RESTRICTEDWORLD TRADE
ORGANIZATIONIP/Q3/USA/1/Add.1
30 September 1998
(98-3788)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
REVIEW OF LEGISLATION IN THE FIELDS OF PATENTS, LAYOUT-DESIGNS
(TOPOGRAPHIES) OF INTEGRATED CIRCUITS, PROTECTION OF
UNDISCLOSED INFORMATION AND CONTROL OF
ANTI-COMPETITIVE PRACTICES IN
CONTRACTUAL LICENCES
UNITED STATES
Addendum
The present document reproduces the responses from the United States to follow-up
questions which Japan had posed to the United States in the context of the Council's review meetingthat took place from 26 to 30 May 1997.  For th e sake of convenience, the initial questions and
answers, which have already been distributed in document IP/Q3/USA/1, are reproduced in thepresent document as well.
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RESPONSES FROM THE UNITED STATES TO FOLLOW-UP QUESTIONS FROM JAPAN
Initial question from Japan
9. According to 35 U.S.C. 102(e) or 35 U.S.C. 103, an application for an invention shall be rejected
if, at the time of invention, it is identical to, or obvious to a person skilled in the art from, an invention byanother person described in a patent granted on an ap plication made before the former invention.  In such
case, if another person’s application claims a priority right, does the defeating effect go back to thepriority date?  If this is not the ca se (Hilmer I), please explain the cons istency with Article 4B of the Paris
Convention applied in Article 2.1 of the TRIPS Agreement establishing that the filing of a third partybetween the priority date and the actual date does not give rise to any right to the said third party.Furthermore, if this is not the case, patented inventions which are obvious from one another may co-existand exert an influence on one another’s exclusive rights in a restrictive way.  Please explain whether thissituation unreasonably prejudices the exclusive right conferred under Article 28 of the TRIPS Agreement.
Section 102(e) cannot serve to preclude the grant of a patent on an application for which an applicant
has established through a valid claim for priority to a foreig n filed application an effective filing date that is prior
to the filing date of an issued United States patent.  On this basis alone, section 102(e) is consistent with Article4B of the Paris Convention, as any party who has made an effective priority claim will not lose rights due to thefiling during the priority year by another of an application in the United States that results in a patent.
The second issue raised in the question is the prior art date of a United States patent in which a claim
has been made for priority to a foreign-filed application.  The effective filing date for purposes of section 102(e)of such an application is the actual filing date of the United States application, not the priority date claimed in
such an application.  The definition of the effective date as a prior art reference under the so-called "Hilmer"IP/Q3/USA/1/Add.1
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rule is not inconsistent with the obligations of Article 4B of the Paris Convention, as it will not affect the ability
of an applicant to obtain a patent where the applicant has made a priority claim that establishes an effective filingdate prior to the effective prior art date of the patent.
The final issue raised by this question is whether the exclusive rights guaranteed to patent owners
through Article 28 of the TRIPS Agreement are prejudiced because of the effect of the Hilmer rule.  The basisfor this question appears to be the assumption that an applicant who has obtained a patent in which a validpriority claim has been made will not be able to preclude the issuance of a second patent on the same invention,or an obvious variant thereof, through operation of section 102(e)/103 to a party who has filed an applicationafter the first patentee’s priority date but before his US fili ng date.  As a result, it is assumed that patents will be
granted that are obvious in view of each other.
This assumption is incorrect, as section 102(e)/103 is not the only legal grounds governing the two
applications in the situation described above. Section 102(g) also will serve to ensure that only one patent willissue on one invention.  Operation of section 102(g) in a situation where section 102(e), standing alone, would
not preclude the issuance of two patents is illustrated in the figure below.
Invention Priority 102 (e)
Date (A) Date Date
Applicant A |  -  -  -  | | PatentApplicant B     |  -  -  -  | X No Patent
        Invention US Filing
        Date (B) Date
The changes implemented by the Uruguay Round Agreements Act of 1994 permit nationals from any
WTO Member to prove a date of invention relying on evidence concerning the invention from outside the UnitedStates.  In view of these points, the answer to the question of whether United States patent law due to thesituation described above "unreasonably prejudices the exclusive right conferred under TRIPS Article 28" isclearly no.
[Follow-up question from Japan]
The US answer appears to apply only to a case where the claims of the two applications
are found interfering and the first inventor is granted a patent right through the interferingproceeding.  This does not apply to the case where application A with priority claim describestwo inventions X and Y and claims only X, whereas application B filed between the priority dateand actual date of the application A claims invention Y.  The interference proceeding may not bedeclared and a patent right might be granted to both X and Y according to Hilmer rule.  Pleaseexplain the consistency of such a practice with Article 4B of the Paris Convention, whichstipulates that any acts accomplished in the interval cannot give rise to any third-party right orany right of personal possession.  Even though the applicant of application A does not claim
invention Y, he should have the right to exclude any third-party from obtaining a patent rightwith regard to invention Y because he has disclosed the invention Y.  Further please explain theconsistency with Article 28 of the TRIPS Agreement in the case where the exploitation of X isunreasonably prejudiced due to the existence of Y which has economical relation with X(example:  X and Y are complementary components for one and the same device).
1
                                                     
1The delegation of Japan has indicated that this follow-up question also applies to its original question No. 10.IP/Q3/USA/1/Add.1
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The statement by Japan in their follow-up ques tion that “[t]he US answer appears to apply
only to a case where the claims of the two applications are found interfering and the first inventor is
granted a patent right through the interfering proceeding” is not an accurate statement of the law
regarding section 102(g) of title 35, United States Code.  The Court of Appeals for the Federal Circuit
has held that the application of section 102(g) is not limited to interference proceedings and that it
also provides a basis for a type of anticipation.  New Idea Farm Equip. Corp. v. Sperry Corp.,  916
F.2d 1561, 16 USPQ2d 1424 (Fed. Cir. 1990); Hybritech Inc. v. Monoclonal Antibodies , Inc., 802
F.2d 1367, 231 USPQ 81 (Fed. Cir. 1986).  With that understanding of the operation of section
102(g), we stand by our original response to questions 9 and 10.
Initial question from Japan
10. According to 35 U.S.C. 102(g) or 35 U.S.C. 103, an application for an invention shall be rejected
if, at the time of invention, it is identical to, or obvious to a person skilled in the art from, an invention byanother person which was made before the former invention and had not been abandoned.  In such case,if another person’s application claims a priority right, does the defeating effect go back to the prioritydate?  If not (Hilmer II), please explain the consistency with Article 4B of the Paris Convention applied inArticle 2.1 of the TRIPS Agreement setting out that th e filing of a third party between the priority date
and the actual date does not give rise to any right to the said third party.  Furthermore, if this is not thecase, it may happen that patented inventions which are obvious from one another may co-exist and exertan influence on one another’s exclusive rights in a restrictive way.  Please explain whether this situationunreasonably prejudices the exclusive ri ght conferred under TRIPS Article 28.
The issue addressed by section 102(g) is the date of invention.  The evidence that can be relied upon to
prove a date of invention is not limited to evidence of an earlier filing in another country, but can be any typeevidence that will persuasive in establishing the date of invention by the applicant.  Taking into account thechanges made to 35 U.S.C. 104 through the Uruguay Round Agreements Act, if an applicant is able todemonstrate a date of invention that is prior to the eff ective filing date established through a claim to priority
under 35 U.S.C. 119, that date of invention will be used in the context of application of section 102(g), ratherthan the priority date.  The issue rais ed in the second part of the question, thus, does not arise under US law as
amended to comply with US obligations under the TRIPS Agreement.
The answer provided in relation to question No. 9 regarding prejudice of exclusive rights under Article
28 is equally applicable to this question
.
[Follow-up question from Japan]
According to the US answer, the date of invention in another WTO Member country can
be used in the context of application of section 102(g).  Does this mean that such an invention is
qualified for prior art even if it is neither claimed for a patent in a US patent application norsubjected in an interference proceeding?  If so, please explain how this understanding conformsto the text of 102(g) which limits the prior art effect of invention to the one "in this country" (i.e.the United States of America).
The above response to the follow-up question to questions 9 and 10 is also applicable
to this follow-up question.  Further, note that  the Statement for Administrative Action that
accompanied the URAA addresses the last issue raised in the follow-up.  That is, the SAA
states:
As foreign inventive activity may now be considered in a determination of which inventor
was the first to invent, fairness to both U.S. and foreign inventors demands a certain identityof treatment with regard to reliance on inven tive activity in the United States and abroad.
Consequently, the inability of an inventor to rely on a date of invention in the United StatesIP/Q3/USA/1/Add.1
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where the invention has been subsequently abandoned, suppressed or concealed the invention
under patentability determinations under Section 102(g) should apply equally to the inventor
relying on foreign inventive activity.  See SAA, Part B(1)(f).
Initial question from Japan
11. Whereas 35 U.S.C. 154(c)(3) allows third parties to continue the exploitation of an invention
which began, or for which significant investment was made, before the date 6 months following the date of
the enactment of the Uruguay Round Agreements Acts upon the payment of an equitable remuneration to
the patentee, Article 70.4 of the TRIPS Agreement al lows a WTO Member to limit the remedies available
for such acts commenced only before the date of acceptance of the WTO Agreement by the Member.Please explain whether these two provisions are the same or not.  If not, please explain the consistencybetween the two provisions.
Article 70.4 of the TRIPS Agreement states:
"In respect of any acts in respect of specific objects embodying protected subject
matter which become infringing under the terms of legislation in conformity with this
Agreement, and which were commenced, or in respect of which a significant
investment was made, before the date of acceptance of the WTO Agreement by thatMember, any Member may provide for a limitation of the remedies available to theright holder as to the continued performance of such acts after the date of applicationof this Agreement for that Member. In such cases the Member shall, however, atleast provide for the payment of equitable remuneration."
The WTO Agreement became applicable to the United States, as it did for all developed countries, on
1 January 1996.  The date on which the United States "accepted" the WTO Agreement was 30 December 1994.Under the terms of Article 70.4, acts that were comm enced or for which a significant investment was made
before the date of acceptance of the WTO Agreement by the United States can serve as a basis for enjoyinglimited liability in respect of infringement of a patent whose term was extended through operation of Article 70.2
of the TRIPS Agreement.  Section 154(a)(3) recognizes acts that occurred six months after the date of passage ofthe legislation - which is five months and nine days after the WTO agreement was accepted by the United States.To our knowledge, this grant of a minimal amount of additional time has not had a commercial effect.
[Follow-up question from  Japan]
With respect to Article 70.4 of the TRIPS Agreement, the US Government recognizes the
time period which is longer than that as provided for in Article 70.4 just because acts in such anextended period have not had a commercial effect.  Please explain whether Article 70.4 whichspecifies the exception to a patent right should be applied superior to the general provision ofArticle 30.  If so, please explain whether such an extension is consistent with Article 70.4.
The United States has answered question 11 clearly.  We do not understand the Government
of Japan’s hypothetical question regarding the superiority of Article 30 in relation to Article 70.4.  We
are, therefore, unable to answer.
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