Analyzing The America Invents Act

The America Invents Act (pdf) (AIA), which was signed into law by President Obama on Friday, September 16, 2011, represents the first major legislative adjustment to the U.S. patent system in decades (see previous coverage). Many changes are included in the 37 sections of this bill, and they will not all take effect at the same time. The most controversial details, found primarily in § 3 of the AIA, continue to be analyzed and debated extensively elsewhere, but there are several elements that may be of particular interest to GLR readers.

First-to-file (§ 3): The most significant change is from a “first-to-invent” system to a “first-to-file” system. Until now, it has been possible for
inventor A to challenge the application of inventor B, who filed an earlier application for the same invention, based on evidence that inventor A had actually invented first.

Under current law, such disputes are resolved in Patent Office proceedings called interferences, which are decided under complex rules that take into account who first conceived of the invention, who first reduced it to practice, and whether the competing parties were continuously diligent in their respective efforts to reduce to practice. The interference proceeding will be eliminated by the AIA legislation, and the entity that presently conducts those proceedings, the Board of Patent Appeals and Interferences, will be renamed the Patent Trial and Appeal Board (§ 7). Assuming all other requirements are met, the first inventor to file an application on the invention will be granted the patent. This provision “harmonizes” the United States patent system with those in other countries and will take effect 18 months from the enactment date.

“Prior commercial use” as a defense to infringement (§ 5): An accused infringer will have a valid defense if they can prove their own good faith commercial use of the infringing device or method at least one year before the earlier of either (a) the effective filing date of the patent or (b) the date the subject matter of the patent was publicly disclosed by the inventor. This section is effective on the date of enactment and applies to any patent issued on or after that date.

False patent marking actions (§ 16): Only the United States or “a person who has suffered a competitive injury as a result” of false marking (e.g., marking a product with an expired patent) may bring a suit on that basis. So-called qui tam actions (also known as whistleblower suits) based on false marking will be eliminated. Only the United States may recover statutory damages, and a person suffering competitive injury may recover “damages adequate to compensate for the injury.” This provision is effective for cases pending on or commenced on or after the date of enactment.

Study on genetic testing for second opinions (§ 27): As Dan wrote in June, the Director of the United States Patent & Trademark Office will be required to conduct a study on “effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist.” This provision is effective immediately on enactment, and a report and recommendations to the House of Representatives and the Senate are due nine months from the bill’s date of enactment. As Myriad, Prometheus and other litigation with implications for personalized medicine patents continue to wend their way through the legal system, the study presents the government – and particularly the Patent Office – with a timely opportunity to once again weigh in on the merits of gene patents, in particular their effect on diagnostic testing and medical care.

Some Additional provisions: For those interested in digging deeper into the AIA, here a few other changes the new legislation will bring about:

As a practical matter, many of the changes described above – including the switch to first-to-file – will take some time to be implemented by the Patent Office (see timeline below, which comes from the PTO’s website) and should not be expected to dramatically alter the number or nature of patent issuances or challenges in the short-term. As for the hotly contested (see here, here and here for a sampling of views) economic impact of the AIA, including its effect on small inventors, if that debate is ever settled (unlikely given the myriad confounding factors) it will be years in the future.

Filed under: General Interest, Genetic Testing/Screening, Industry News, Legal & Regulatory, Patents & IP, Pending Regulation
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