Patent Law - Patentable Subject Matter - Leahy-Smith America Invents Act Revises U.S. Patent Law Regime

Article excerpt

The United States's patent regime is straining under its own weight. The U.S. Patent and Trademark Office (PTO) faces a daunting backlog of roughly 700,000 patent applications, (1) aggressive litigants holding vague patents pursue dubious claims against alleged infringers, (2) and corporations have spent billions of dollars on defensive patent portfolios. (3) The Supreme Court has hesitated to read the Patent Act of 1952 (4 to restrain systemic excesses, (5) and calls for solutions have grown urgent. (6 On September 8, 2011, Congress attempted to address these concerns by passing the Leahy-Smith America Invents Act, (7) "arguably mak[ing] the most significant changes to the U.S. patent statute since the 19th century." (8) Welcome reforms include a first-inventor-to-file priority standard, opportunities to challenge patents through administrative proceedings, and new budgetary flexibility for the PTO. But beyond these modest improvements, the Act fails to confront the pressing issue of patentable subject matter, on which both industry and the courts have been awaiting congressional instruction.

The Act was sponsored by Senator Patrick Leahy and Representative Lamar Smith, who introduced versions through their chambers' respective Judiciary Committees. (9) The 112th Congress, generally wracked by partisan disagreement, passed the Act by wide margins; the final votes were 89-9 and 304-117 in the Senate and House, respectively. (10) The bill was signed into law on September (16), 2011.11

The Act's provisions, most of which will take effect in September 2012, (12 fall into three main categories: revised standards for patent applicants, novel procedures and rules for potential litigants wishing to challenge existing patents, and changes to PTO funding.

First, the Act affects incentives and strategies for potential patent applicants. One major provision creates a "first-inventor-to-file" priority standard for determining to whom a patent should be granted. (13) The United States has long been the only country with a "first-toinvent" standard, (14) and Congress introduced the change to "promote greater international uniformity and certainty in the procedures used for securing the exclusive rights of inventors." (15)

Under the outgoing system, if two inventors file applications for the same invention, the later applicant can initiate an interference proceeding. (16) While the first applicant would enjoy a presumption in her favor, the challenger can offer evidence that she had conceived of the invention earlier and was diligent in the "reduction to practice of the invention." (17) But under the new Act, interference proceedings will be eliminated; priority in filing will usually be dispositive. (18)

However, the Act does not encourage a sprint to the PTO. Rules of "prior art" dictate that inventions are not patentable if they have been "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." (19) But the new first-inventor-to-file rule grants inventors a grace period, (20) effectively creating a "first-to-publish" rule. (21) If the inventor (or "another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor") publicly discloses the nature of the invention less than a year before filing the application, the disclosure will not count as prior art for purposes of that application. (22) Because that disclosure qualifies as prior art for other applicants, however, competitors are locked out.

Second, the Act affects potential litigants eager to invalidate existing patents. For those looking to avoid costly litigation, the Act provides two administrative alternatives for reviewing contested patents through the PTO. (23) First, a third party may initiate "postgrant review" for any reason within nine months of the grant of the patent. …

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