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The commercial use defense set forth in the America Invents Act created a new defense to patent infringement, and several best practices have been prompted as a result. Documentation policies should be revised to help ensure that important trade secrets for a product line can take advantage of this new defense. Due diligence checklists for mergers and acquisitions should also be updated to ensure that important information related to this new defense be obtained and evaluated because early assessments of such information can impact the negotiation strategy and valuation of the acquisition target.

SECRET COMMERCIAL USE AS PATENT INFRINGEMENT DEFENSE

When the America Invents Act was enacted on September 16, 2011, a new defense to patent infringement allegations was created under 35 U.S.C. § 273, the commercial use defense. The commercial use defense permits a defense of a patent infringement allegation asserted by a party that is not “an institution of higher education” (as defined in Section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))) “or a technology transfer organization whose primary purpose is to facilitate the commercialization of technologies developed by one or more such institutions of higher education.”

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