Timing of Enactment of New Rules in America Invents Act

I’ve pulled together a list of each change, and categorized it in terms of timing.  I highlighted those items that will likely change the way we practice.

Effective immediately

  • Prior commercial use defense (any patent issued on or after date of enactment)
  • Venue moved to District Court for Eastern District of Virginia
  • Funding agreements of government with non-profit organizations
  • Tax strategies are part of the prior art (all patents issued after the effective date)
  • Best mode may not be the basis for canceling or holding invalid a patent (all proceedings commenced on or after date)
  • Marking statutory damages only available to US, actual damages suits available to competitors.  (to all cases, including those pending)
  • Joinder:  Restriction of joint litigation only if it’s the same product (all civil actions commenced after date)
  • Prohibition against human organism patents (for all pending or later filed applications)
  • +1 day for extension of patent term (Wilmer-Hale Act, for applications for extension of time pending, filed after, or subject to judicial review)
  • Inter partes review update (applicable to all patents, regardless of filing date)

Effective one year from the enactment

  • Post-grant review (applies to all patents, regardless of filing date)
  • Pre-issuance submissions to the patent office (applies to all patent applications)
  • Supplemental Examination (applies to all patents)
  • Lack of Advice of Counsel cannot be used to prove willfulness
  • Business Method patents available for post-grant review (valid for 8 years only)

Effective 18 months from the enactment

  • First inventor to file
  • Change in grace period (requires inventor disclosure)
  • Inventor’s oath and declaration changes, changes allowing entity having sufficient proprietary interest to file without inventor
  • Derivation proceedings
  • Repeal of statutory invention registration

If you see any mistakes, or items missing, please let me know so I can correct it.


America Invents Act (HR 1269) has been passed by the Senate with no changes

The act now goes to the President, who has said he will sign it.  Some of the changes of the law will go into effect immediately, while some will be delayed by up to 18 months after the President signs it into law.  I will be posting a detailed analysis of the law, and what changes will be effective now, and later.

You can find the final version of the law, as passed by the Senate at Thomas.gov.

Zynga v. Vostu Update

As I mentioned in my prior post, the US judge in this case slapped a temporary restraining order on Zynga, so they could not enforce a Brazilian injunction against Vostu. The Brazilian injunction was obtained without a full hearing, and without notifying Vostu, in Brazil, after Zynga sued Vostu in the US court.

The Brazilian order has been stayed by the Brazilian court, while Vostu appeals. The US judge has therefore disolved the TRO, and said that no injunction is likely to be forthcoming. Zynga filed a stipulation with the court in which it said it would not pursue the recovery of any damages in Brazil that were recoverable in the U.S. litigation.

The two cases are going on in parallel again, but the US court has the damages issue in hand. Given that Zynga will not pursue damages in Brazil, they may choose to stop litigation there.

Be careful where you file your case: A Lesson from Zynga v. Vostu

If you look at the pictures you will see why Zynga said “ it is one thing to be inspired by Zynga games, but it is entirely different to copy all of our key product features…”

Vostu’s purpose, according to Zynga is to copy literally every feature of every Zynga game.

Zynga sued Vostu in District Court in California, on June 16th.

Then, they filed another lawsuit on August 2nd in Brazil, Vostu’s home country. The Brazilian judge granted an injunction quickly, telling Vostu it had to shut down its games within 48 hours.

The U.S. District Judge, Edward Davila was not amused. He issued an order restraining Zynga from enfordcing the Brazilian decision. In particular, he noted “Zynga—which chose the U.S. forum first—now seeks to enforce an injunction it obtained abroad that would paralyze this Court’s ability to decide this case.”

So, while Zynga won a round in Brazil, their decision to file the case initially in the U.S. prevents them from enforcing the Brazilian court’s decision.

Lesson learned: Choose your jurisdiction carefully. Especially when looking for an injunction, consider finding a fast jurisdiction, and filing there first. U.S. judges will not look kindly upon a later suit impacting their jurisdiction.

The Implementation of the new Patent Rules

David Kappos, Director of the USPTO recently participated in an hour and a half of Q&A with Eileen McDermott of Managing IP (webcast available here) , discussing how implementing the new patent rules will change Patent Office practice.

He was overall quite positive about the changes.  Below I summarize some the aspects of his comments that I thought were particularly relevant.  My comments are in italics.

Continue reading “The Implementation of the new Patent Rules”

Leahy-Smith America Invents Act: Will It Happen This Year?

Congress has tried to amend the Patent Act for the last decade, introducing ever more complex versions of legislation which is designed to change the U.S. to first to file, and serve numerous interested parties.

This year’s version has passed the Senate, by a large margin, and has been passed from the House Committee.

The current major hold-up is that the Senate version ends fee diversion, leaving all funds the Patent Office collects with the Patent Office. The House wants that money under Congressional control. In addition to this big issue, there are also now numerous differences between the version of the bill passed by the Senate, and the one currently pending in the House. In particular, Lamar Smith has made a manager’s amendment to the act, which appears to make a large set of (mostly minor changes). Here is a list of these changes, courtesy of Greg Aharonian of PATNEWS.  I have bolded the more significant changes:

Continue reading “Leahy-Smith America Invents Act: Will It Happen This Year?”

Reviving the Non-Analogous Art Argument

In their first case since the Supreme Court’s KSR v. Teleflex (2007) decision, the Federal Circuit strongly re-affirmed the rule that obviousness cannot be based on references from non-analogous art in the precedential opinion of In re Arnold G. Klein.  Surprisingly, the opinion did not even mention KSR.

Continue reading “Reviving the Non-Analogous Art Argument”

Declaratory Judgment and the Supplier

A unanimous three judge panel of the Federal Circuit found in Arris Group v. British Telecommunications (decided May 19, 2011) that if a supplier’s customer is accused of infringement, there may be sufficient Article III case or controversy for a declaratory judgment action by the supplier, even if the supplier was never directly accused of infringement.

In this case, BT contacted a customer of Arris Group (Cable One), claiming they infringed a patent, and pointed to their use of Arris products specifically. There were a series of communications, discussing Cable One’s use or non-use of BT’s patents. Arris then filed for Declaratory Judgment.

The lower court found that Arris did not have standing, since there was no Article III case in controversy, because there was no adverse legal relationship, or reasonable apprehension of imminent suit.

The Federal Circuit reversed the lower court, and relied on MedImmune’s standard of “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, 549 U.S. at 127.

Arris’ argument that it had standing because it suffered an economic injury, because of the likelihood that its customer would stop using its product, was quickly discarded. The Federal Circuit noted that MedImmune affirmed that economic injury alone is not sufficient to confer standing, and that an “adverse legal interest” was still required.

However, the unanimous court then turned around and stated that while the economic injury of having a customer accused of infringement is insufficient, the risk of contributory infringement charges is enough to provide standing for a declaratory action.  The court also noted the numerous communications between BT and Arris, and the fact that Arris was “directly and substantially involved in BT’s infringement and licensing negotiations.”

If you are a company accusing someone of infringement, be aware of the risk of an implied assertion that the supplier is committing contributory infringement.  If your communications imply such contributory infringement, and you communicate directly with that supplier, you are quite likely opening yourself up to a declaratory judgment suit.

First to File: Trading a Small Problem for a Host of Big Ones

The America Invents Act (S. 23 & H.R. 1249), previously called the Patent Reform Act of 2011, has gotten further than other recent attempts at amending the current patent laws. The Senate passed the bill on March 8, 2011, by a vote of 95–5. The equivalent Act was passed by the House Judiciary Committee on April 14, 2011, by a vote of 32-3. It is going to be raised before the House in this session.

One of the major changes introduced by the America Invents Act is the switch to “first to file” from “first to invent.” The first person to file a patent application will be entitled to the patent. An earlier inventor, who delays too long, will not be able to have any rights to their invention. The rest of the world has had a first to invent system, and this change is in part to harmonize U.S. law with international law.

Why was this Law Passed

The primary problem that is addressed by changing to first to file is the issue of interferences. Interferences are procedures in which “first to invent” conflicts are resolved. The Board of Appeals publishes interference statistics, and in 2010, a total of 52 interference cases were filed, in 2009 it was 55, in 2008 it was 66, in 2007 it was 59. (http://www.uspto.gov/ip/boards/bpai/stats/process/fy2011_mar_b.jsp). Compare this with a total number of patent infringement cases of 2,896 in 2008, a rate which is increasing at 5.6% per year.

Unfortunately, the proposed solution of changing to First to File has a number of very serious problems, for inventors as well as for attorneys. These problems are likely to include a change of incentives, a cost and timing, a significant malpractice exposure, and an increase in litigation expenses. Solving the problem of interferences by switching to First to File is swatting a mosquito with a howitzer.

Continue reading “First to File: Trading a Small Problem for a Host of Big Ones”

Customer Suggestions and the Law

Customers will often send kudos, complaints, reviews, as well as requests for features and suggestions for improvements to companies.  Many of these messages may simply be an expression of like or dislike, but sometimes customers will send suggestions on how to improve the product, or for future products.  Unfortunately, this can lead to problems if those ideas overlap with the company’s plans.

While ideas as such are not patentable, a creator has some rights to his or her ideas even if they are submitted freely as suggestions.  There is also the risk that the person contacting you has a patent or copyright.  There have been a number of cases where unsolicited manuscripts or emails were used as a basis for a claim of theft of ideas, or challenging ownership of a copyright in a game or movie.  In many of these cases, the companies won, having shown that they separately developed these ideas or that the ideas were quite distinct from the suggestion that was sent.  Unfortunately just having to respond to a complaint is expensive.

In order to protect yourself, and still let your customers feel like they can contact you, I recommend you set up automatic procedures that insulate customer suggestions from your design team.

  • Have a designated contact point, who receives and handles customer contacts, who is not involved in design, or creation.
  • Ask members of the creative teams to keep an inventor’s notebook or similar log of inventive activities, especially new ideas.
  • Keep a log of client contacts, and how they were processed.
  • Automatically respond to any contacts that include suggestions with a form response requesting that the customer return a signed assignment or disclaimer of rights.
  • Do not open attachments, or review suggestions until a signed assignment or disclaimer has been received.

This should make complaints more unlikely, and if any complaints are brought it will help you quickly prove that your processes make the suggested theft impossible.