First-to-File or First-to-Invent? New Patent Reform Act Changes the Game

by Eversheds Sutherland (US) LLP

After nearly six years of proposed legislation and highly contentious debate, patent reform is finally a reality. In an 89-9 vote on September 8, the U.S. Senate passed the Leahy-Smith America Invents Act (“the Act”), thereby marking the first substantial modification to the U.S. patent system since 1952. This landmark piece of legislation fundamentally changes the U.S. patent system by awarding patents to the first inventor to file an application with the U.S. Patent and Trademark Office (USPTO). Thus, in order to stay competitive, inventors of all sizes will need to file patent applications quickly and frequently in order to stay a step ahead of their competition. Moreover, the Act provides for additional third-party input during both the pre- and post-issuance phases of the patent process. These provisions require entities to monitor published applications and newly issued patents more closely in order to take swift action in accordance with the new processes. The President has not set an enactment date but the White House expects it to come within days.

First-to-File Provisions

Most significantly, the Act moves the U.S. to a First-Inventor-To-File (FITF) system. This change brings the U.S. system closer in line with most of the rest of the world and is a significant departure from the old First-to-Invent system. The new version of § 102 (35 U.S.C. § 102) provides that a person shall be entitled to a patent unless the claimed invention was publicly disclosed prior to the effective filing date of the patent application. Exceptions remain for public disclosures made by the inventor or by another who received the information from the inventor one year or less before the effective filing date of the patent application. Moreover, disclosures in published applications and patents are not prior art if the subject matter disclosed came directly or indirectly from the inventor. The new version of § 102 will apply to all applications with priority claims that fall 18 months after the date of enactment.

As a result of the change to FITF, the Act eliminates reference to interferences in §§ 134, 135, 146, 154 and 305 of Title 35. For applications with priority claims that fall 18 months after the date of enactment (those to which the “new” § 102 applies), “an interference” is replaced by “a derivation proceeding.” The purpose of a derivation proceeding is to determine whether the inventor named in an earlier-filed application derived the subject matter from the inventor of a later-filed application. The “Board of Patent Appeals and Interferences” will now be the “Patent Trial and Appeal Board.” Interference proceedings will continue to be available to earlier applications under the existing version of 35 U.S.C. § 135.

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