The America Invents Act (AIA) is patent reform legislation that has been enacted in a series of steps. The most significant change resulting from the AIA occurred on March 16, when the U.S. patent system converted from a "first to invent" system into a "first to file" system. The transition from first-to-invent to a first-to-file system means that both the laws that govern the first-to-invent system (or pre-AIA rules) and the laws that govern the first-to-file system (or post-AIA rules) will exist simultaneously for more than 20 years, and which set of rules governs the prosecution of a patent application depends on the application’s filing date.

The rules take different approaches to true inventorship. For those applications filed pre-AIA, the first-to-invent rules rely on the date of conception of the invention when making a determination as to which inventor prevails as the first to invent. The pre-AIA patent laws allow for interference proceedings — proceedings to determine who was the first inventor to conceive of an invention in situations where two patent applications pending at the same time each describe the same invention. For those applications filed post-AIA, the first-to-file rules focus on whether the first person to file a patent application is actually a true inventor. The post-AIA rules allow for derivative proceedings — proceedings to determine that the first person to file did not derive the invention from another and claim it as his or her own.

This may seem confusing, especially to those who are unfamiliar with patent law. To help illustrate the differences between the pre-AIA rules and the post-AIA rules, consider the famous case of Elisha Gray and Alexander Graham Bell and the controversy surrounding who invented the telephone.

The Alleged Facts

Gray and Bell were both prominent inventors in the late 19th century, both being heavily involved in the development of electromagnetic telephone devices, which were more commonly referred to at the time as harmonic telegraphs.

Gray began working on a harmonic telegraph device in 1874 and by February 11, 1876, he had drawn a diagram of a telephone in his inventor’s notebook. On February 14, 1876, Gray filed a patent caveat with the United States Patent and Trademark Office (USPTO), which is similar to today’s provisional patent application, based on his February 11 diagram. Like provisional applications, caveats were confidential documents that served as a notice to the patent office that the inventor intended to file a patent application on the invention.

In 1874, Bell was in competition with Gray to develop a harmonic telegraph, and filed a patent application with the USPTO on February 14, 1876, although allegedly later in the day than Gray’s patent caveat, for a telegraph device. Bell’s application disclosed an improvement to telegraphy that involved the use of variable resistance for transmitting vocal sounds. Bell was issued U.S. Patent 174,465 for the telephone on March 7, 1876, just three weeks and a day after he filed the application. On March 10, Bell and his lab assistant, Thomas Watson, recorded in their notebooks the famous telephone transmission in which Bell said, "Watson, come here. I want to see you."

Analysis

Under the first-to-invent pre-AIA rules, upon learning that Bell was also seeking a patent on the telephone, Gray could seek an interference proceeding during which he could demonstrate that he was the first inventor to conceive of the idea for the telephone. His evidence would be his February 11 inventor’s notebook entry of the telegraph diagram, which he used as the basis for his patent caveat.

While both Gray and Bell had worked on harmonic telegraphs from 1874 until 1876, Gray’s notebook entry is the first piece of evidence that relates to the idea embodied in both Gray’s patent caveat and Bell’s patent application. Bell would not be able to pre-date Gray’s notebook entry, because Bell’s own notebook entries did not occur until March 1876 — after he had filed his patent application. Gray would prevail as the first to invent under the pre-AIA rules.

Under the post-AIA first-to-file system, it is a race to the USPTO. The first inventor to file gets priority. While the scenario where two inventors file for patents on similar inventions on exactly the same day is highly unlikely, in the case of Gray and Bell, it was the reality.

This particular scenario raises interesting technical questions, which are yet to be answered, in light of modern technology, online filing, time-stamping and literal interpretation of the first-to-file rules. For instance, under a first-to-file system, does time-stamping filings matter? Is there an inherent advantage to filing applications online so that they are instantly time-stamped upon submission, compared to filing via express mail, which is also time-stamped but not until the submission arrives at the post office?

Taking "first to file" literally, the conclusion in this case is that Gray would have prevailed as the first inventor to file because he submitted his patent caveat, via hand delivery to the patent office, earlier in the day than Bell submitted his patent application. But let’s explore the facts further.

When Gray submitted his patent caveat to the patent office, the office placed his application in its application inbox for review later in the day. As more applications came in throughout the day, they were placed on top of Gray’s application. Finally, when Bell’s application was filed, it was placed near the top of the inbox stack. After closing, the office worked its way through the inbox stack, marking each item as filed. Bell’s application was filed first because it was closer to the top of the stack. Under this scenario, Bell would be awarded a patent.

However, assuming that Gray was the true inventor, and that Bell had derived his invention from Gray in some way, Gray must petition for a derivation proceeding against Bell to challenge Bell’s patent. In order to initiate the derivation proceeding, there are two conditions that must be satisfied. First, Gray must file a petition within one year of Bell disclosing his claim to his invention (which is the same or substantially the same as Gray’s invention) via publication. Second, the invention claimed in Bell’s earlier-filed application must be derived from Gray’s invention disclosed in his later-filed patent caveat, without Gray’s permission.

Conclusion

Whether pre-AIA or post-AIA rules apply has a significant impact on how prosecution of the patent application will proceed when there is a controversy over inventorship. The transition from first-to-invent to first-to-file is going to take some getting used to, but overall, it has helped to unify the U.S. patent system with the patent systems of other countries around the world. And while a first-to-file system may not seem to be inventor-friendly, there are safeguards built into the AIA, such as derivation proceedings, to help true inventors get the IP protection they deserve for their inventions. •

John C. Donch Jr., a shareholder at Volpe and Koenig, concentrates his practice on securing, licensing and enforcing intellectual property rights. His technical experience includes wireless communications, computers, computer software, semiconductors and electronics. He can be contacted at jdonch@vklaw.com.

Amber R. Stiles is a law clerk at the firm and a third-year law student at the Earle Mack School of Law at Drexel University. She can be contacted at astiles@vklaw.com.