June 30, 2011

By Michael Dixon

On June 23, 2011, the U.S. House of Representatives passed the Leahy-Smith America Invents Act, H.R. 1294, by a 304-117 vote. The few differences that exist with the companion Senate Bill, S.23, which passed in March with a 95-5 vote, will likely be reconciled in Congress and sent to the President for signature, thereby creating the most sweeping patent reform in the U.S. in nearly 60 years.

Installation of First-to-File System

H.R. 1294 changes the U.S. Patent System to a first-to-file patent system, thereby eliminating the costly process of determining which inventor was the first to invent and thereby the rightful owner of an invention. Now, the first inventor to file in the US Patent and Trademark Office wins the race.

Looking ahead, timely filing patent applications will be essential. Corporate IP departments will have to revamp their systems to eliminate the delay that often occurs between generation of an invention disclosure by an inventor and filing of a patent application. Otherwise, the owner of the patent application may lose their rights to a first-to-file competitor. 

New Third Party Challenge Mechanisms

Third parties may now challenge any patent on any basis in a Post-Grant Opposition within a nine month window from the date of patent issuance. After enactment, a competitor's patent may be challenged in a one year proceeding within the Patent Office that will be less complicated and less expensive than litigation.

In addition, inter partes reexamination ("IPR"), in which patentability of a patent may be challenged, has been modified from an examination model to an oppositional model. As such, the inter partes reexamination will likely become a cost effective alternative to Federal court litigation. 

The creation of such challenge mechanisms further enhances the value of monitoring competitor filings. Those who become more engaged in monitoring the additions to their competitors' patent portfolios will be well positioned to challenge patents in a more cost effective proceeding within the Patent Office than those who wait to challenge the validity of patents in defense to an assertion of patent infringement during litigation in Federal court.

Our talented, experienced team of patent attorneys have spent decades working with contested cases within the U.S. Patent Office. Our experience will enable us to effectively work with these new challenge mechanisms within the Patent Office to your benefit. Of course, we will keep you updated as to what provisions are made into law. In the meantime, we welcome the opportunity to discuss in greater depth with you how these changes may affect your business.

False Marking Liability has been Limited

H.R. 1294 limits who can bring false markings claims to the Department of Justice or a person who has suffered a competitive injury as a result of a violation of the false markings provision. H.R. 1294 allows only the government to file suits to recover the statutory damages. Competitors injured by another party’s false marking could sue for damages equal to the competitive injury. A more detailed summary can be found here.

 

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This Akerman Practice Update is intended to inform firm clients and friends about legal developments, including recent decisions of various courts and administrative bodies. Nothing in this Practice Update should be construed as legal advice or a legal opinion, and readers should not act upon the information contained in this Practice Update without seeking the advice of legal counsel. Prior results do not guarantee a similar outcome.