2011 Patent Law Reform – The Leahy-Smith America Invents Act

The Patent Statute, 35 U.S.C. sec. 100, will soon be amended by Presidential approval of the recently passed 2011 Leahy-Smith America Invents Act, H.R. 1249 (available here). Several sections of the America Invents Act (“AIA”) are effective one year after the President signs the bill but of note are portions of the AIA which become effective immediately upon signing. Immediate implementation of the best mode requirements in Section 112, false patent marking Section 287, reexamination, taxes, and fees are key portions of the legislation. Most dramatically, the AIA changes the U.S. patent system to a “first to file” system, similar to most foreign systems, and abandons the “first to invent” statutory concepts which dominated U.S. practice for decades. The first to file system is effective in one year.

Effective Upon Signing:

Best mode: Section 282 of the current Patent Statute lists, as an enumerated defense, a failure to disclose “the best mode contemplated by the inventor of carrying out his invention.” Effectively immediately, Section 15 of the AIA amends 35 U.S.C. 282 by eliminating this failure to disclose defense (“the best mode contemplated by the inventor”). However, the same condition for patentability remains in Section 112. Therefore, the significance of this change is uncertain. The AIA does not eliminate the Section 112 “best mode contemplated” requirement for patents.

False Patent Marking – Virtual Marking: Section 16 of the AIA amends the patent marking provision at Section 287. Patentees may virtually mark their products “by fixing … [on the product or label] the word ‘patent’ or the abbreviation ‘pat.’ together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent.” Of significance to many pending lawsuits is that False Marking actions may now only be brought by the Federal Government or competitors who suffered competitive injury. The AIA states: ‘‘(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.’’ Qui tam actions and the assessment of a civil penalty shared with the government are abolished as of the date of the enactment. The cottage industry for false marking claims has effectively ended.

Patent Term Extension: Section 37 of the AIA amends provisions for patent term extension of FDA commercial marketing or use permits. See 35 U.S.C. 156(d)(1).

Tax Strategies: A new provision in the AIA explicitly excludes certain inventions form patent protection. The legislation states that any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of invention or the filing of a patent application, “shall be deemed insufficient to differentiate a claimed invention from the prior art.” AIA, Section 14. The provision expressly excludes tax preparation inventions. All pending patent applications and all patents issued on or after the date of enactment are subject to AIA Section 14.

Human Organisms: AIA Section 33 states that “no patent may issue on a claim directed to or encompassing a human organism.” This provision applies to all any pending patent applications.

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