What Every Business Needs to Know About How Patent Law is Changing

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The America Invents Act (AIA), which President Obama signed into law on September 16, 2011, brought about substantive changes to the U.S. patent system. The first two phases of the AIA’s implementation went into effect last year. The third and final phase—which, among other things, converts the U.S. patent regime into a “first-to-file” system—takes effect March 16, 2013.

Below are some of the changes under the AIA:

  1. “First-to-File” provision: For the first time in U.S. history, patent rights will be granted to the first person to file for a patent, rather than the first person to invent the invention. This means that inventors need to file for patents as soon as possible.
  2. New microentity status: The U.S. Patent & Trademark Office (USPTO) has identified a new group of patent applicants who will be eligible for reduced filing fees. Eligible applicants include:
    1. Applicants that: (1) qualify as a small entity as defined in 37 CFR 1.27; (2) filed four or fewer previous non-provisional patent applications (excluding certain types of applications, such as applications resulting from prior employment where the applicant has assigned or is under an obligation to assign all ownership rights as the result of the previous employment); (3) had in the prior calendar year a gross income of less than three times the national median household income; and (4) has not assigned and is not under an obligation to assign a license or other ownership interest in the application to an entity that had in the prior calendar year a gross income exceeding three times the median household income.
    2. An applicant employed by a university from which a majority of the applicant’s income is obtained or an applicant who has assigned or is under an obligation to assign a license or other ownership interest in the particular applications to a university. (The university must still qualify as a small entity).
  3. Prior art: The definition of prior art, which is used to determine patentability, will expand to include public use, sales (including foreign offers for sale), publications and any disclosures available to the public anywhere in the world as of the filing date, excluding the publication-conditioned grace period by the inventor within one year of filing.
  4. Tax strategy reform: In the past, inventions could provide certain tax shelters. Under the AIA, any strategy for reducing, avoiding or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be considered insufficient to differentiate a claimed invention from the prior art.
  5. False marking claims: Only the U.S. government or a party who can prove a competitive injury will be able to bring suit for falsely marking a product with a patent number.
  6. Marking with expired patent: Marking a product with a patent number that previously covered that product but has expired will no longer be a violation.
  7. Best mode: Failing to disclose a best mode will not be a basis to invalidate a previously issued patent.
  8. Prior user: If an invention was used by anyone more than one year before a subsequent inventor files for a patent on that invention, the user will be able to continue using the invention even after the subsequent inventor is granted a patent—provided the user did not obtain the basis for the invention from that subsequent inventor.
  9. Interference proceedings: These are eliminated because priority is determined by the application filing date instead of the invention date. A derivation proceeding will be used to determine whether the filer is the actual inventor.
  10. Assignment: Assignees can apply for patents on behalf of inventors.
  11. Third party submissions: Third parties will be able to submit to the USPTO written material that is relevant to the examination of a patent.
  12. Supplemental examination: Patent owners will be able to request supplemental examination of their patents. This examination allows a patent owner to request that the examiner consider or correct information believed to be relevant to the patentability of the invention itself.
  13. Trial proceedings: Significant changes have also been made to trial proceedings, including post-grant review, inter partes review and covered business method patent review.

 

For those debating whether or not to patent an invention, check out the USPTO website for more details. Get to the USPTO with your patent application as soon as possible and check out LegalZoom patents for a fast and simple way to work within the new patent system. The AIA has drastically changed the patent world, so make sure you’re prepared.