America Invents Act Takes Hold

At 12:01 am on 16 September 2012, seven new provisions of the Leahy-Smith America Invents Act of 2011 went into effect. The new rules are intended to streamline the patent application process and introduce new procedures to ensure patent quality, spur innovation and grow the economy.

The rules that went into effect include:

  • The Oath and/or Declaration finally allows an assignee, rather than an inventor, to file a patent application;
  • Inter partes review, post-grant review, and the transitional program for covered business method patents give third parties timely and cost-effective alternatives to federal litigation to challenge the patentability of an issued patent;
  •  Applicants can now submit additional information relevant to the patentability of an issued patent to the Office; this new procedure may protect the patent from an inequitable conduct charge;
  •  The citation of prior art and written statements provision now enable the Office to treat the patent claims consistently with the patent owner’s representation of its claims to the courts or in other Office proceedings.

These steps are just the beginning: look for the first-to-file requirement to go into effect in 2013; that will be huge.

Parsing the Patent SHIELD Act

The bill introducing the Saving High-tech Innovators from Egregious Legal Disputes (Patent SHIELD Act, H.R. 6245) attempts to bring a “loser pays” system for software and hardware patent lawsuits, purportedly to protect startups from plaintiffs that want to force settlements through the threat of high legal bills. The Patent SHIELD Act was introduced by Peter DeFazio (D-OR) and Jason Chaffetz (R-UT).

The bill introduces a new 35 U.S.C. 285A, which reads, in relevant part:

“(a) In General- Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.”

Hmmm. Let’s parse this one.

  • “Notwithstanding section 285…” Section 285 allows the court to award attorneys’ fees to the prevailing party “in exceptional cases.” I guess any litigation surrounding a computer software or hardware patent is now supposed to be an “exceptional case.” That’s … odd. What about the startups whose product or service does involve patents but does not involve computer patents?
  • “upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding…” Um … when is this determination made? At the time of the complaint? At the time of the verdict? Somewhere in the middle? A plaintiff, up until now, could bring a lawsuit in good faith, regardless of whether the suit ultimately won or lost; now, legitimately aggrieved plaintiffs have to worry about whether losing a suit is the contingency that brings costs and attorneys’ fees into play for them? That chills the blood of the legitimately aggrieved plaintiff, to put it mildly, which has the effect of eviscerating the patent enforcement system, since a plaintiff who worries that his/her costs will be increased dramatically by losing his/her legitimate suit through the award of costs and attorneys’ fees won’t even start the process.
  •   Nowhere does the bill allow the prevailing plaintiff — the legitimate patentee — to recover costs and fees, which makes this bill extraordinarily one-sided.

The gentle, bipartisan language at the start of this new bill thus masks a bill that, if it becomes law, has the potential to punish a legitimate plaintiff who makes a good-faith decision to litigate the infringement of a legitimate patent.

While I absolutely agree that patent trolls need to go away, I think this is absolutely not the way to achieve that end.

Apple Wins

Apple won. Bigtime.

Their patents officially declared infringed by a jury, Apple walked away from the Apple/Samsung trial with an enormous award.

Not quite sure what I think of a billion-dollar patent infringement award. I agree, of course, that patents should be enforced, and infringers should be held liable for their infringements, but a billion dollars?? I guess it hits Samsung hard enough in the wallet to be felt, but GEEZ.

The USPTO Finally Takes Steps Toward the 21st Century

The US Patent & Trademark Office (“USPTO”) announces that it is in the process of modernizing electronic patent application filing to allow applicants to submit electronic patent applications in a text format. Prior to submission, we can (and should) expunge metadata from an appropriately formatted text file. We can also run an optional analytics report to ensure the abstract length is correct, generate an automated claims tree, and identify any errors in claims numbering. Based on information submitted in the Application Data Sheet (ADS), the USPTO will be able to generate maps that show relationships between patent applications, or patent family maps.

Hurray!!!!! It’s about time that this arbiter of high technology gets around to joining the 21st Century in terms of its patent filing requirements.

Up until the time when the new file format actually hits the eCommerce site, the requirement for online patent filing has been and continues to be .pdf only. Even that is a decided improvement over the BeforeTime; before .pdf, filing was done in this weird MS Word amalgam thing that ran only on Windows (I’m a Mac geek) and gave me so many problems that I generally filed on paper.

They’re also replacing their current fee collection system to (1) expand self-service capabilities and (2) further integrate financial information with the patent and trademark businesses. The fee collection system replacement effort is in the beginning stages, and while they are looking to other successful eCommerce sites for best practices, they believe that USPTO customers may have unique needs. In the next few months, they will reach out to practitioners to solicit user input.

Again, it’s about time.

AIA Changes Who Is Entitled to the Title of “Applicant” in US National Applications Under the PCT

On September 16, 2012, the America Invents Act is slated to change who is entitled to the title of “applicant” in U.S. national patent applications, removing the requirement that inventors be named as applicants solely for the purposes of US designation. This impacts applicants who have filed under the Patent Cooperation Treaty (PCT) and brings the US patent system further into alignment with those of the rest of the PCT signatory nations.

The Laws of Nature STILL Cannot Be Patented

Last week, a unanimous US Supreme Court decided Mayo Collaborative Services v. Prometheus Laboratories, interestingly citing the 150-year-old O’Reilly v. Morse which invalidated Samuel Morse’s attempt to get a patent to cover “electro-magnetism, however developed, for marking or printing intelligible characters, signs, letters, at any distance, being a new application of that power of which I claim to be the first inventor or discoverer.”

In Mayo, the patent was for a method to help doctors determine the right drug dose to give different patients, specifically patients with autoimmune disorders, but the Court said this was an innovation based on natural laws, so it can’t be protected by patent.

Although “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent pro­tection,” Diamond v. Diehr, 450 U. S. 175, 187 (1981), “…the steps in the claimed processes (apart from the natural laws them­ selves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” slip op. at 4.

The laws of nature still cannot be patented.

America Invents Act

America Invents Act Presentation

I can’t do a better job of dissecting this complex new patent legislation, the first overhaul of the patent code since the early 1950s, than does Professor Jeff Hawley, who teaches at my alma mater, the former Franklin Pierce Law Center (now University of New Hampshire School of Law). His video and presentation slides are definitely worth a look.

America Invents Act Is Signed …

This is the first major overhaul of the patent system since 1952, and major it is. Here’s a line-up of some of the changes that the new law puts into effect.

The Biggie: Today, the patent system in the USA is a so-called “first-to-invent” system; an inventor who wants to prove that they invented something first can easily force another party into a protracted legal battle. However, the first-to-file system put into place by the America Invents Act would make things much clearer. In its most general terms, if you filed for the patent first, you get the protection.

Post-Grant Review: The Act creates a new process by which to challenge a patent within nine months of its issuance by presenting evidence directly to the Patent and Trademark Office itself, which will review the merits of the argument.

Fee Collections: The Patent Office can now set its own fees rather than relying on Congress to set reasonable fees for it. Congress will continue to have some budgetary power, but fees collected above the Patent Office’s budget will be placed into escrow, and the Patent Office can petition for their release. Fees will go up for some filers, but small entities may very well see fee reductions.

The bill does NOT include any new process for determining damages included in the America Invents Act. Jury awards for patent violations may continue to be huge for the foreseeable future.

The America Invents Act does little to clear up the controversy surrounding whether a “business method” patent or a software patent is a reasonable thing. There are provisions that may come very close to excluding software dealing with taxes from being patentable, for example.

Star Trek Technology is Swedish

Star Trek influences many aspects of our society; flip phones, for example, came from Captain Kirk’s flippy communicator. Now, it seems, the Romulans are getting in on the 21st Century act. A Swedish company, BAE Systems, has conjured up a cloaking device. See Bae Systems’ cloaking device.

I love it when sci fi isn’t so fi anymore.