KEY POINTS ABOUT THE NEW PATENT REFORM LAW PROF. PAUL JANICKE UNIVERSITY OF HOUSTON LAW CENTER...

KEY POINTS ABOUT THE NEW PATENT REFORM LAW

PROF. PAUL JANICKEUNIVERSITY OF HOUSTON LAW CENTER

OCTOBER 2011

2011 2

1. WE ARE NOT GOING TO A “FIRST TO FILE” SYSTEM

• THE SENATE FLOOR REMARKS AND THE HOUSE REPORT MAKE CLEAR THAT THE RULE WILL BE:

• IN A CONTEST BETWEEN INDEPENDENT INVENTORS, THE VALID CLAIM WILL GO TO THE FIRST TO PUBLICLY DISCLOSE

2011 3

• FIRST-TO-FILE IS THE DEFAULT RULE

– TWO ENTITIES VYING FOR SAME PATENT COVERAGE WILL LIKELY CONTINUE TO BE A FAIRLY RARE HAPPENING

• CALLING THE STATUTE THIS WAY IS ODD

– RULE: WHERE NO ONE HAS PUBLICLY DISCLOSED AND BOTH HAVE FILED CLAIMING ≈ SAME SUBJECT MATTER, THE FIRST TO FILE WINS

2011 4

EXAMPLE

• JANUARY A INVENTS• FEBRUARY B INVENTS• MARCH B PUBLICLY USES• APRIL A FILES• MAY B FILES

• B WINS, EVEN THOUGH A WAS FIRST TO INVENT AND FIRST TO FILE

• A IS BARRED BY THE PUBLIC USE• B IS SAVED BY HIS “GRACE PERIOD”

2011 5

2. MOST ONE-YEAR CLOCKS FOR TIME BARS WILL BE ABOLISHED

• OFFERS FOR SALE AND PUBLIC USES WILL NOW BE WORLD-WIDE

• AND THEY INSTANTLY BAR ANYONE WHO IS NOT ALREADY ON FILE SOMEWHERE (PRIORITY DATE) OR IN A GRACE PERIOD

2011 6

SO-CALLED GRACE PERIOD ONLY FOR FIRST-INVENTOR-TO-PUBLISH

• WHERE AN INVENTOR’S OWN WORK TRIGGERED THE BAR, DIRECTLY OR THROUGH AN INTERMEDIARY:

– HE GETS A ONE-YEAR PERIOD IN WHICH TO FILE, IF NOTHING ELSE HAPPENS

– A PARIS CONVENTION FILING WILL BE OK TO AVOID THE BAR

>

2011 7

BOTTOM LINE

• THE SYSTEM SHOULD BE NAMED “INSTANT BAR SYSTEM, WITH NARROW GRACE PERIOD” RATHER THAN “FIRST TO . . . ”

• THE ONLY WAY TO PROTECT AGAINST 3RD PARTY PUBLIC DISCLOSURES IS TO FILE OR PUBLICLY DISCLOSE BEFORE THEY HAPPEN

2011 8

DANGER: TARDY APPLICATION DRAFTING

• LAWYERS: MUST TAKE ACCOUNT OF POTENTIAL INSTANT BAR BY 3RD PARTY WHEN COMMISSIONED TO FILE AN APPLICATION

• THE CLIENT CAN BE BARRED IF AN INDEPENDENT PARTY PUBLISHES TOMORROW!

2011 9

• CLIENTS SHOULD BE WARNED

• LAWYERS SHOULD BE AS PROMPT AS FEASIBLE

2011 10

3. “INVENTION DATE” IS HERE TO STAY FOR QUITE SOME TIME

• THE PHASE-IN OF “NEW” PRIOR ART PROVISIONS IS PAINFULLY SLOW

• NEW APPLICATIONS FILED AFTER 3/16/13, WITH NO EARLIER PRIORITY CLAIM, ARE UNDER “NEW” PRIOR ART

• BUT >

2011 11

• ALL NOW-EXISTING PATENTS• ALL APPLICATIONS NOW PENDING– AND PATENTS ISSUING THEREON

• ALL APPLICATIONS FILED UP TO 3/16/13– AND PATENTS ISSUING THEREON

• ALL LATER APPLICATIONS, IF THEY CLAIM EARLIER PRIORITY– AND PATENTS ISSUING THEREON

• ARE UNDER THE OLD NOVELTY LAW! >

2011 12

• RESULT:

–WE SHOULD EXPECT TO SEE LITIGATION DEFENSE OF EARLIER INVENTORSHIP BEING ADJUDICATED UNTIL ABOUT 2025; MAYBE LONGER

–WE SHOULD NOT SAY INTERFERENCES HAVE BEEN ABOLISHED, OR ARE EVEN OBSOLESCENT, UNTIL AT LEAST 2020

>

2011 13

• BEST MODE, HOWEVER, IS RETROACTIVELY PURGED FOR EXISTING PATENTS

• ALL “PROCEEDINGS” COMMENCED AFTER 9/16/11 HAVE NO BEST MODE DEFENSE

2011 14

4. BEST MODE CAN NOW BE CONCEALED?

• EVEN DELIBERATELY

• § 15 OF THE BILL:

– “. . . EXCEPT THAT THE FAILURE TO DISCLOSE THE BEST MODE SHALL NOT BE A BASIS ON WHICH ANY CLAIM OF A PATENT MAY BE . . . HELD INVALID OR OTHERWISE UNENFORCEABLE”

>

2011 15

• NO LOSS OF PRIORITY EITHER

–AMENDED 119, 120 NOW HAVE SPECIFIC EXCEPTION FOR BEST MODE OMISSION

• SEEMS TO BE NO PENALTY FOR HIDING IT

• A BOON TO FOREIGN ORIGINATORS

>

2011 16

• MYSTERY: WHY DID CONGRESS KEEP BEST MODE IN

§ 112?

• DOES IT HAVE SOME LINGERING EFFECT?

• PTO HAS INDICATED AN INTENTION TO CONTINUE TO ENFORCE IT (SOMEHOW)

2011 17

5. DERIVED INFORMATION IS NOT PRIOR ART

• INVENTOR’S STATEMENT NEW 35 U.S.C. §

115(b) MUST ASSERT BELIEF OF ORIGINALITY

• BUT: A LITTLE CHANGE MAY GO A LONG WAY– SLIGHT VARIATION FROM THE DERIVED

INFO WOULD SEEM TO BE OK– DERIVED INFO IS NOT PRIOR ART >

2011 18

• “PRIOR ART” WAS NEVER DEFINED IN THE 1952 ACT

• IT APPEARED ONLY IN § 103

• NOW, IT APPEARS IN THE HEADING OF NEW § 102(a): “NOVELTY; PRIOR ART”

• SO, PARTIAL DERIVATION SHOULD HAVE NO EFFECT ON OBVIOUSNESS

2011 19

• CONGRESSIONAL APPROACH TO DERIVED INFO: – NEW 35 U.S.C. § 291: “DERIVED

PATENTS”– APPLIES ONLY WHERE THE ORIGINATOR

SEEKS A PATENT AT SOME POINT

• IF ORIGINATOR DOESN’T CARE TO FILE, THE MAINLY DERIVED CLAIMS APPEAR TO BE VALID

2011 20

6. PENITENCE“SUPPLEMENTAL EXAMINATION,” § 10 OF H.R. 1249,

NEW 35 U.S.C. § 257(c)

• INEQUITABLE CONDUCT CAN NOW BE CURED BY A POST-GRANT CLEANSING PROCEDURE

• ANY WITHHELD INFORMATION CAN BE BROUGHT FORWARD TO PTO

• IF CLAIMS ARE RE-ALLOWED, THIS INFO IS BLOCKED IN COURT

2011 21

CONDITIONS FOR CLEANSING

• CANNOT COMMENCE OR CONTINUE SUPPLEMENTAL EXAM IF PATENTEE HAS BROUGHT A PENDING INFRINGEMENT ACTION– FILING OF SUIT TERMINATES THE

SUPPLEMENTAL PROCEEDING

• CANNOT COMMENCE SUPPLEMENTAL EXAM IF A D.J. SUIT IS PENDING AND THE CHALLENGER HAS PLEADED INEQ. CONDUCT “WITH PARTICULARITY”

2011 22

7. DECEPTIVE INTENT DISAPPEARS

• “WITHOUT DECEPTIVE INTENTION” HAS BEEN DELETED FROM THE STATUTE (ALL 7 OCCURRENCES)– CHANGE OF INVENTORSHIP (§§ 116, 256)– ERROR IN REISSUE (§ 251)– FILING A DISCLAIMER (§ 253)– SUING ON A PATENT CONTAINING AN

INVALID CLAIM (§ 288)– FOREIGN FILING WITHOUT A LICENSE (§§

184, 185) >

2011 23

WHY?• PROBABLY:

– TOO MANY MENTAL STATES FOR A MODERN COMMERCIAL STATUTE

– NEED TO STREAMLINE PATENT LITIGATION

• COULD ALSO BE: HARMONIZATION ATTEMPT

2011 24

8. PUBLIC SUBMISSION OF PRIOR ART AND OTHER INFO

• WE HAVE LONG HAD 35 USC § 301: – ANY PERSON, AT ANY TIME, CAN SEND

IN PRIOR PATENTS OR PUBLICATIONS FOR CONSIDERATION RE. SOMEONE ELSE’S ISSUED PATENT

– IF EXPLANATION IS GIVEN, WILL BE PLACED IN THE FILE

• AMENDED § 301 ADDS A WRINKLE THAT COULD BE IMPORTANT >

2011 25

• A PERSON CAN NOW SUBMIT CLAIM-SCOPE POSITION STATEMENTS PREVIOUSLY MADE BY PATENTEE– THESE CAN BE USED FOR PURPOSES OF

CONSTRUING A CLAIM IN• AN INTER PARTES REVIEW [LATE TYPE]• A POST-GRANT REVIEW [EARLY TYPE]• A REEXAM

• CAVEAT PATENTEE: BROAD CLAIM- SCOPE ASSERTIONS CAN BITE!

2011 26

AND WILL NOW BE ALLOWED TO ATTACK PENDING

APPLICATIONS AS WELLH.R. 1249 §8, ADDING 35 U.S.C. §122(e)

• SUBMISSIONS OF PRIOR PATENTS AND PUBLICATIONS

• SOME TIME CONSTRAINTS:1. BEFORE NOTICE OF ALLOWANCE2. OTHER LIMITS BASED ON APPL. PUBLICATION

DATE OR CLAIM REJECTION >

2011 27

• THE STATUTE SAYS THESE SUBMISSIONS ARE “FOR CONSIDERATION AND INCLUSION IN THE OFFICIAL RECORD”

• EXPLANATIONS ARE REQUIRED

• THEORETICALLY, THESE ARE NOT OPPOSITION PROCEEDINGS– PRE-GRANT OPPOSITIONS ARE STILL

PROHIBITED BY 35 U.S.C. §122(c)

2011 28

9. NEW DANGER: UNSUPPORTED CLAIMS

• NEW § 102 (STRICT) vs. OLD § 102 (EASIER)

• IN A CHAIN OF APPLICATIONS THAT STRADDLES 3/16/13, INSERTION OF ANY CLAIM THAT IS NOT ENTITLED TO PRIORITY:–MAY BE UNPATENTABLE UNDER § 112,

OF COURSE– ALSO PUTS ALL CLAIMS UNDER THE

NEW, MORE STRINGENT LAW

2011 29

10. SUBMARINE PRIOR ART

• WE WORRIED ABOUT SUBMARINE PATENTS– STILL A PROBLEM, ALTHOUGH LESS

WITH 20-YEAR EXPIRATION

2011 30

• NOW WE HAVE SECRET RETROACTIVE PRIOR ART, EXTENDED:– PUBLISHED APPLICATION OR PATENT OF

ANOTHER IS RETROACTIVE PRIOR ART– AND IT IS EFFECTIVE NOW GOING TO BE

AS OF ITS FOREIGN PRIORITY DATE (MORE ON THIS LATER)

– YOU CAN’T FIND IT IN A SEARCH, UNTIL RELATIVELY LATE

2011 31

THINGS IN THE REFORM LEGISLATION THAT HAVE BEEN TALKED ABOUT IN THE PRESS

2011 32

ASSIGNEE FILING (FINALLY)

• BUT INVENTOR’S “STATEMENT” STILL NEEDED

– RISKY TO ASSUME THERE IS AN OBLIGATION TO ASSIGN

– HARDLY WORTH IT

2011 33

PRIOR USER RIGHTS

• ARE NOW EXPANDED, FROM BUSINESS METHODS TO ALL KINDS OF PATENTS

• MIGHT BE NEEDED FOR SECRET METHODS IN FACTORIES– CURRENTLY THESE COULD BE

ENJOINED BY A LATER PATENTEE

2011 34

POST-GRANT REVIEW

• MUST FILE WITHIN 9 MONTHS OF ISSUE

• ANY GROUND OF INVALIDITY, E.G.:– INDEFINITENESS– INELIGIBLE SUBJECT MATTER– ENABLEMENT–WRITTEN DESCRIPTION

>

2011 35

• 3-JUDGE DECISION– DISCOVERY MIGHT BE ALLOWED– PROTECTIVE ORDERS MIGHT BE

FOUGHT OVER– PRIVILEGE ISSUES WILL ARISE– 18-MONTH TIME FUSE

• BROAD PRECLUSIVE EFFECT – ANY GROUND THAT WAS “RAISED OR REASONABLY COULD HAVE BEEN RAISED” >

2011 36

• COULD BE VERY EXPENSIVE

• SMALL AND MIDSIZE PATENTEES WILL BE HARD-PRESSED

• MAY HAVE TO ISSUE CHEAP LICENSE TO SETTLE

2011 37

INTER PARTES REVIEW

– CAN BE FILED ONLY AFTER 9 MONTHS FROM GRANT

– GROUNDS: PATENTS AND PRINTED PUBLICATIONS ONLY

– AGAIN, A 3-JUDGE DECISION– BROAD PRECLUSIVE EFFECT RE. ITEMS

THAT WERE OR COULD HAVE BEEN RAISED (PATENTS AND PRINTED PUBLICATIONS)

2011 38

COSTS FOR EITHER FORM OF POST-GRANT PROCEEDING

–WILL DEPEND HEAVILY ON DIRECTOR KAPPOS’S REGULATIONS

– THESE ARE DUE BY SEPTEMBER 2012

– THE PROCEEDINGS BEGIN THEN

2011 39

A FEW ADMINISTRATIVE PROBLEMS

• CURRENTLY PTO HAS 102 ADMINISTRATIVE PATENT JUDGES

• BACKLOG: 24,000 APPEALS [ABOUT 240 PER JUDGE]

• ADDING POST-GRANT REVIEWS WILL BE A BURDEN

• LOOKING FOR 100 MORE JUDGESPROBABLE BUDGET: MINUS 10% >

2011 40

• DON’T BE FOOLED BY THE “FUNDS CAN BE USED ONLY FOR” LANGUAGE

• PRESENT STATUTE HAS THIS AS WELL [35 U.S.C. § 42]

• THE WAY IT WORKS:– FREEZE PTO APPROPRIATIONS– SPEND $$ ELSEWHERE– TREASURY’S DEFICIT IS UNCHANGED

2011 41

QUI TAM ACTIONS FOR MISMARKING ABOLISHED

“QUI TAM PRO DOMINO REGE . . .”

• NEW LAW: ONLY U.S. CAN SUE IN GENERAL

• A DAMAGED PRIVATE ENTITY CAN SUE FOR THE AMOUNT OF HARM CAUSED– HIGHLY UNLIKELY

• AND NO ONE CAN SUE FOR MISMARKING WITH AN EXPIRED PATENT NUMBER

2011 42

TAX STRATEGY PATENTS ABOLISHED

• “DEEMED TO BE WITHIN THE PRIOR ART” [BILL § 14]

• MYSTERY: WHY NOT AMEND § 101?

• REJECTIONS WILL NOW BE UNDER §102??

2011 43

“HUMAN ORGANISMS” ARE NONSTATUTORY

• BUT WHAT IS EMBRACED IN THAT TERM?– CELL LINES?– STEM CELLS?– TISSUE SAMPLES?

• LEGISLATIVE HISTORY REFERS TO REP. WELDON’S AMENDMENT

• AIMED AT EMBRYOS

2011 44

TWO MINDS NEEDED!

• FOR THE NEXT 15 YEARS OR SO, WE WILL BE LITIGATING PATENTS UNDER THE OLD NOVELTY RULES– ALL FILINGS UP TO MARCH 2013, AND

THE PATENTS ISSUING ON THEM

• AND PROSECUTING UNDER THE NEW ONES

>

2011 45

• FILING ANY CLAIM AFTER 3/16/13 THAT LACKS AN EARLIER PRIORITY DATE– PUTS ALL THE CLAIMS UNDER AT LEAST

THE NEW LAW– IF SOME CLAIMS ARE ENTITLED TO PRE-

3/16/13 DATE, A HYBRID TYPE OF PRIOR ART APPLIES TO ALL THE CLAIMS: NEW LAW + OLD 102(g)

2011 46

SPECIAL TREATMENT FOR SOME BUSINESS METHODS

• SPECIAL PROCEDURE FOR CHALLENGING ALREADY-ISSUED PATENTS AND FUTURE PATENTS

• APPLICABLE ONLY TO FINANCIAL-SERVICE METHODS

>

2011 47

• SPECIAL KINDS OF PRIOR ART ARE RETAINED

• RETROACTIVITY IS PROBLEMATIC

• HOW TO EXAMINE APPLICATIONS?– THE STATUTE REFERS ONLY TO POST-

GRANT REVIEWS OF THESE PATENTS!

2011 48

AU REVOIR TO HILMER

• PATENTS AND PUBLISHED APPLICATIONS NOW EFFECTIVE AS PRIOR ART AS OF THEIR FOREIGN FILING DATES

• ON THE PLUS SIDE: FOR THAT APPLICANT, FOREIGN FILING PREVENTS ALL BARS [CF. OLD § 119]

2011 49

ADVISING CLIENTS

• FILE EARLY, AS NOW

• INCLUDE THE BEST MODE, UNTIL THE SITUATION CLARIFIES

• CONSIDER INVITING PREISSUANCE PRIOR ART SUBMISSIONS BY YOUR COMPETITORS

2011 50

• BEFORE SUING FOR INFRINGEMENT:

– SCOUR THE FILES, U.S. AND FOREIGN, AND CORPORATE RECORDS FOR OMITTED PRIOR ART

– INTERVIEW INVENTORS RE. POSSIBLE UNDISCLOSED PRIOR ART

– SCOUR THE FILE HISTORY FOR POSSIBLE MISSTATEMENTS

– USE SUPPLEMENTAL EXAMINATION IF NEEDED

2011 51

IF YOU ARE A POTENTIAL INFRINGEMENT TARGET

• MONITOR PUBLISHED APPLICATIONS FOR POTENTIAL TROUBLE– CONSIDER PREISSUANCE ART

SUBMISSIONS

• CONSIDER PROS AND CONS OF POST-GRANT PROCEEDINGS

2011 52

OVERALL ASSESSMENT OF THE NEW LAW

• PATENT PROSECUTION AND KEEPING A PATENT–MORE EXPENSIVE–MORE DANGEROUS– NOT STREAMLINED

• HELPFUL TO FOREIGN ORIGINATORS– NO BEST MODE NEEDED (MAYBE)– FOREIGN PRIORITY IS NOW COMPLETE– ALL BARS ARE NOW WORLDWIDE

2011 53

• ON THE LITIGATION FRONT: SOME STREAMLINING– ABOLITION OF PRIOR INVENTOR

DEFENSE– ABOLITION OF BEST MODE– ABOLITION OF QUI TAM– TIGHTENING OF WILLFULNESS

ARGUMENTS

2011 54

• MORE JOBS CREATED?

– CERTAINLY FOR LAWYERS

– UNLIKELY FOR ANYONE ELSE