What Is the Significance of Recent Patent Law Reform?

For the first time in almost sixty years, patent law is receiving a major update.

On September 16, 2011, President Obama signed the Leahy-Smith America Invents Act (the “Act”), providing the most significant change to patent law since the Patent Act of 1952. The Act (H.R. 1249) shifts the underlying legal framework for patents from a “first-to-invent” to “first-to-file” system. It  places a greater emphasis on the date of patent application is filed. By doing so, it puts United States law more in line with the patent laws used in other countries. The Act seeks to ensure that the first person to file the patent application and have it approved will be the owner of that patent.

Under the “first-to-invent” system, companies generally wait until patents are close to marketability before they file applications for them. The new “first-to-file” system will alter incentives and expedite the process. Companies and individuals with sufficient resources will be more likely to file patent applications earlier during the development process. A company or individual that waits to file an application will now run the risk that another company or individual will invent and file for protection of the same product and thus be granted patent protection over it. The delay that had become common under current law should diminish when the new law takes effect. The Act will apply to patents with priority claims after March 2013.

The Act also eliminates the ability for plaintiffs to sue unrelated entities in a single case. Under previous patent law, plaintiffs were able to join in one lawsuit all defendants who allegedly infringed on the plaintiff’s patent. For cases filed after September 16, 2011, plaintiffs will only be able to join defendants if the alleged infringement is based on the same product or process.

In addition to the shift to a first-to-file system, the Act makes several other significant changes to the patent system. These include:

  • Creating two additional ways for a person or company to contest an issued patent: post-grant review and inter partes review.
  • Specifying who can file a false-marking lawsuit. Under the Act, either the United States government or a competitor who can prove actual injury can sue for false marking.
  • Eliminating the “best mode” requirement. Under the Act, an applicant’s failure to disclose a “best mode” of accomplishing the invention is not a basis for invalidating an issued patent.
  • Expanding the prior commercial use defense. The defense was previously only available for method claims. It is now available for any type of claim, so long as it meets certain time requirements.
  • Scheduling the opening of additional satellite offices for the Patent and Trademark Office. Four offices are scheduled to open in the next five years, including an expected opening in Detroit.

The Act can be read in its entirety here.

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© 2011 Nissenbaum Law Group, LLC