venturelab-foley aia overview 12-05-2011

©2011 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500

December 5, 2011

Leahy-SmithAmerica Invents Act

Effective Dates

Day of Enactment

Sept 16, 2011

10 Days

Sept 26, 2011 Oct 1, 201160 Days

Nov 15, 2011

12 Months

Sept 16, 2012

18 Months

Mar 16, 2013

Reexamination transition Inter Partes threshold

Tax strategies are deemed within the prior art

Human organism prohibition

Virtual Marking

False Marking

Venue change from DDC to EDVA for suits brought under 35 U.S.C. §§ 32, 145, 146, 154 (b)(4)(A), and 293

OED Statute of Limitations

Fee Setting Authority

Establishment of micro-entity

Best mode

Track 1 Expedited examination

15% transition surcharge

Reserve fund Electronic filing incentive

Inventor’s oath/declaration

Third party submission of prior art for patent applications

Priority examination for important technologies

Supplemental examination

Inter partes review

Post-grant review

Transitional post-grant review program for covered business method patents

First-to-File

Derivation proceedings

Repeal of Statutory Invention Registration

New Prior Art Use Defense

Inter Partes Transition Threshold

What

• Eliminates inter partes reexamination proceedings as of September 16, 2012 and begins era of inter partes reviews

• Changes standard of review from substantial new question (SNQ) of patentability to a reasonable likelihood that the requestor will prevail with respect to at least one of the claims challenged in the request

Applies to

• All Requests for inter partes reexamination filed between September 16, 2011 and September 16, 2012

Effect

• Raises the old threshold for declaration of an inter partesreexamination (~95% of all current requests granted)

Best Mode Eliminated

What

• Best mode eliminated as basis for patent invalidity or unenforceability

Applies to

• All proceedings commenced on or after Sept. 16, 2011

Effects

• Reduces cost of litigation because expansive discovery on inventor’s best mode will not be conducted

• Disclosure of best mode still required but minimal impact on patent prosecution because PTO rarely issues a best mode rejection

False Marking

What

• Only US government may sue for penalty

• Must suffer commercial injury to have standing to bring civil action and can be compensated only for injury

• A once legitimate marking of a patent now expired is no longer aviolation

Applies to

• Any case pending on, or commenced on or after, Sept. 16, 2011

Effects

• Reduce false marking suits

Micro-Entity Status

What

• Micro-entities get a 75% discount on fees

Applies to

• Small entities that are not named as an inventor on more than 4 US applications; and whose gross income (or assignee’s) < 3 times median household income reported by the Bureau of Census (< $150,000 based on 2009 census); or,

• Public and nonprofit institutions of Higher Education

Effects

• Significant reduction of fees for independent inventors and universities

• Definition effective immediately, but will apply only when USPTOexercises its new fee-setting authority

Not clear how the USPTO will define micro-entity

Only for USPTO fees, not attorney fees

Won’t apply to applications licensed to small or large entity

Strategies for University Spinouts?

New Prior Use Defense

What

• Defense eliminating infringement liability relating to a process or thing used in manufacturing or commercial process

• If a defendant commercially used subject matter covered by plaintiff’s patent more than a year before

(i) effective filing date of patent application; or

(ii) date invention was disclosed by inventor or another who obtained from inventor

Applies to

• Patents issuing after September 16, 2011

• Defense is personal; not assignable

• May be used against any patent granted on or after date of enactment

• “Commercially used” includes pre-marketing regulatory review activities and use by non-profit entities such as university or hospital

Effective Dates

Day of Enactment

Sept 16, 2011

10 Days

Sept 26, 2011 Oct 1, 201160 Days

Nov 15, 2011

12 Months

Sept 16, 2012

18 Months

Mar 16, 2013




Virtual Marking

False Marking





Best mode








Inter partes review

Post-grant review


First-to-File




Track 1 Expedited Examination

What

• “Final disposition” of application in 12 months

Applies to• Utility and plant applications that are new, continuations, or divisional (not a

national stage or reissue) filed on or after September 16, 2011

• Total filing fees of $6,480 ($3,360)

• Application must be “in condition for examination”

• No more than 4 independent claims or 30 dependent claims, and nomultiple dependent claims

• Track 1 status terminated by any request for extension of time or RCE

Effects

• Cost-effective acceleration of new applications

• Likely to increase pendency of “normal examination” route

Electronic Filing Incentive

What

• $400 fee reduction

Applies to

• All applications filed on or after November 15, 2011 via the USPTO'sElectronic Filing System

Effects

• Should encourage wider use of the USPTO's Electronic Filing System

Effective Dates

Day of Enactment

Sept 16, 2011

10 Days

Sept 26, 2011 Oct 1, 201160 Days

Nov 15, 2011

12 Months

Sept 16, 2012

18 Months

Mar 16, 2013




Virtual Marking

False Marking





Best mode








Inter partes review

Post-grant review


First-to-File




Priority Exam for Important Tech

What

• Free prioritization of applications that are important to the national economy or national competitiveness

Applies to

Applications filed on or after September 16, 2012 presenting forexamination claims directed to products, processes, or technologies that are important to the national economy or national competitiveness

Unclear what “important” will mean; USPTO rule-making this year will define

Effects

Preferential treatment of applications deemed to be “important”

Potential to increase pendency of “normal examination”

3rd Party Prior Art Submissions

What

• Opportunity to anonymously make of record patent or other printed publications in third-party applications that have a bearing on the patentability of any claim

• Must be provided before the Notice of Allowance or the later of (i) six months after publication of the application and (ii) the first rejection of any claims

• Must be accompanied by a “concise description of the asserted relevance of each submitted document”

Applies to

• Any application pending on or after September 16, 2012

Effects

• Will third parties monitor cases and submit prior art?

• Filings become part of official record

• Filings may be used by PTO to determine meaning of claim

Supplemental Examination What

• Request to have relevant information considered, reconsidering, or corrected by USPTO in connection with an issued application

• Similar to ex parte reexamination, but can be based on any “information” that raises a substantial new question of patentability, not just prior art

• Ex parte re-exam ordered if patentee raises a substantial new question of patentability

Applies to

• Only patent owners

• Any patent pending on or after September 16, 2012

Effects

• May inoculate against certain inequitable conduct charges

• 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.

• Will supplemental examination be a better option than RCE / IDS when references received after Final OA?

What

• 3rd party may raise any questions of patentability including written description, enablement, and patent-eligibility

• Petitioner must establish

• “it is more likely than not that at least 1 of the claims challenged … is unpatentable”; OR,

• “the petition raises a novel or unsettled legal question that is important to other patens or patent applications”

• Timing

• Must file within 9 months of patent grant

Applies to

• All business method patents pending on September 16, 2012

• All patents on March 16, 2013 that are governed by “new” version of 35 U.S.C. §102 with priority dates after March 16, 2013

Effects

• If granted, a final determination will be made within 1 year (plus 6 month extension for good cause)

• Monitor competitor applications

• Understand vulnerabilities of client patents and have fall-back positions

Post-Grant Review

What

• Replacement for inter partes reexamination

• Petitioner may raise anticipation or obviousness based on patents and printed publications

• Petitioner must establish “a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged”

• Total number of reviews granted in the first four years may be limited by USPTO to the number of inter partes reexaminations filed this year

Applies to

• Any patent pending on or issued after September 16, 2012 (retroactive)

• Petition may be filed only after the later of 9 months after patent grant date or after termination of post-review grant proceeding

• Must file within 1 year after served complaint alleging infringement

Effect

• Alternative to litigating validity; handled by the Board in the first instance

• Ability to settle and dismiss before a final decision is reached

• Estoppel that petitioner may not assert in district court litigation or ITC proceeding that a claim is invalid on a ground petitioner raised or reasonably could have raised duringa review that resulted in a final decision may chill adoption

Inter Partes Review

Petitioner must identify real parties in interest

Petitioner burden of proof: preponderance of evidence

Patentee can cancel or propose substitute claims, but cannot enlarge scope or introduce new matter

USPTO must issue final determination in review within a year (extendable by six months) after review instituted

Estoppel: Petitioner may not assert in district court litigation or ITC proceeding that a claim is invalid on ground petitioner raised or reasonably could have raised during review resulting in a final decision

If review is terminated (e.g., via joint request after settlement), no estoppel

Review barred if petitioner (or real party in interest) previously brought civil action challenging validity of a relevant claim

If petitioner files suit after submitting a petition, civil action is stayed until patent owner takes certain action in court:

• Patentee asks court to lift stay or moves to dismiss civil action

Both Post Grant and Inter Partes Review

What

• Provides defendants in infringement actions (or those charged with infringement) with a special post-grant review process to challenge the validity (on any grounds) of the patent from Sept. 16, 2012 to Sept. 16, 2020

Applies to

• All existing and future “Covered Business Method Patents,” i.e., “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.”

• Any action during the effective period

• But not to counter-claims for invalidity or to patents that have previously been challenged the patent in a declaratory judgment action

Effect

• Lower standard of proof (preponderance of the evidence) may enhance invalidity chances

• Estoppel only for “raised” arguments

Covered Business Method Patents

Specifically include post-grant reviews in “stand still” agreements with potential licensees

Limit use of business method patents in claim charts and letters to potential licensees

Continue to use “technological” elements in claims

Strategic Considerations

What

• Invention date no longer available to establish inventive priority

• Eliminates general 1-year grace periods

• Eliminates interferences in favor of “derivation” proceedings

• 1-year grace period for inventor’s own disclosure and disclosures obtained from inventor

• Eliminates ability to “swear behind” 3rd party prior art with proof of prior invention

• Remove 3rd party disclosures within 1-year grace period with proof of prior public disclosure of “the subject matter disclosed” by inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor

Applies to

• Any application with effective filing date on of after 18 months after enactment

• Does not apply to continuations/divisionals with no new matter

Effects

• Changes to 35 U.S.C. §102

• Prior art = any available before effective filing date

First-Inventor-to-File

35 USC 102 – Prior Art

35 USC 102(a)(1):

A person shall be entitled to a patent UNLESS

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

No longer limited to public use/sale in U.S.

No longer based on date of invention

Exceptions to 102(a)(1) are in 102(b)(1):

Disclosures made 1 year or less before the effective filing dateare not prior art if—

(A) disclosure was made by inventor or “another who obtained the subject matter disclosed directly or indirectly from inventor”

(B) the subject matter disclosed had, before such disclosure,

been publicly disclosed by inventor or another ….

35 USC 102- New Grace Period

Questions on “disclosure”:

Is an inventor’s public use or sale a “disclosure” that falls under the grace period?

How closely does the “subject matter disclosed” have to correspond to the “claimed invention” for the grace period to apply?

How can you establish that another obtained the subject matter “indirectly” from an inventor?

35 USC 102 – New Grace Period

Exceptions to 102(a)(2) are in 102(b)(2):

Disclosures appearing in a patent or patent application are not prior art if—

(A) the subject matter disclosed was obtained directly or indirectly from inventor;

(B) the subject matter disclosed already had been publicly disclosed by inventor or by another who obtained the subject matter disclosed directly or indirectly from inventor;

(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by/subject to an obligation of assignment to the same person.

35 USC 102-First to File Exceptions

(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

Effective Date of New 35 USC 102

18 month effective date

6 months to roll out new policies/procedures and prepare…

Disclosures made in 6 months can have a defeating effect on applications filed under the new § 102

Client Actions

Controls on pre-filing disclosures

Record-keeping for all disclosures

Increased importance of early filing date

Extreme care must be taken with CIP applications!

Avoid “poison pill” claims

Should inventors intentionally make a public disclosure prior to filing a patent application?

Are lab notebooks a thing of the past?

Adapting to the New 35 USC § 102

What• USPTO proceeding or civil action to determine whether inventor named in an

earlier-filed application derived claimed subject matter from inventor of a later-filed application

• Must file petition within one year of first publication of a relevant claim (i.e., same or substantially same as claim in earlier application)

Applies to• Applications filed on or after March 16, 2013

Effect• Logical consequence of first-inventor-to-file

• Significant narrowing of issues currently resolved through interference proceedings

Derivation Proceedings

Filed by Applicant of later-filed application against earlier filed application

Inventor of earlier application derived the claimed invention from inventor named in the petitioner’s application

Made under oath, supported by substantial evidence

Must be filed “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” (Same problematic language as PTE deadline?)

Director’s decision to institute proceedings is not appealable

USPTO Derivation Proceedings

Filed by owner of later-filed patent against owner of earlier filed patent

Must be filed “before the end of the 1-year period beginning on the date of the issuance of the first patent.”

Court also can adjudge validity of both patents

Governed by second paragraph of 35 USC 146

Civil Action Derivation Proceedings

USPTO wants input NOW!

Implementing Regulations

©2011 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500

Thank You!John D. Lanza

(p) 617-342-4084

(f) 617-342-4001

[email protected]

venturelab-foley aia overview 12-05-2011

Technology