Changes to 35 USC 102 under
the America Invents Act
© Robert J. Yarbrough
On September 16, 2011 President Obama signed the ‘America Invents Act’ into law. More than five years in the making, the Act will have profound consequences for inventors, for companies whose employees create inventions and for persons accused of patent infringement. This memorandum addresses the changes under the Act to §102 of the patent law, which determines what inventions are patentable, when patent applications must be filed and what prior art can be cited against a patent application.
The effective date of the changes to 35 U.S.C. section 102 is 18 months after enactment from section 3(n)(1) of the Act. The effective date is March 17, 2013.
The principal changes to §102 can be summarized as ‘super absolute novelty’ and ‘first to invent.’
I. SUPER ABSOLUTE NOVELTY
A. CHANGES TO THE PATENT BARS
One of the purposes of the ‘America Invents Act’ was to harmonize U.S. patent law with the laws of other countries. The ‘absolute novelty’ requirement as applied by many other countries denies a patent if the invention is disclosed to the public prior to the filing date of the patent application. In the ‘America Invents Act,’ Congress went far beyond ‘absolute novelty.’
The amended patent bars appear in the new §102(a) and read as follows:
(a) NOVELTY; PRIOR ART.—A person shall be entitled to a
(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or
(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.
The prohibition formerly contained in §102(e) is now in §102(a)(2). All of the other existing patent bars are now rolled into 102(a)(1).
As adopted by Congress, the amended §102(a)(1) provides that ALL U.S. PATENT RIGHTS IMMEDIATELY TERMINATE if any of the following events occurs on or after March 17, 2013 , unless the inventor has first filed a patent application:
1. the invention is on sale anywhere in the world;
2. the invention is in public use anywhere in the world;
3. the invention is described in a printed publication anywhere in the world; or
4. the invention is otherwise available to the public anywhere in the world.
Note that the new §102(a)(1) applies to disclosures, sales and public use. From §102(a)(1), the disclosure, sale or public use precludes a patent if the disclosure, sale or public use occurs prior to the filing date. This change in the law reverses what U.S. inventors have been accustomed to for generations. Under the prior law, the inventor could file a patent application up to one year after the date of a sale or offer for sale, public use or disclosure of the invention in a printed publication. Although a new one-year ‘grace period’ will exist for disclosures by the inventor, no grace period will exist for sales or offers for sale or for public use. The public use and on sale prohibitions are extended worldwide because the language is removed limiting the on sale or public use to the United States.
New §102(a)(2) is the heart of ‘first to file’ and relates to the effective filing date of other U.S. patent applications. The new section precludes a patent to an inventor if the invention is taught by a U.S. patent or U.S. application that is eventually either issued or published and is filed prior to the effective filing date of the inventor’s patent application. New §102(a)(2) is similar to the existing §102(e), except that the crucial date is the filing date of the inventor’s application, not when the invention was invented. Note that §102(a)(2) does not apply to foreign publications or issued patents.
B. NEW, LIMITED ONE-YEAR GRACE PERIOD
A new, limited one-year grace period exists both for §102(a)(1) and (a)(2) for public disclosures by the owner of the invention, but not for sales or public use. The new grace period appears in the new §102(b), which reads as follows:
(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION.—A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
(2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.—A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if
(A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
Of course, any public disclosure as contemplated by §102(b) immediately terminates the inventor’s foreign patent rights.
C. EXAMPLES OF PATENT BARS UNDER THE AMERICA INVENTS ACT
Consider the following examples:
Example 1: On March 17, 2013, the day after the new requirements go into effect, the Alpha Company opens a booth at a vending industry trade show. Alpha Company has invested a large amount of money in developing a new and novel vending machine, which it brings to the trade show. Alpha Company has not yet filed a patent application to protect the new vending machine. The new and novel aspects of the machine are not apparent from looking at Alpha’s display and Alpha does not reveal how to make and use the invention.
a. An Alpha representative offers to sell the new vending machine to a customer at the trade show. The machine is ‘on sale’ and Alpha Company immediately forfeits its U.S. patent rights, even though the offer for sale did not disclose the invention. The vending machine still may be patented in Europe, Asia and the rest of the world, provided Alpha does not run afoul of some other prohibition. The rest of the world does not care about sales or offers for sale.
b. The Alpha representative demonstrates the machine by putting a coin in the machine and dispensing a piece of candy. This is a ‘public use’ of the invention. Alpha Company immediately forfeits its U.S. patent rights, even though the public use did not disclose the invention. The vending machine still may be patented in the rest of the world, because the rest of the world does not care about public use.
c. The trade show is in Bangalore, India. The public use and 'on sale' bars still immediately terminate U.S. patent rights because sale or public use anywhere in the world triggers the bar.
Example 2: At the same trade show, Beta Company brings its own new vending machine. Beta Company also has not filed a patent application for the new machine. The machine is not yet operational and Beta is not ready to take orders for the machine, so Beta does not sell or publicly use the machine.
a. A Beta Company representative gives a presentation at the trade show disclosing how to make and use the invention. This is a public disclosure. The company does NOT forfeit U.S. patent rights, because the disclosure came from Beta Company. The new law includes a limited grace period for public disclosures by the inventor. The Beta Company has one year to file the U.S. patent application, provided it does not trigger some other prohibition. The public disclosure immediately terminates most foreign patent rights.
b. Beta produces a brochure that discloses how to make and use the invention. The brochure is on Beta’s table at the trade show and available to the public. This is a ‘printed publication,’ and ordinarily such a printed publication immediately terminates U.S. patent rights; however, because the disclosure came from Beta Company, the company has one year to file its U.S. patent application. The printed publication also immediately terminates most foreign patent rights.
Alpha Company loses its patent rights, even though it did not disclose the invention. Beta Company keeps its patent rights, even though it disclosed the invention. Counterintuitive? You bet. So what can Alpha and Beta do to protect their rights?
D. PREPARING FOR MARCH 17, 2013
Inventors can prepare now so that they are not surprised and do not forfeit important patent rights after March 17, 2013. Section D.1. below applies to companies having inventive employees. Section D.2. below applies to independent inventors.
1. COMPANIES WITH EMPLOYEE INVENTORS:
A company with inventive employees can take the following steps to be ready for March 17, 2013and to avoid patent bars. Since the patent bars relate to activities occurring anywhere in the world, the company that wishes to protect its U.S. patent rights should take the following steps for all of its operations around around the world.
a. Develop company-wide employment agreements, employee handbooks and company policies that require employees to promptly report inventions to the company. The employment agreements and employee handbooks should provide that inventions are automatically assigned to the company. Be aware that the laws of many states, including Pennsylvania, include special requirements for a change to an employee agreement.
b. Develop a company strategy to promptly review all employee inventions for commercial value. For those inventions determined to have value, promptly decide how to protect the invention (trade secret, patent or copyright). For inventions that the company decides to protect through patenting, develop a procedure to promptly file a provisional, utility, PCT (international) or design patent application, as appropriate.
c. Develop company forms and policies requiring visitors and
other members of the public to sign non-disclosure
agreements as a condition for entering company premises
where an unprotected invention may be in use.
d. Train employees on the importance of not using any invention in any setting that could be considered public until a patent application is filed for the invention.
e. Train employees of the importance of not marketing or accepting orders for a product incorporating an invention until a patent application is filed for the invention.
f. Train employees about the importance of not disclosing an invention, either in writing or verbally, until a patent application is filed.
2. INDEPENDENT INVENTOR:
The independent inventor can prepare now for March 17, 2013:
a. The inventor can get in the habit of requiring anyone with whom the inventor deals (consultants, designers, engineers, suppliers, attorneys) to sign a non-disclosure agreement. The non-disclosure agreement will alert the inventor’s associates of the importance of secrecy and will avoid any argument that a use in the associate’s presence is a public use or that any disclosure to the associate is a public disclosure.
b. Although this part of the law does not go into effect until 2013, the inventor should become accustomed to evaluating inventions promptly and deciding whether to protect the invention by patent. If the inventor decides to protect the invention by patent, or if the inventor is unsure whether the invention is valuable, then the inventor should consider a provisional patent application as a relatively cost-effective way to preserve the inventor’s rights for one year.
c. Although this part of the law does not go into effect until 2013, the inventor should become accustomed to guarding against any sale or offer for sale of the invention until a patent application is filed. The inventor also should become accustomed to guarding against any use of the invention in public until the patent application is filed.
d. The inventor should not post information on the invention to a website or distribute any printed publication disclosing the invention prior to filing a patent application. While such a disclosure by the inventor may trigger a one-year grace period in the U.S., the inventor immediately loses foreign patent rights.
II. AMERICA INVENTS ACT AND ‘FIRST TO FILE’
A. ‘FIRST TO FILE’ DEFINES ‘PRIOR ART.
Every invention must be both novel under §102 and unobvious under §103 to qualify for a patent. The America Invents Act moves the US patent system away from ‘first to invent’ and to ‘first to file.’ The most important practical difference between ‘first to invent’ and ‘first to file’ is in the ‘prior art’ that will be cited against a patent or application by the patent examiner or by a court in determining whether an invention is both novel and unobvious. Sections 102(a), (b) and (d) of the Act determine what is prior art after March 17, 2013.
Under §102 as it exists prior to March 17, 2013 law, the date that a publication or patent is effective as prior art is determined by the date of invention (‘first to invent),’ up to one year prior to the applicant’s filing date.
After March 17, 2013, the date that prior art is effective is determined by the ‘effective filing date’ of the patent application (‘first to file’). The ‘effective filing date’ is the priority date of the application, such as the filing date of a parent patent application, PCT (international) patent application or foreign patent application.
Since an invention is invented prior to the filing date of the patent application, there will be more prior art to cite against an application after March 13, 2013 than before that date. In the U.S., approximately one half million patent applications are filed every year, not including applications filed only in foreign countries. That is a rate of about 42,000 applications per month. For every month that goes by between the date of invention and the date of filing, an additional 42,000 patent applications are prior art for the invention. In general and all other things being equal, an inventor will have a better chance of getting and keeping a patent if the inventor files his or her patent application before March 17, 2013.
For patent applications filed on or after March 17, 2013, the following are ‘prior art:’
1. Publications (including issued patents and published applications) are prior art for an invention if they were PUBLISHED before the patent application for the invention is ‘effectively’ filed. BUT, the inventor is protected from the publication if the publication occurs within one year of the inventor’s filing date AND the disclosure came from the inventor (it’s the inventor’s application that is published), or someone took the information from the inventor, or the inventor publicly disclosed the invention prior to the date of publication.
2. A United States patent application effectively FILED before the inventor’s filing date becomes prior art when it is eventually published or issued as a patent, even if that publication or issuance date is after the inventor’s filing date. BUT, you are protected from the prior filing of the patent application if the disclosure is yours (your patent application) or the information was taken from you, or if the two patent applications are under common ownership or obligation to assign at the time that the second application is filed.
B. EXAMPLES OF POST-MARCH 17, 2013 PRIOR ART
As in all things patent, it’s complicated, so consider some examples:
Example 1. You file a first patent application on March 17, 2013. You have a second invention that is a follow up to the first. What is the latest date that you can file a second patent application without your first patent application becoming prior art to the second application?
Answer: Up to one year after the first application is either published or issued as a patent, whichever happens first. Publication generally will occur eighteen months after your first U.S. filing, so you have a total of up to two and one half years after filing application number 1 to file application number 2. Note that you are not protected from intervening applications or disclosures by other people.
Example 2. You file a patent application on March 17, 2013. The examiner cites a technical treatise published on March 16, 2013. Is the treatise prior art to your application?
Answer: Yes, it is. You will be able to overcome the treatise if you can show that the information came from you (you wrote the treatise) or was derived from you (someone wrote about your research) or that you publicly disclosed the invention less than one year before the filing date.
Example 3. You file a patent application on March 17, 2013. The examiner cites a U.S. patent application filed by your competitor on March 16, 2013 and published after your filing date. Is the competitor’s application prior art to your invention?
Answer: Yes, unless you can show that the list of inventors is the same, or that the competitor derived the invention from you, or that you publicly disclosed the invention prior to your competitor’s filing date, or that both applications are under common ownership at the time of the second filing date or were the subject of a joint research agreement.
Example 4. You file a patent application on March 17, 2013. The examiner cites a European patent application filed March 16, 2013 and published long after your filing date, but that was never filed as a U.S. patent application. Is the European patent application prior art to your application?
Answer: No, it is not. ‘First to file’ only applies to applications that are eventually filed in the U.S, even if the application started out life in another country.
Example 5. You file a patent application on March 17, 2013. The examiner cites a European patent application that was published on March 16, 2013. Is the European application ‘prior art’ to your U.S. application?
Answer: Yes, unless you can show that the information is yours (you filed the European application), or the information was taken from you, or that you publicly disclosed the information less than one year prior to your filing date.
Example 6. An R&D team at your company created an invention and the company filed an application for patent on March 16, 2013. A different team with different inventors created another invention and the company filed an application for patent on March 17, 2013. All of the inventors are employees or contractors working for the company. All inventors signed agreements to assign patent rights to the company in the future, but have not yet signed the assignments. Is the first patent application prior art to the second?
Answer: No, because the inventions were commonly owned at the time the second application was filed.
After March 17, 2013, many inventors will be prevented from obtaining a patent by a patent bar, where the same inventor and the same invention would qualify for a patent under pre-March 17, 2013 law. Inventors and invention-owning companies can take steps, outlined above, to reduce the adverse impacts of the post-March 17, 2013 patent bars.
After March 17, 2013 more prior art can be cited against a patent application than can be cited against an application filed prior to that date. An inventor can reduce the amount of prior art that can be cited against the application by filing before March 17, 2013. After March 17, 2013, inventors should consider filing early in the process to reduce the amount of prior art and also to avoid patent bars. Inventors also should consider whether to publicly disclose an invention, which buys the inventor a one year respite from intervening prior art but will forfeit foreign patent rights.