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Legal Review: America Invents Act Has Implications for Marketers and Inventors

1 Nov, 2011 By: Jeffrey D. Knowles, Venable LLP’s Advertising Response

Knowles and GenieserThe America Invents Act (AIA), the most dramatic change to U.S. patent law since the 1952 revision, was signed into law on Sept. 16. A driving force behind the Act’s passage was the perception that “reform” of the patent system has an important role to play in stimulating the economy, creating jobs and promoting U.S. global competitiveness. Whether the Act will have the intended effect on the economy remains to be seen. However, the AIA undeniably has changed the foundations of U.S. patent law, so that those who adapt to this change may benefit, while those who do not will suffer.

At its core, the AIA affects decisions on what should be patented and when and how a patent application should be filed. Because provisions in the new law will be phased in over time, a patent applicant must, for the time being, synthesize clear business objectives with a detailed understanding of provisions under both the AIA and the prior law in order to maximize the value of technical innovations.

A substantial change under the AIA is the effective evisceration of the “best mode” requirement. Under the prior law, an applicant was required to include a description of the “best mode contemplated by the inventor of carrying out his invention.” Most other countries do not have such a requirement. One intent of effectively eliminating this requirement was to render the U.S. patent law more “harmonious” with that of other countries. Although the AIA leaves the text of this requirement in the law, another section states that failure to disclose the best mode cannot be used to cancel or hold invalid any claim or patent. However, applicants should consider that there might be some risk in not conforming to the nominal requirement.

Perhaps the most dramatic change is the transformation of U.S. patent law from a “first-to-invent” to a “first-to-file” regime. Under the prior law, an inventor who was not the first to file a patent application could, in some circumstances, assert that he or she was entitled to a patent by virtue of having been the first to invent the claimed subject matter. This provision was frequently criticized for complicating and adding uncertainty to the patent process and being inharmonious with other countries’ laws.

On the other hand, the “first-to-file” system is perceived as favoring corporations, which have the sophistication and resources to ensure that patent applications are promptly filed for potentially valuable innovations, over individual inventors and small businesses. The AIA does provide for a derivation proceeding, by which an inventor who believes that another “derived” his invention and filed for a patent can seek relief, but there are specific time limits for filing.

The AIA also makes significant changes to the tests imposed to determine whether a claimed invention is “novel.” Under the prior law, an invention “known or used by others” in the United States, would preclude the issuance of a patent, but knowledge or use in foreign countries would not be a disqualifying event. The AIA makes no distinction between domestic and foreign events, stating that the claimed invention being “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date” precludes the issuance of a patent. The AIA does retain a grace period under which disclosures made by the inventor one year or less before the effective application filing date are not disqualifying events.

A provision separate from other aspects of the patent law is the implementation of a prioritized examination track, which became effective on Sept. 26. Under this track, an applicant can receive an expedited examination if a $4,800 filing fee is paid and a claim not to exceed four independent and 30 total claims is submitted. The extent of the advantage afforded by prioritized examination remains to be seen. Ultimately, whether it is worthwhile to pay the fee will depend on the applicant’s business objectives and circumstances.

Those concerned with the patent protection of innovations should seek understanding of key provisions of the AIA, monitor interpretation by the courts of provisions, consider strategic implications, and be prepared to reconsider general conclusions of effects of the Act in light of specific facts and circumstances.

Jeffrey D. Knowles is a partner at Venable LLP and chair of the firm’s Advertising, Marketing and New Media Group. Lars H. Genieser is an attorney at Venable who focuses his practice on Intellectual Property issues. They can be reached at (202) 344-4000.

About the Author: Jeffrey D. Knowles

Jeffrey D. Knowles

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