America Invents Act Passed by Congress

Today (September, 8 2011), the United States Senate passed the House of Representative’s version of the America Invents Act (H.R. 1249) (“Act”). President Obama is expected to sign the Act into law soon. When the Act becomes law, there will be several significant changes to the U.S. patent laws and rules. Below is a brief summary outlining the substance and effective dates of some of the key provisions of the Act.  

First-to-File – 18 months after enactment

The Act moves the U.S. from a first-to-invent system to a first-to-file system. Any third-party prior art available before the patent application filing date could be used to reject the application. An applicant will still be given a one year grace period for any disclosures made by the applicant. Any application filed before this provision goes into effect, which is 18 months after enactment, will be examined under the current first-to-invent system.

Prioritized Examination – 10 days after enactment

For an additional $4,800 fee ($2,400 for small entities), applicants can file a request to have their application examined out of turn.

Fee Increase – 10 days after enactment

Ten days after enactment, there will be a 15 percent increase in almost all U.S. Patent Office fees, including filing, examination, extension, and maintenance fees.

Post Grant Review – One year after enactment

A new post grant review system will be created that will expand the ability to challenge the validity of granted patents. The Act provides several options, outlined briefly below, to challenge patents, with each option having various timeframes and limitations as to the grounds for the challenge. 

• Post Grant Review – within nine months of patent grant for challenges on nearly any ground
• Inter Partes Review – more than nine months after patent grant for adversarial challenges based on prior art patents and printed publications
• Ex Parte Reexamination – anytime after patent grant for non-adversarial challenges based on prior art patents and printed publications

The details of the new system must be established by the U.S. Patent Office within one year of enactment. We will monitor the rules created by the U.S. Patent Office for the new post grant review system and provide additional updates.

Effective immediately upon enactment, requests for inter partes reexamination will no longer be granted upon a showing of a “substantial new question of patentability.” Rather, the standard for determining whether to grant the request will require the requestor to show “a reasonable likelihood that the requester would prevail with respect to at least one of the claims challenged in the request.”

Transitional Post Grant Review for Business Method Patents – One year after enactment

The U.S. Patent Office must issue regulations establishing and implementing a transitional post grant review proceeding for the review of the validity of business method patents. Petitions for post grant review under the transitional review proceeding can only be filed by persons who have been sued for infringement or have been charged with infringement of the patent for which review is requested.

Pre-issuance Prior Art Submissions by Third Parties– One year after enactment

A third party will be able to submit prior art publications for consideration during prosecution of an application if the prior art is timely submitted. The third party will have until the later of (1) six months after the date of publication of the application; or (2) the date of the first rejection. If a notice of allowance is issued before either of the foregoing events, the third party will no longer be able to submit prior art. Therefore, third parties should not delay in submitting relevant prior art.

False Marking – upon enactment

The Act will no longer allow any person to bring a false marking lawsuit under 35 U.S.C. Section 292. Rather, false marking lawsuits will be limited to those filed by the United States or by a competitor who can prove a competitive injury. Also, marking a product with an expired patent that covered the product will not be false marking. This change applies to any lawsuit pending on or after the date of enactment.

Virtual Marking – upon enactment

A patent article can be marked with the word “patent” together with an address of a posting on the Internet that associates the patented article with the number of the patent.

Prior User Defense – available to all patents issued on or after enactment

The Act provides a defense to infringement based on prior commercial use if the accused infringer can show a reduction to practice and commercial use at least one year before the effective filing date of the asserted patent.

Tax Avoidance Strategies – upon enactment

Tax avoidance strategies are defined as within the prior art for both existing patents and pending applications upon enactment of the Act. In other words, tax avoidance strategies will not be patentable and patents directed to tax avoidance strategies will not be enforceable.