America Invents Act: A Sea Change in Patent Law

President Obama signed the Leahy-Smith America Invents Act (AIA) into law on September 16, 2011.  The AIA is the first major change in the U.S. patent law system since 1952 and probably the most far reaching statutory changes since the 1836 Patent Act established the Patent Office and the modern system of patent examination.  The changes include substantive changes to the standards of patentability as well as significant changes to the way the Patent Office handles challenges to the grant of a patent.

Some parts of the law went into effect upon enactment, but the more significant changes will go into effect at various times in the future.  It will be years before we are fully converted to the new system, and practitioners must keep track of both the current law and the new law in the interim.

Although the AIA did not include venue or damages reform that was in past versions of patent reform legislation, it did include an anti-joinder rule in patent cases.  The new anti-joinder rule prohibits the joinder of multiple defendants in the same patent case just because they have infringed the same patent(s).  Rather, joinder is now only proper if the defendants all allegedly infringe the patent with the same product or process.

The anti-joinder rule went into effect on September 16, 2011 and has resulted in a decrease in the number of defendants that are sued in a single case, particularly in the Eastern District of Texas.  Although the full effect of the new anti-joinder provision remains to be seen, it will likely result in more cases being filed in venues other than the Eastern District of Texas.  Delaware, for example, has seen an increase in the number of patent cases filed there given that many corporations are incorporated in Delaware.

Another significant change of the American Invents Act is the conversion from a “first to invent” to a “first to file” patent system that will go into effect for patent applications with an effective filing date on or after March 16, 2013.  Under the current system, the first person to invent is generally entitled to a patent even if another inventor files an application first.  The first to file rule is not absolute, however.  For example, a new “derivation proceeding” will allow a second filer to obtain a patent upon proof that the first filer derived the invention from the second filer.

A number of changes to patent office procedure will go into effect on September 16, 2012, including a new third party submission procedure, post-grant review, and inter partes review.  These new procedures will affect strategies for both obtaining patent protection and defending against the patents of others.

To avoid getting caught behind the curve, it is important for companies to plan for the changes in the law now and to implement strategies to take advantage of the new laws.  Without proper planning, valuable patent protection may be lost or the ability to operate freely may be impeded by the patents of others.

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