The American Invents Act: one year on

May 1, 2014

Patrick R. H. Waller PhD, Daniel W. Young PhD

(as published in IP Magazine)

16 March 2014 marked the one-year anniversary of the implementation of the final changes to US patent law under the America Invents Act (AIA), signed into law by President Obama in 2011. While the full impact of these changes on US patent applicants will play out over the next several years, this anniversary provides an opportunity to reflect on the significance of the changes and their impact on the country’s patent system.

First-inventor-to-file system

One of the goals of the AIA was to harmonise the US patent system with other industrialised countries. To this end, the first-inventor-to-file system closely aligns with the first-to-file system used in other industrialised countries, by tying patentability to the date of filing rather than the date of invention.

A key distinction of AIA’s first-inventor-to-file system is that it offers a limited one-year grace period within which an invention can be publicly disclosed by an inventor, (or another who obtained it from the inventor) before filing a patent application on the invention. Most other countries have an absolute bar to novelty that does not permit prior disclosures, even by an inventor.

The AIA also expands the scope of prior art under US Code § 102, to include foreign offers for sale, sales, and public uses. US patents and published patent applications that originate in foreign jurisdictions may also be counted as prior art based on when they were originally filed in those foreign jurisdictions, rather than when ultimately filed in the US. This effectively makes US patents more vulnerable to validity challenges based on prior disclosures and activities anywhere in the world.

Further, patents on inventions subject to the first-inventor-to-file system can be challenged within the first nine months following issuance under a new post-grant review proceeding, which is similar to post-grant opposition proceedings available in Europe. The new post-grant review proceeding allows anyone to challenge validity of a patent before the US Patent Trial and Appeal Board (PTAB) on essentially any ground, including prior art, written description, enablement, and indefiniteness, and at a much lower cost than in federal court. Although, as of 17 April 2014, no post-grant review proceedings are reported to have been instituted, it is likely these proceedings will become quite common as more patents issue under the first-inventor-to-file system.

Given the expanded scope of prior art, availability of post grant review, and relative uncertainty of the new law, inventors and companies were expected to file applications in advance of 16 March 2013 deadline to ensure their applications were examined under the pre-AIA provisions. Indeed, the US Patent and Trademark Office (USPTO) filing statistics showed a significantly large number of patent applications filed in the week prior to 16 March 2013. Even though many of these were filed as provisional patent applications, their subsequent conversions to regular utility applications will still be examined under pre-AIA law, if all their claims are supported by their provisional specifications. As a result, a large number of patent applications pending in the USPTO will continue to be examined under pre-AIA law for several years to come.

Derivation proceedings

The transition to the first-inventor-to-file system under AIA involves a phasing out of the interference proceedings, (which remain for applications with an effective filing date prior to 16 March 2013) and implementation of a new derivation proceeding, (which apply to patents filed on or after 16 March 2013). Both interferences and derivations proceedings are handled by the PTAB.

The new derivation proceedings were established to ensure that the first person to file a patent application is the true inventor. These proceedings are initiated when a patent applicant files a petition asserting the inventor from an earlier application derived the invention claimed in the petitioner’s patent application without authorisation. The petition must be filed within one year of the first publication of a claim to an invention that is the same or substantially the same as the first true inventor’s claim. As of 17 April 2014, the USPTO reports that six derivation petitions have been filed with the PTAB. One was filed in 2013 and five so far in 2014.

General observations

Although certain US patent law changes under the AIA provided a motivation to file patent applications earlier than under pre-AIA law, in practice, many organisations have not changed their filing approach significantly since they already were operating under global IP strategies that accounted for the first-to-file standard outside the US.

With the phasing-out of interferences, it was thought that companies may become less concerned about record keeping procedures required to document activities associated with conception and reduction to practice. However, these record keeping procedures remain very important – for example, to document inventorship and assess ownership rights. In addition, companies should keep records of individuals whose access to inventions preceded the application filing date, as such records may become critical in the context of a derivation proceeding.