Source: https://neifeld.com/pubs/2000_newpatentlaws.html
Timestamp: 2019-02-18 15:45:17
Document Index: 245950446

Matched Legal Cases: ['§ 4508', '§ 4502', '§ 4503', '§ 4502', '§ 4504', '§ 4503', '§ 4503', '§ 4503', '§ 4801', '§ 4801', '§ 4801', '§ 4801', '§ 4802', '§ 4505', '§ 4508', 'art 2', 'art 1', '§ 4508', '§ 4806', '§ 4807', '§ 4507', '§ 4405', '§ 4402', '§ 4402', '§ 4402', '§ 4403', '§ 4402', '§ 4402', '§ 4402', '§ 4402', '§ 4302', '§ 4302', '§ 4302', '§ 4608', '§ 4604', '§ 4604', '§ 4604', '§ 4803']

SUMMARY AND ANALYSIS OF THE NEW PATENT LAWS ENACTED NOVEMBER 29, 1999
BY RICHARD NEIFELD(1)
II. PUBLICATION OF PENDING US NATIONAL APPLICATIONS
B. Publication - 35 USC 122(b)
C. Provisional Rights for Published Claims - 35 USC 154(d)
D. Related Changes to Priority Laws - 35 USC 119 and 120
E. Comments on the Publication Provision
III. CHANGES TO THE EFFECTS OF PENDENCY AND CO-PENDENCY WITH PROVISIONAL APPLICATIONS - 35 USC 111(b)(5) and 119(e)(2)
IV. RIGHT OF PRIORITY EXTENDED TO ALL WTO COUNTRIES - 35 USC 119(A)
V. CHANGES TO THE DEFINITION OF PRIOR ART
A. Prior Art Effect of Published Applications - 35 USC 102(e)
B. Limitation on the Prior Art Effect of Interfering Claims - 35 USC 102(g)
C. Exclusion from Prior Art of Commonly Assigned Patents - 35 USC 103(e), (f), and (g)
D. Patent Barring Effect of Published Claims - 35 USC 135(b)(2)
VI. THE NEW PATENT TERM GUARANTEE - 35 USC 154(b)
B. Provisions of the New Patent Term Extensions - 35 USC 154(b)(1)
C. Limitations on the New Patent Term Extensions - 35 USC 154(b)(2)
D. The New Patent Term Extension Determination and Notice Provisions - 35 USC 154(b)(3)
E. The Remedy for Correction of an Incorrect Patent Term Extension Determination - 35 USC 154(b)(4)
VII. THE NEW FIRST INVENTOR'S DEFENSE - 35 USC 273
B. Definition of Terms Used in the First Inventor's Defense - 35 USC 273(a)
C. Elements of the First Inventor's Defense - 35 USC 273(b)(1) and (2)
D. Limitations on the First Inventor's Defense - 35 USC 273(b)(3)-(9)
E. Comments Specific to 35 USC 273(b)(9)
VIII. OPTIONAL INTER PARTES REEXAMINATION - 35 USC 311 ET SEQ
B. Requirements For Inter Partes Reexamination - 35 USC 311
C. Procedures for Inter Partes Reexamination - 35 USC 312-317
D. Estoppel Effect of Inter Partes Reexamination - 35 USC 315(c) and Section 4607 of the Act
E. The Right to a Stay of Litigation
IX. CHANGES TO THE MEDICAL PRACTITIONER'S ACT UNDER 35 USC 287(c)(4) EXCLUDING CERTAIN APPLICATIONS FROM ITS PROVISIONS
On November 29, 1999, the President signed into law S. 1948 (the "Act") which included a Title IV directed to the patent laws of the United States. This paper summarizes and comments on the portion of Title IV affecting the practice of patent law.
The amendments relating to publication are effective on November 29, 2000 (one year after enactment of the Act) and apply to all national applications (filed under 35 USC 111) and international applications complying with 35 USC 371 (entry into the US national stage) filed on or after that date.(2) Applications will be published eighteen months after their earliest claimed priority date and will provide provisional rights to a reasonable royalty for infringement of claims substantially similar to claims in the issued patent.(3) Since the priority date must be known in advance for the date of publication to be set, the statute is amended to give the USPTO the authority to require applicants to timely claim priority.(4)
35 USC 122 is amended to maintain non-published applications in secret, provide for publication of applications eighteen months after their earliest claimed priority date unless the applicant specifically requests no publication and certifies that no foreign application for the invention has been filed, to authorize the USPTO to prevent pre-issuance oppositions to published applications, and to exclude from publication applications under secrecy orders.(5)
35 USC 154(d) is amended to provide the remedy of a reasonable royalty from the time a US national application or an English language PCT application is published until the time the patent issues, for infringement of any claim in the published application that is substantially identical to a claim in the issued patent. It also sets a statute of limitations for actions for a reasonable royalty for infringement of the published application that runs six years from the issue date of the patent.(6)
35 USC 119(b) is amended to require only that a Paris Convention priority claim, as opposed to a claim and a certified copy of the foreign application, be made during the pendency of the US application, but it also provides that unintentional failure to timely make a Paris Convention priority claim may be curable via a petition. It also provides that filing of a certified copy, translation, and other papers relating to the Paris Convention priority application may be required by the USPTO, at its discretion.(7)
35 USC 119(e)(1) is amended to grant the USPTO discretion to set when a claim in a national application to a provisional application must be made, but it also provides that unintentional failure to timely make a claim in the time period set may be curable via a petition.(8)
35 USC 120 is amended to authorize the USPTO to set a time period in which an applicant must make a claim the benefit of an earlier filed US application, but it also provides that unintentional failure to timely make a claim in the time period set may be curable via a petition.(9)
The statute does not specify if applications filed on or shortly after November 29, 2000 that claim priority dates more than eighteen months earlier are immediately published. Presumably they would be published as soon as practicable.
The statute does not specify if continuations and divisions for previously published applications that contain the same specification as the earlier application will be published. It would be a waste of the USPTO's resources to republish the same specification for every such application. Hopefully, the USPTO will implement rules enabling it to publish each unique specification only once.
Publication will have a dramatic effect upon interference practice. Most interferences involve a patent because (1) examiners rarely sua sponte recommend an interference and (2) it is only after the patent is issued that the owner of the interfering application realizes the existence of interfering claims and requests an interference. However, the publication of pending applications is certain to lead to more 37 CFR 1.604 requests for interferences with applications.
The publication provisions give the USPTO authority to prevent public protests from slowing down the issuance of applications. However, if the USPTO is too aggressive in exercising that authority, it may result in a substantial fraction of patents having an inter partes reexamination request filed on the same day the patent issues, thereby bogging down the USPTO in a relatively large fraction of resource consuming post issuance proceedings.
Finally, removing the requirement to file a certified copy of a foreign priority application will reduce the burden on foreign applicants.
The amendments to provisional applications were effective on November 29, 1999 and are retroactively applied to all provisional applications filed after June 07, 1995, unless there is preexisting "action" involving the provisional application.(10)
One question that these amendments raise is whether the statutory language "action" include an interference.
35 USC 111(b)(5) is amended to define a provisional application as "regarded as abandoned" 12 months from its filing date, subject to new section 35 USC 119(e)(3).(11)
35 USC 119(e)(3) is added and defines the period of pendency of a provisional application to extend from a holiday to the next succeeding secular business day in the District of Columbia.(12)
35 USC 119(e)(2) is amended to eliminate the co-pendency requirement for a provisional application and either a national or PCT application, for the provisional application to be relied upon in any proceeding in the USPTO.(13)
The elimination of co-pendency is unprecedented in US law. The legal effect of being able to rely upon a provisional application filed more than twelve months prior to the filing date of an application directed to the same invention is unknown. Certainly such evidence can be used to show conception. The legislative history indicates that removal of the copendency requirement was to ensure that the other amendments authorizing priority claims to provisional applications was effective. However, it has a much broader implication, raising the possibility that a break in the chain of copendency is not fatal to a provisional application's serving as a constructive reduction to practice.(14)
The case law in this area is based on the theory that a break in copendency terminates a constructive reduction to practice. However, the case law assumed abandonment of the invention, or intent to abandon, partially because copendency was a requirement. Since copendency is expressly not a requirement for relying upon a provisional application as proof of invention, there seems to be no good rationale why a break in copendency should prevent a provisional application from serving as a constructive reduction to practice.
35 USC 119(a) is amended to extend the Paris Convention right of priority to any member of the WTO.(15) No date of amendment is specified, so presumably this section is effective on November 29, 1999, the date of enactment of the Act. (When the Act was enacted Angola, Antigua, Belize, Brunei, Djibouti, Macau, Maldives, Myanmar, Namibia, Pakistan, Qatar, Solomon Islands, and Thailand were WTO members and were not Paris Convention members.) 35 USC 119(a) is also amended to extend the effect of a Paris Convention claim to applications for plant breeders rights in a WTO or UPOV country.
The WTO extensions were enacted to comply with the United States' TRIPS obligations.
35 USC 102(e) is amended to provide prior art effect to a published application as of its filing date for both (1) a published US national application and (2) a published PCT application designating the US, filed anywhere in the world, so long as the PCT application was published in the English language.(16)
It is clear what will be the ultimate effect of the amendments to 35 USC 102(e). However, it is unclear what applications will be affected by amended 35 USC 102(e) due to the effective date for these amendments.
The effective date of 35 USC 102(e) is defined in section 4508 of the Act, which reads:
SEC. 4508. EFFECTIVE DATE.
Sections 4502 through 4507, and the amendments made by such sections, shall take effect on the date that is 1 year after the date of the enactment of this Act and shall apply to all applications filed under section 111 of title 35, United States Code, on or after that date, and all applications complying with section 371 of title 35, United States Code, that resulted from international applications filed on or after that date. The amendments made by sections 4504 and 4505 shall apply to any such application voluntarily published by the applicant under procedures established under this subtitle that is pending on the date that is 1 year after the date of the enactment of this Act. The amendment made by section 4504 shall also apply to international applications designating the United States that are filed on or after the date that is 1 year after the date of the enactment of this Act.
The first sentence of section 4508 of the Act identifies the effective dates for amendments relating to all of the application publication provisions, including section 4505, which is the section containing amended 35 USC 102(e). Section 4508 states (1) that the publication amendments are effective on November 29, 2000 (one year after enactment of the act) and (2) that those amendments apply to all national applications (filed under 35 USC 111) and international applications complying with 35 USC 371 (entry into the US national stage) filed on or after that date. Section 4508 clearly defines the date that publication will start to be November 29, 2000. Based upon the first sentence of section 4508, amended 35 USC 102(e) is applicable to all national applications (filed under 35 USC 111) and international applications complying with 35 USC 371 (entry into the US national stage) filed on or after November 29, 2000.
The second sentence of section 4508 of the Act also identifies to which applications the amendments to 35 USC 102(e) (and the provisional rights) will apply. It states that amended 35 USC 102(e) will apply to "any such application voluntarily published by the applicant under procedures established under this subtitle that is pending on the date that is 1 year after" November 29, 1999. The "established under procedures of this subtitle" apparently excludes PCT applications since the publication subtitle of the Act does not establish publication of PCT applications. The first sentence of section 4508 does not apply to applications filed prior to November 29, 2000. Therefore, that sentence does not authorize the Director to publish applications filed prior to November 29, 2000. Therefore, the only way such applications could be published is with the applicant's permission. The "voluntarily published" recitation apparently refers to the applicant's permission expressed via a request that the Director publish his or her application. The third sentence of 35 USC 122(b)(1) provides a "procedure[] established under this subtitle" for the applicant to request publication of her application. Presumably, the Director will honor a request to publish an application pending on November 29, 2000, and the published application will then be prior art as of its filing date pursuant to section 4508 of the Act and amended 35 USC 102(e).
In summary, amended 35 USC 102(e) likely will be construed to provide a published application prior art effect as of its filing date if the application (1) was a US national application pending on or after November 29, 2000 or (2) was a PCT application filed on or after November 29, 2000 and which was published in English. It is unclear from 4508 and 35 USC 102(e) if the PCT application must also comply with 35 USC 371 (entry into the national stage) requirements in order to be 35 USC 102(e) prior art.(17) In addition, it appears that an applicant can file a 35 USC 122(b)(1) request to have published an application pending on November 29, 2000. The same analysis holds true for the provisional rights section 4504 of the Act.
This amendment favors filing PCT applications, as follow ons, to US provisional applications, instead of US national applications, since it removes the prior drawback to filing PCT applications. That drawback was that the USPTO did not recognize PCT applications as prior art as of their filing date.(18) Oddly enough, the USTPO did recognize the filing date of a PCT application, as the PCT application's prior art date, if the PCT application was claimed as a priority application in an issued patent (i.e., the patent was a continuation of the PCT application). That bizarre practice by the USPTO resulted in the patent bar's filing continuation applications claiming priority to a PCT application, instead of entering the national stage with the PCT application, for the purpose of obtaining the prior art effect of the filing date of the PCT application.(19) The USPTO's lack of recognition of the prior art effect of PCT applications has been legislatively overruled by this statutory amendment to 35 USC 102(e). In fact, under the new statute, it would be foolish to bypass the US national stage by filing a continuation of a PCT application, since that procedure would not comply with the entry into the national stage requirement of section 4508 imposed on new 35 USC 102(e).(20)
Another drawback to filing a PCT application instead of a US national application is that filing the PCT application starts the nominal twenty year patent term, but it does not advance the application towards issuance of a US patent. However, that fact is ameliorated by the facts that PCT applications filed in the USPTO, EPC, and JPO are searched sooner after their filing date than all other applications,(21) and the rapid search obtained with a PCT application may actually result (depending upon several other factors) in a patent's being issued more rapidly than if a non-PCT application constitutes the first filing.
35 USC 102(g) is amended to provide for a showing, only in an interference in the USPTO (pursuant to 35 USC 135) or a district court (pursuant to 35 USC 291), of priority under 35 USC 104, to defeat another's entitlement to a patent. (22)
This section impliedly requires showing of diligence and, when necessary, Peeler diligence, by foreign inventors as proof of priority, thereby preserving the current rules of priority law. In contrast with the amendment to 35 USC 102(e), the amendment to 35 USC 102(g) preserves the Hilmer doctrine to the extent possible that is also consistent with new 35 USC 104, by precluding 35 USC 104 prior invention showings outside the US from constituting prior art, except in the context of an interference.(23)
Effective on the November 29, 1999 enactment date of the Act, 35 USC 103(c) is amended so that commonly assigned prior filed applications' disclosures are not and will not be obviousness-type prior art against "any application for patent filed on or after" November 29, 1999.(24)
What happens if ownership changes after the date of invention but prior to filing? Whether the courts will consider that fact pattern to provide common assignment and therefore be excluded from 35 USC 103 prior art is unclear. Also, bear in mind that the prior art exclusion still does not apply to a 35 USC 102 anticipation.
The "any application" recitation literally includes continuing applications and reissue applications. Thus, an applicant can moot a 35 USC 102(e)/103 rejection based upon a commonly assigned patent simply by filing a continuation of the application containing that rejection.
It may be possible for a patentee to reissue a patent in which claims were narrowed due to rejections under 35 USC 102(e)/103 based upon a commonly assigned patent or where a commonly assigned patent may limit the scope of the doctrine of equivalents. However, it is an open legal question whether broader reissue application claims presented on the basis that the error was the existence of rejections based upon art that is no longer prior art under the new law violates the recapture doctrine.(25)
New 35 US 135(b)(2) bars a claim in another application to substantially the same invention as is claimed in an application published under 35 USC 122(b) if no such claim was presented prior to one year after the date of publication of the application.(26)
This section tracks the prior section 35 USC 135(b), now 35 USC 135(b)(1), and preserves the one year statute of limitations on presenting a claim to substantially the same invention as another's claim. 35 USC 122(b) refers to publication of patents. 35 USC 122(b) is not expressly limited to national applications filed pursuant to 35 USC 111. Moreover, 35 USC 371 is amended to state that publication of a PCT application "shall have the same effect as an application for patent published under section 122(b)." Therefore, it appears that 35 USC 135(b)(2) applies both to national and PCT applications as of their publication date. Thus, amended 35 USC 135(b) substantially expands the number of inventions to which the claim bar applies, by including PCT applications, and substantially advances in time, from one year post issuance to one year post publication, the requirement to file a claim to "substantially the same subject matter" in order to avoid the claim bar. The probable result of the combined effects of publication of applications and advancing in time the claim bar to one year from publication will be to move forward in time priority disputes, so that more priority disputes will be resolved as application-application interferences in the USPTO, and less priority disputes will be resolved either as 35 USC 291 actions or as 35 USC 102(g) priority based defenses to validity of an asserted patent.
In addition, one can much more effectively present claims drafted to interfere with claims in a published application than in a non-published application.(27) Since claim copying will be more effective in the publication era, it is likely that more requests for interferences with applications will be filed and that a higher fraction of those requests will result in 35 USC 135(a) interferences.(28)
It is also likely that examiners, soon to have the ability to search and cite pending published applications, will more often make ex parte rejections based on those published applications under 35 USC 135(b)(2), in light of the holding in In re McGrew, 120 F.3d 1236, 43 USPQ2d 1632 (Fed. Cir. 1997) (Rich, J.), aff'g Ex parte McGrew, 41 USPQ2d 2004 (PTOBPAI 1995), that:
The application of section 135(b) is not limited to inter partes interference proceedings but may be used, in accordance with its literal terms, as a basis for ex parte rejections.
Moreover, it is likely that the interference bar, having access to the same data, will test this theory during preliminary motions periods in interferences by arguing that an opponent's claims are barred based upon a third party's published application's claims.(29)
Furthermore, the claims of a published application are both conceptually and legally different from the claims of an issued patent, and the new provisions of 35 USC 135(b) have not taken these differences into account. Patented claims carry a presumption of validity, which implies a presumption that their specification contains 35 USC 112 support for them. Will a claim in a non-enabling specification, say in the biotechnology field, bar the first true inventor from that claim? That is not the intended result of the patent laws, but that would be the result of a literal interpretation of 35 USC 135(b)(2). As a corollary, it may be desirable for applicants to draft claims that stretch the limits of the support in their application for the purpose of barring a subsequent in time claims to the invention presented by the actual first inventor.
The amendments to the patent term take effect on May 29, 2000 (6 months after the November 29, 1999 date of enactment of the Act) and apply to any patent (except a design patent) issuing on any application filed on or after May 29, 2000.(30) New section 35 USC 154(b)(1) provides patent term extensions, and new section 35 USC 154(b)(2) limits those term extensions.(31) These new provisions provide term extensions of the 20 year patent term, which is specified in 35 USC 154(a)(2), for certain periods of delays in issuance of the patent that are beyond the control of the applicant.
Term extensions are determined by (a) determining the actual days qualifying for a delay in issuance due to (1) untimely action on the part of the USPTO, (2) delays in issuance due to interferences or secrecy orders imposed on the application, and (3) delays in issuance due to improper rejections of claims subsequently reversed by the Board or a court and (b) then subtracting from that number of days the number of days of delay in issuance due to the applicant's lack of diligence in prosecuting the application.
New section 35 USC 154(b)(1)(A) adjusts the patent term by increasing the patent term to account for the USPTO's delays in prosecution.(32) This section lengthens the patent term by (1) any time in excess of 14 months after the filing date of an application for the USPTO to issue a first office action in the application, (2) any time in excess of 4 months for the USPTO to properly respond to the applicant, (3) any time in excess of 4 months for the USPTO to properly respond to conclusion of any Board proceeding or court action involving the application.
New section 35 USC 154(b)(1)(B) lengthens the twenty year term of a patent by increasing it to account for any net time exceeding three years that the application is being examined by the examining corps.(33) Specifically, this section provides that the term of a patent issuing from an application shall be extended by 1 day for each day over three years that the application is pending, but that the extension shall not include the periods during which the application is involved in an interference under 35 USC 135(a), is under a secrecy order imposed under 35 USC 181, or is under any appellate review by the Board or a court. The extension also does not include any delay due to examination under the new continued examination provision of 35 USC 132 that now defines CPA (Continued Prosecution Application) practice.(34)
New section 35 USC 154(b)(1)(C) lengthens the twenty year term of a patent by increasing it to account for delays in issuance due to interferences, secrecy orders, or appellate review.(35) Specifically, this section provides that the term of a patent shall be extended for a period equal to the delay in issuing the application equal to the duration during which the application was involved in an interference, was under a 35 USC 181 secrecy order, or was under appellate review that resulted in a reversal of an adverse decision of patentability of any claim.
New section 35 USC 154(b)(2) limits the period of extensions to the twenty year patent term provided under 35 USC 154(b)(1) by stating that, to "the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days [that] the issuance of the patent was delayed."(36) Moreover, it provides that no extension can extend the term of the patent beyond a date specified in a terminal disclaimer. Furthermore, this section reduces the extension by the amount of time during "which the applicant failed to engage in reasonable efforts to conclude prosecution of the application," and it spells out that any period in excess of three months from the USPTO's mail date of a "rejection, objection, argument, or request" for the applicant to file a response will be subtracted from the term extension period.
It appears from the new 35 USC 154(b)(2) that the term extensions for (b)(1)(A), (b)(1)(B), and (b)(1)(C) can be cumulative up to "the actual number of days that the issuance of the application into a patent was delayed." The legislative history supports this conclusion, stating that:
To the extent that there are multiple grounds for extending the term of a patent that may exist simultaneously (e.g., delay due to a secrecy order under section 181 and administrative delay under section 154(b)(1)(A)), the term should not be extended for each ground of delay but only for the actual number of days that the issuance of a patent was delayed.
What is "the actual number of days that the issuance of a patent was delayed"? There is no explicit definition of an "actual number of days of delay." Each of 35 USC 154 subsections (b)(1)(A), (b)(1)(B), and (b)(1)(C) define the different cumulative number of days of delay. The phrase "actual number of days" and the legislative history indicate that this term means any day on which any one of (b)(1)(A), (b)(1)(B), and (b)(1)(C) was operative, should only be counted once in calculating patent term extension. This in turn means that it is not the sums of days of delay calculated for each one of the (b)(1)(A), (b)(1)(B), and (b)(1)(C) that defines a term extension. Instead, it is the sum of the days during which any one of (b)(1)(A), (b)(1)(B), and (b)(1)(C) is operative to provide an extension. Practitioners therefore need to keep track of the days on which any of (b)(1)(A), (b)(1)(B), and (b)(1)(C) are operative to provide an extension, and to count those days.
35 USC 154(b)(3) requires the Director (i.e., the USPTO) to determine the patent term extension due each application and include that determination with the notice of allowance.(37)
Unfortunately, the term extension determination provided with the notice of allowance will not be reliable since one of the terms essential in the calculation of term extension is whether the patent issued within four months after payment of the issue fee (see 35 USC 154(b)(1)(A)((iv)), and that event does not occur until after the notice of allowance is sent!
35 USC 154(b)(4) gives the patentee 180 days from the grant of the patent to sue the Director in the U.S. District Court for the District of Columbia under Chapter 7 of Title 7 (Judicial Review of Agency Decisions) to require the Director to correct the determination of the term of the patent. This section contains a provision precluding third party intervention.(38)
Approximately 150,000 patents issue each year. The patent term extension calculation requires a determination of an extensive number of facts, and there is a probability that the applicant's and the USPTO's determinations will disagree on each one of those facts. Hence, a significant number of patentees will disagree with the USPTO's determinations of patent term extensions. It appears that the scope of review is governed by 5 USC 706 (1) and (2)(A)-(D). Those sections do not require a finding of arbitrary and capricious action to be reversed. Since the standard of review is not impossibly high, and since there will likely be a large number of patentees disagreeing with the USPTO's term extension determinations, this new term provision in the statute may give rise to a cottage industry of patent term actions.
What happens to the term of the patent if the patentee does not sue the Director as proscribed in 35 USC 154(b)(4)? Is the term defined by the Director's determination? That is, can a patentee or a defendant argue in an infringement action that the patent term is different from the term identified in the USPTO's determination? The term is defined by 35 US 154(b)(1) and (2), and those sections are distinct from the term determination requirement of 35 USC 154(b)(3), which suggests that the Director's term determination does not statutorily define the patent term. Thus, it may be possible for a patentee or a defendant to raise the issue of the patent term in litigation.
The first inventor's defense is codified in Chapter 28 entitled "Infringement of Patents" as new 35 USC 273(a) and (b). The first inventor's defense is effective as of the November 29, 1999 enactment of the Act, but is not applicable to "actions" ongoing prior to November 29, 1999.(39) This section provides a new defense to infringement requiring proof of (1) commercial use of the claimed invention in the United States by the entity asserting the defense prior to the earliest priority filing date claimed in the asserted patent and (2) completion of the invention by the entity asserting the defense, not necessarily in the United States, more than one year prior to the patentee's earliest claimed priority filing date.(40)
The legislative history provides a good explanation why this section was enacted, stating that:
The subtitle clarifies the interface between two key branches of intellectual property law-patents and trade secrets. Patent law serves the public interest by encouraging innovation and investment in new technology, and may be thought of as providing a right to exclude other parties from an invention in return for the inventor making a public disclosure of the invention. Trade secret law, however, also serves the public interest by protecting investments in new technology. Trade secrets have taken on a new importance with an increase in the ability to patent all business methods and processes. It would be administratively and economically impossible to expect any inventor to apply for a patent on all methods and processes now deemed patentable. In order to protect inventors and to encourage proper disclosure, this subtitle focuses on methods for doing and conducting business, including methods used in connection with internal commercial operations as well as those used in connection with the sale or transfer of useful end results-whether in the form of physical products, or in the form of services, or in the form of some other useful results; for example, results produced through the manipulation of data or other inputs to produce a useful result.
35 USC 273(a) contains definitions of terms used to express the defense. 37 USC 273(b) expresses the defense using the terms defined in 35 USC 273(a).(41)
35 USC 273(a)(1) and (2) define a "commercial use" to mean (1) use of any method in the United States in connection with an internal commercial use or an actual sale or transfer of a useful end result, (2) pre-marketing or regulatory review establishing safety or efficacy, and specifically including the "regulatory review period" statutorily defined in 35 USC 156(g) with respect to patent term extensions due to governmental review of drug and biological products, or (3) a use by a non-profit of a method for which the public is the intended beneficiary. The legislative history clarifies that this section applies to non-public uses, stating that "Commercial use does not require the subject matter at issue to be accessible to or otherwise known to the public."
35 USC 273(a)(3) defines a method to mean a method of doing business. The legislative history indicates that a method of doing business should be broadly construed, stating that:
"Method" means any method for doing or conducting an entity's business.
The issue of whether an invention is a method is to be determined based on its underlying nature and not on the technicality of the form of the claims in the patent. For example, a method for doing or conducting business that has been claimed in a patent as a programmed machine, as in the State Street case, is a method for purposes of section 273 if the invention could have as easily been claimed as a method. Form should not rule substance.
35 USC 273(a)(4) defines the effective filing date of a patent to be the earliest domestic or foreign priority date claimed in the patent.
The legislative history provides an extremely broad definition of "method." If that definition is accepted, then this defense may be widely applicable. The legislative history implies that the defense can be asserted for an apparatus used to perform the claimed method. If that is the case, then the defense covers all subject matter used in connection with a commercially used method.
35 USC 273(b)(1) specifies the elements of the defense. 35 USC 273(b)(1) defines the prior user defense to infringement to be (1) a prior inventor's actual reduction to practice of the inventions defined by the claims in the asserted patent at least one year prior to the effective filing date of the patent and (2) the prior inventor's commercial use of the invention in the United States prior to the effective filing date of the patent. 35 USC 273(b)(2) clarifies that the prior inventor's defense extends (via the doctrine of exhaustion) to those purchasing the results or products of the use of that invention from the prior inventor. The legislative history indicates that the defense is widely applicable, stating that:
The first inventor defense is not limited to methods in any particular industry such as the financial services industry, but applies to any industry which relies on trade secrecy for protecting methods for doing or conducting the operations of their business.
One important consequence of the requirement in the defense relating to claimed priority dates is that there may be a statute induced benefit to claiming a priority date that does not support the claim of the patent asserted in litigation. This is because it appears from the statute that the patentee's actual date of invention of the asserted claim is irrelevant in determining if the defense exists. In light of 35 USC 273(a), a claim to an earlier priority date reduces the chance that an infringer can defend by showing completion of the claimed subject matter more than one year prior to the patent's earliest claimed priority date.
35 USC 273(b)(3)-(9) specify limitations to the first inventor's defense. The defense is only applicable to the methods defined in 35 USC 273(a)(3), is inapplicable if the invention was derived from the patentee, is limited to the claims of the asserted patent for which the defense can be established, requires proof by the standard of clear and convincing evidence, is inapplicable if the user abandoned inside the time periods specified in 35 USC 273(b)(1), and cannot be transferred to anyone except the patentee except for a sale of the line of business to which the use relates. Moreover, a purchaser of such a line of business is limited in the defense to uses occurring at the sites where the use existed prior to the purchase. Furthermore, a court can impose exceptional damages if it finds that the defense is raised without a reasonable basis. Finally, 35 USC 273(b)(9) clarifies that proof of a prior use is not evidence of prior art under 35 USC 102.
35 USC 273(b)(1) is limited to the prior inventor using the subject matter that the prior inventor actually reduced to practice. It does not provide the prior inventor the license to use obvious variations of what it reduced to practice. Thus, a company relying upon this defense will have trouble modernizing its product line. On the flip side, this statute suggests that patent applicants should obtain trivially obvious dependent claims to limit the scope of a competitors license under this defense.
35 USC 273(b)(9) preserves the rule of law respecting abandonment, suppression, or concealment provided in 35 USC 102(g). On this issue, the legislative history is instructive, stating that:
Subsection (b)(9) specifies that the successful assertion of the defense does not mean that the affected patent is invalid. Paragraph (9) eliminates a point of uncertainty under current law, and strikes a balance between the rights of an inventor who obtains a patent after another inventor has taken the steps to qualify for a prior use defense. The bill provides that the commercial use of a method in operating a business before the patentee's filing date, by an individual or entity that can establish a section 273 defense, does not invalidate the patent. For example, under current law, although the matter has seldom been litigated, a party who commercially used an invention in secrecy before the patent filing date and who also invented the subject matter before the patent owner's invention may argue that the patent is invalid under section 102 (g) of the Patent Act. Arguably, commercial use of an invention in secrecy is not suppression or concealment of the invention within the meaning of section 102(g), and therefore the party's earlier invention could invalidate the patent.8
8 See Dunlop Holdings v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 1975), cert. denied, 424 US 985 (1976).
VIII. OPTIONAL INTER PARTES REEXAMINATION - 35 USC 311 ET SEQ.
The sections of the Act providing for inter partes reexamination become effective on November 29, 1999, and they apply to "any patent that issues from an original application filed in the United States on or after" that date.(42) Inter partes reexamination provides the reexamination requestor an opportunity to respond to each of the patentee's statements, and it provides estoppel effect to any facts determined and any issues that were or could have been raised and decided.(43)
Section 4608 of the Act does not specify whether a PCT application constitutes "an original application filed in the United States." However, Article 11(3) of the PCT specifies in pertinent part that any PCT application fulfilling the formal requirements and accorded an international filing date "shall have the effect of a regular national application in each designated State as of the international filing date, which date shall be considered to be the actual filing date in each designated State." Accordingly, a PCT application designating the United States filed anywhere in the world arguably constitutes an "original application filed in the United States" for purposes of the determining if a patent issuing from it can be inter partes reexamined.
35 USC 100 is amended to provide in a section (e) a definition of "third party requestor" to be a person requesting either ex parte or inter partes reexamination who is not the patent owner. 35 USC 311-318 are added to provide authority for inter partes reexamination.(44)
35 USC 311 provides the requirements for a request for inter partes reexamination. Such a request must be based upon one or more patents and printed publications (as per 35 USC 301), identify the real party in interest, be accompanied by a fee to be specified by the Director, and specify the manner and pertinency of applying the prior art to every claim for which reexamination is requested. 35 USC 311 also provides that any person may file a request for an inter partes reexamination.
If the patent owner files the request for an inter partes reexamination presumably the proceeding is not inter partes because it involves only the patent owner. If it does involve another party, how is that other party determined? Moreover, would there be jurisdiction over that other party? Does a party in a civil action have the right to intervene or obtain third party status in an inter partes reexamination requested by the patentee? The statute provides no answers to these questions.
35 USC 312 and 313 require the USPTO to determine within three months of the filing of the request whether to order reexamination.
35 USC 313 provides that the order to inter partes reexamine may be accompanied by a first office action from the examiner.
35 USC 314 provides that the inter partes reexamination procedure for a patent shall be governed by the procedures for examining patent applications (provided by 35 USC 132 and 133). It also specifies that the patentee and the third party requestor will serve a copy on the other party of every paper each files in the reexamination and that the USPTO will send a copy of every communication with the patentee to the third party requestor. The reexamination requestor has thirty days from the date of service of any paper filed by the patentee in response to an action on the merits to file in the USPTO and serve on the patentee written comments on both the action by the USPTO and the patentee's response thereto. 35 USC 314 limits claim amendments by providing that no proposed or amended claim in the reexamination may enlarge the scope of protection provided by the original patent. Finally, 35 USC 314 requires that inter partes reexamination proceedings in the USPTO be carried out with special dispatch.
The procedures specified for examining patent applications in 35 USC 132 and 133 do not provide for anybody besides the applicant and its representatives attending a personal interview. All practitioners acknowledge that personal interviews with the examiners are effective in clarifying and rapidly resolving issues. If the third party cannot attend the personal interview, it will be shut out of the decision making process that occurs at the personal interview. Per contra, allowing the third party to attend the personal interview would have a chilling effect on the communication between the examiner and the patentee and therefore slow down the issue resolution process. How the USPTO handles this issue will have a substantial impact on a litigant's determination whether to request an inter partes reexamination.
35 USC 315 provides both the patentee and the third party requestor the right to appeal to the Board of Patent Appeals and Interferences (under 35 USC 134) any decision on any proposed new or amended claim adverse to it and the right to be a party of the other party's appeal to the Board. 35 USC 315 provides that the patentee, but not the third party requestor, has the right to appeal an adverse decision of the Board to the Court of Appeals for the Federal Circuit (under 35 USC 141-144).
35 USC 316 provides for termination of the reexamination proceeding and issuance of a reexamination certificate, and it provides for the same intervening rights law applicable to reissue applications (under 35 USC 252).
35 USC 317(a) precludes a third party or any of its privies from filing another inter partes reexamination request (but not an ex parte reexamination request) prior to publication of the certificate of reexamination resulting from their earlier filed request.
35 USC 317(b) precludes a third party or any of its privies from requesting another inter partes reexamination (but not an ex parte reexamination request) for any claims proposed or new claim of the patent not found to be invalid based upon any issue that it raised or could have raised in either a prior inter partes reexamination or prior district court action (pursuant to 28 USC 1338). However, prior art unavailable to the third party requestor and the USPTO during the inter partes reexamination may be a basis for a subsequent inter partes reexamination.
The ability for the opponent to file follow on ex parte reexamination requests is a loophole in the statute. That loophole will probably enable some opponents to tie up a patent in reexamination for extended periods of time.
All claims of a patent are reexamined in a reexamination proceeding. However, 35 USC 317(b) is drafted to estop the third party or its privies from obtaining another inter partes reexamination based upon an allegation of invalidity of (1) "any patent claim in suit" not found invalid or (2) any "original or proposed amended or new claim" not found unpatentable in a prior final decision of a court or the USPTO. This section apparently does not preclude the third party or its privies from obtaining an inter partes reexamination after a final decision in a civil action in which it did not carry its burden of proving the validity of an asserted claim, so long as the basis for the inter partes reexamination request relates to a claim of the patent that was not one for which the civil action resulted in a final decision of no invalidity.
If the third party requestor elects to be a party to an appeal to the Board, then it is subject to the estoppel specified in 35 USC 315(c) of contesting in a district court at a later time the validity of any claim on any ground that it could have raised in the reexamination proceeding. 35 USC 315 also provides that the third party requestor can only assert invalidity in a district court (e.g. as a defendant in an infringement action) on a later date based upon "newly discovered prior art unavailable to the third-party requestor and the Patent and Trademark Office at the time of the inter partes reexamination proceedings." Further, section 4607 of the new act, which is not codified in 35 USC, provides estoppel effect in any subsequent civil action against the third party requestor as to any fact determined during the process of the reexamination (unless later proved to be erroneous due to information unavailable during the reexamination).
The statute's reference to estoppel of the third party requestor is obviously intended to apply to the real party in interest. 35 USC 311 requires the third party requestor to name the real party in interest.
Conforming amendments to 35 USC 134 clarify that neither the third party requestor nor the patentee has a right to file a civil action in a district court seeking review of a Board decision. The patentee's right to seek review from a decision in an inter partes reexamination proceeding (by appeal to the Court of Appeals for the Federal Circuit) is the same as its right to seek review in an ex parte reexamination. See 35 USC 306.
35 USC 318 provides that the patentee may obtain a stay of any litigation involving an issue of patentability of any claim of the patent based upon the existence of an inter partes reexamination, unless the court determines that the stay would not serve the interests of justice.(45) However, it does not provide for such a semi automatic stay at the request of the third party requestor.
35 USC 287(c)(4) is amended to exclude from its applicability any patent whose earliest effective filing date is prior to September 30, 1996.(46)
This provision raises the value of any medical procedure method claims in applications that claim priority to an effective filing date prior to September 30, 1996.
What does "the earliest effective filing date" in this section of the Act mean? The term "effective filing date" has been used by the patent bar to refer to the 35 USC 102(e) prior art date of a US patent. However, it is defined in the Act in a section relating to the prior inventor defense to include foreign priority claims. The meaning in this section is unclear.
(1)Neifeld IP Law, PC. The views expressed in this article are my own. I wish to thank Charles Gholz, Robert Pous, Jim Boler, Brad Lytle, Derek Mason, Jacob Eisenberg, and Stephen Maebius for comments and discussions. I can be contacted at .
(2)§ 4508 of the Act.
(3)§ 4502 and 4504 of the Act.
(4)§ 4503 of the Act.
(5)§ 4502 of the Act.
(6)§ 4504 of the Act.
(7)§ 4503 of the Act.
(8)§ 4503 of the Act.
(9)§ 4503 of the Act.
(10)§ 4801 of the Act.
(11)§ 4801 of the Act.
(12)§ 4801 of the Act.
(13)§ 4801 of the Act.
(14)In re Costello, 717 F.2d 1346, 219 USPQ 389 (Fed. Cir. 1983).
(15)§ 4802 of the Act.
(16)§ 4505 of the Act.
(17)I note that there is an ad hoc committee composed of senior members of the AIPLA preparing proposed technical revisions to the Act, and that one of their proposals is a revision to § 4508 so that that section makes more sense.
(18)See Manual of Patent Examining Procedure, Sixth Edition, Second Revision, section 2136.03.
(19)Edward Heller and I severely criticized the USPTO's position on that issue in Neifeld et al., "The 35 USC 102(e) Date of a Continuation of a PCT Application," Part 2 at 80 JPTOS 141 (1998) and Part 1 at 80 JPTOS 71 (1998).
(20)Of course, if the ad hoc committee of the AIPLA is successful getting a revision to § 4508 passed, this rationale will be inapplicable.
(21)These facts are based upon my experiences with PCT search reports and the experiences communicated to me from some of my foreign colleagues with their search reports, not upon the procedural requirements defined in the treaty.
(22)§ 4806 of the Act.
(23)See Neifeld, "Viability of the Hilmer Doctrine," 81 JPTOS 544 (1999).
(24)§ 4807 of the Act.
(25)Cf. In re Wadlinger, 496 F.2d 1200, 1209, n. 8, 181 USPQ 826, n. 8 (CCPA 1974)("It is also possible to look at the so-called "change in the law" here, which comes about from the case law overruling of case law, as merely a later recognition of the fact that the statute had been incorrectly interpreted. Taking this view, one can say the statutory law was always as we interpreted it in Kuehl, but had merely been incorrectly applied for a time after In re Saunders. Looked at in this fashion, there really was no change in the law to be taken advantage of by reissue, and the "error" was in not recognizing that Saunders was wrong.")
(26)§ 4507 of the Act.
(27)As an interference practitioner, one of the problems I often face with current interference practice is the inability to know exactly what claims an opponent has on file. The current practice of copying claims in pending applications is based largely upon guesswork in light of the file history of related issued applications and published foreign applications identifying via their priority claim the existence of corresponding US application.
(28)See Neifeld, "The Number of Interferences," 79 JPTOS at 886 (1997).
(29)Indeed, I have recently presented a test case for this theory, albeit for the claims of a third party's issued patent, relying upon the prior version of 35 USC 135(b), to assert that an opponent's claims in an interference are unpatentable to the opponent.
(30)§ 4405 of the Act.
(31)§ 4402 of the Act.
(32)§ 4402 of the Act.
(33)§ 4402 of the Act. The extension provided in this section presumably includes the often lengthy periods starting when an examiner forwards files to the Board with a recommendation that an interference be declared and ending when an administrative patent judge declares the interference. See Gholz, "The Black Hole of the Interference System," Intellectual Property Today, No. 11 at page 26 (1999).
(34)§ 4403 of the Act.
(35)§ 4402 of the Act.
(36)§ 4402 of the Act.
(37)§ 4402 of the Act.
(38)§ 4402 of the Act.
(39)§ 4302 of the Act.In this case, "actions" must mean infringement actions, since this issue will not arise unless there is a claim of infringement.
(40)§ 4302 of the Act.
(41)§ 4302 of the Act.
(42)§ 4608 of the Act.
(43)§ 4604 and 4607 of the Act.
(44)§ 4604 of the Act.
(45)§ 4604 of the Act.
(46)§ 4803 of the Act.