Authored by William B. Raich, Ph.D.
On September 16, 2011, President Obama signed the Leahy-Smith America Invents Act ("AIA") into law with the stated goals of promoting innovation, improving patent quality, and streamlining application processing at the U.S. Patent and Trademark Office ("USPTO").1,2 The AIA represents the first comprehensive overhaul of the U.S. patent system since 1952, and changes fundamental patent law tenets including the scope of what constitutes prior art and how patents and patent applications can be challenged—both in court and at the USPTO.3 This article explores the new prior art provisions and offers strategic guidance in navigating these uncharted waters.
II. Prior Art Under the AIA
The United States long stood virtually alone among industrialized nations in using a "first-to-invent" system in which the right to a patent is granted to the first inventor. The first-to-invent system rewards the first inventor rather than the winner of a race to the patent office; however, determining the first inventor can be difficult and the administrative proceedings at the USPTO for determining priority of invention (called "interferences") can be costly and time-consuming.4 Most other jurisdictions use a "first-to-file" system, in which the right to a patent is awarded to the first person to file a patent application for an invention.
The AIA seeks to blend U.S. practice with that of other nations by establishing a "first-inventor-to-file" system.5 Under this first-inventor-to-file system, the "effective filing date" is paramount in determining whether an invention is patentable. The effective filing date is defined under amended 35 U.S.C. § 100(i)(1) as the earliest priority date for a claimed invention or the actual filing date if there is no priority claim to an earlier application.6 Priority dates can come either from parent applications in the U.S. or from earlier-filed corresponding applications filed abroad.7 However, the AIA's first-inventor-to-file system also provides inventors with the benefit of a one-year grace period intended to encourage early disclosure of new inventions.8 Notably, the shift to a first-inventor-to-file system means that patent applicants can no longer use earlier inventive work to antedate earlier-filed applications by another.
To effect these changes, the AIA rewrites 35 U.S.C. § 102, which defines what is prior art.9 Before the AIA, § 102 defined some types of prior art as related to the application filing date and some related to the date of invention. New § 102 eliminates this distinction, instead defining prior art exclusively in terms of the effective filing date. Specifically, § 102(a) recites that a person shall be entitled to a patent unless:
(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective date of the claimed invention; or
(2) the claimed invention was described in [an issued U.S. patent], or in [a published U.S. patent application or a published PCT application designating the U.S.], in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.10
Standing alone, § 102(a) would establish a strict first-to-file system. However, new § 102(b) provides limited exceptions that establish a one-year grace period for certain activities by the inventor.11 In particular, § 102(b)(1) exempts from § 102(a)(1) any disclosure from an inventor, a joint inventor, or another who obtained the disclosed subject matter from the inventor or joint inventor—provided such disclosure occurs within one year before a claim's effective filing date. Similarly, § 102(b)(2) exempts from § 102(a)(2) disclosures appearing in published applications and patents if: the subject matter was obtained from the inventor or a joint inventor; the subject matter had been publicly disclosed by the inventor, joint inventor, or another who obtained the disclosed subject matter from the inventor or joint inventor, before the effective filing date of the published application or patent; or the subject matter disclosed in the published application or patent and the claimed invention were owned by or subject to an obligation of assignment to the same person, not later than the effective filing date of the claimed invention.12
The AIA also revises 35 U.S.C. § 103, the obviousness section of the patent statute, to change the date on which to assess the obviousness of an invention from "the time the invention was made" to "before the effective filing date of the claimed invention."13
The rewriting of §§ 102 and 103 generally expands the scope of available prior art that can be used to reject patent applications and invalidate patents. Under the old statute, an offer for sale, sale, or public use in a foreign country, unlike those in the U.S., could not be used as prior art unless it appeared in a publication, patent, or patent application. New § 102(a)(1) abolishes this distinction by removing geographic limitations from what constitutes prior art. As stated in the relevant House Report:
Prior art will . . . typically include all art that publicly exists prior to the filing date, other than disclosures by the inventor within 1 year of filing. Prior art also will no longer have any geographic limitations.14
The AIA also expands the scope of available prior art by abolishing the so-called Hilmer doctrine, in which the foreign priority date of a U.S. patent could not be used as prior art under § 102(e).15 The Hilmer doctrine disadvantaged non-U.S. inventors who filed an application in their home country prior to filing in the U.S. under the Paris Convention, because the foreign application was not effective prior art against any other U.S. application under § 102(e) as it was not "filed in the U.S." New § 102(d) eliminates this distinction by providing that a published application or patent is "effectively filed" for the purposes of § 102(a)(2) on the date of actual filing in the U.S. or the date that an application under §§ 119, 365(a), or 365(b) was filed.16
Prior art under new § 102(a)(2) is broader in at least two respects than current practice under the European Patent Convention ("EPC"). Under § 102(a)(2), prior art patents and published applications can be used for both novelty and obviousness analyses. Published PCT applications fall within the scope of § 102(a)(2) provided that the U.S. has been designated, irrespective of whether or not the application has validly entered the U.S. national phase. In Europe the prior art under Article 54(3) EPC is available only if the application has validly entered the EPO regional phase, and then for novelty purposes only.
A fascinating and unresolved question is the treatment of private offers-for-sale and sales under the AIA. Under established precedent, offers-for-sale and sales in the U.S. need not be public to invalidate a claim under 35 U.S.C. § 102(b), even if kept secret until after the critical date.17 However, new § 102(a)(1) states that a person shall be entitled to a patent unless the claimed invention was "in public use, on sale, or otherwise available to the public."18 If "available to the public" is read to modify "on sale," then private sales and offer-for-sales may no longer be construed as prior art. Nevertheless, until the courts clarify this legal question, the prudent course of action is to assume that private sales and offers-for-sale will continue to have prior art effect, particularly those occurring in the United States.
B. Determining Which Law to Apply
The first-inventor-to-file provisions, including the revised prior art provisions, take effect on March 16, 2013.19 Thereafter, the new laws apply to any application or patent that contains or contained at any time "a claim to a claimed invention" having an effective filing date on or after March 16, 2013, as well as any application or patent claiming the benefit of an application that contains or contained at any time such a claim.20 Thus, existing U.S. law will continue to apply to applications effectively filed before March 16, 2013. In contrast, the new laws will apply to applications having even a single claim with an effective filing date on or after March 16, 2013, even if that claim is later cancelled.
Consequently, U.S. patent practitioners and courts will have to deal with two prior art systems for several years during the transition to a first-inventor-to-file system. For example, if both the priority date and the U.S. filing date (i.e., the filing date of a nonprovisional U.S. application or the filing date of a PCT application designating the U.S.) occur before March 16, 2013, the existing first-to-invent law will apply. Alternatively, if both the priority date and the U.S. filing date occur on or after March 16, 2013, the first-inventor-to-file law will apply.
Moreover, the situation will be more complex if the earliest possible priority date is before March 16, 2013 and the U.S. filing date occurs on or after March 16, 2013. If all claims in the later-filed U.S. application are entitled to the priority date, then the effective filing date will be before March 16, 2013 and the existing first-to-invent law will apply. If no claims in the later-filed U.S. application are entitled to the priority date, then the effective filing date will be after March 16, 2013 and the first-inventor-to-file law will apply. If at least one claim in the later-filed U.S. application is not entitled to the priority date, however, then the entire application will be subject to the first-inventor-to-file law, even if that claim or claims are later cancelled.
Even if all claims presented in a U.S. application filed on or after March 16, 2013 are identical to claims presented in a priority application filed before March 16, 2013, the U.S. application could be subject to the first-inventor-to-file law. To be entitled to a priority date as its effective U.S. filing date, the priority application must comply with the written description and enablement requirements of 35 U.S.C § 112, first paragraph. Generic language in an application does not automatically satisfy the written description requirement.21
Consider the following example. An applicant files a priority application on April 1, 2012, disclosing a limited number of new chemical compound species and claiming a broad genus of chemical compounds encompassing the disclosed species. During the priority year, research continues and on March 30, 2013, a U.S. application is filed which adds additional species within the genus claimed in the priority application. If the number of species disclosed in the priority application is insufficient to describe the broad genus claim, then the effective filing date of the genus claim would be March 30, 2013—and the entire application would be subject to the new first-inventor-to-file law.
Crossing the Rubicon into the new first-inventor-to-file law carries with it at least two significant consequences. First, as discussed above, the scope of available prior art expands substantially. Second, a patent granted on a first-inventor-to-file application can be challenged through post-grant review ("PGR") in the USPTO. PGR is a new, opposition-like proceeding which will enable a third-party petitioner to challenge a granted U.S. patent directly before the USPTO Patent Trial and Appeal Board.22 The petitioner in a PGR may request cancellation of one or more patent claims on any ground that could be raised as an invalidity defense in U.S. patent litigation.23
III. Strategic Considerations
A. File Early and Purposefully
To prevent U.S. applications with a first priority date on or after March 16, 2012 from inadvertently becoming subject to the first-inventor-to file law, file any U.S. or PCT application containing added subject matter before March 16, 2013. If filing the U.S. or PCT application prior to March 16, 2013 would unacceptably shorten the potential U.S. patent term, then file a second priority application directed to the additional subject matter just prior to March 16, 2013 to secure an early priority date for as much subject matter as possible. In a situation in which there is clear support for a narrow but commercially significant invention in a priority application filed on or after March 16, 2012 and subject matter will be added to a PCT application filed on or after March 16, 2013, consider filing a U.S. nonprovisional application at the end of the priority year directed only to the subject matter of the priority application. Filing of such a parallel U.S. application can avoid the negative consequences of presenting claims in the PCT application which are later determined to have an effective filing date on or after March 16, 2013.
Finally, in crowded or fast-following technologies, a "one and done" priority application filing strategy is unlikely to be the most effective under the first-inventor-to-file law. Applicants should consider filing multiple priority applications throughout the priority year, as R&D efforts deliver results, to provide the earliest effective filing date and earliest effective prior art date for a later U.S. patent or U.S. or PCT application.
B. Create Effective Prior Art
Under the first-inventor-to-file law, U.S. patents and published U.S. applications, including PCT applications designating the U.S., will be available as prior art as of their effective filing dates.24 This means that subject matter of priority applications filed today, in any country, in any language, may be available as prior art under the first-inventor-to-file law for both novelty and obviousness purposes. The new law does not recognize the concept of "accidental anticipation" inherent in EPC Article 54(3) and a U.S. applicant will most likely not be able to overcome an earlier-filed, later published U.S. patent or application by filing a technical disclaimer of the overlapping subject matter. Applicants should therefore consider filing priority applications as early as possible to create prior art and should also consider filing a series of priority documents for defensive purposes and to protect ongoing R&D efforts.
C. Review Employee Assignment Obligations
New § 102(b)(2)(C) exempts from the prior art disclosures appearing in earlier-filed, later-published U.S. patents and applications if the subject matter disclosed and the claimed invention were owned by the same person or subject to an obligation of assignment to the same person, not later than the effective filing date of the claimed invention.25 Many organizations have employees in multiple countries, employed by different legal entities, or assign patent ownership to different legal entities in different countries. Such organizations should take steps to ensure that there is at least an obligation to assign a later-filed priority application, no later than the priority filing date, to the same legal entity that owns an earlier-filed U.S. patent or application. A European parent company and a U.S. subsidiary may not be considered the "same person" for purposes of §102(b)(2)(C).
D. Stop or Modify Outdated Practices When Appropriate
Many organizations have established filing strategies or internal practices to address the vagaries of current U.S. patent law. For example, in some industries it is common practice to file a U.S. provisional application at the same time as a foreign priority application to create prior art under current § 102(e). With the elimination of the Hilmer doctrine by the AIA, this practice will no longer be necessary as of March 16, 2013, because a foreign priority document will be prior art as of its filing date.
The transition to first-inventor-to-file and the attendant changes in the prior art provisions under the AIA represent a sea-change in U.S. patent law. Given the breadth of the statutory changes and the uncertainty of how the USPTO and courts will interpret and apply the AIA, practitioners need to diligently follow future developments and adapt their strategies to meet this dramatically altered patent landscape.
You can find more information on the America Invents Act on Finnegan's website at www.finnegan.com.
1 Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (to be codified as amended in 35 U.S.C. § 100 et. seq.) [hereinafter AIA].
2 Remarks by the President at Signing of the America Invents Act, 2011 WL 4842596, at *2 (Sep. 16, 2011).
3 Act of July 19, 1952, ch. 950, 66 Stat. 792, (codified as 35 U.S.C. § 100 et seq.).
4 H.R. REP. NO. 112-98, at 40-41 (2011).
5 Id. at 42.
6 AIA, § 3(b).
7 Id. (citing §§ 119, 365(a), and 365(b) to define foreign applications and §§ 120 and 121 to define U.S. applications affording earlier filing dates).
8 H.R. REP. NO. 112-98, at 42.
10 AIA § 3(b). Additionally, new 35 U.S.C. § 102(d) defines the effective filing date of a prior art patent or patent application under § 102(a)(2) as the earlier of (1) the actual filing date of the patent or application for patent containing the relevant subject matter or (2) the filing date of the earliest application that meets the requirements of 35 U.S.C. §§ 119-121 or 365. Notably, under the new law, there is no requirement for a U.S. filing date and no distinction based on language. Id.
12 Id. New § 102(c) defines common ownership.
13 Id. § 3(c).
14 H.R. REP. NO. 112-98, at 42-43.
15 In re Hilmer, 359 F.2d 859, 879 (C.C.P.A. 1966).
16 35 U.S.C. § 119 states in pertinent part that "[a]n application for patent for an invention filed in this country by any person who has . . . previously regularly filed an application for a patent for the same invention in a foreign country which affords similar privileges in the case of applications filed in the United States or to citizens of the United States, or in a WTO member country, shall have the same effect as the same application would have if filed in this country on the date on which the application for patent for the same invention was first filed in such foreign country, if the application in this country is filed within twelve months from the earliest date on which such foreign application was filed."
17 In re Caveney, 761 F.2d 671, 675-76 (Fed. Cir. 1985).
18 AIA, § 3(b) (emphasis added).
19 Id. § 3(n)(1).
21 Ariad Pharm., Inc. v. Eli Lilly and Co., 598 F.3d 1336, 1349 (Fed. Cir. 2010) (en banc).
22 AIA, § 6(d) (new 35 U.S.C. § 321(a)).
23 Id. (new 35 U.S.C. § 321(b)); see generally Anthony C. Tridico et al., "Post-Grant Review v. EPO Oppositions," LAW360, October 20, 2011, http://www.finnegan.com/resources/articles/articlesdetail.aspx?news=5421457e-2019-497a-9e78-35bf4b646071.
24 AIA § 3(b) (new 35 U.S.C. § 102(a)(2)).
25 Id. (new 35 U.S.C. § 102(b)(2)(C)).
Originally printed in CIPA Journal. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.