First to File, Other Patent Rules Effective March 16

February 28, 2013 | Intellectual Property News

The fist-inventor-to-file provision of the America Invents Act takes effect on March 16, 2013. After a long history of granting patents to the first applicant to invent an invention, the new law will now award a patent to the first applicant to file an application for the invention. Under the old system, an applicant faced with a rejection based on prior art could submit proof in the form of contemporaneous notes or the like to establish a date of invention earlier than that of the prior art reference. Because the system was focused on the first to invent, retaining good notes, prototypes, or other proof of the invention date was important. Under the new system, the invention date will no longer matter for priority purposes. Instead, the importance of the filing date makes it crucial to file an application at the earliest stage possible.

There are many additional changes that accompany the migration to the first-to-file system, and surely too many to address fully in this account. As such, this report will highlight some of the more notable provisions of the new law.

The new law also brings changes to the definitions of prior art and activities that will prevent an applicant from getting a patent. Under the old law, an applicant was barred from a patent if the invention was on sale more than a year before the patent application date. Judicial interpretations of the prior law concluded that almost any sale was a barring event, even if it was under a nondisclosure agreement and even if the buyer could not decipher the inventive subject matter. As one example, the use of a trade secret method to produce a product that is sold would place the method on sale even if the method was actually completely unknown to the public. The Patent Office’s current interpretation of the new law is that such private processes are not commercial uses available to the public. Consequently, it appears permissible to seek patent applications for such processes even if they have been used for many years—assuming, of course, that there is no other prior art lurking, and no other applicants who file applications first. Note that this interpretation is somewhat preliminary; although the Patent Office has adopted it for the purpose of evaluating patentability, the courts may disagree. Accordingly, there is risk in assuming that a privately conducted method, or a sale under an NDA, will not be a commercial event triggering the on-sale bar to patentability.

Another change relates to the treatment of public disclosures that might bar patentability. Under the first-to-invent system, an applicant could defeat a publication showing that a third party had developed the same invention by submitting proof that the patent applicant invented the invention before the third party. Under the new first-to-file rule this is no longer allowable: if the same invention is available to the public, through a published document or otherwise, before the date of the application then the applicant will not be entitled to a patent. The key exception to this rule relates to public disclosures made by the applicant or derived from the applicant, which are not prior art against the applicant so long as the application is filed within one year of the disclosure. The Patent Office seems to intend to treat this exception very narrowly, and under its current examination guidelines the disclosure may still qualify as prior art unless it is essentially a verbatim copy of the patent applicant’s own work. If the public disclosure is a variation of the applicant’s work then it may be treated as prior art, thereby barring the patent from issuing. Given the risks involved in such publications, the best course is to file an application before any public disclosures.

The first-to-file rules do not apply retroactively, and therefore do not apply to any applications filed prior to March 16, 2013. Likewise, the old rules related to prior art, commercialization, and public disclosures will still apply to such applications. Because the old rules may be preferable, most applicants will be better off if they file applications prior to March 16. For applications filed on or after that date, the applicability of either the new or old rules depends on the nature of the application. A request for continued examination for an application filed before March 16, 2013, as well as the filing of a national stage application for a pre-March 16, 2013 PCT application, will not subject the application to the new first-to-file rules even if the RCE or national stage application is filed after March 16.

For applications filed on or after March 16, 2013, the application will be treated under the new first-to-file rules if the application contains even a single claim that has an effective filing date of March 16 or later. Thus, all new applications with no priority claims to prior-filed applications will be treated under the new rules. Likewise, any continuation in part application that includes one or more claims that rely on subject matter submitted after March 16, 2013 will also be treated under the new rules. Once such a claim is submitted in an application it is processed under the new rules for all time, even if the triggering claim is later canceled.

The Patent Office is also raising its fees, effective March 19, 2013. While the Patent Office routinely raises its fees at least annually, in this case the increases are hefty. For example, a utility patent application previously required a small entity filing fee of $533 under the old rules, but will cost $730 under the new rules. For large entities, these basic filing fees increase from $1260 to $1600. A further change creates a new “micro entity” for filing purposes, with a micro entity being small entities with four or fewer prior patent applications, a gross income that does not exceed three times the national median household income, and has not granted rights in the invention to an entity with an income greater than three times the national median. For a micro entity, the basic filing fee is $400.