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10 Things You Should Know as the New Patent Law Goes Into Effect
The National Law Journal
Reporter Sheri Qualters asked several patent practitioners to come up with a list of things lawyers should know about the Leahy-Smith America Invents Act, enacted on Sept. 16, 2011. Most notably, the patent reform law moves the United States from a first-to-invent to a first-to-file patent system. Here, in no particular order, are the top 10.
1. FILE EARLY AND OFTEN
When first-to-file takes effect on March 16, 2013, it's critical for inventors to race to the U.S. Patent and Trademark Office with high-quality provisional filings, which can be turned into full applications within a year.
"They should make sure their initial filing provides good support for all of those features that they're later going to claim," said Steven Koffs, a partner and senior patent attorney at Philadelphia's Duane Morris. Making additional provisional filings when there's a significant improvement is also key for important inventions, Koffs said. Speedy filing is equally critical for lawyers concerned about potential liability. "The AIA has greatly increased the possibility of malpractice or even just malpractice allegations," said William Dippert, a White Plains, N.Y., partner at Eckert Seamans Cherin & Mellott.
2. COURT OF THE PTO
The America Invents Act "shifts some litigation activity from the courts to the U.S. Patent and Trademark Office," said Erik Belt, a Boston partner at McCarter & English. Several procedures that enable parties to challenge or strengthen patents will combine elements of traditional patent prosecution and court litigation, such as depositions, Belt said.
One example is the inter partes review system slated to come online on Sept. 16. Under the new regime, anyone except the applicant could start the process within nine months of the patent's issue or reissue. Once the first-to-file regime kicks in, third parties can also call for inter partes review at the end of a separate post-grant review process.
Patent filers will have to react quickly to an inter partes challenge because the PTO must finish review in one year in nonexceptional cases.
3. PRIORITY FOR PRIOR ART
Finding potentially disqualifying published information about the subject matter of the invention claimed on a patent application, including issued patents — known as prior art — will move up the priority list under the AIA.
Starting on Sept. 16, third parties will be able to put their two cents in by making prior-art submissions during the patent's prosecution.
And applicants filing after the U.S. patent system switches to first-to-file from first-to-invent will need to search for new categories of prior art. Prior art dated less than a year before the filing date, along with foreign prior-sale and -use activities, will be on the table.
Upcoming changes to PTO review procedures for challenging others' patents also will expose applicants to more prior-art challenges.
4. PAY TO PLAY
Paying an extra $4,800 for a speedy patent application review is a huge benefit for many clients, said Rod Berman, a Los Angeles lawyer who chairs the intellectual property group at Jeffer, Mangels, Butler & Mitchell. Small entities pay $2,400 for the perk, which gives the PTO the goal of completing the application within one year. That provision went into effect on Sept. 26, 2011.
In the regular course of business, applications in some technology areas could be in the system for three years before an applicant first receives substantive patent office comments, Berman said.
"If there is ongoing infringement, or patent allowance is necessary for investment valuation purposes, three years is likely unacceptably too long," Berman said. "The cost/benefit analysis of this reform clearly favors the applicant and the investment in technology."
5. DO OVER, CAREFULLY
Lawyers should tread carefully when using a new supplemental examination procedure expected to come online on Sept. 16 that will allow patentees to correct applications, said Eckert Seamans' Dippert.
The procedure's chief use is to defuse allegations of inequitable conduct, also known as fraud on the patent office. The PTO has three months to decide if the new information raises "a substantial new question of patentability" that calls for patent re-examination.
If the PTO believes the initial filing was fraudulent, an investigation with possible sanctions could follow.
"The patentee may initially request supplemental examination to strengthen the patent, but that could backfire in that the patentee may end up with a serious problem in being investigated for fraud," Dippert said.
6. BEST PRACTICES FOR BEST MODE
A patent applicant's failure to disclose a preferred embodiment of the invention, known as the best mode, can't be used to challenge patent validity, but it's still part of the patent statute, said Scott Kamholz, counsel to Boston's Foley Hoag who chairs the firm's patent re-examination practice.
If the applicant doesn't meet the best-mode requirement, a patent examiner may reject a claim or deny a priority claim. A priority claim is crucial after first-to-file goes into effect because it allows an applicant to claim the earlier filing date of either a provisional application or one filed in another country.
7. CONSULTING COUNSEL STILL COUNTS
The AIA says that an infringer's failure to get the advice of counsel is not a basis for proving willful infringement or the intent necessary for inducement of infringement, but that's not the whole story. It's unclear whether courts will interpret this language as banning such arguments from patent owners, said Michael Albert, co-chairman of the litigation group at Boston's Wolf, Greenfield & Sacks.
Albert said some courts might consider it one of the factors a jury can weigh because legislative history suggests the AIA language was designed to codify the 2007 U.S. Court of Appeals for the Federal Circuit ruling in In re Seagate Technology. Seagate raised the bar for alleging willful patent infringement. Defendants can still argue that their lawyers OK'd their actions.
8. JOINED AT THE COURT
The new law bars joinder, meaning one suit against multiple defendants, unless there's a common question of law or fact for all defendants and the claims stem from the same transaction or occurrence. But some togetherness is still likely. District courts could still consolidate different patent cases for pretrial matters, including discovery and claim construction.
Defendants in those situations must still work together, "meaning that the AIA joinder provision will not lead to the cost savings envisioned by restricting any single complaint to common transactions or occurrences," said Fish & Richardson Washington partner Indranil "Indy" Mukerji.
9. USING PRIOR USE
Defendants in all types of patent infringement cases can now argue that their prior commercial use of the disputed technology protects them. Previously, the defense only applied to business-method patents, which are related to business processes and often involve software.
Some lawyers say the AIA's restrictions and exceptions make it nearly useless, but Jason White, a Chicago partner at Morgan, Lewis & Bockius, said it's "something that defendants should be mindful of in all cases.
"It will not be a commonly used defense, but in the right situation, it may very well come into play," White said.
10. ITC ATTRACTS JOINERS
The International Trade Commission "will become an even more important forum for patent litigation" because of the AIA's bar against bringing a single patent case against numerous unrelated defendants, Mukerji said.
The ITC was already popular with patent litigants because it's easier to get an injunction there than in district court, Mukerji said.
ITC exclusion orders instruct the U.S. Customs and Border Protection to refuse entry to the infringing items. Litigants may also be able to get a cease-and-desist order banning the sale of infringing products already in the United States.
This article originally appeared in The National Law Journal.