What the America Invents Act Really Means for Individual Inventors

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Robinson Bradshaw Publication
Jan. 30, 2012

After years of congressional wrangling, patent reform is finally a reality. The America Invents Act, signed into law by President Obama on September 16, 2011, makes a number of significant changes in U.S. patent law. Perhaps the most fundamental change will be the abandonment of this country’s “first to invent” system and the movement to a “first inventor to file” system that is similar to what is used in the rest of the world. Under the first to invent system, when two inventors claim the same invention the winner has been determined under a complex system of “priority rules” that take into account who first conceived the idea and then who first reduced the invention to practice. The first inventor to file system is pretty much what it sounds like: in most cases whoever files the first patent application wins.

The switch to a first inventor to file system was a highly controversial proposal that was derided by some detractors as being overly favorable to big corporations. The argument against a first inventor to file test was succinctly summarized in a letter written by an inventor to Sen. Diane Feinstein:

All parties, regardless of their resources, must adhere to “race to the patent office.” This places small entities at an enormous disadvantage to large entities. Indeed, it is a key reason why no other nation has anything close to the number of startups as the US.

But on the other hand, David Kappos, director of the U.S. Patent and Trademark Office, testified before Congress that the practical effect of the switch was being greatly exaggerated. He said that of three million patent applications filed in the past seven years, only twenty-five patents were granted to small entities that were the second inventor to file but the first to invent.

Whatever its future impact, the change will not begin to apply to patent applications until the spring of 2013. Nonetheless, it is not too early for individual inventors and small businesses to start trying to understand what it will mean for them, and what tactics they can use to minimize any negative impacts of the change.

As might be expected, the transition will not be simple. The first inventor to file test will apply only to patent applications with one or more claims that have a priority date (the earliest filing date that any claim can relate back to) on or after March 16, 2013. So dual systems will be in effect for an extended period of time: the new first inventor to file system for those applications that have at least one claim with a priority date on or after March 16, 2013 and the old first to invent system for those that do not. In determining the first inventor to file under the new test, the focus will be on the first “effective filing date.” That term means the earlier of the actual filing date or any other filing date to which the application might be entitled as a matter of law—for example, the date of a provisional application (an abbreviated “place-holder” application, described in more detail below) from which the final, full application is derived.

While most of the commentary has focused on the expected race to be the first inventor to file, this change will have other important consequences. Under the old patent law, a patent applicant has to establish that the invention was new and non-obvious at the time of invention. That requires an examination of the prior art -- patents, published patent applications, other available publications, and public uses -- as of the time of invention (with a further examination, for some purposes, as of the date one year prior to application). Under the first inventor to file test, a patent applicant will have to establish that the invention is new and non-obvious on the effective filing date, which in almost all cases will come later than the old critical dates. By pushing the cutoff date later and thus increasing the amount of prior art that the PTO will consider, this change may make it more difficult to obtain a patent.

So what does all of this mean for individual inventors and small businesses? First, provisional patent applications, always a valuable tool, are now more significant than ever. As noted above, an inventor will be able to establish an effective filing date -- and thereby limit the prior art that the PTO will consider -- by filing a provisional patent application. A provisional application includes a written description of the invention, but not the claims, which typically are the part of the application requiring the most difficult and expensive work on the part of a patent lawyer. The applicant will retain the provisional filing date as long as a full application is filed within twelve months. Consequently, a provisional filing can be a relatively cheap and expedited procedure that allows an individual inventor to reserve an earlier effective filing date for a year while she evaluates the potential scope of the patent and determines if it is worth paying the money for a full application.

Second, the change does not mean that individual inventors should now completely abandon their use of written records, such as inventor’s notebooks with attested dates, to prove the date that they invented some product or process. As mentioned above, the new rules begin to apply only to patent applications filed in 2013, and it still may be necessary to prove who was the first to invent an earlier invention. In addition, the new law will protect only the first inventor to file, and a patent application could be defeated if an individual inventor could show that the person filing the application “derived” the invention from the individual inventor. Derivation could be based on some type of development relationship between the parties, or on the disclosure of the invention by the inventor to the person who is the first to file. If the facts are contested, the inventor’s written records might be essential to providing the required proof of her claims of both invention and derivation.

Finally, the complicated transition rules mean that an inventor will sometimes be able to choose which of the two systems will apply. For example, an inventor could elect to avoid the new first inventor to file test for a particular invention, and to proceed under the first to invent test, by filing a provisional application in 2012. There may be other opportunities to determine which test will apply by the selection of the specific claims to include in particular patent applications and by using continuations and divisionals. This means that there will be an unusually high benefit for doing early planning in 2012 of the inventor’s patent filing strategy for the following year.

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