Tag Archives: America Invents Act

“The Times They Are a-Changin’”

By Michael Zoller, Esq.
mzoller@pashmanstein.com

The system for obtaining a patent in the United States is in and of itself one giant machine.  The idea for protecting intellectual property dates all the way back to the writing of the Constitution and the first federal patent act was passed in 1790.  As time has passed and technology has evolved the need to update the “patent machine” has arisen.  Change, as one can expect, has generally been slow.  Until recently that is.  In the last three years the United States patent machine has undergone several significant changes.

The changes first started in September 2011 when President Obama signed into law the America Invents Act.  With all of the Acts provision in effect as of early 2013, President Obama continued to work on changes by sending seven proposals to Congress that intended to limit patent trolling.  At the same time, the President also announced five executive actions aimed at the same goal.  Now with its recent decisions in the companion cases of Highmark, Inc. v. Allcare Health Management Systems, Inc. and Octane Fitness, LLC v. Icon Health & Fitness, Inc., the Supreme Court has gotten in on the act as well.

In the cases, the Supreme Court took aim at patent trolls, by making it easier for them to be forced to put their money where their mouth is.  Patent trolls gum up the patent machine by hoarding patents they have no intention of utilizing just so they can file law suits when any new idea might in the slightest most tangential way have a hint of infringing on one of their patents.  The trolls then usually use the high cost of defending a suit to force a settlement.  One defense to this type of action is to award attorney’s fees to a successful defendant and section 285 of the patent statute has always authorized the awarding of such fees in “exceptional cases.”  The problem has been that the Federal Circuit has applied the “exceptional cases” language so rigidly that fees were rarely shifted.

In its Octane Fitness decision, the Supreme Court aims to loosen the reins.  Instead of the rigid test previously utilized, the Supreme Court has instructed that courts should determine whether a case is exceptional “in the case-by-case exercise of their discretion, considering the totality of the circumstances.”  Moreover, in its Highmark, Inc. decision, the Court declared that the District Court’s decision to shift fees should be reviewed utilizing the abuse of discretion standard.  The idea is that the Highmark, Inc. decision will make it harder for the rigid Federal Circuit to overturn fees that are awarded by the District Courts under the new Octane Fitness approach.  Now that patent trolls know that it should be easier for defendants to be awarded attorney’s fees for defending frivolous patent infringement lawsuits, the hope is that we will see fewer such suits and the “machine” will better able to deal with serious patent infringement actions.

Even with the Octane Fitness and Highmark, Inc. decisions, the Supreme Court may not yet be done in attempting to affect change on the patent machine.  On April 28th the Court heard oral argument in the case of Nautilus, Inc. v. Biosig Instruments, Inc.  At the heart of the case is a dispute over how much detail needs to be in a patent so that it is not “indefinite” and thus invalid.  If the Court rules in such a way as to raise the bar on the specificity required in a patent it could be a major strike to patent trolls because it would potentially make it harder for them to pursue litigation on a lot of the patents they currently hold.

Only time will tell what effect the Supreme Court’s recent and future decisions will have on the US patent machine.  But as Bob Dylan once sang, “The Times They Are a-Changin’” so stay tuned to find out what comes next.

“America Invents,” But Does It File?

By Michael Zoller, Esq.
mzoller@pashmanstein.com

The process to patent an invention in the United States can best be described as archaic.  Recent legislation that is now beginning to take effect looks to change the process (and hopefully improve it, but that remains to be seen).  On September 16, 2011, President Obama signed into the law the “America Invents Act.”  All of the Acts provisions became effective as of March 16, 2013.  The Act presents some big changes to US Patent Law that every inventor, or business that employees inventors, needs to be aware of.

The biggest change is that the Act changes the United States from a “first-to-invent” country to a “first-inventor-to-file” country.  Under the old system, when a person filed for a patent was not as important as being able to show that he was the true inventor of the material for which the patent was sought.  Now, under the new system, baring a few exceptions described below, the most important thing for establishing the right to a patent will be who was the first to file the application not who actually invented the material.

A second change to the system is an expansion in the definition of “prior art.”  Under the old system, prior art that caused the denial of a patent only came from the United States.  Under the new law, prior art can come from anywhere in the world.  An exception to the prior art that excludes a patent is a “disclosure.”  A disclosure, though not fully defined in the Act, is when the inventor reveals his invention to the public within a year prior to filing for a patent.  While this sounds very beneficial to the patent applicant, an applicant needs to be aware that a lot of countries do not have the disclosure grace period that the US system offers, so if a patent applicant makes a disclosure it might not affect his ability to obtain a patent in the US, but it could ruin his chance of obtaining a patent in other countries.

As mentioned above, even though the system is now a first-inventor-to-file system, the first person to file will not always be the one to retain the patent.  Once a patent is granted, there are three procedures whereby a person can challenge the patent to have it revoked from the filer.  Under the new derivation proceeding, within a year of a patent being granted, a fellow patent holder can challenge the newly patented invention as being derivative of his previously granted patent by showing that the new patent is the same or substantially similar to his previously granted patent.  If the person who brings the derivation proceeding is successful, the new patent will be transferred to the successful claimant.

If a person who does not have a patent of their own wants to challenge a newly granted patent, they can do so either via an inter partes review or a post grant review.  An inter partes review has to be brought within nine months of a patent being granted and a non-patent holder can challenge the new patent on the specific grounds of either the patent not being novel or consisting of non-obvious material.  If the challenger is successful, the patent will be canceled.  A post grant review also has to be brought within nine months of a patent being granted and in it, a non-patent holder can challenge a new patent on any ground related to patentability.  Again if the challenger is successful, the patent will be canceled.  Even though the US system is now a “first-inventor-to-file” system, all of these review procedures will stop a patent from remaining with a filer, regardless of him being the first to file.

These changes to the US patent system are intended to make the system clearer, speed up the process and bring it closer to conformity with the systems in other countries.  Whether these goals will be achieved remains to be seen, but all inventors and companies that employee inventors need to be aware of the new laws and proceed accordingly.