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IP Cases & Commentary – Details

America Invents Act - A European Perspective

Doug Ealey

On 16 September 2011, President Obama signed into effect the America Invents Act (AIA). Over the course of the next 18 months, this act will introduce sweeping changes to how US patent applications are examined and to how disputes can be handled in the USA. As European patent attorneys, and hence outside observers, we now look at one of the most significant changes from a European perspective.

As of 16 March 2013, the US will move from a first-to-invent (FTI) system to a first-inventor-to-file (FITF) system. As we discuss below, however, this change-over will be complex, and the FITF system introduces new differences that set it apart from both the original FTI system and the first-to-file (FTF) system found in Europe and the rest of the world.

Two US systems in parallel

The AIA provides that the new first-inventor-to-file system applies to all applications having an effective filing date on or after 16 March 2013. Hence, US applications filed after this date but claiming an earlier priority will still use the FTI system, resulting in a year’s overlap of first-filed US applications and those claiming priority in which each uses a different system. Moreover, new US continuation applications can be filed into the foreseeable future that could ultimately claim an effective filing date prior to 16 March 2013 (whereas continuation-in-part applications will use the new FITF system if they include any claim based on material added after 16 March 2013). As a consequence, we can expect prosecution under the FTI and FITF systems to run in parallel for many years to come.

A true first-to-file system?

Whilst the new FITF system is often referred to as an FTF system in US commentaries, as noted above it in fact contains a series of provisions that mean the outcome for a US patent application can be very different to that of a corresponding application in the rest of the world.

The FITF system is in effect created by the definition of citeable prior art found in the new sections §102 and §103 of the US patent act as modified by the AIA. The new §102(a)(1) provides a European-style system of absolute novelty for any public dissemination of prior art. Meanwhile, the new §102(a)(2) provides for the citation of US applications filed earlier and published later than an examined application, in a similar manner to European Article 54(3) (excepting that the USPTO can cite these documents for both novelty and inventive step).

Hence at first glance the FITF system appears to take a harmonising step towards the FTF system used in Europe and the rest of the world.

However, 35 USC §102 then introduces a series of exceptions to the definition of prior art that mean it is possible for an applicant – despite being both the first to invent and the first to file an application – to lose out to a competitor’s later patent application. These exceptions can mean that there is an incentive to publish an invention at the earliest opportunity before filing in the US, placing the new FITF system in direct conflict with the absolute novelty requirements of the European FTF system.

Exceptions to prior art

The exceptions to prior art are found in updated 35 USC §102(b)(1) and (2):

(b) EXCEPTIONS.

(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION.

A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if:

(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

(2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.

A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if:

(A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;

(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.

§102(b)(1)(A) embodies the existing 12-month grace period for disclosures by the inventor or by a third party obtaining the subject matter.

However, §102(b)(1)(B) introduces a new effect of such a disclosure – if an inventor directly or indirectly discloses their invention and then subsequently files an application within the ensuing 12-month grace period, then any independent disclosure of the subject matter of that invention (ie, by a third party) during the period between the publication and filing will not count as prior art.

A similar effect is provided by §102(b)(2)(B) for independent US patent applications; if these are filed in the period between an inventor’s public disclosure and subsequent filing in the grace period, then the corresponding subject matter in the independent application will not count as prior art.

To make sense of this, consider the example below:

  • Mr Able is the first to devise an invention and reduces it to practice.
  • Independently, Mr Baker later devises the same invention, and then publishes it.
  • Mr Able then files a US patent application, and subsequently publishes the invention.
  • Finally, within a year of his own publication, Mr Baker files a US patent application.

Under the FTF system found in Europe and the rest of the world, Mr Baker’s initial publication is fully citable prior art for both Mr Able and Mr Baker’s applications, and as a result neither would be granted a patent.

If evaluated under the existing US FTI system, Mr Able would be allowed to ‘swear behind’ Mr Baker’s publication to the earlier date at which he devised the invention and reduced it to practice, meaning that he would eventually get the patent.

However, if evaluated under the new US FITF system, Mr Able would not get the patent, despite being both the first to invent and the first to file. Instead, Mr Baker would get the patent.

This is because Mr Baker’s publication counts as fully citable prior art for Mr Able’s application under new §102(a)(1), whereas the publication does not count against Mr Baker’s own application due to the grace period of new §102(b)(1)(A). But in addition, Mr Able’s application does not count against Mr Baker’s application due to new §102(b)(2)(B), and similarly Mr Able’s publication also does not count against it due to new §102(b)(1)(B). As a result, Mr Baker’s application can proceed to grant.

This is a counter-intuitive outcome of the new system, but one that can be all-too-easily envisaged as happening in ‘hot’ technology areas where many competitors may be issuing press releases, product specifications, and beta-products during overlapping grace periods, and which will now interact with each other in a tangled web of prior publication exclusions that could make prosecution far more complex.

At the moment, however, we do not know how different publications and filings will interact with each other under these new laws, as this needs to be clarified under implementing regulations that the USPTO is still drafting.

Outstanding issues

One can speculate, however, on several issues that seem necessary for the USPTO to address.

The first is that in the above example, if Mr Able files his application before 16 March 2013 then it will be examined under the existing FTI system, whilst if Mr Baker then files his application on or after 16 March 2013 it will be examined under the new FITF system – and this means that in principle both applications to the same invention can validly proceed to grant under their respective systems of evaluation, as outlined above. It is unclear how this conflict can be resolved without retrospectively stripping one party of their property rights, which in turn may be unconstitutional under the Fifth Amendment. We are sure that the USPTO will issue guidance on this matter before 16 March 2012, after which applications that lead to such conflicts could be filed.

The next issue is that in reality it is highly unlikely that two publications will disclose exactly the same invention, or disclose it to the same enabling extent. To illustrate this using the above example, suppose that Mr Able had invented MPEG video encoding, but also thought of enhancement layers (extra layers of video data that can be selectively transmitted, allowing image quality to easily go up or down in response to the available quality of a transmission link). Meanwhile, Mr Baker independently invented MPEG video encoding only. Under the FITFsystem, the MPEG video encoding part of Mr Able’s subsequent publication is not prior art, but it would seem reasonable to suppose that the enhancement layers will be citable prior art as they are not part of the subject matter of Mr Baker’s publication.

However, wouldn’t the existence of citable prior art for MPEG enhancement layers make the invention by Mr Baker of MPEG itself obvious, even if Mr Able’s MPEG-only subject matter is discounted? In other words, since prior art can be cited for obviousness, how can one realistically expect to decontextualise the citable matter that remains after §102(b)(1)(B) or §102(b)(2)(B) are applied? This seems to be a difficult problem for the new system, and one for which the USPTO will need to provide clear guidance soon.

US-EU interactions

The final issue from a European perspective is the apparent lesson from the FITF system that the grace period will now become a saving-grace period, in which one’s own publications shelter you from intervening prior art. Consequently there is the concern that some US applicants might disclose their inventions as a precautionary step in US prosecution, only to later find that by doing so they have prevented themselves from obtaining effective protection under the first-to-file system used by the rest of the world.

The converse situation also has problems – applicants first-filing in Europe will naturally not disclose their inventions prior to filing, but as a result will not then be able to benefit from the effects of the new publication-based exclusions when they later file into the US, placing domestic US applicants at a significant competitive advantage over their European counterparts within the US patent system.

It will be fascinating to see how the new system unfolds, and when the USPTO issues more guidance and implementing regulations we will be sure to re-visit this topic.

Useful links

Further information about the America Invents Act

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