• Sweeping Changes to U.S. Patent Regulations Include First-to-File System
  • September 21, 2011 | Authors: Adam R. Bialek; Juan P. Rodriguez; Jura Christine Zibas
  • Law Firms: Wilson Elser Moskowitz Edelman & Dicker LLP - New York Office ; Wilson Elser Moskowitz Edelman & Dicker LLP - Las Vegas Office ; Wilson Elser Moskowitz Edelman & Dicker LLP - New York Office
  • On September 8, 2011, the United States Senate passed the Smith-Leahy America Invents Act (AIA), H.R. 1249, without amendment. After six years of consideration in Congress, the AIA represents the most significant reform to the U.S. patent system in nearly 60 years. The AIA provides for changes that affect any person or business currently protecting their inventions or considering protection in the future.

    The most notable change is the transition to a “first-to-file” system for U.S. patents. Aspects of the new legislation will impact the patent strategy for individual inventors as well as for companies. For example, new information disclosure requirements may affect whether a patent is filed at all, and revisions to the supplemental examination process may be an option to consider in challenging a patent.

    The AIA is the fourth major revision to the U.S. patent system since its inception; the last major revision, within the American Inventors Protection Act, occurred in 1952. The AIA seeks to simplify the American patent process and bring it in line with those of major trading partners (through the introduction of the first-to-file system), as well as introduce several fee changes that are intended to bring value to the patent process and spur innovation and growth within those industries dependent on patents for the protection of their assets.

    The incorporation of a first-to-file system is key to unifying the U.S. patent system with other comparative patent jurisdictions (such as Europe, under the EPO, and Japan). Some have argued that this change will undermine inventors’ rights and limit the ability of smaller entities to ensure that their technology is properly disclosed on time and with sufficient development. The impact to the quality and quantity of mandatory and peripheral disclosures will be analyzed as the AIA is implemented. However, first-to-file can ensure that applicants will be able to unify their patent development strategies worldwide without having to address U.S. disclosure requirements separately. The goal is to provide for lower patent prosecution costs long-term as well as to reduce the time needed to address dual disclosure issues from a global perspective.

    Additional changes under the AIA will provide inventors more choices in the initial cost and timeline of their applications. A new option granting priority examination will provide inventors the option for an expedited process within the Patent Office to ensure that patent applications are finalized for more timely protection of inventions in the market. There is also a new micro-entity status that gives single inventors and smaller entities a 75 percent reduction in filing fees, ensuring that they can better account for the costs associated with protecting their inventions, spurring growth and development in tandem.

    False patent marking claims will also be affected under the AIA. It will be substantially more difficult to sue and recover damages for false patent labels. The AIA eliminates the qui tam nature of false marking claims (meaning there did not need to have been an actual injury to the party bringing the suit) and will therefore force current and future false patent marking plaintiffs to prove they suffered a “competitive injury” as a result of the alleged false marking. Moreover, plaintiffs will no longer be able to simply accumulate “fixed” penalties as their damages; instead, they will be required to prove they have been actually damaged as well as prove the amount of those damages; and damages are limited to an amount “adequate to compensate for the injury.”

    Many of the changes within the AIA are designed to trigger further development in all types of industries and at all levels within the economy. It also provides a significant number of changes that will ensure inventors can take the necessary steps toward protecting their intellectual assets.