Rumor has it that the Senate will vote on the House Patent Reform bill (HR 1249) this week. The Senate is scheduled to vote on the procedural issue of “cloture” on the bill in its first roll call session on Tuesday, September 6, 2011 at 5:30 pm. The cloture process limits further debate and precludes new amendments after the vote, although amendments may be introduced on Tuesday before the vote. If the Senate approves the House bill without amendment, the Leahy-Smith America Invents Act could become law within a few days. (I still don’t believe it!)

The full text of HR 1249 is nearly 100 pages long, and different provisions have different effective dates, and will be more or less important to different groups. In this article, I outline the effective dates of some of the provisions of interest, based on my understanding of HR 1249.

Because of the potential significance of this law and the complexity of HR 1249, I remind my readers that this article does not provide legal advice, but rather is intended to spur further review and discussion.

General Effective Date

The default effective date set forth in HR 1249 is one year after the date of enactment, with applicability to patents issued on or after that date.

Effective Immediately

  • USPTO Fee Setting Authority (on a cost recovery basis)—but fee diversion remains possible.
  • Ban On Tax Strategy Patents—effective immediately and applicable to pending applications.
  • Ban On Patents To A Human Organism—effective immediately and applicable to pending applications—so you might as well maintain your basement Frankenstein as a trade secret!
  • Changes to requirements for standing to bring False Marking cases and marking requirements—effective immediately and applicable to pending proceedings.
    This means that standing will no longer exist for virtually all pending false marking suits, requiring their dismissal.
  • Change of Inter Partes Reexamination standard—effective immediately and applicable to any requests for inter partes reexamination filed on or after that date, the standard for inter partes reexamination will change from “substantial new question of patentability” to “a reasonable likelihood that the requestor would prevail” with respect to at least one of the challenged claims.
  • Appeal of Board decisions in ex parte reexamination to Federal Circuit only—effective immediately and applicable to any pending or subsequent Board appeal.
  • Best Mode violation no longer a basis for invalidating a patent—effective immediately and applicable to proceedings commenced on or after the effective date.
  • Changes to Prior Use Defense—effective immediately as applied to any patent issued on or after the date of enactment.
  • Limitations on joinder of defendants in infringement actions—effective immediately and applicable to all actions commenced on or after the date of enactment.
  • Exception to Patent Term Extension application deadline if marketing approval is transmitted after 4:30 pm on a business day—effective immediately and applicable to any pending or subsequent Patent Term Extension application, or any Patent Term Extension application subject to judicial review on the date of enactment.

Effective After 10 Days

  • 15% surcharge will be added to all patent-related fees, including patent maintenance fees.
  • The USPTO is to set a Prioritized Examination Fee of $4800/$2400.
    (I expect the USPTO to quickly implement the “Track I” prioritized examination program, in accordance with the regulations set forth in the April 4, 2011 Federal Register Notice.)

Effective After 60 Days

USPTO to impose a $400/$200 surcharge for patent applications not filed electronically.

Effective After One Year, But With Retroactive Effect

  • Revised Ex Parte Reexaminaton procedures—effective after one year and applicable to any patent issued before, on or after that date.
  • New Inter Partes Review procedures (based only on patents or printed publications under 35 USC § 102 and/or 103)—effective after one year and applicable to any patent issued before, on, or after that date.
    A petition for inter partes review will have to be filed after the later of 9 months after the patent grant date or after the termination of any post-grant review proceeding. Competitors may wish to consider monitoring pending applications now, and begin assessing whether an inter partes review proceeding may be appropriate.
  • Transitional Post-Grant Review procedures for Business Method Patents—effective after 1 year and applicable to any covered business method patent issued before, on, or after that date, unless a petition for post-grant review could be filed.
  • Filing By Assignee—effective one year after the date of enactment and applicable to any application filed after that date (apparently without regard to priority date).
  • Elimination of requirement for no “deceptive intent”—effective one year after the date of enactment and applicable to all proceedings commenced on or after that date (apparently regardless of the filing/issue date of the application/patent at issue), errors in inventorship, errors being corrected in reissue applications, and the failure to obtain a foreign filing license can be corrected without averring that the error(s) arose without deceptive intent.
  • Preissuance Third Party Prior Art Submissions—effective after one year and applicable to any pending application, a third party can submit prior art before the earlier of a first Office Action on the merits, Notice of Allowance, or within 6 months of the application’s publication date.
    (Current 37 CFR § 1.99 requires third party prior art submissions to be made within 2 months of publication and prohibits any discussion of the prior art, while the new law requires a concise explanation of the asserted relevance.)

Effective After One Year, But Strategies Should Be Developed Now

  • New Post-Grant Review procedures (based on any ground for challenging validity)— effective after one year under the transitional provisions for certain business method patents, and then effective generally to patents encompassed by the first-to-file provisions, e.g., patents granted from applications with priority dates on or after 18 months after the date of enactment.
    A petition for post-grant review will have to be filed within 9 months of the patent grant date. Competitors may want to consider monitoring pending applications now, and begin assessing whether a post-grant review proceeding may be appropriate.
  • Pending Interference Proceedings—The current provisions of 35 USC §§ 102(g), 135 and 291 will continue to apply to applications that are not affected by the first-to-file provisions (e.g., applications with priority dates prior to 18 months after the date of enactment). However, the USPTO will determine the circumstances and procedures under which a pending interference could be dismissed without prejudice in favor of a post-grant review proceeding.

Effective After Eighteen Months, But Strategies Should Be Reviewed Now

  • First-To-File—effective 18 months after the date of enactment and applicable to any application with an effective filing date on or after that date.
    To the extent that the first-to-file provisions eliminate or curtail the current one year grace period afforded by 35 USC § 102(b), this means that companies have at most 6 months to educate their inventors about the elimination of the grace period and the importance of filing a patent application before making any public disclosure of the invention, and to develop and implement appropriate safeguards against pre-filing disclosures.
    (Yes, there are exceptions to the first-to-file provisions, but their precise meaning and scope are sure to be litigated for years to come.)
  • Derivation Proceedings—effective 18 months after the date of enactment and applicable to any application with an effective filing date on or after that date.
    A derivation proceeding can be brought by a later applicant who alleges that an inventor named in an earlier application derived the invention for an inventor named in the later application. A petition must be filed within one year (or 364 days?) of the first publication of a relevant claim, and must be supported by substantial evidence. This means that applicants concerned about derivation should have procedures in place to monitor the claims of newly published applications.

The USPTO Wants Your Help

The USPTO knows that it has its work cut out in drafting and promulgating regulations to implement patent reform. The USPTO is seeking public input, and has established a patent reform implementation website that provides information on patent reform and contact information to provide informal comments to appropriate USPTO officials.

For additional updates on patent reform, including updates relevant to other industries, please visit Foley & Lardner LLP’s Patent Reform webpage.

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