Patent Reform 2011

By Andrew Wasson

Congress moved closer towards the passage of a major overhaul to the Patent Act on March 1, 2010 with a bi-partisan manager’s amendment to S. 23 (now titled, the “America Invents Act” or in this memo, “the Act”). While failed attempts to effectuate patent reform stretch back to at least 2005, Senator Leahy introduced S. 23 on January 25, 2011. The Judiciary Committee ordered for the bill to be reported favorably with amendments on February 3, 2011. The manager’s amendment passed by a wide margin (97-2) but it appears that Senators may still present additional amendments. Even if the Senate passes the bill, however, the House of Representatives would also need to take up the issue.
The Act makes many complex changes to the Patent Act, however, the following are a few high-level and notable differences:
• Effective filing date: The Act provides for a first-to-file system in lieu of the current first-to-invent system by amending the definition of “effective filing date” to refer to the “actual filing date” of the application.
• Section 102: Abolishes § 102(a) as we know it, leaving in place a provision much like current § 102(b), but without a blanket one-year grace period. The new Act provides for certain exceptions: for example, the Act deems certain disclosures (such as disclosures made by an inventor) as not prior art if they were made during the one-year period prior to the effective filing date.
• Section 103: Section 103 no longer refers to “the time the invention was made” but rather to before the “effective filing date.”
• Interferences: The Act replaces interference practice with “derivation proceedings.” The Act permits a civil action by one patent owner against another patent owner with the same invention but an earlier effective filing date (as long as it is filed within one year of the issuance of the first patent). The Act also provides for a petition procedure before the Patent Office during pending a pending application.
• Damages: While the originally presented Act established the judge as a “gatekeeper” for the methodologies and factors used to determine damages, the manager’s amendment struck the section on damages from the proposed law. Remaining in the Act, however, is a provision stating that the failure to obtain advice of counsel may not be used to demonstrate willfulness.
• Opposition proceedings: The Act provides for inter partes review and post-grant review. Post-grant review allows a petitioner to request the cancellation of one or more claims under any of the defenses under § 282. Inter partes review allows a petitioner to request to cancel one or more claims under §§ 102 or 103.
• No best mode: The Act prohibits using a failure to disclose the best mode as a defense.
• Business method patents: The manager’s amendment also added a post-grant review program specifically allowing petitioners to challenge granted business method patents. The transitional program would start one year from the enactment date of the Act and would sunset four years following the issuance of relevant regulations.
• Preliminary injunctions: The manager’s amendment added a provision that would prevent a court from staying a proceeding in light of a post-grant review if the infringement suit was filed within three months of the patent grant.