AIA - Overview

Hantel Technologies is pleased to announce the next seminar in the
2011 – 2012 Hantel Tech webinar series:
Navigating the new risks and rewards of the America Invents Act
for start-ups and entrepreneurs
Speaker: Brian Eller, NCSU
Date: Thursday, October 27th, 2011
Time: 11:30 AM – 1:00 PM PST
First 30 minutes will be used as a networking session - with seminar to begin at noon.

Location: Hantel Technologies | 703 Sandoval Way | Hayward, CA
Please register on EventBrite (http://hanteltech.eventbrite.com/) for this free seminar – you are cordially
invited to attend in person (lunch provided / limited number of seats), to join live via Webinar, or to view
at a later date (links will provided to those who register for notification).
Abstract: As the most significant change in patent law reform since 1952, the Leahy-Smith America Invents Act (AIA) has
been signed into law this year. In addition to a change from the "first to invent" from the "first to file," there are some key
challenges and benefits that both entrepreneurs and smaller developing companies should be aware of in navigating the new
patent legislation. These changes include fast track examination, new satellite offices including possibly one to emerge in the
Bay Area, new "derivation proceedings," a weakened filing grace period, and expansion of post grant review. Mr. Eller will
share his general overview and analysis of the immediate and longer term impacts on innovation and technology
development, with special relevance for those with an interest in medical devices.

Brian Eller, J.D., currently works as a licensing associate for North Carolina State University (NCSU) Office of Technology Transfer
(OTT), which helps university inventors to commercialize their inventions. He earned a B.S. in Materials Engineering from California
Polytechnic State University, San Luis Obispo and a J.D. from U.C. Davis School of Law. Prior to joining the OTT, he completed an
internship at the U.C. Davis InnovationAccess, a unit of the Office of Research, in addition to an externship at the United States Patent and
Trademark Office Technology Center Unit #2800, where he examined patent applications in the field of semiconductors, electrical and
optical systems, and components. During law school, Mr. Eller spent a summer as a judicial extern for the Honorable Charles R.
Wolle, Senior Judge for the Southern District of Iowa.

Fast and flexible service for the medical device market

Hantel Technologies is pleased to announce in 2012 the upcoming topics
in the Hantel Tech webinar series:

In consideration of the upcoming holidays, October’s webinar will be
our last public seminar scheduled for 2011 at Hantel Tech, and we
will feature a return to our webinar series in the new year
(January 26, 2012).

Please email webinar@hanteltech.com for announcement of the next
seminar/webinar in December.

Future topics in 2012
• Plasma technology
• Three-dimensional printing
• Integrating market research into the product development process
• Viewpoint on medical device inspections from the California
Department of Public Health (Food and Drug Branch)

Please share what else you would like to see in our series

Fast and flexible service for the medical device market

Navigating the New Risks and Rewards of the American
Invents Act for Start-Ups and Entrepreneurs

3

Leahy-Smith America Invents Act (AIA)
Overview (Enacted September 16, 2011)

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America Invents Act Overview

The Bill is 150 pages long (in bill print style).
• By comparison:
– Patent Act of 1952 – 24 pages (approx. 66
pages in modern bill print style).
– Patent Act of 1870 – 20 pages.
– Patent Act of 1836 – 9 pages.
– Civil Rights Act of 1963 – 28 pages.
– National Labor Relations Act of 1935 – 9
pages.
– Clean Air Act of 1963 – 10 pages.

Background of America Invents Act

• Enacted September 16, 2011
• Key Provisions
– First to File
– Derivation Proceedings
– Post Grant Review Proceedings
– 3rd party submissions
– Prior User Defense
– Supplemental Examination
– Fee Setting/Fee Diversion

Key challenges for small companies

• 102 First to File & Weakened Grace Period
• 135 New Derivation Proceedings
• 321-29 Expansion of Post Grant Review


Patent terms to know

• Statutory Bars
• Prior Art
• Novelty, Non-obviousness
• Priority dispute, Interference
• Provisional Patent Application
• Non-Provisional Patent Application
• PCT Application

Benefits for small companies

• Establishment of micro entities
• Prior use defense
• New satellite offices (considering Bay Area as a possibility)
• Patent ombudsmen program for small business
• USPTO to work with pro-bono IP law firms to help small
business
• Fast track examination
• Opinions of counsel cannot be used to prove willful
infringement

102 Overview: “First Inventor To File”

One of the most sweeping changes of the Act is to
change the U.S. Patent Law from a ―first-to-invent‖
priority system to a ―first-to-file‖ priority system.
(See Sec. 3. FIRST INVENTOR TO FILE.)


102 Overview: “First Inventor To File”

Section 3 will not become effective until March
16, 2013 (18 months after enactment). This provision
will apply only to applications which have an earliest
effective filing date after March 16, 2013. (See Sec.
3(n)).


102 Existing Law (currently in effect)

Current Patent Law Text from Act

35 U.S.C. 102 Conditions for
Under current U.S. Patent patentability; novelty and loss
Law, as to many categories of of right to patent.
prior art, the determination A person shall be entitled to a
patent unless –
whether a reference is prior art
(a) the invention was known or
is based on whether the used by others in this country, or
reference pre-dates the date of patented or described in a printed
the patent applicant’s publication in this or a foreign
country, before the invention
―invention.‖ (See, e.g., 35 thereof by the applicant for
U.S.C. §§ 102(a) & (e)). patent, or


102 Existing Law

Text from Act (cont.)

patentability; novelty and loss
of right to patent.
A person shall be entitled to a
patent unless –
***
(e) the invention was described in
- (1) an application for
patent, published *** by another
filed in the United States before
the invention by the applicant
for patent ****


102 AIA (effective March 13, 2013)

Text from AIA Effects of AIA on Prior Art

§ 102. Conditions for
patentability; novelty Under the Act, the determination of
(a) NOVELTY; PRIOR ART.—A whether a particular reference is
person shall be entitled to a patent prior art will instead be based on
unless— whether the reference pre-dates the
(1) the claimed invention was ―effective filing date of the
patented, described in a printed claimed invention.‖ (See new 35
publication, or in public use, on
sale, or otherwise available to the U.S.C. § 102(a)(1) & (2)).
public before the effective filing
date of the claimed invention; or
***


102 AIA (effective March 13, 2013)

Text from AIA

§ 102. Conditions for patentability;
novelty

(a) NOVELTY; PRIOR ART.—A person
shall be entitled to a patent unless— ***
(2) the claimed invention was described
in a patent issued ***, or in an
application for patent published ***, 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.


102 Comparison of Prior Art Timing

Current U.S. Law Patent Law Under AIA

Under current U.S. Patent
Law, as to many categories of Under the Act, the determination
prior art, the determination of whether a particular reference
whether a reference is prior art is prior art will instead be based
is based on whether the on whether the reference pre-
reference pre-dates the date of
the patent applicant’s dates the ―effective filing date
of the claimed invention.‖
―invention.‖(See, e.g., 35
U.S.C. §§ 102(a) & (e)). (See new 35 U.S.C. § 102(a)(1) &
(2)).
1
6
N o r t h C a r o l i n a S t a t e U n i v e r s i t y © 2 0 11

102 Existing Law Prior Art (Issued Patent)


Law, prior art includes: of right to patent.
* Patents anywhere A person shall be entitled to a
+ before invention patent unless –
used by others in this country, or
patented or described in a printed
publication in this or a foreign
country, before the invention
thereof by the applicant for
patent, or


102 Existing Law Prior Art (Issued Patent)


* Patents anywhere A person shall be entitled to a
patent unless – ***
+ more than 1 year before first
(b) the invention was patented or
U.S. application date described in a printed publication
in this or a foreign country or in
public use or on sale in this
country, more than one year prior
to the date of the application for
patent in the United States, or


102 AIA Prior Art (Issued Patent)


patentability; novelty Under the Act, prior art will
(a) NOVELTY; PRIOR ART.—A include:
person shall be entitled to a * Patents anywhere
patent unless—
+ before effective filing date
(1) the claimed invention was
patented, described in a printed
sale, or otherwise available to the
public before the effective filing (new 35 U.S.C. § 102(a)(1)).
***


102 Comparison of Prior Art (Issued Patent)


Under current U.S. Patent Under the Act, prior art will include:
Law, prior art includes: * Patents anywhere
* Patents anywhere + before earliest effective filing
+ before invention date
+ more than 1 year
before first U.S. application
date (new 35 U.S.C.§102(a)(1)).

(35 U.S.C. §§ 102(a) & (b)).


102 Existing Law Prior Art (Printed Publication)


* Printed Publications anywhere A person shall be entitled to a
patent unless –
+ before invention
used by others in this country, or
patented or described in a
printed publication in this or a
(35 U.S.C. §§ 102(a)). foreign country, before the
invention thereof by the applicant
for patent, or


102 Existing Law Prior Art (Printed Publication)

Current Patent Law Text from Act (statutory bar)

Under current U.S. Patent patentability; novelty and loss of
Law, prior art includes: right to patent.
* Printed Publications anywhere A person shall be entitled to a
patent unless – ***
+ more than 1 year before first (b) the invention was patented or
U.S. application date described in a printed
publication in this or a foreign
country or in public use or on sale
(35 U.S.C. §§ 102 (b)). in this country, more than one year
prior to the date of the application
for patent in the United States, or


102 AIA Prior Art (Printed Publication)


person shall be entitled to a * Printed Publications anywhere
patent unless—
publication, or in public use, on (new 35 U.S.C. § 102(a)(1)).
***


102 AIA Prior Art (Printed Publication)

What is considered a “publication”?

• Printed journal article or a book
• Handout at a seminar or class
• On-line meeting abstract
• Poster presentation - specific contents of a poster
hard to document 1 - 2 years after the poster
event; could have been photographed.
• E-journal paper, including on-line ―previews‖
• Magazine or newspaper story
• Thesis once it is cataloged and accessible
• Posting to a web page or blog


102 Comparison of Prior Art (Printed Publication)


Under current U.S. Patent Under the Act, prior art will
Law, prior art includes: include:
* Printed Publications * Printed Publications
anywhere anywhere
+ before invention + before earliest effective
+ more than 1 year filing date
before first U.S. application
date

(35 U.S.C. §§ 102(a) & (b)). (new 35 U.S.C. § 102(a)(1)).


102 Existing Law Prior Art (Public Use)


Under current U.S. Patent 35 U.S.C. 102 Conditions for
Law, prior art includes: patentability; novelty and loss
of right to patent.
* Prior Public Use in the U.S.
+ before invention patent unless –
used by others in this
country, or patented or described
in a printed publication in this or a
foreign country, before the
(35 U.S.C. § 102(a)). invention thereof by the applicant
for patent, or


102 Existing Law Prior Art (Public Use)


of right to patent.
* Prior Public Use in the U.S.
+ more than 1 year before first patent unless – ***
U.S. application date (b) the invention was patented or
described in a printed publication
(35 U.S.C. §§ 102(b)). to the date of the application for


102 AIA Prior Art (Public Use)


person shall be entitled to a * Prior public use anywhere
patent unless—
date of the claimed invention; or (See new 35 U.S.C. § 102(a)(1)).
***


102 Comparison of Prior Art (Public Use)


Under current U.S. Patent Under the Act, prior art will
Law, prior art includes: include:
* Prior public use in the U.S.
* Prior public use anywhere
+ before invention
+ before effective filing
+ more than 1 year
before first U.S. application date
date

(35 U.S.C. §§ 102(a) & (b)). (new 35 U.S.C. § 102(a)(1)).


102 Existing Law Prior Art (On Sale)


of right to patent.
* Prior Sale in the U.S.
+ more than 1 year before first patent unless – ***
U.S. application date (b) the invention was patented or
described in a printed publication
(35 U.S.C. §§ 102(b)). to the date of the application for


102 AIA Prior Art (On sale)


person shall be entitled to a patent * On sale anywhere
unless—
(1) the claimed invention was + before effective filing date
*** (See new 35 U.S.C. § 102(a)(1)).


102 Comparison of Prior Art (Overall)


Under current U.S. Patent
Law, prior art includes: Under the Act, prior art will
include:
* Patents anywhere
* Printed Publications * Patents anywhere
anywhere * Printed Publications anywhere
* Prior Use in the U.S. * Prior public use anywhere
* Prior Knowledge in U.S. * ―Otherwise available‖ anywhere
* Prior sale in the U.S. more •On sale anywhere
than 1 year prior
(new 35 U.S.C. § 102(a)(1)).
(35 U.S.C. §§ 102(a) & (b)).


102 (b) “Exception” Weakened Filing Grace
Period

The Act retains a limited one-year ―grace
period‖ under the ―exceptions‖ provision for
disclosures made one year or less before the
effective filing date of the claimed invention
―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.‖ (new 35 U.S.C.
§ 102(b)(1)).

102 Examples

Sample Cases Under § 102 (OLD)

One Year

Conception Conception Effective Effective
and and Filing date Filing date
reduction to reduction to of claim to of claim to
practice by practice by ABC filed ABC filed
Ms. X of ABC Ms. Y of ABC by Ms. Y by Ms. X
Under the old rules, who
wins?


102 Examples


One Year

Ms. Y not entitled to a
Patent; Ms. X wins!

§ 102. (g) (2) A person shall be entitled to a patent unless – before such person’s invention thereof,
the invention was made in this country by another inventor who had not abandoned,
suppressed, or concealed it. In determining priority of invention under this subsection, there shall
be considered not only the respective dates of conception and reduction to practice of the invention,
but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a
time prior to conception by the other.


102 Examples

Sample Cases Under § 102 (NEW)

One Year

Under the new rules, who
wins?


102 Examples


One Year

Ms. X not entitled to a
Patent; Ms. Y wins!

§ 102. (a) (2) A person shall be entitled to a patent unless— the claimed
invention was described in a patent issued ***, or in an application for
patent published ***, 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.

102 Examples


One Year

Conception Effective
and Filing date
reduction to Publication of of claim to
practice by ABC by Ms. Y ABC filed
Ms. X of ABC Under the old rules, is by Ms. X
Ms. X entitled to a
patent?


102 Examples


One Year

and Filing date
practice by ABC by Ms. Y Ms. X is entitled to a patent ABC filed
Ms. X of ABC (publication is after the by Ms. X
invention and the filing is
within 1 year of the printed
publication); Ms. X wins!

§ 102. A person shall be entitled to a patent unless - (a) the invention was known or
used by others in this country, or patented or described in a printed publication in this or
a foreign country, before the invention thereof by the applicant for patent, or (b)
the invention was patented or described in a printed publication in this or a foreign
country or in public use or on sale in this country, more than one year prior to the
date of the application for patent in the United States,

102 Examples


One Year

and Filing date
Ms. X of ABC Under the new rules, is by Ms. X
Ms. X entitled to a
patent?


102 Examples “Weakened Grace Period”


One Year

and Filing date
Ms. X of ABC by Ms. X
Ms. X is not entitled to a
patent Ms. X loses!

§ 102. (a) (1) A person shall be entitled to a patent unless— the claimed
invention was described in a patent issued ***, 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.

102 Examples

Sample Cases Under New § 102

One Year

Effective
Publication Filing date
by Ms. X of claim to
of ABC ABC filed
by Ms. X
Under the new rules, can
Ms. X get a patent?


102 Examples


One Year

Effective
Publication Filing date
by Ms. X of claim to
of ABC ABC filed
EXCEPTION APPLIES, Ms. by Ms. X
X can get a patent

§ 102. (b) (1) 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 *** if—(A) the disclosure was
made by the inventor ***

102 Examples


One Year

Publication Effective Filing
by Ms. X date of claim to
of ABC ABC filed by
Under the new rules, can Ms. X and Ms.
Ms. X and Ms. Y get a Y as co-
patent? inventors


102 Examples


One Year

Publication Effective Filing
by Ms. X date of claim to
of ABC EXCEPTION APPLIES, Ms. ABC filed by Ms.
X and Ms. Y can get a X and Ms. Y as
patent co-inventors

§ 102. (b) (1) 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 *** if—(A) the disclosure was
made by the *** joint inventor ***

102 Examples


One Year

Ms. X Mr. Y
discloses publishes an
article Effective Filing
ABC under date of claim to
CDA to Mr. Y disclosing
ABC ABC filed by Ms.
Under the new rules, can X
Ms. X get a patent?


102 Examples


One Year

Ms. X Mr. Y
NOT PRIOR ART X

§ 102. (a) 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;


102 Examples


One Year

Ms. X Mr. Y
EXCEPTION! Ms. X can X
get a patent

§ 102. (b) (1) 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 *** if—(A) the disclosure was made *** by another who
obtained the subject matter disclosed directly or indirectly from
the inventor or a joint inventor

102 Examples


One Year

Mr. Y Mr. Z
Ms. X
publishes an publishes an Effective Filing
discloses
article article date of claim to
ABC under
disclosing disclosing ABC filed by Ms.
CDA to Mr. Y
ABC ABC X and Ms. Y as
co-inventors

Ms. X get a patent?


102 Examples


One Year

Mr. Y Mr. Z
Ms. X
publishes an publishes an Effective Filing
discloses
article article date of claim to
ABC under
disclosing disclosing ABC filed by Ms.
CDA to Mr. Z
ABC ABC X and Ms. Y as
EXCEPTION!, Ms. X can
co-inventors
get a patent

§ 102. (b) (1) 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 *** if—(B) 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.


102 Examples


One Year

Ms. X Mr. Z
discloses AB publishes an
under CDA date of claim to
to Mr. Z disclosing
ABC Under the new rules, can ABC filed by Ms.
Ms. X get a patent on X
ABC?


102 Examples

AB versus ABC

C) Eraser

A) Body A) Body

B) Tip
B) Tip


102 Examples


One Year

Ms. X Mr. Z
discloses AB publishes an Effective Filing
under CDA article date of claim to
to Mr. Z disclosing ABC filed by Ms.
ABC X and Ms. Y as
Not Prior Art!
co-inventors

§ 102. (a) 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;


102 Examples


One Year

Ms. X Mr. Z
discloses AB publishes an Effective Filing
under CDA article date of claim to
to Mr. Z disclosing ABC filed by Ms.
ABC EXCEPTION TO PRIOR X and Ms. Y as
ART!?!?!; UNCLEAR co-inventors

§ 102. (b) (1) 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 *** if—(A) the disclosure was made *** by another
who obtained the subject matter disclosed directly or indirectly
from the inventor or a joint inventor

102 Summary

• Change: For priority disputes, priority is given to the first
inventor to file an application, or to the first inventor to
disclose the invention to the public, assuming they then
file within a year. Swearing behind a reference is
eliminated.

• The change effects patents that have an earliest
effective filing date after March 16, 2013.


102 Implications

• Loss of patent rights if new prior art published
after the invention date but before the filing date
• Creates ―race‖ to the patent office.
• Time & funding used for costly paperwork and
legal fees - NOT to test and validate the product
or market, R&D, building a business, buying
inventory, jobs.
• Increased due diligence required for investors to
ensure that no previous disclosures were made
before filing.
• More but lower quality patents filed (increased
backlog).

102 Patent Strategy: File Early!!!

• Consider urgency on case by case basis
- Crowded/Active area; predictable versus
unpredictable art
• Prompt or immediate filing of application
- Inventors should report inventions to decision-
makers quickly
- Make strategic patent filing decisions quickly
- Work closely and quickly with patent attorneys


102 Patent Strategy: File Early!!! (Provisional)

• Provisional applications
 Develop rolling provisional application filing strategy
 Revisit invention disclosure form(s) – include description of
invention in application format
 Pre-emptive disclosure strategy for U.S. filings (NOT WORLD)
 Importance of setting ―stake in the ground‖
 Extent of disclosure may determine extent of rights
 Carefully document disclosures and preserve the records


102 Patent Strategy: File Early (continued)!!!

Basic strategy generally not impacted - continue to file a
provisional application before any public disclosure to
retain foreign rights.

So, FILE EARLY AND OFTEN? Filing early and often as a
risk mitigation strategy requires a significant budget
commitment or a lower "acceptance rate― for conversion
to utilities.


135 New “Derivation Proceedings”

• Change: Interference proceedings are replaced with
―derivation proceedings‖ in cases in which the
applicant claims that a competing application or prior
disclosure was derived from the applicant’s own work.
• Effective Date: Applies to applications with effective
filing dates after March 16, 2013.
• Effect: Creates a proceeding where an owner of a
later-filed application can challenge that an earlier-
filed patent was derived from their inventor.
– The action must be filed within 1 year from the publication of the
first application or within 1 year from the issuance of a first patent
– USPTO proceeding if it is a pending application and civil action if
an issued patent.


135 New “Derivation Proceedings”

An applicant may succeed in the derivation
proceeding against the owner of another patent or
patent application that claims the same invention
and has an earlier effective filing date, if he can
establish that the invention claimed in the other
patent or patent application was derived from the
inventor of the later-filed patent application. (See
new 35 U.S.C. §135).


135 Examples


One Year

Ms. X
discloses Effective Filing
Effective Filing
date of claim to
CDA to Mr. Y ABC filed by Ms.
ABC filed by Mr.
Y X

Ms. X get a patent?


135 Examples


One Year

Ms. X
discloses Effective Filing
Effective Filing
Ms X. must initiate a date of claim to
CDA to Mr. Y ABC filed by Ms.
derivation proceeding ABC filed by Mr.
against Mr. Y; To win, Ms. Y X
X must establish that the
invention claimed in the
other patent or patent
application was derived
from the inventor of the
later-filed patent
application


135 Patent Strategy

• Consider implementing documentation procedures for
communications regarding disclosures
– This will help ―establish that the invention claimed in the other
patent or patent application was derived from the inventor of
the later-filed patent application‖

• Showing access will be key!
– Law might develop similarly to copyright with respect to
derivative works


135 Patent Strategy

• Good lab notebook practice is still important
for derivation evidence

• Consider monitoring published applications
and issued patents of parties with whom
information is shared


321-29 Expansion of Post Grant Review

• Replaces current inter partes reexamination
proceeding
• Includes two distinct new proceedings
• Post-Grant Review
• Inter Partes Review
• Proceedings handled by newly established
Patent Trial and Appeal Board (PTAB)
rather than an Examiner
• Effective September 16, 2012

321-29 Post-Grant Review

• Filed by a third party within 9 months of patent grant
• Claims can be challenged on virtually any grounds
• Allows for submissions of factual evidence and expert opinions, and
discovery (i.e., deposition of witnesses), and an oral hearing
• Standard for granting petition is ―more likely than not‖
that at least one claim is unpatentable
• Can appeal to the Court of Appeals for the Federal Circuit
(CAFC)
• Applicable only to patents issued from applications filed
under the first to file system


311-19 Inter Partes Review

• Third-party challenge similar to current inter partes
reexamination
• Can only be filed after the later of 9 months after the patent
grants or termination of a post-grant review proceeding
• Lack of novelty or obviousness based on patents or printed
publications
• Standard for granting petition is “reasonable likelihood” at
least one claim is unpatentable
• Can appeal to the CAFC (Court of Appeals for Federal Circuit)
• Applicable to all patents, regardless of filing or issuance date
• Bill expands the existing inter partes procedure, adding
discovery and a hearing in the Patent Trial and Appeal Board.

8 Third Party Submissions

Third parties may submit prior art for consideration
in application, where the prior art is
"any patent, published patent application, or other
printed publication of potential relevance to the
examination of [an] application" for consideration and
inclusion in the file, provided that the submission is
made:
• before notice of allowance is issued
• 6 months after application is published or first
rejection of any claim, whichever is later

8 Third Party Submissions

• Submissions must also include:
a) concise description of asserted relevance
b) statement that submission was made in compliance
with section
c) A fee (if USPTO prescribes one)
• Provision will apply to all applications filed
before, on, or after effective date
• Third party submission of written statements by
inventor at any time for inclusion in file (§6)

Effects of post grant review and third party
submissions
• Even after USPTO re-affirms validity of
patent, violator can mount consecutive claims
– Endlessly keeping new technology from the market.
– Weakens small companies when revenue and investment
capital used for legal fees, not jobs.
– Increases legal tools for well-funded incumbents to attack
a competitive threat and to delay potential liability on
damages for infringing.
• Incumbents may start targeting start-ups for post-
grant review
- Perhaps instead of taking a license?
- Low risk – high reward for incumbents


Effects of post grant review and third party
submissions (cont.)
• The new PTO processes to challenge patents will add more
unpredictability to whether or not one will get an enforceable
patent
• Increased risk to investors means greater demand for risk
reduction/de-risking inventions
- Can additional de-risking of technical and business risks
compensate for increased IP risk under AIA?
• New Opportunity?
- If a patent survives the gauntlet of possible challenges, it should
have less risk and a greater relative value.
- In start-up licenses one may need to forego some upfront $ and
ask for $$ when a patent gets beyond the opposition time
periods.
- Companies well positioned to protect IP under new rules may be
more competitive in attracting funding for their startups.

Empirical evidence of effects of inter-partes
review.
• Predatory corporations can and do file multiple post-grant
oppositions against startup companies for the purpose of
inflicting financial pain.
– Weakens small companies when revenue & investment capital used for
legal fees, not jobs.
• The existing inter partes process in a contested case now
takes 34 to 53 months for an un-appealed reexam
– Assumptions include no ―rework‖ by the patent office and no secondary
appeals to the BPAI, the Federal Circuit, or the Supreme Court)
– 5 – 8 years for appealed cases
• Stock Fluctuation: Impact of PTO and Court Decisions on
Stock Price – The practical impact of reexam on patent
owners can be enormous.
– Example: Stocks dropping 40% in hours after the release of a non-final
office action rejecting claims in a suit (even though this development is
not controlling on a court case because the reexam is not final).

11 Increased fees

Immediate 15% increase in all fees (including maintenance
fees) under 11(i).

 Includes filing and basic national fees, excess page
and claims fees, multiple dependent
claim, examination, issue, disclaimer, appeal, revival,
extension fees), (b) (maintenance fees), and d(1)
(search fees) and 132(b) (RCEs)

 November 15, 2011 -- additional fee of $400 for non-
electronic filing of applications (other than
design, plant, or provisional applications) established
under § 10 of AIA


10 (b) Benefits for small companies: micro
entities (not yet implemented)

• Change: The PTO is given fee-setting authority. Fees
can only be set to recover ―aggregate costs‖ for each
side of the PTO (patents or trademarks). New ―micro
entities‖ (which don’t make more than three times
median household income and haven’t filed more than
four other patents, or which happen to be universities)
get a 75% fee reduction.

• Effective Date: September 16, 2011. Sunsets on
September 16, 2018.

• Implication: Fees may increase (except for micro-
entities). PTO may be better funded and may process
applications more quickly, more thoroughly, or both.

Micro Entity Fees (from small entity to micro
entity; includes 15% surcharge)

USPTO Fee Type Before After Difference
Basic Utility Fee $165 $95 $70
Utility Search Fee $270 $155 $115
Utility Exam Fee $110 $63 $48
Issue Fee $755 $435 $320
3.5 Year Fee $490 $283 $208
7.5 Year Fee $1240 $713 $528
11.5 Year Fee $2,055 $1,183 $873


11 Prioritized Examination

Available for all patent applications in any technology
Requirements:
• $4,800 fee for filing request for prioritized
examination of nonprovisional application
– Does not include filing, search, examination fees, excess
claims and pages fees, processing and publication fees
– Fee reduced 50% for small entities
• Application limited to 4 independent claims or 30
total claims
• Limited to 10,000 requests per fiscal year


Advice of Counsel and Inducement

• Change: Provides that failure to obtain or to present advice of
counsel can’t be used as evidence of willful infringement or
inducement.
• Effective Date: Not specified, which means that it applies
only to patents issued on or after September 16, 2012.
– Note that this significant delay is probably unintentional.
• Implication: No immediate change in the law.
– No substantive change in the law of willfulness, which already provides
this, though it clarifies that courts should not allow in evidence of failure
to rely on advice of counsel.
– Will eventually reverse Broadcom, in which the Federal Circuit suggested
that failure to obtain advice of counsel could be evidence of inducement.
– Should help small companies that cannot afford advice of
counsel opinions

Prior User Rights

• Change: Under the current law, a limited ―prior user
right‖ is available with respects to ―methods of
doing business‖ (See 35 U.S.C. 273(a)(3)). Under
the Act, the prior user right is expanded and not
limited by subject matter. (See Sec. 5 and new
35 U.S.C. 273).
• Effective Date: Effective as of September 16, 2011
to any patent issued on or after that date.


Prior User Rights (cont.)

Under the Act, a prior user defense may be used as a defense to
infringement
• by a person ―acting in good faith, [who] commercially used the
subject matter in the United States, either in connection with
an internal commercial use or an actual arm’s length sale or
other arm’s length commercial transfer of a useful end result
of such commercial use‖

• which occurs at least one year before the ―effective filing
date of the claimed invention‖ or ―the date on which the
claimed invention was disclosed to the public in a manner that
qualified for the exception from prior art‖ under new 35 U.S.C.
102(b).

See new 35 U.S.C. 273(a)(1) & (2).

Prior User Rights (Restrictions)

The prior user right is subject to several significant restrictions:
• It remains personal to the actual entity that performed or directed the performance of
the commercial use (see new 35 U.S.C. § 273(e)(1)(A));
• It may not be separately licensed, assigned or transferred (see new 35 U.S.C. §
273(e)(1)(B));
• It is limited to the sites of the prior use (see new 35 U.S.C. § 273(e)(1)(C));
• It does not apply to any prior use that derived from the patentee or persons in privity
with the patentee (see new 35 U.S.C. § 273(e)(2));
• It only applies to particular claims that were in prior use, and does not apply to other
claims (see new 35 U.S.C. § 273(e)(3));
• It does not apply when the prior use has been abandoned (see new 35 U.S.C. §
273(e)(4));
• It does not apply to inventions originating from Universities (unless activities to
reduce the invention to practice could not have been undertaken using Federal
Government funds) (see new 35 U.S.C. § 273(e)(5)).

Prior User Rights (RISK!)

If the defense is pled ―by a person who is found to
infringe the patent and who subsequently fails to
demonstrate a reasonable basis for asserting the
defense, the court shall find the case exceptional for
purposes of awarding attorney fees under section
285.‖ (See new 35 U.S.C. § 273(f) (emphasis added)).


Joinder

• Change: Forbids parties or courts from joining multiple
defendants or consolidating cases against those defendants
unless there are common issues of fact or the cases arise out
of the same transaction or occurrence. The fact that they are
accused of infringing the same patent is not enough.

• Effective Date: Applies to all lawsuits filed on or after
September 16, 2011.

• Implication: Multi-defendant patent litigation will become
a thing of the past. The number of patent cases filed will
likely increase significantly. Patent plaintiff costs will
increase, and patentees suing multiple defendants will face
multiple assessments of validity, each with potential collateral
estoppel effect.


“Human Organism” Claims

Section 33 of the Act provides that ―no patent may
issue on a claim directed to or encompassing a
human organism.‖(Sec. 33 (a))

The implications will depend on how ―human
organism‖ is interpreted.

Could affect stem cell research, organ research etc.


New Satellite Offices

By September 16, 2014, the PTO is to set up at least
three new Satellite Offices around the Country,
including one currently planned for Detroit, Michigan.
(See Secs. 23 & 24).


Take-home messages

• New challenges but still a lot of new
opportunities!
• March 16, 2013 is the day we change over
• Don’t be afraid to engage patent lawyers and
ask questions!


THANK YOU

Brian Eller J.D.
Licensing Associate
Campus Box 8210
Raleigh, NC 27695-8210

919-515-7199 (phone)
919-515-3773 (fax)
brian_eller@ncsu.edu

www.ncsu.edu/ott

102 (b) “Exception” Weakened Filing Grace
Period
102. Conditions for (A) the disclosure was made
patentability; novelty by the inventor or joint inventor
(b) EXCEPTIONS.— or by another who obtained
(1) DISCLOSURES MADE 1 the subject matter disclosed
YEAR OR LESS BEFORE directly or indirectly from the
THE EFFECTIVE FILING inventor or a joint inventor; or
DATE OF THE CLAIMED (B) the subject matter
INVENTION.—A disclosure disclosed had, before such
made 1 year or less before disclosure, been publicly
the effective filing date of a disclosed by the inventor or a
claimed invention shall not joint inventor or another who
be prior art to the claimed obtained the subject matter
invention under subsection disclosed directly or indirectly
(a)(1) if— from the inventor or a joint
inventor.


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