Update on Implementation of American Invents Act Effective As of September 16, 2012

By Dennis Clarke and James McEwen

On September 16, 2011, the “Leahy-Smith America Invents Act” (AIA) was signed into law. The AIA makes the most substantial changes in U.S. patent law in decades and sets various dates on which these changes are to take effect.

The most profound of those changes is the switch to a first-inventor-to-file system, in place of the current first-to-invent practice in the U.S. This change takes effect only for applications originally filed on or after March 16, 2013. However, on September 16. 2012, other major changes will take effect, including the possibility of requesting inter partes review and other post-grant trial procedures before the newly renamed “Patent Trial and Appeal BoarcL” This paper will predominantly relate to the new requirements relating to declarations and assignments and other miscellaneous provisions that have an effective date of September 16, 2012. The new trial proceedings are discussed briefly hereinbelow.

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USPTO Issues Proposed Rules for Implementing the America Invents Act

Charles Pierce and James G. McEwen

On July 25, 2012, the United States Patent and Trademark Office (USPTO) announced proposed rules as a result of changes in the America Invents Act (AIA) converting the U.S. patent system from a first to invent to a first to file system.  These changes will take place on March 16, 2013.

The proposed rules are intended to promote consistency caused by the changes in the AIA for pending applications, and to implement the AIA for future applications.  Comments on the proposed rules are open until October 5, 2012.  Below is a summary of significant elements of the proposed rules.

The proposed rules will treat commonly owned or joint research agreement patents and patent application publications as having the same inventive entity for the purposes of 35 U.S.C. §§ 102 and 103 as required under 35 U.S.C. § 102(c) of the AIA.  35 U.S.C. §102(c) of the AIA essentially broadens the current 35 U.S.C. §§ 103(c) by making these provisions usable for novelty.  The broadened use of this exclusion should be beneficial to holders of large families of patents.

Since new 35 U.S.C. §102(b) provides exceptions to 35 U.S.C. §102(a) based upon prior disclosure by the inventor, the rule changes also allow the submission of affidavits or declarations to show that a disclosure upon which a claim rejection is based was made by an inventor, joint inventor, or someone who obtained the disclosed subject matter from the inventor or a joint inventor.  These provisions will also allow the submission of affidavits to show that there was a prior public disclosure by an inventor, joint inventor, or someone who obtained the disclosed subject matter from the inventor or a joint inventor.  This will be codified in 37 CFR §§ 1.104, 1.130, and 1.131.

Another change being implemented relates to using the effective dates of foreign priority applications against third party patents.  In order to ensure that the foreign priority documents are received in time for publication and use, the USPTO is now requiring that the certified copy be received within the deadline now only required for submitting the priority claim: the later of four months from the filing date or sixteen months from the foreign priority date.  The claim must also be included in an Application Data Sheet.  While these changes are likely not an issue where the applicant is able to retrieve priority documents using the priority document exchange (PDX) system, this timing will be an issue for all other applications.  Therefore, applicants need to ensure that the certified copies are provided as soon as possible in the prosecution process or be required to file a Petition for late acceptance.

The last major change in this round of AIA rulemaking is relate to the transitional period between first to invent and first to file, and probably will have the greatest short term impact on patent practitioners.  In order to ensure that the USPTO can properly evaluate which set of rules to apply when faced with priority claims for applications filed prior to March 16, 2013, the USPTO is requiring the applicants identify which rules will apply.

Specifically, where the application is filed after March 16, 2013, but claims the benefit of a foreign, provisional, or nonprovisional application having an effective filing date prior to March 16, 2013, the applicant will need to provide a statement whether the claims in the application are entitled to the earlier effective filing date.  Also, if the nonprovisional application that claims such benefit does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the prior application, the applicant must provide a statement to that effect.  For example, under proposed 37 C.F.R. 1.55, where the application claims priority to a foreign application filed prior to March 16, 2013, the applicant will need to specify if there is new matter in the application, and whether the claims are supported by the foreign priority date.  Examples of such statements include “upon reasonable belief, this application contains subject matter not disclosed in the foreign application” or “upon reasonable belief, this application contains at least one claim that has an effective filing date subject matter on or after March 16, 2013”.

These statements will have to be filed within the later of four months from the actual filing date of the later application, four months from the date of entry into the national stage in an international application, or sixteen months from the filing date of the prior filed application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013 is presented in the application.  Failure to make such a statement after these deadlines will require a Petition, and any changes will result in the Examiner issuing a Request for Information under 37 CFR 1.105 to require the applicant to prove by line and element number where support is found.  For continuations, divisionals, and continuation in part applications, this requirement will be codified in 37 CFR § 1.78.

As these rules are still only being proposed, applicants and the legal community are reviewing the proposed changes and preparing comments.  While many of the changes seem consistent with the requirements of the AIA, the transitional requirement for identifying whether disclosures and claims can have an effective filing date in a prior application are likely the most controversial and the most likely to cause significant problems for applicants having families of patents.  Therefore, as a short term solution, in order to avoid these potential issues should the USPTO not retract this provision, applicants should ensure that they file applications prior to March 16, 2013 if any priority claim is going to be made to an application filed prior to March 16, 2013.

Stein McEwen issues Vol. 8, Issue 2 of the SteinMcEwen Newsletter (July 2012)

We are pleased to present the latest edition of the Stein McEwen, LP Newsletter, Vol. 8, Issue 3 (July 2012).
The newsletter includes information on the following:

  • USPTO Issues Proposed Rules for Implementing the America Invents Act
  • In re Hyon: Substantial Evidence Standard Helps Preserve Finding of Obviousness
  • Viacom v. YouTube: Open Questions of “Substantial Influence” Weaken a Safe Harbor
  • McDonnell Boehnen Hulbert & Berghoff LLP Respond to John Wiley & Sons Ltd.’s Copyright Infringement Complaint
  • Federal Circuit Finds Prior Use By Another Invalidates Patent
  • Per se legal? The Eleventh Circuit Rejects FTC’s “Unlikely to Prevail” Antitrust Challenge to “Reverse Payment” Patent Settlements
  • Bear Declines Invitation to Oust MDL from Patent Infringement Realm

For more information on Stein McEwen, LLP, please visit www.smiplaw.co

Federal Circuit Finds Prior Use By Another Invalidates Patent

In Teva Pharmaceutical Industries Ltd. v. AstraZeneca Pharmaceuticals LP, 100 U.S.P.Q.2d 1852 (Fed. Cir. 2011), Teva Pharmaceutical Industries Ltd. (“Teva”) appealed the District Court for the Eastern District of Pennsylvania’s grant of summary judgment in favor of AstraZeneca Pharmaceuticals LP (“AstraZeneca”).  The district court’s decision invalidated four asserted claims of Teva’s U.S. Patent No. RE39,502 (“‘502 patent”) based on AstraZeneca’s prior invention of the subject matter claimed therein.

Teva’s ‘502 patent is directed to formulations of statins, which are a class of compounds useful in the treatment of dyslipidemia, or high blood pressure.  Statins are inherently unstable and so must be manufactured in stabilized formulations; Teva’s patent is directed to formulations that are stabilized by an amido-group containing polymeric compound (“AGCP compound”).

In October 2008, Teva sued AstraZeneca for infringement of the ‘502 patent based on AstraZeneca’s manufacture and sale of its Crestor drug, which is also a stabilized statin formulation for the treatment of dyslipidemia.  AstraZeneca designed this drug with a non-AGCP compound as a stabilizer; however, the drug also contains crospovidone, an AGCP compound, which was included as a disintegrant as AstraZeneca did not understand it to have a stabilizing effect at the time.

AstraZeneca moved for summary judgment of invalidity under 35 U.S.C. § 102(g)(2), alleging that it conceived and reduced Crestor to practice prior to Teva’s first conception of the claimed subject matter.  AstraZeneca showed that it manufactured large batches of its formulation containing the same ingredients in the same amounts as its commercial drug prior to Teva’s date of conception and reduction to practice.  The district court held that AstraZeneca was not required to have “an appreciation of the stabilizing effect of crospovidone,” it only needed an “appreciation of the stabilization of its overall pharmaceutical composition that contained crospovidone.”  As such, the district court granted AstraZeneca’s motion and held the asserted claims invalid. Teva appealed to the Federal Circuit.

On appeal, the Federal Circuit held that the district court correctly concluded that AstraZeneca’s earlier development of Crestor satisfied the requirements for prior invention under 35 U.S.C. § 102(g)(2) and therefore affirmed.  The court determined that as a matter of law, AstraZeneca did not have to understand that crospovidone acted as a stabilizer in its drug prior to Teva’s conception.

35 U.S.C. § 102(g)(2) provides that:

A person shall be entitled to a patent unless … before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.

The court discussed three previous cases,[1] explaining that they stand for the following: (1) “[t]o establish prior invention, the party asserting it must prove that it appreciated what it had made;” (2) “[t]he prior inventor does not need to know everything about how or why its invention worked;” and (3) “[n]or must [the prior inventor] conceive of its invention using the same words as the patentee would later use to claim it.”

The court noted that AstraZeneca had to appreciate that its drug was stable and what the components were, which AstraZeneca undisputedly did.  However, the court held that AstraZeneca did not have to appreciate which component of the drug was responsible for the stabilization, as that would require AstraZeneca to have first conceived of its drug in the same words that Teva chose to use to claim it.  The invention is not the language of the claim but the subject matter thereby defined.  AstraZeneca knew what it had made, even if it did not know precisely the cause of the stability.

Teva argued that the district court implicitly adopted a broadened claim construction, but the Federal Circuit disagreed.  The court noted that there was no instant dispute over the scope of the asserted claims because AstraZeneca made a limited concession of infringement for the purpose of advancing its summary judgment motion.  Thus, Teva essentially was arguing that AstraZeneca needed to understand its invention in the same terms used in Teva’s asserted claims, which as discussed above, is without merit.  For the same reason, the court declined to resolve how, if at all, the doctrine of inherency applies to priority under § 102(g), because this case did not involve a factual dispute over whether the prior art included a certain claim limitation (expressly or inherently).  Finally, the court held that AstraZeneca did not suppress or conceal its understanding that crospovidone was a stabilizer in its drug formulation, again because AstraZeneca was not required to appreciate the stabilizing effect of crospovidone.

Significance to Prior Users

While the American Invents Act in 35 U.S.C. § 273(a) allows the “new” defense when the infringing subject matter is “a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process” and where the defendant was “acting in good faith” and “commercially used” the subject matter in the United States, the defense itself has been in existence under existing law, albeit under different labels.  As pointed out in “Review of the Effects of the Leahy-Smith America Invents Act on Third Party Participation Applicants“, prior users could use portions of 35 U.S.C. §102(b) to i   The use must also be internal 35 U.S.C.  §102(g) as was done in Teva.  In contrast, under the 35 U.S.C. § 273(a) defense, a similar showing is required, but there will be an additional hurdle in that the use or commercial transfer, and have been ongoing for at least 1 year before the effective filing date or the disclosure date of new 35 U.S.C. § 102(b).   Therefore, while it likely inadvertent, it appears that the American Invents Act actually narrowed the prior user defense as compared to existing law.


[1] Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052 (Fed. Cir. 2005); Mycogen Plant Sci. v. Monsanto Co., 243 F.3d 1316, 1332 (Fed. Cir. 2001); Dow Chemical Co. v. Astro-Valcour, Inc., 267 F.3d 1334 (Fed. Cir. 2001).

Federal Circuit Rules that the Invention of a Method of Making Chemical Compounds May Be Sufficient Contribution to Qualify for Joint Inventorship of the Compounds

By Charles Pierce

In Falana v. Kent State Univ., 101 USPQ2d 1414 (Fed. Cir. 2012), the Federal Circuit affirmed the district court’s order that Dr. Olusegun Falana (Falana) be added as an inventor to U.S. Patent No. 6,830,789 (the ‘789 patent), and did not address the district court’s award of attorney’s fees to Falana.

Kent Displays, Inc., a private spinoff of Kent State University (collectively, KDI) was attempting to develop proprietary chiral additives with high, temperature independent helical twisting power (HTP) for use in liquid crystal displays.  They hired Dr. Alexander Seed (Seed), who in turn hired Falana.  While working for KDI, Falana developed a synthesis protocol for making naphthyl substituted TADDOLs.  He used his synthesis protocol to create such a TADDOL, which was designated Compound 7.  Compound 7 was found to be significantly temperature independent, and represented significant progress for the project.  Falana left KDI soon after this development. Continue reading

Stein McEwen issues Vol. 8, Issue 2 of the SteinMcEwen Newsletter (April 2012) with Emphasis on Patentable Subject Matter

We are pleased to present the latest edition of the Stein McEwen, LLP Newsletter, Vol. 8, Issue 2 (April 2012).
The newsletter includes information on the following:

  • Supreme Court Provides New Test for Patentable Subject Matter
  • Ninth Circuit Finds President of Restaurant and Lounge Personally Liable For Unlicensed Public Music Performance
  • Federal Circuit Defines Language of 35 U.S.C. § 271(e)(2) in a Hatch-Waxman Controversy
  • Federal Circuit Says § 101 Requires “Concrete Steps” In Software Methods
  • Federal Circuit Finds Computer Software For Real Estate Investment Strategy To Be Abstract
  • Typhoon Touch v. Dell: Claims Saved From Aristocrat Invalidity But No Infringement Found
  • Hermes Loses Trademark Battle on its Chinese Name for the Third Time in China
  • Cell Phone Network Patent Survives § 112 Attacks in Federal Circuit
  • Broadening Reissue Application Filed Within Two Years Allows Subsequent Broadening Reissue Applications After the Two Year Bar Regardless of Whether the Claim Language is Related
  • Difference in Prior Art Requirements in Obviousness and Anticipation; Broad Genus Disclosures in Prior Art
  • Claim Language Defined in the Specification Is Reason for Overturning District Courts Ruling of Invalidity for Violating the Recapture Rule
  • Federal Circuit Overturns District Court’s Narrow Claim Construction
  • The Harari Cases: Copied Claims Found Unsupported Despite Proper Incorporation of Prior Applications
  • Vexatious Plaintiff Is Slapped With $4.5M In Fees
  • Federal Circuit Rules that the Invention of a Method of Making Chemical Compounds May Be Sufficient Contribution to Qualify for Joint Inventorship of the Compounds
  • Stein McEwen Welcomes New Additions
  • Feature Comment: Eastern District of Texas Presents Its Take on the Model Discovery Order
  • Feature Comment: Linsanity Hits Trademark Registration both in the United States and China: A Study In Contrasts For Celebrity Brand Protection

For more information on Stein McEwen, LLP, please visit www.smiplaw.com

Federal Circuit Rules that the Invention of a Method of Making Chemical Compounds May Be Sufficient Contribution to Qualify for Joint Inventorship of the Compounds

By Charles Pierce

In Falana v. Kent State Univ., 101 USPQ2d 1414 (Fed. Cir. 2012), the Federal Circuit affirmed the district court’s order that Dr. Olusegun Falana (Falana) be added as an inventor to U.S. Patent No. 6,830,789 (the ‘789 patent), and did not address the district court’s award of attorney’s fees to Falana.

Kent Displays, Inc., a private spinoff of Kent State University (collectively, KDI) was attempting to develop proprietary chiral additives with high, temperature independent helical twisting power (HTP) for use in liquid crystal displays.  They hired Dr. Alexander Seed (Seed), who in turn hired Falana.  While working for KDI, Falana developed a synthesis protocol for making naphthyl substituted TADDOLs.  He used his synthesis protocol to create such a TADDOL, which was designated Compound 7.  Compound 7 was found to be significantly temperature independent, and represented significant progress for the project.  Falana left KDI soon after this development. Continue reading

New Presentations and Articles Written

December and January were a particularly active month for publications and presentations.  Below are new articles and presentations provided by SteinMcEwen, LLP

 

 

 

Stein McEwen issues Vol. 8, Issue 1 of the SteinMcEwen Newsletter (January 2012) with Emphasis on Patent Reform and SOPA

We are pleased to present the latest edition of the Stein McEwen, LLP Newsletter, Vol. 8, Issue 1 (January 2012).
The newsletter includes information on the following:

  • Review of the Effects of the Leahy-Smith America Invents Act on Third Party Participation Applicants
  • Federal Circuit Confirms Expansive View of Patent Eligibility
  •  Federal Circuit Limits Domestic Industry Requirement For Licensors
  • Injunctions in Copyright Not Automatic
  • Are Federally Funded Clean Technology Investments Built to Last?
  • Stein McEwen Welcomes New Additions
  • Feature Comment: The Death (and Rebirth?) of SOPA

For more information on Stein McEwen, LLP or to subscribe to the newsletter, please visit www.smiplaw.com

Review of the Effects of the Leahy-Smith America Invents Act on Third Party Participation Applicants

James G. McEwen*

Introduction

In the article included in the Stein McEwen Newsletter entitled Overview of the Leahy-Smith America Invents Act: What Is The Practical Effect of First-to-File for Patent Applicants (October 2011), the novelty portions of the American Invents Act were explored.  However, as the America Invents Act was the result of pressures from diverse industries and groups, not all changes revolved directly around first to file issues.  Specifically, in view of the high costs of litigation, there was pressure from electronics companies to reduce the uncertainties of litigation by clarifying the law in regards to willful infringement and inequitable conduct, eliminating “secret” prior art, and retaining the prior user defense.[1] Additional issues included ensuring patent quality and reducing pendency by increasing third party participation in the issuance of patents, and increasing funding for the United States Patent and Trademark Office so that more examiners could be hired to deal with the increased number of patent applications being filed. Continue reading