Leahy-Smith American Invents Act of 2011. First Inventor to File with Grace(FTFG). Changes Already in Place. Changes for Next Year (2012). Putting it into Practice. What's Next for the AIA?

1. June 26, 20181
Protecting Innovation the American Invents Act
Bradley Thorson
October 13, 2011
Leahy-Smith American Invents Act of 2011
First Inventor to File with Grace (FTFG)
Changes Already in Place
Changes for Next Year (2012)
Putting it into Practice
What’s Next for the AIA

2. SM
© 2011 Patterson Thuente Christensen Pedersen, P.A., some rights reserved - www.ptslaw.com
DISCLAIMER: This presentation and any information contained herein is intended for informational purposes only and should not be construed as legal
advice. Seek competent legal counsel for advice on any legal matter.
Protecting Innovation
Under the
America Invents Act
Bradley J. Thorson
SDSU Innovation Campus
October 13, 2011
TM

3. Leahy-Smith America Invents Act of 2011
Signed into law September 16, 2011
The most significant change to US patent law since 1836
Three significant changes:
Shift from first-to-invent to first-inventor-to-file with first-to-publish grace
period
Fee-setting authority for the USPTO
Revamp of post-issuance proceedings
Contentious litigation issues not included (e.g. damages, inequitable
conduct)
Stated goal is to encourage investment in innovation and stimulate job
growth
October 13, 20113

4. October 13, 20114
First-Inventor-to-File
with First-to-Publish Grace Period
and other significant changes

5. I. First-Inventor-to-File
Global harmonization? Not completely
Patent awarded to first person to file a patent application, unless
2nd filer can show that the 1st filer derived the invention from 2nd filer
2nd filer made a public disclosure of the invention before the 1st filer’s filing
date
Goes into effect March 16, 2013
Eliminates “Hilmer” doctrine
Accords foreign national applications prior art status as of their foreign
filing date if subsequently filed directly in U.S. or as PCT, regardless of
filing language
October 13, 20115

6. Scenario 1: and both file, but neither publishes
Scenario 2: publishes and files, but only publishes
Scenario 3: and both publish and file
Party Party
First Inventor to File w/ Grace (FTFG) –
A Few Basic Examples of How New § 102
works under the AIA
6
6 October 13, 2011

7. Scenario 1.1: invents first and files first before
Party
Party
AIA RESULT: No change from current
First To Invent (FTI)
wins
7 October 13, 2011

8. Scenario 1.2: invents first, but files first
Party
Party
AIA RESULT: Change from FTI – Old 102(a)/(g)
loses can no longer swear behind or win by
interference – now must “publish ahead” to
establish a First-To-Publish (FTP) Grace Period
8 October 13, 2011

9. Scenario 1.3: invents first, files first, but establishes FTP
Grace period by publishing before files
Party
Party
A’s FTP
Grace
AIA RESULT: No effective change – New 102(b)(2)(B)
wins FTP Grace period exempts filing even though it is
before filing
9
9 October 13, 2011

10. Scenario 2.1: invents first and files first before is
publicly available
Party
Party
AIA RESULT: No change from FTI
wins
10
10 October 13, 2011

11. Party
Scenario 2.2a: invents first, but files after has itself
been publicly available for more than 1 year
A’s Full Year Grace
AIA RESULT: No effective change – New 102(b)(1)(A)
loses public actions are outside Full Year Grace
period for actions by/for or derived from inventor
11
11 October 13, 2011

12. Party
Scenario 2.2b: invents first, but files after has itself
been publicly available for less than 1 year
A’s Full Year Grace
AIA RESULT: No effective change – New 102(b)(1)(A)
wins public actions are inside Full Year Grace period
for actions by/for or derived from inventor
12
12 October 13, 2011

13. Scenario 2.3: invents first, but files after has been
publicly available for more than 1 year
Party
Party 1 year
AIA RESULT: No change from FTI
loses
13
13 October 13, 2011

14. Scenario 2.4a: invents first, but files after has been
publicly available for less than 1 year
Party
Party
1 year
AIA RESULT: Change from FTI - New 102(b)(1)(B)
loses 3rd party First To Publish (FTP) Grace period
only if makes invention publicly available
14 October 13, 2011

15. Scenario 2.4b: invents first and publishes first, but files after
has been publicly available for less than 1 year
Party
Party
A’s FTP
Grace
1 year
AIA RESULT: Change from FTI - New 102(b)(1)(B)
wins If is publicly available for less than 1 year and
before is publicly available – inside FTP Grace period
15 October 13, 2011

16. Scenario 2.4c: invents first, but publishes and files after has
been publicly available for less than 1 year
Party
Party
1 year
A’s FTP
AIA RESULT: Change from FTI - New 102(b)(1)(B)
loses If is publicly available for less than 1 year but
after was publicly available – outside FTP grace period
16 October 13, 2011

17. A’s FTP
Grace
B’s FTP
Scenario 3: invents first, publishes first and files before
files or is publicly available for less than 1 year
Party
Party
1 year
AIA RESULT: No effective change – New 102(b)(1)(B)
wins FTP Grace period (exempting public activity) is
before FTP Grace period
17 October 13, 2011

18. II. USPTO Fee-Setting Authority
USPTO can set its own fees
Fees in excess of annual appropriation will be placed in a trust account with
Congressional authorization required to access trust account
Intended to provide stable and increased funding for USPTO staffing and
systems to address patent application backlog
About 18 months before USPTO proposed new fees begin to take effect
Immediate 15% transition surcharge on Patent Office fees
Extra $400 fee for not filing electronically—except design, plant and
provisional applications—as of November 15, 2011
October 13, 201118

19. III. Revamping Post-Issuance Proceedings
Phases out interferences and inter partes reexamination
Several new post-issuance proceedings designed to improve methods for
determining patent validity at the Patent Office, rather than in court
Post-Grant Review
Inter-Partes Review
Transitional Program for Financial Business Method Patents
Supplemental Examination
Take effect in 1 year, after implementation of rules packages
Proceedings run by Administrative Patent Judge
Initiated only if petition shows “reasonable likelihood of prevailing on at least
one claim”
October 13, 201119

20. End of multiple defendant
lawsuits?
Addresses biggest actual change
in patent litigation over last 3
decades – increasing # of
defendants/case
Will likely mean numerically more
patent lawsuits
But, there will likely be fewer total
defendants than today
Potential “loopholes” are already
being tested
20
Changes Already in Place
October 13, 2011

21. Changes Already in Place
Expanded prior user rights
“Personal” defense to infringement allegations for prior “commercial”
use of a claimed invention, even if the use was secret.
Must be proven by clear and convincing evidence
Does not establish invalidity of the patent
Abandonment of the commercial use at any time eliminates the
defense
University exemption with an exception to the exception
• Defense cannot be asserted if the claimed invention was, at the time the invention was made, owned
or subject to an obligation of assignment to either an institution of higher education or a technology
transfer organization whose primary purpose is to facilitate the commercialization of technologies
developed by an institution of higher education.
• BUT – the exception does not apply if any of the activities required to reduce to practice the subject
matter of the claimed invention could not have been undertaken using funds provided by the Federal
Government. (e.g. embryonic stem cell research, etc.)
October 13, 201121

22. Changes Already in Place
Patent marking
Effective end of false marking suits
Start of “virtual” marking
End of best mode
For litigation – failure to disclose “best mode” is no longer a basis for
invalidity of a patent
Doesn’t really change prosecution practice
October 13, 201122

23. Changes Already in Place
No patents on human organisms
Intended to codify current law
Micro-entities
75% fee reduction
<5 patents by inventor
End of tax strategy patents
Exempts strategies for reducing or avoiding taxes
Willful infringement
Codifies Seagate
October 13, 201123

24. Changes Already in Place
Expedited prosecution option
$4800/$2400 fee (~$7K total) – no requirement for ESD as with
Accelerated Examination
Guaranteed final rejection or allowance in 1 year
4 independent and 30 total claims
No extensions or RCEs
Only bypass PCT, not national stage
Limit of 10,000 filings per FY – (856 filed in FY 2011, 3 so far in FY 2012)
15% fee surcharge
October 13, 201124

25. Changes Already in Place
Electronic filing incentive
Extra $400 for not filing electronically
• Except for design, plant and provisional applications
Start of PTO revolving fund
Gives PTO its own savings account
October 13, 201125

26. Changes For Next Year
Filing by assignee
Institutions and companies can file for patents in the name of the
institution or company
Easier proof of obligation to assign
• NOTE: SDSU and other South Dakota state educational institutions
have a detailed policy on the obligation to assign inventions made in
the course of work or using university funds. See Board of Regents
Policy Manual § 4.34.
Inventor’s oath can be combined in an assignment by the inventor
October 13, 201126

27. Changes For Next Year
Easier patent correction
Removal of “without deceptive intent” requirement for reissues,
inventorship correction, etc.
Change from BPAI to PTAB
Name change to reflect law changes from interference to derivation
Will run new review proceedings
October 13, 201127

28. Changes For Next Year
3rd party submission of prior art
Any time up to notice of allowance (instead of 60 days from
publication)
3rd party must now point out relevance of submitted references
Supplemental examination
New route into ex parte reexam
Will allow owner to cleanse patent
Attorney not necessarily cleared of breach of duty of candor
PTO to submit any evidence discovered of actual fraud in
prosecution of a patent to the U.S. Attorney General
October 13, 201128

29. Putting it Into Practice
October 13, 201129

30. Idealized
Patent
Filing
Fully Complete
Disclosure with
no Additional
Development
Always Filed
Before Any Public
Availability
First-to-Publish
(FTP) Grace
Period Not Used
Reality for
Most
Corps.
Initial Invention
Disclosure with
Subsequent
Development
Filed After
Approval By
Patent Review
Committee
Limited Use of
Provisional/FTP
Grace Based on
Product Release
Reality for
Startups
Initial Concepts
with Subsequent
Development
Patent Filings
Efforts
Competing with
Fund Raising
Typical Use of
Provisional
Filings to
Minimize Cost
Reality for
Universities
Research
Concepts Instead
of Product
Concepts
Patent Filings
Contend with
Demands of
Publish or Perish
Will Make Most
Use of
Provisional/FTP
Grace
30
The New 102: Theory vs. Practice
30 October 13, 2011

31. First-to-Publish Grace Period
Potentially start taking advantage of first-to-publish grace period on March
16, 2012
BUT – must file concurrent with or before publication in order to retain rights
for ROW countries having first-to-file
Uncertainty under new statute what happens if the scope of publication is not
co-extensive with scope of disclosure in filing
October 13, 201131

32. Initial Thoughts on Practical Filing Strategy Under AIA
File provisional application as early as possible even if development of
invention is not complete
Follow up initial filing with further provisional filings as necessary to
provide written description and enablement, or to cover later developed
features
File non-provisional US, PCT, and/or foreign national applications within
one year from 1st provisional
Consider publishing concurrent with provisional filings to prevent
patentability by others if provisional applications may not be perfected
October 13, 201132

33. What’s Next for the AIA?
Rule making (and lots of it)
Numerous provisions expressly require rulemaking
• Derivation proceedings
• Inter-partes review
• Post-grant review
• Supplemental review
• Fees
PTO can use notice and comment rulemaking and establish
“interpretive rules” that can be afforded Chevron deference
October 13, 201133

34. What’s Next for the AIA?
Statutory construction
Most of § 102 is new language and contains many undefined new
terms
• “Disclosure”
• “Public disclosure”
• “Subject matter”
The U.S. Court of Appeals for the Federal Circuit will have to establish
through cases the scope and meaning of the new provisions
And that means:
Litigation (and lots of it) to define this whole new set of patent statute
terminology
October 13, 201134

35. How Long Will It Take to Cut Over to the AIA?
Sept 2011
AIA Enacted
Sept 2012
New Post
Issuance
Proceedings
March 2013
FTFG Starts
March 2014
1st FTFG
patents start
issuing
Sept 2015
Earliest
Possible
PTAB ruling
on a PGR
case
Sept 2016
1st District
Court Cases
Completed*
and
1st Federal
Circuit
Appeal on
PTAB-PGR
Sept 2017
1st Federal
Circuit
Rulings on
Litigated
Cases
Answer: About a Decade
35 October 13, 2011

36. Questions?
Brad Thorson | thorson@ptslaw.com | 612.349.5756
October 13, 201136