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The America Invents Act of 2011

The Leahy-Smith America Invents Act of 2011 (AIA) is the "Patent Reform" law passed by the US Senate on September 8, 2011, which made significant changes to the US Patent Law. The act has now fully gone into effect. The USPTO has a web page on the implementation of the Leahy-Smith Act. 

On January 14, 2012, H.R. 6621, officially titled An Act To correct and improve certain provisions of the Leahy-Smith America Invents Act and title 35, United States Code was signed into law by President Obama. The Act made a number of changes to the AIA, which are noted below. 

The following is a summary of most of the provisions of the law, which are most likely to affect our clients. The law runs 152 pages, and includes many things which are primarily of interest to the USPTO but which don't impact inventors directly, and if you're really interested you can  read all 152 pages of the Act here in PDF form (off-site link to the Patently-O site).  

Effective immediately on signing - September 16, 2011

  • Reexamination Standard: Changes standard for inter partes reexamination from “substantial new question of patentability" to a “reasonable likelihood that the requester would prevail.” 

  • Statutory fee amounts: basically, this just puts the pre-AIA USPTO fee schedule into the law. The final fees enacted by the USPTO under its new fee-setting authority in the AIA went into effect on March 19, 2013.

  • Refunds and error in payment: Allows USPTO to refund excess claims fees for canceled claims or fees paid in error. 

  • Micro entity discount: A new 75% discount on some fees will be offered to "micro entities" - small entities even smaller than Small Entities, basically individuals who are below a certain income level and have not filed more than a certain number of patent applications. Although this provision was supposed to take effect on enactment, in fact the implementation of the Micro Entity fees was delayed until March 19, 2013. For more information, see our page on Small Entity and Micro Entity fees.  

  • Tax strategies are within the prior art: Effectively eliminates patents on methods of tax reduction, avoidance or deferral. Applies to any patent application that is pending on, or filed on or after enactment date, and to any patent that is issued on or after enactment date.

  • Best Mode: Failure to state the best mode (preferred embodiment) is no longer grounds for invalidity. Note that this does not remove the requirement in section 112 of the Patent Law to state the best mode in the application, it just makes it impossible to challenge the validity of a patent in litigation based on the failure to do so.

  • Human organism prohibition: Bans patents "directed to or encompassing human organisms". While commentators have raised concerns that this could be interpreted broadly to ban patents on such things as cell lines or methods of treating people, the USPTO position on this provision is that it does not change existing law or long-standing USPTO policy, which already banned patenting human beings, as such. 

  • Patent term extension for drugs: A very particular section dealing with the consequences of when a product receives permission for patent term extension purposes, if the permission is sent after 4:30 Eastern Time on a business day, or on a non business day. Sometimes referred to in the blogosphere as the "Dog Ate My Homework Act", it is not clear that this will have any effect at all on anything other than Medco's U.S. Patent No. 5,196,404 covering ANGIOMAX (bivalirudin). 

  • Virtual Marking: Allows marking a product with a reference to a web page instead of the actual patent numbers covering the product. 

  • Marking (qui tam actions): Eliminates the ability of anyone but the government to sue a manufacturer who marked a product with an expired patent number to get civil penalties. A party who has suffered commercial harm by such marking can still sue, but only for actual damages.   

  • Civil action under 35 U.S.C. 145: In an ex parte reexamination, a party who disagrees with a ruling of the BPAI (now to be called PTAB) can no longer sue the USPTO in District Court to overturn the ruling.

  • Multiple-Defendant Lawsuits: This provision is aimed at so-called "trolls", and is intended to make suing multiple defendants on a single patent more expensive. It will prevent a patent owner from suing more than one company in a single lawsuit,  if the only grounds for the suit is that they all infringed the same patent. This also applies to prevent a court from consolidating multiple cases just because they all involve infringement of the same patent, unless the defendants agree, so that plaintiffs can't make an end-run around the law by bringing lots of lawsuits and then merging them afterward. The law applies to all lawsuits filed on or after the bill's enactment date. 

Became effective ten days after enactment - September 26, 2011

  • Prioritized examination and fee (Track 1): Implements the "fast track" examination program previously announced by the USPTO, but put on hold due to budget limitations. 

  • 15% transition surcharge fees: Adds a 15% surcharge to patent fees. Surcharge expires when USPTO revises fee under fee provisions of the Act. A list of fee changes may be downloaded from the USPTO, and the updated fees are reflected in our Patent Budget Estimator and USPTO Patent Fees pages. 

Became effective sixty days after enactment - November 15, 2011

  • Paper Filing Penalty: Added a $400 penalty for applications which are not filed electronically. 

Became effective one year after enactment - September 16, 2012

  • Oath or Declaration: Several changes, including: (a) elimination of the requirement that an inventor state his/her citizenship, (b) adds new required wording; (c) allows the required statements to be made in the assignment rather than in the oath or declaration; (d) statements for non-signing inventors; (e) elimination of "lack of deceptive intent" statement in reissue declarations and when changing inventorship; (f) no longer requiring supplemental oath or declaration in reissues. The final rules issued in August 2012 also made the following changes: (a) removed requirement that declaration list all inventors, as long as an ADS is filed listing all inventors; (b) removed requirement that declaration state that person signing has reviewed and understands application, and acknowledging duty to disclose material relevant to patentability (although these things are still required, they just don't need to be stated in the declaration); (c) removed requirement that declaration acknowledge that willful false statements may jeopardize validity of patent and statements made are true; (d) the oath or declaration may be filed at any time up to the date of payment of the issue fee (but with a late filing surcharge if the oath or declaration is not filed with the application). Note: the proposed USPTO rules required filing the oath or declaration before allowance of the application, but the January 14, 2013, Act changed this.

  • Assignee as Applicant: For applications filed after September 16, 2012, an assignee is permitted (but not required) to apply for a patent as "applicant". The inventors must still be named and must still file oaths or declarations, or the assignee will have to petition to accept the application without the oaths or declarations, as in current practice. The inventor(s) names will still be used for application and patent identification purposes, however. 

  • Third Party Preissuance Submissions: A new section 122(e) is added:

    • Third parties are allowed to submit certain types of information (publications, patents, published applications, but not public use or sale or improper inventorship, to which section 122(c) applies). 

    • Submissions must be made before the earlier of (i) allowance or (ii) the later of six months after the publication of the application or the first rejection. 

    • Submissions are made through a web-based submission system which can be accessed through the normal USPTO e-filing system, EFS-Web.

    • There are several items that must be included for a compliant preissuance submission:
      • Form PTO/SB/429 (or equivalent document list), identifying the publications, or portions of publications, being submitted [NOTE: use form PTO/SB/429 for paper submissions only; a completed form PTO/SB/429 will be automatically generated for electronic submissions];
      • A concise description of the asserted relevance of each item identified in the document list;
      • A legible copy of each item identified in the document list, other than U.S. patents and U.S. patent application publications;
      • An English language translation of any non-English language item identified in the document list;
      • Statements by the party making the submission that: The party is not an individual who has a duty to disclose information with respect to the application under § 1.56; and the submission complies with the requirements of 35 U.S.C. 122(e) and § 1.290; and 
      • A fee of $180 for every ten documents listed or fraction thereof, unless the fee exemption applies to the submission. 
      • A third party is exempt from paying a fee for a submission of three or fewer documents, provided it is the party’s first such submission and the party files a “first and only” statement..
  • Post-Grant Review (PGR)
    • Patents granted on applications with a priority date after March 15, 2013, (i.e. "first to invent" patents) are subject to "Post Grant Review" during the nine-month period following issue. 
    • Petition must establish that at least one claim is "more likely than not" unpatentable. 
    • Must be filed before a third party initiates a declaratory judgment action to invalidate the patent.
    • Can raise any grounds that can be used to challenge the validity of a patent claim - not just patents and publications or other prior art, but also public use, sale or other public disclosure (section 102 novelty or section 103 obviousness), or lack of written description or enablement (section 112), or statutory subject matter (section 101).
    • Estoppel standard is “raised or reasonably could have raised” before the USPTO and the courts. 
  • Inter-Partes Review (IPR): 
    • The “inter partes reexamination” procedure is replaced with “Inter Partes Review” (IPR)
    • IPR can be requested at any time during the life of patent, after the later of 9 months from grant of the patent or termination of post-grant review (PGR), if any. 
      Note: As originally passed, this left a nine-month gap for patents issued under the "first to invent" rules during which they could not be challenged, since pre-March 16, 2013, patents are not subject to Post-Grant Review (PGR).  The Act signed on January 14, 2013, amended the AIA to eliminate the nine-month gap for such patents.  
    • IPR is started by a third party filing a petition. The patent owner may respond to the petition. The threshold showing is a “reasonable likelihood” that the petitioner will prevail. If the threshold is met, then IPR will be scheduled by PTAB.
    • The basis for the IPR is limited to patents or printed publications.  
    • IPR is not available if filed more than 1 year after service of infringement complaint or if petitioner previously filed Declaratory Judgement action alleging invalidity; 
    • Provides for intervening rights with respect to any new or amended claims. 
    • Estoppel standard is “raised or reasonably could have raised” before the USPTO and the courts. 
    • Director may limit number of proceedings in first 4 years.
  • Supplemental Examination

    • Applies to all patents, whenever issued. 

    • A patent owner can file a Request for Supplemental Examination, supplying information  not limited to patents and publications. 

    • Supplemental Examination must be carried out within three months. 

    • If information supplied raises at least one "substantial new question of patentability", Director is required to conduct a supplemental-examination-ordered ex parte reexamination. 

    • If Director becomes aware of fraud either during supplemental examination or reexamination based on supplemental examination, the Director will refer the matter to the Attorney General. 

  • Citing art in an issued patent's file under section 301: Expanded to allow filing written statements of the patent owner into a patent file, if the statements were filed in proceedings before a Federal court or the Office taking a position on the scope of a patent claim. Provides for submission of additional information with such statements and limits the use of such statements (not to be considered for any purpose other than to determine the proper meaning of a patent claim).

  • Priority examination for "important technologies": Will allow the Director to provide for priority examination for applications for "products, processes, or technologies that are important to the national economy or national competitiveness". Specifically says that this may be done "without recovering the aggregate extra cost of such prioritization". Watch for enabling regulations for definitions of these terms. 

  • Transitional Program for review of certain business method patents: Eight-year transitional term, during which a petitioner who has been charged with or sued for infringement may bring post-grant review proceeding to determine validity of certain business method patents. Patent must claim a method or corresponding apparatus for performing data processing operations utilized in the practice, administration, or management of a financial product or service, but not patents for technological inventions. 

Became effective eighteen months after enactment - March 15, 2013

  • First Inventor to File: The most significant change in the Act is from the "first to invent" standard for who gets a patent in a conflict between two applicants, to "first inventor to file". 

Until this change, if there was any conflict between two inventors, the patent was granted to the first person to invent (conceive plus reduce to practice) in an "interference" proceeding. How "first to invent" worked involved complex sets of rules to decide who was actually first, especially if one inventor conceived first and reduced to practice later, and so on. "First to Invent" also affected what constituted "prior art" - in case of a publication or other prior art, an inventor could "swear behind" the prior art by showing he had invented before the publication. 

The change to "first inventor to file" eliminates the need to inquire as to date of invention, although the Act as passed does not go all the way to a pure "first to file" system, where nothing matters but when the application was filed. The applicant still needs to be an inventor - just anyone cannot get a patent simply by filing first - and the patent goes to the application with the earliest "effective date". The effective date for an application will be its actual filing date or, if the inventor published less than a year before the filing date, the date of publication. 

  • Effective Date vs Filing Date: US patents or US published applications or PCT applications which claimed priority from a foreign application are now "prior art" as of their foreign filing date, rather than as of their US filing date or date of publication.  This is true regardless of language.
  • Public use or sale and "otherwise available": Section 102(a)(1) is amended to add that prior art, in addition to patents, publications, public use or sale,  includes the invention being "otherwise available to the public". This section is also amended to remove the words "in this country" after "publicly used or on sale", so that public use or sale anywhere in the world would prevent getting a patent, not just US use or sale as before. 
  • One-year Grace Period: Section 102(b) is amended so that the one-year "grace period" applies only to the inventor's own publications or to publication by someone who obtained it from the inventor. There is no "grace period" for publications by others. 
  • "Grace period": Publications by the inventor, if less than a year before the application filing date, are now the "effective date" for prior art purposes - but, according to the USPTO's interpretation of the law, only as to exactly what is in the publication. If anything at all is added to the patent application relative to the inventor's disclosure, the disclosure would not be the effective filing date (so that prior art which arises between the publication and filing will be prior art to the application), and for anything in the application which is changed from the publication, the publication would be prior art for obviousness purposes. In essence, this eliminates any benefit from the "grace period", and it is best to treat the US under "first to file" as if we were an "absolute novelty" country like most of the rest of the world, where any publication will defeat patentability. The take-home lesson? File a patent application before you publicly disclose your invention! 
  • Section 102 Novelty changes: In addition to the above, the following sections are eliminated as no longer necessary under "first inventor to file": 102(c) (abandonment), 102(d) (first patented in a foreign country), parts of 102(f) (other than impact on derivation and improper inventorship), 102(g) (priority of inventorship, including impact on 37 CFR 1.131 priority of invention affidavits).
  • Section 103 Obviousness: amended such that obviousness is to be judged as of the effective date of the application, rather than as of the date of invention. 
  • Section 104: This section, dealing with requirements for inventions made abroad, is repealed. 
  • Derivation Proceedings: These replace interferences as inter-inventor proceedings in the USPTO before the renamed Patent Trial and Appeal Board (PTAB), formerly the Board of Patent Appeals and Interferences (BPAI). Derivation proceedings will be used to determine if an inventor in an application having an earlier effective date in fact derived his invention from the inventor with the application having a later effective date. Unlike interferences, the date of invention would be irrelevant, and the only issue would be if the earlier filer derived from the later. 
  • Statutory Invention Registrations: The SIR program, which was seldom used anyway, has been eliminated. 
  • Time to file priority documents: If a US application is filed claiming priority from a foreign application, the certified copy of the priority document must be filed within four months of the filing date of the US application, or sixteen months from the priority filing date, whichever is later. Before March 16, 2013, applicants could wait until the examiner directed them to file, or until the time they paid the issue fee to file the certified copy. If the certified copy is not filed within the new "four or sixteen" time period, priority is lost unless a petition to restore priority is filed (with a high petition fee).  Note that this applies to US national applications only, not to an application which is the US national stage of a PCT international application.
  • Transition Period - Subject Matter filed before March 16, 2013, applications filed after March 16, 2013

Patent applications (and the patents which result from them) which were filed under "First to Invent" remain under that standard. "First Inventor to File" will apply to any application with a claim "having an effective date as defined in section 100(i)" on or after March 16, 2013, or (ii) having a specific reference under sections 120, 121, or 365(c) to an application having such a claim (i.e. a continuation, continuation in part, divisional or National Stage of PCT), and to patents based on such applications. 

This means that the old rules continue to apply to applications filed before March 16, 2013, and to continuations and divisionals of those applications which are filed after March 16th, assuming that they are "correct" continuations or divisionals - that is, nothing was added to the disclosure compared to the parent application. 

The new rules will apply to any application that ever contains a claim that claims subject matter which was filed on or after March 16, 2013

For continuations-in-part (CIPs) it would appear that one would have to look at each claim and see if any claim claims subject matter which has an effective date after March 16, 2013. Under the USPTO's interpretation of the rules, once the CIP is filed with at least one claim with an effective date after March 16th, the entire application would be under the First Inventor To File system, even if that claim is later canceled. This would probably mean that most CIPs filed after March 16, 2013, would be under the new rules, since CIPs are, by definition, filed to add new matter. 

It remains unclear if one adds new matter to a pre-March 16th application, but keeps exactly the same claims, whether this would throw the application under the new rules or not - the claims are the same as originally filed, but if they read on the added matter it seems likely that at some point a court will decide that they now claim this new matter even if they are word-for-word the same. It would seem safest to assume this is true.  

So, for the foreseeable future, we will be working under a dual system, some applications being judged under "first to invent", and others judged under "first to file". 

Other Provisions 

  • Satellite Offices: There are to be four satellite patent offices:
    • Detroit (Elijah McCoy - 300 River Place Drive) has been operating since July 2012
    • Denver (Byron G. Rogers Federal Office Building) is scheduled to open in July 2014
    • Dallas-Fort Worth (Terminal Annex Federal Building) was on hold pending settlement of the budget sequestration issues as of November 2013. 
    • Silicon Valley - (probably in the City Hall in San Jose, California) was operating out of temporary quarters in Menlo Park as of November 2013. 
  • "Prior commercial use" is added as a defense to infringement for all technologies, if the use was at least one year before effective date of application. There is an exemption for patents owned by universities or their tech transfer offices. 
  • Advice of Counsel: Provides that failure of an infringer to obtain advice of counsel cannot be used to prove willfulness or induced infringement.
  • Misc. Studies: The USPTO is directed to perform some studies, and to review fees. 

You can get a summary of the patent provisions from the USPTO, or if you really care, you can read all 152 pages of the Act here in PDF form (off-site link to the Patently-O site).   

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