I. INTRODUCTION -

On September 16, 2011, President Obama signed the Leahy Smith America Invents Act (AIA) (H.R. 1249). The AIA is the most sweeping modification of the Patent Act since 1952. Among the various objects of the AIA is to “reform” the patent law to provide greater certainty to inventors and to promote greater international patent harmonization.

While the AIA does not alter the fundamental requirements of patentability and infringement, the AIA moves the United States from a first-to-invent system to a first-inventor-to-file (FITF) system like the rest of the world. The AIA also limits the one-year “grace period” for pre-filing disclosures to disclosures derived from the inventor that is applying for a patent.

The AIA further modifies and creates procedures for examining patentability issues of both issued patents and patent applications at the U.S. Patent and Trademark Office (PTO), potentially avoiding patent litigation in the federal courts. Multiple sections of the AIA are directed towards this end including the creation of a new PTO-based, decision-making body called the Patent Trial and Appeal Board.

The AIA also adds statutory provisions specific to individual industries or technologies. Business method patent owners in the financial service industry who bring infringement claims in court are likely to see their litigation stayed while the PTO reexamines patent validity. Tax strategy patents are essentially nullified.

Finally, the AIA required the PTO to open a branch office in Detroit which opened on July 13, 2012 at The Elijah J. McCoy Patent office. McCoy was an African-American engineer and inventor who is the named inventor on numerous U.S. patents. He was born free in Ontario, Canada in 1844 and lived in Detroit where he died in 1929.

The Federal Circuit was quite busy in 2011, with the post-Bilski contours of patent eligibility under Section 101 taking center stage. In CyberSource, one Federal Circuit panel denied patent eligibility to patent claims on internet based credit card fraud detection. The panel not only found the method steps ineligible as computational methods which can be performed entirely in the human mind, it added that so-called Beauregard claims, adding a “computer readable medium” to the preamble, did not change the analysis.

In Ultramercial, a different Federal Circuit panel, with Judge Rader writing the opinion, held that claims directed to internet advertising are applications of an abstract idea that advertising can be monetized and so are patent eligible.

The court distinguished CyberSource by stating: “The eligibility exclusion for purely mental steps is particularly narrow,” the court said. “Unlike the claims in CyberSource, the claims here require, among other things, controlled interaction with a consumer via an Internet website, something far removed from purely mental steps.”

In Perfect 10 Inc. v. Google Inc., the court refused a request for an injunction to stop Google from using thumbnail images of Perfect 10’s nude photos.

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