10 aspects of the AIA that are (somehow) comparable to European provisions

U.S. President Obama signs the AIA into law on 16 September, 2011

The final package of the Leahy-Smith America Invents Act (H.R.1249, pdf) will enter into force on 16 March 2013 (for a list of amendments and their effective dates, see here). By this date, the most significant amendments of the new Act will enter into force, namely the transformation from the traditional first-to-invent regime to the new first-inventor-to-file regime.

Besides reducing the USPTO’s backlog of approx. 680.000 patent applications and improving patent quality, the main objective of the America Invents Act is to harmonise the US patent system better with international patent law standards and by that facilitate second filings of US applicants in foreign jurisdictions.

This is indeed a brilliant idea, not only for US applicants but also for European applicants and practitioners, as it will align the US system closer with the European patent system. However, event for those legal instruments that are clearly adapted to the European point of view, important differences remain. Some of those tiny differences that may have a huge impacts on practice are outlined below: 

1.  Grace period (effective as of 16 Mar 2013). The traditional 12-months US grace period has survived the transition from first-to-invent to first-to-file but had to be adapted. While the classical first-to-file grace period is designed like the 6-months grace period according to German utility model law (§ 3 (1) GbmG) which excludes any disclosure by the inventor (an ‘own disclosure’) within the grace period from prior art, the new US grace period rather is a mixture between the old first-to invent grace period and the classical first-to-file grace period, as required by new 35 USC § 102(b):

A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if–

(a)  the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(b)  the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

This provision does not only exclude disclosure made by the inventor within the grace period from prior art but also any (identical) third-party disclosure between such disclosure by the inventor and the effective filing date.

That is, under new 35 USC § 102(b) a disclosure by the inventor has the effect of both an own disclosure under the classical first-to-file grace period (paragraph a) and possession of the invention by the  inventor before the actual filing date under the old first-to-invent grace period (paragraph b).

2.  Prior public use (effective as of 16 Mar 2013). While old 35 USC § 102 (a) (1) excluded an invention from patent protection based on prior public use only if  ”the invention was  known or used by others in this country“, new § 102 (a) (1) implements an absolute novelty regime (like Art. 54 (2) EPC) according to which the place where a prior art reference was made public is irrelevant:

(a)  A person shall be entitled to a patent unless –

(1)  the claimed invention was 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;

(2)  [...]

3.  Intervening rights (effective as of 16 Mar 2013). The rules for intervening rights have been moved from old 35 USC § 102 (e) to new § 102 (a) (2):

(a)  A person shall be entitled to a patent unless –

(1)  [...]

(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.

This paragraph determines the effective date of an intervening right, i.e. a US application or US patent that has been filed before but published after the effective filing date of a US application under examination. European intervening rights are defined in Art 54 (3) EPC as “European patent applications as filed, the dates of filing of which are prior to the [effective filing date of an European application under examination] and which were published on or after that date“.

While old § 102 (e) required that an intervening right is “filed in the United States before the invention” according to the Hilmer doctrine (based on the 1966 case In re Hilmer) the notion of “effective filing date” of new § 102(a) (2) covers foreign priority filings as well.

Consequently, an intervening US application based on a German priority application will in future be considered as prior art, whereas up to now such applications have been simply excluded from prior art because they have not been available upon the filing date of an application under examination and the priority has not been “filed in the United States”.

As the sheer definition of an intervening right is basically comparable to what is required by Art 54 (3) EPC, the legal effects thereof are different in the two jurisdictions. This is because new § 102 (a) (2) continues to consider US intervening rights as regular prior art relevant for both novelty and obviousness, whereas European intervening rights are only relevant for novelty but cannot be considered with respect to inventive step.

4.  Usurpation and derivation (effective as of 16 Mar 2013, faq). For new patent appliactions filed as of 16 March 2013 under the new first-inventor-to-file regime, inter-partes interference proceedings are not required any more, as there are no conflicts about the date of invention as the crucial date of an application rather is its (effective) filing date. Instead, the new derivation proceedings were established to determine, upon petition, whether an applicant has derived the invention from the petitioner, who then has the right to the patent instead of the applicant.

The new derivation procedure comes in to shapes, as a trial proceedings before the Patent Trial and Appeal Board (PTAB) according to 35 USC § 135 (a) if the petitioner (i.e. the person who claims usurpation) has a pending patent application or as a civil action before a district court according to 35 USC § 291 (a) if both parties own a patent. The term for initiating derivation proceedings is one year as of publication of the usurper’s derived application or patent. The new post-grant and inter-partes review do not provide any measured to handle derviation issues.

If the PTAB or court considers the petition convincing, claims of the usurper’s derived application/patent may be cancelled or finally refused or inventorship of such application/patent may be corrected.

The approach in Europe/Germany is different not only to the extent that a person claiming usurpation does not have to have an application or own a patent for initiating derivation proceedings.

By a civil action for vindication according to Section 8 of the German patent act (§ 8 PatG) the plaintiff can seek a transfer of a defendant’s derived application/patent. In contrast to 35 USC § 135 and § 291, section 8 PatG requires the lawsuit to be initiated until two years after grant of the patent.

According to Art 61 (1) EPC, a final decision of a national court that a European patent application has been filed by a non-entitled person provides the options to the entitled inventor to either continue prosecuting the application, file a new application, or request refusal of the application.

Besides such civil court actions, German patent law also provides the option to revoke a patent due to usupation in opposition proceedings or an invalidity action (sections 21 (1) No. 3 and 22 (1) PatG). If such opposition is successful, the entitled inventor may file a new patent application in Germany (section 7 (2) PatG) which will be granted the filing date of the opposed patent.

5.  Post Grant Review (effective as of 16 Sep 2012, faq, info). Comparable to European Opposition Proceedings (cf. Art 99-105 EPC) in principle, a post grant review (PFR) can be requested for patents having a priority of 16 March 2013 or later (i.e. for patent underfalling the first-to-file regime) within nine months as of the date of grant of a patent. Other than in the new Inter-Partes Review (and the old Inter-Partes Reexamination) where a patent can (could) be challenged based on written prior art only, the grounds based on which the validity of a patent can be challenged in a PGR are those of 35 USC § 282 (b), paragraphs (2) and (3), namely

• lack of patent subject-matter eligibility,
• lack of novelty or obviousness,
• lack of written description, lack of enablement, or indefiniteness.

The grounds of opposition available in the European Opposition Proceedings (Art 100 EPC) are basically comparable:

• lack of patent subject-matter eligibility,
• lack of novelty or lack of inventive step,
• lack of sufficiently clear and complete disclosure to carry out the invention,
• new matter as compared to the original disclosure.

An important difference between US Post Grant Review and European Opposition, however, is the level of evidence required to initiate the proceedings, i.e. the admissibility of the petition or request. While for instituting a PGR the petitioner must show that it is more likely than not that at least one claim is unpatentable, an Opposition submitted with the EPO is admissible and will thus be handled by the Board already if the opponent sufficiently substantiates the grounds of opposition raised.

What is definitely not comparable are the costs. While the office fees to initiate a Post Grant Review were initially set to 35.800 USD (see USPTO table) they have now been reduced to 12.000 USD for the first 20 claims and 250 USD for each additional claim (see final rules, table 4, p. 4223-4), the European opposition fees are as little as 745 EUR (see EPO fees), independent on the number of claims.

6.  Covered Business Methods Review (effective as of 16 Sep 2012, faq, info). For a period of eight years as of 16 September 2012, any business method patent can be challenged under the CBM Review program by a Post Grant Review, regardless of the date of filing or date of patent, as soon as it is enforced against an accused infringer.

The defendant can thus challenge the patent in a CBM review even if the patent has been granted more than nine months ago. The respective petition, however, must be filed within one year as of initiation of the infringement suit. One must not be a prophet to assume that if the validity of a CBM patent is challenged under this program, patent subject-matter eligibility will play a central role.

But how is it determined whether or not a patent really relates to a covered business method and thus falls under the program? This question is answered now by 37 CFR § 42.301 as follows:

(a) Covered business method patent means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

(b) Technological invention. In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

The latter definition is surprisingly similar to what European case law (and German case law) has developed to define “methods for performing mental acts, playing games or doing business, and programs for computers [...] as such” according to Art. 52 (2), (3) EPC (and § 1 (3), (4) PatG).

According to the new law a “technological invention” requires a claim comprising a “technological feature that is novel and unobvious” to be excluded from CBM review. A claim comprising only known or obvious technological features will thus be subject to a CBM review.

European patent practitioners might feel strongly reminded of the EPO’s established Comvik approach (cf. T 641/00, 2002), according to which non-technical features cannot contribute to novelty and inventive step. From this finding one may roughly conclude that the CBM review program covers exactly those US patents whose inventions would not have been patentable in Europe anyway. Is this another – albeit unintentional – convergence between US and European patent law?

The first case of the newly established Patent Trial and Appeal Board (PTAB) under the CBM program, instituted on 9 Jan 2013, was SAP America, Inc. v. Versata Development Group, Inc. (CBM 2012-00001) based on US 6,553,350 related to “pricing products in multi-level product and organizational groups“. Regarding the question of whether or not the subject-matter relates to a technological invention, the PTAB argued that this was not the case as

no specific, unconventional software, computer equipment, tools or processing capabilities are required [and that the] invention may be implemented in any type of computer system or programming or processing environment.

The first infringement lawsuit stayed for a CBM review (CBM2013-00005) is Markets-Alert Pty. Ltd v. Bloomberg Finance L.L. et al. before the Delaware District Court (1:12-CV-00783-GMS) based on US 7,941,357 (trading system).

7.  Third party submissions (effective as of 16 Sep 2012, faq, info). As replacement of the ended pilot programs Peer-to-Patent and Peer Review and very similar to Art. 115 EPC, the AIA has introduced the option for third parties and interested members of the public to submit relevant prior art and related observations during the examination proceedings – however, only prior to issuance of the first Office Action on the merits.

8.  Supplemental examination (effective as of 16 Sep 2012, faq, info). Comparable to the European limitation proceedings under  Art 105a EPC, a patent proprietor can request supplemental examination of his patent in case relevant prior art is revealed only after the grant. The purpose of such request may be to strengthen the patent’s validity or to heal inequitable conduct. Contrary to European limitation proceedings, where the submitted claims are only examined as to whether they really limit the granted scope of protection, supplemental examination will be a real examination proceedings on the merits, albeit limited to the newly submitted prior art.

9.  Prior use rights (effective as of 16 Sep 2011, info).Formerly, prior use rights were an admissible defensive measure only in infringement lawsuits based on a business method patents. This measure, which was introduced in reaction to the Federal Ciruit’s State Street Bank decision in 1999 in order to protect such businesses that used a patented business method as a trade secret, could be raised if the accused infringer used the respective business method more than one year before the filing date of the enforced patent.

The AIA extended the availability of the prior use rights defense to all kinds of patents, 35 USC § 273 (a):

[...] subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process, that would otherwise infringe a claimed invention against the person [...].

Except for the one-year-term and some minor differences (e.g. the university exception) this new legal institute is essentially comparable with the prior use rights we know in Europe, e.g. as implemented in section 12 of the German Patent Act or Section 64 of the UK Patents Act.

10.  Patent marking (effective as of  16 Sep 2011). In order to reduce the number of false marking lawsuits, the right to file a civil action for false  patent marking has been limited from “any person” to “a person who has suffered a competitive injury”. That is, false marking is now regarded as an act of unfair competition with the effect that private persons and uninvolved entities cannot anymore initiate a legal action for false marking.

This is basically the situation in Germany, where § 8 (3) UWG (Act against Unfair Competition) grants the right to sue to affected competitors and certain associations only.