amends 35 USC 273 Effective upon DOE Applies to any patent issued on or after DOE Defense to infringement based upon prior commercial use Internal commercial use Arm s-length sale or commercial transfer of useful end result of such commercial use Commercial use occurred at least 1 year before earlier of: Effective filing date of patent application Public disclosure that qualified as prior art exception under (new) 35 USC 102(b) Prior user rights defense now applies to all subject matter Previously was confined under 35 USC 273(a)(3) to methods of doing or conducting business 51

52 Prior User Rights Uses deemed commercial to qualify for PUR 273(c)(1): Regulatory review period under 35 USC 156(g) Defines patent term extension for drugs and biological products 273(c)(2): Nonprofit laboratory use, provided that: Use is by nonprofit entity (e.g. research laboratory, university or hospital); Public is intended beneficiary; and Defense applies only to continued noncommercial use 52

53 273(b): Burden of Proof Prior User Rights Person asserting the defense has burden of proof Clear and convincing evidence standard 273(d): Exhaustion Sale of useful end result to which PUR defense applies exhausts patent rights as if patentee had sold product 273(f): Unreasonable assertion of defense If defendant fails to demonstrate reasonable basis for assertion, the court shall find the case exceptional under 35 USC 285 (for award of attorney fees) 53

54 Prior User Rights - Limitations 273(e): Limitations on PUR Defense is personal to: Person who performed or directed the commercial use; or Entity controlled by (or controlling/under common control with) such person No transfer of PUR, except: To patent owner; or Ancillary to good-faith transfer of entire enterprise or line of business Upon transfer, PUR restricted to site of activity before later of: Effective filing date of claimed invention; or Date of transfer Abandonment of use eliminates defense Assertion of defense does not invalidate patent 54

55 Ex Parte Reexams Appeals Under AIA AIA Sec. 6(h)(2): Eliminates U.S. district court remedy under 35 USC 145 as option for patentee in ex parte reexam PGRs 35 USC 329: Blocks PGRs from 145 remedy BMP Challenges AIA Sec. 18(b): provides as-of-right interlocutory appeals from denial or grant of stay of infringement action 55

56 Best Mode AIA SEC. 15 Best mode eliminated as basis for invalidity or unenforceability Applies to all proceedings commenced on or after DOE 56

57 Virtual Marking AIA SEC. 16(a) 35 USC 287(a) is amended Internet web addresses associating patented article with patent number Report due 9/16/2014 on effectiveness of virtual marking Applies to all cases pending or commenced on or after DOE 57

58 False Marking AIA SEC. 16(b) Only United States may sue for penalty under 35 USC 292(a) 35 USC 292(b) is amended A person who has suffered a competitive injury may sue Damages are adequate to compensate for the injury Applies to all proceedings pending or commenced on or after DOE Without exception 58

59 Jurisdiction AIA SEC. 19(a)-(c) Clarifies exclusive federal court jurisdiction Patents Plant variety protection Copyright 59

60 Advice of Counsel AIA SEC. 17 adds new 35 USC 298 Applies to patents issued on or after one year after DOE (September 16, 2012) But not to parent cases: possibly two standards in one case Failure of an infringer to obtain advice of counsel, or present such advice to the court or jury, may not be used to prove: Willful infringement Codifies In re Seagate Technology, L.L.C., 497 F.3d 1360 (Fed. Cir. 2007) (en banc) Intent to induce infringement Overrules Broadcom v. Qualcomm, 543 F.3d 683 (Fed. Cir. 2008) 60

61 USPTO Structures and Processes

62 USPTO Structures and Processes AIA SEC. 7: New Patent Trial and Appeal Board (PTAB) AIA SEC. 22: Patent and Trademark Office Reserve Fund AIA SEC. 23 & 24: USPTO Satellite Offices 62

63 AIA SEC. 7 modifies 35 USC 6 Duties Patent application appeals Reexam appeals Conduct derivation proceedings Conduct inter partes reviews Conduct PGRs Appeals are to CAFC PTAB District court actions are available for: Patent applications 35 USC 145 Derivation proceedings 35 USC 141(d), 145, 146 Appeal to CAFC waives right to district court action 35 USC 141(a) & (d)(2)(a) 63

64 Patent Office Funding AIA SEC. 22: Establishes Patent and Trademark Office Reserve Fund Effective October 1, 2011 Does not end USPTO fee withholding ( fee diversion ) by Congress Senate bill (S.23) would have ended fee diversion Fees collected beyond appropriated amount are placed in Fund Amounts in Fund will be made available to USPTO To the extent and in the amounts provided in appropriations Acts 64

65 AIA SEC. 23 & 24 USPTO Satellite Offices 3 satellite offices within 3 years after DOE Report to Congress after 3rd year First satellite office in Detroit Elijah J. McCoy United States Patent and Trademark Office Elijah McCoy was a prolific African-Canadian-American inventor ( ), the son of slaves who escaped to Canada. He studied mechanical engineering in Edinburgh, then settled in Detroit and specialized in designs relating to locomotive engines. He received 57 patents, and was inducted into the National Inventors Hall of Fame in

66 Studies

67 Studies AIA SEC. 3(l): Small Business Concerns AIA SEC. 3(m): Prior User Rights AIA SEC. 26: Implementation of AIA AIA SEC. 27: Genetic Testing AIA SEC. 29: Diversity of Applicants AIA SEC. 31: International Patent Protections for Small Businesses AIA SEC. 34: Patent Litigation Involving NPEs 67

68 Study on Small Business Concerns (SBCs) AIA SEC. 3(l) USPTO Chief Counsel will study Effect of eliminating invention priority, including How this change would affect ability of SBCs to obtain patents How this change would affect costs to SBCs Whether this change creates, mitigates or exacerbates disadvantages of SBC applicants relative to non-sbc applicants Cost savings and other potential benefits to SBCs Feasibility, cost & benefits to SBCs of alternative means of determining whether an applicant is entitled to a patent Report due to relevant Congressional committees 1 year after DOE (September 16, 2012) 68

69 Report on Prior User Rights (PUR) AIA SEC. 3(m) USPTO will report on Comparison of laws of U.S. with other industrialized countries (including EU, Japan, Canada, Australia) Analysis of: Effect of PUR on innovation rates Correlation, if any, between PUR and: Start-up enterprises Ability to attract venture capital to start new companies Effect of PUR on small businesses, universities, individual inventors Legal and constitutional issues arising from placing trade secret law in patent law Whether change to first-to-file system creates particular need for PUR Report due to Congressional Judiciary Committees 4 months after DOE (January 16, 2012) 69

70 Study on Implementation of AIA AIA SEC. 26 USPTO will study Manner of implementation of AIA by USPTO, relating to: Patent rights U.S. innovation U.S. competitiveness Access by small businesses to investment capital Other appropriate issues Report and recommendations due to Congress 4 years after DOE (September 16, 2015) 70

71 AIA SEC. 27 USPTO will study Study on Genetic Testing Effective ways to provide genetic diagnostic tests, where there exist: Gene patents; and Exclusive licensing for primary genetic diagnostics tests Report and recommendations due to Congressional Judiciary Committees 9 months after DOE (June 16, 2012) 71

72 Study on Diversity of Applicants AIA SEC. 29 USPTO will establish methods for studying applicant diversity Including minorities, women and veterans Director may not use results to provide preferential treatment Must be complete 6 months after DOE (March 16, 2012) 72

73 Study on International Patent Protections for Small Businesses AIA SEC. 31 USPTO will study How USPTO can help small business with international patent protection Whether loan or grant programs should be established Director may not use results to provide preferential treatment Report and recommendations due to Congress 120 days after DOE (January 14, 2012) 73

74 Study on Patent Litigation Involving NPEs AIA SEC. 34 GAO will study Consequences of patent litigation by Non-practicing entities (NPEs) Patent assertion entities To address Annual volume of litigation over 20-year period preceding DOE Volume of meritless litigation Impact of such litigation on time required to resolve patent claims Estimated costs (including defense costs) for patent holders, licensors, licensees, inventors & users of alternate or competing innovations Economic impact of such litigation on U.S. economy, including on inventors, job creation, employers, employees and consumers Benefit to commerce, if any, supplied by NPEs or patent assertion entities that engage in such litigation Report and recommendations due by Comptroller General to Congress 1 year after DOE (September 16, 2012) 74

75 What next? USPTO implementation already in the works for many months Public input is solicited: USPTO's Timeline: Technical corrections bill 75

76 Thank you The beat goes on.

77 About Matt Rainey Matt Rainey is Vice President/Chief IP Policy Counsel at Intellectual Ventures, and handles licensing and public policy matters for Intellectual Ventures. He has 28 years of experience in various aspects of intellectual property protection, licensing, litigation and policy matters, working both in-house and in law firms and including work on European patent matters in Munich. He has studied in detail and worked on language for each of the series of patent bills introduced in Congress since 2005, and additionally works on USPTO regulation proposals, amicus briefs and other policy matters. Mr. Rainey has a B.S. in Physics from the University of Maryland and a J.D. from University of Southern California. mattr@intven.com About Intellectual Ventures Founded in 2000, Intellectual Ventures (IV) is the global leader in the business of invention. IV collaborates with leading inventors, partners with pioneering companies, and invests both expertise and capital in the process of invention. IV s mission is to energize and streamline an invention economy that will drive innovation around the world. 77