Big Changes to Patent Laws

President Obama signed the America Invents Act (the "Act") on September 16, 2011 providing for significant changes to United States patent law.  One of the biggest changes went into effect on March 16, 2013.  This change is the conversion of the U.S. patent system from a "first to invent" system to a "first to file" system.

According to the U.S. Patent and Trademark Office (www.uspto.gov), "A patent is an intellectual property right granted by the Government of the United States of America to an inventor 'to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States' for a limited time in exchange for public disclosure of the invention when the patent is granted."  There are three types of patents: utility patents, design patents and plant patents.

In general terms, patents cover products, processes for making products, product designs and plants (flora, not manufacturing plants).  This is opposed to a trademark which is a brand or service mark that identifies or distinguishes goods or services or a copyright which protects "original works of authorship," such as literary, dramatic, musical and artistic works.

In order to obtain a U.S. patent, you must file an application with the U.S. Patent and Trademark Office.  If two or more people file an application for the same invention, the law determines who is entitled to the patent.

Under prior law, the standard for obtaining a patent in the United States was that you had to be the first person to invent something and "diligently reduce the invention to practice."  That means that you could not just have an idea of an invention, you had to take action on it, such as developing a prototype or describing the invention in a published work.  If two people filed an application for the same patent, the person who filed the patent first was presumed to be entitled to the patent.  The person who filed second, however, could prove that he had in fact invented the product first.  This was done by means of an "interference proceeding."

In contrast to the United States, the international standard for patents has long been the first to file system.  The United States was the last country in the world to switch to a first to file system.  (Canada and the Philippines also had first to invent systems, but they adopted the first to file system long before the United States.)  The debate over the first to file system had been going on for decades.  For example, in 1966 the President's Commission on the Patent System had recommended a change to a first to file system.

In changing to the first to file system, the Act provides:

    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.

Section (1) provides that the first inventor is not entitled to the patent unless the invention was made public such as by being published or sold.  Therefore, an inventor who was still secretly working on the invention does not receive protection under the Act.

Section (2) includes another significant change to the law.  Under prior law, in determining when a patent application was filed, only U.S. applications were considered.  Under the Act, applications filed in another country under the Patent Cooperation Treaty are considered in determining who was the first to file.  Section (2) makes the race to the patent office an international race.

There is a great deal of concern that the first to file system will endanger "little guy" inventors and entrepreneurs.  Filing a patent application can be very expensive.  Large companies can afford to file patent applications at any time.  Start up companies and individual inventors might not be able to do so.  Before the Act, they did not need to worry about getting their application on file quickly if they could prove that they were the first to invent.  The Act does provide for reduced fees for certain small entities, however, much of the cost of obtaining a patent can be legal fees, meaning the small entities could still face large costs in filing an application.

Proponents of the Act claim that the Act will make the patent process faster and reduce the cost of patent litigation.  The cost of litigation will be potentially reduced by two new proceedings under the Act, the post grant review and the inter partes review.  The proceedings will be brought before the Patent Trial and Appeal Board.  A post grant review can be filed by any party for any grounds of patent invalidity within nine months of the date the patent is granted.  An inter partes review can be filed more than nine months after a patent is granted but can only be filed to challenge whether or not the invention was previously patented or described in a printed publication.  The procedures put in place by the Patent Trial and Appeal Board are intended to make the process move much more quickly than in the courts.  If the costs of a patent challenge are significantly reduced, this could work in the little guy's favor by making it possible for him to challenge the patent of a larger company.

Ultimately, the effects of the Act remain to be seen, but one thing is certain – it is now more important than ever to file your application sooner rather than later.