Congress Overhauls Patent System with Passage of Leahy-Smith America Invents Act

On September 8, 2011, the Senate approved the America Invents Act, considered by some commentators to be the most substantial revision of U.S. patent law since 1952. The Act's various provisions will go into effect over an 18-month period, with some having retroactive effect. President Obama is expected to quickly sign it into law. 

The Act effects many changes, ranging from the eventual elimination of interference proceedings to how funding of the Patent Office will be achieved. The following changes are likely to be of interest to companies involved in patent litigation, or invested in the development and protection of their own intellectual property.

First Inventor to File

One of the most significant shifts in law will be moving from the current First-to-Invent system to a First-Inventor-to-File (FITF) regime, effective 18 months after enactment. Under this system, the first true inventor will receive priority based on the date of filing of his/her application. Disputes over whether the first filer is in fact the true inventor will be resolved through newly implemented derivation proceedings, under which priority may be awarded to a later filer found to be the first true inventor.

Post-grant Proceedings

Newly created post-grant proceedings, known as "inter partes review," will be conducted by the new Patent Trial and Review Board (replacing the Board of Patent Appeals and Interferences) and will replace ex parte and inter partes reexaminations. The applicable standard will be a "reasonable likelihood that the requestor would prevail" with respect to at least one of the challenged claims, on the grounds of anticipation or obviousness based on prior art patents or publications. Under a new "post-grant review" procedure, any party may challenge a patent for 12 months after issue or reissue on any invalidity grounds. Parties will be estopped from raising in civil litigation or ITC proceedings any issue that was raised or could have been raised in inter partes or post-grant review.

Prior Art

The Act will eliminate the prior one-year general grace period on printed publication, public use, sale or availability, with an exemption only for the inventor's own disclosures. However, the Act's ambiguity as to what constitutes disclosure is certain to foster litigation. Further, all of the prior art categories will expand to use anywhere in the world. These changes all increase the importance of filing a provisional application before making any public disclosure of an invention.

Other Significant Shifts

• Elimination of Best Mode Requirement. Failure to identify best mode of carrying out the invention will no longer provide a basis for invalidity, effective immediately and applicable to all proceedings commenced on or after the effective date.
• Extension of the Prior Use Defense. The Act will extend the availability of the prior use defense, formerly only applicable for users of a business method, to all patents.
• Limits on Joinder Rules. Parties may no longer be joined as defendants solely on the basis of alleged infringement of the same patent. Rather, a plaintiff will have to allege related acts of infringement by the defendants. This change is effective immediately, applicable to all actions commenced on or after the date of enactment.
• Limits on False Marking Suits. The Act will eliminate Qui Tam false marking lawsuits as the only parties with standing to sue for false marking will be the U.S. (with a fine per article) or one who has suffered a competitive injury (for compensatory damages); and elimination of civil liability for marking a product with an expired patent number, if the patent number covered the product. This change is effective immediately and applicable to pending proceedings.