July 5, 2018
Law360
By Barbara Clarke McCurdy; Jill K. MacAlpine, Ph.D.; Amanda K. Murphy, Ph.D.; Thomas L. Irving
Before the American Invents Act, the U.S. had a "first-to-invent" patent system. That system included provisions for resolving disputes concerning who was the first to invent, called "interferences," and took place both before the USPTO and the courts (pre-AIA §135 and §291). Interferences between parties who collaborated or otherwise shared communications often involved issues of first-to-invent, i.e., priority and derivation. Priority and derivation are alternative theories, however, as one who derives an invention is neither a first nor a second inventor; he is a noninventor. Derivation has been a recognized issue in interferences, as well as a ground for invalidating a patent in court or rejecting a claim during prosecution (pre-AIA §102(f)).1
The AIA maintained the focus on the inventor as it transformed the U.S. patent system from "first-to-invent" to "first-inventor-to-file." Congress sought to preserve the requirement that the first to file a patent application actually invented the subject matter, rather than derived it from another. The U.S. patent statute requires that a patent application identify the true and original inventor or inventors.2 Even with the possibility under the AIA of an assignee filing an application, the inventor(s) must be named on the face of the U.S. patent application. Thus, "first-inventor-to-file" is a more precise phrase to describe the post-AIA U.S. patent system than "first-to-file."
Under the AIA, inventorship is central to determining compliance with §112(b), priority assertions, antedating references, eligibility for prior art exceptions, double patenting, eligibility for common ownership benefits, and derivation. In this article, we will take a close look at derivation. The AIA derivation proceeding recognizes the importance of a U.S. patent being awarded to a true inventor/innovator. An inventor may be the second to invent but the first to file, and will get a patent under the "first-inventor-to-file" system. But a party who does nothing but appropriate an invention from another is not entitled to a patent even if first to file.
The very first AIA derivation proceeding was instituted on March 21, 2018—more than five years after the AIA was enacted. Perhaps the most significant part of the AIA derivation proceeding is the ability of the USPTO to fashion remedies. The USPTO has the authority to change inventorship on any application or patent involved in the proceeding.3 The winner of the derivation contest could end up owning the losing party’s application or patent if the Patent Trial and Appeal Board determines that the invention claimed in the application or patent represents the sole invention of the winning party. Once the correct inventor is named, the winning party may well be entitled to claim the benefit of the filing date of the losing party’s application. And, as one can imagine, having such an earlier effective filing date can bolster patentability prospects. Remember, however, that the derivation proceeding is before the USPTO and the duty of disclosure fully applies.4 A victory may ring hollow if the patent obtained from a successful derivation proceeding is found unenforceable for inequitable conduct.
AIA SEC. 3(n)(1) and (n)(2), found only in the AIA statute and not codified in 35 U.S.C. provide the effective date for AIA derivation proceedings. For any U.S. patent/applications with all claims having an effective filing date after March 15, 2013, AIA law will apply. For patents/applications with at least one claim having an effective filing date before March 16, 2013, and at least one claim having an effective filing date after March 15, 2013, AIA law applies, along with pre-AIA 35 U.S.C. §§102(g), 135 and 291.
The AIA amended both 35 U.S.C. §§ 135 and 291 relating to derivation proceedings for resolving inventorship disputes administratively and judicially. Under AIA 35 U.S.C. §135, a derivation petition must "set forth with particularity the basis for finding that an individual named in an earlier application as the inventor or a joint inventor derived such invention from an individual named in the petitioner’s application as the inventor or a joint inventor and, without authorization, the earlier application claiming such invention was filed."5 The petition must be filed within one year of the earlier of the date on which the U.S. patent containing such claim was granted or the earlier U.S. application containing such a claim was published.6 If a derivation proceeding is instituted, the PTAB “shall determine whether an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner’s application and, without authorization, the earlier application claiming such in vention was filed."7
The USPTO issued new rules to implement the AIA derivation proceedings.8 37 C.F.R. §42.405 sets out the threshold showing required. In particular, the petition must
Endnotes
1 A person shall be entitled to a patent unless—(f) he did not himself invent the subject matter sought to be patented…
2 See, e.g., 35 U.S.C. §101 and §115.
3 See 35 U.S.C. §135(b).
4 37 C.F.R. §1.56.
5 35 U.S.C. §135(a)(1).
6 35 U.S.C. §135(a)(2).
7 35 U.S.C. §135(b).
8 37 C.F.R. PART 42 — TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD, Subpart E.
9 37 C.F.R. §42.405(b)(2).
10 37 C.F.R. §42.405(c).
11 Id.
12 37 C.F.R. §42.71(c).
13 On June 11, 2018.
14 DER2013-00001, DER2014-00002, DER2014-00005, DER2014-00006, DER2015-00003, DER2015-00005, DER2015-00009, DER2015-00011, DER2016-00001, DER2016-00002, DER2016-00003, DER2016-00021, DER2016-00022, DER2017-00007, DER2018-00008.
15 Interestingly, derivation recently arose in the context of a litigation. In Cumberland Pharm. Inc. v. Mylan Institutional LLC, 846 F.3d 1213 (Fed. Cir. 2017), Mylan asserted invalidity on, inter alia, "derivation of the claimed invention from someone at the FDA." However, the district court ruled that Mylan did not show anyone at FDA conceived of the claimed invention prior to the named inventor. The Federal Circuit affirmed, noting that the standard for conception in a derivation analysis is the same as for inventorship.
16 Andersen Corp. v. GED Integrated Solutions Inc., DER2017-00007, Paper 32 (P.T.A.B. March 21, 2018)
17 Id at 16.
18 Id. at 17.
19 Id. at 18.
20 Id. at 14.
21 Id. at 14.
22 Catapult Innovations Pty Ltd. v. adidas AG, DER2014-00002, Paper 19, at 18 (P.T.A.B. July 18, 2014). See also, Catapult Innovations Pty Ltd. v. adidas AG, DER2014-00005 and Catapult Innovations Pty Ltd. v. adidas AG, DER2014-00006.
23 Id. at 19
24 Id.
25 37 C.F.R. §42.405. There have been three derivation petition terminated prior to institution. In DER2015-00009, the parties settled prior to institution and the PTAB terminated the proceeding. In DER2015-00005, the petition was dismissed because both applications at issue were abandoned. In DER2015-00011, the petition was dismissed because the petitioner did not have a filed patent application.
Originally printed in Law360 on July 5, 2018. 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.
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