Although derivation proceedings only will be available for U.S. patent applications with an effective filing date on or after March 16, 2013, the USPTO already has published its final rules implementing the derivation provisions of the Leahy-Smith America Invents Act (AIA). The final rules embody several changes and clarifications as compared to the proposed rules.
The Revisions to 35 USC § 135
The first-inventor-to-file provisions of the AIA phase out interference proceedings, but create new derivation proceedings to address situations where an applicant or patentee believes that the applicant or patentee of an earlier filed application derived the subject invention.
If the derivation petitioner is an applicant, the USPTO will conduct a derivation proceeding under revised 35 USC § 135. (If the derivation petitioner is a patentee, the derivation proceeding will be conducted as a civil action under 35 USC § 291(a))
35 USC § 135 Derivation Proceedings
(a) INSTITUTION OF PROCEEDING.—An applicant for patent may file a petition to institute a derivation proceeding in the Office. The petition shall set forth with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s application and, without authorization, the earlier application claiming such invention was filed. Any such petition may be filed only within the 1-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention, shall be made under oath, and shall be supported by substantial evidence. Whenever the Director determines that a petition filed under this subsection demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding. The determination by the Director whether to institute a derivation proceeding shall be final and nonappealable.
(b) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD.—In a derivation proceeding instituted under subsection (a), the Patent Trial and Appeal Board shall determine whether an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner’s application and, without authorization, the earlier application claiming such invention was filed. In appropriate circumstances, the Patent Trial and Appeal Board may correct the naming of the inventor in any application or patent at issue. The Director shall prescribe regulations setting forth standards for the conduct of derivation proceedings, including requiring parties to provide sufficient evidence to prove and rebut a claim of derivation.
(c) DEFERRAL OF DECISION.—The Patent Trial and Appeal Board may defer action on a petition for a derivation proceeding until the expiration of the 3-month period beginning on the date on which the Director issues a patent that includes the claimed invention that is the subject of the petition. The Patent Trial and Appeal Board also may defer action on a petition for a derivation proceeding, or stay the proceeding after it has been instituted, until the termination of a proceeding under chapter 30, 31, or 32 involving the patent of the earlier applicant.
(d) EFFECT OF FINAL DECISION.—The final decision of the Patent Trial and Appeal Board, if adverse to claims in an application for patent, shall constitute the final refusal by the Office on those claims. The final decision of the Patent Trial and Appeal Board, if adverse to claims in a patent, shall, if no appeal or other review of the decision has been or can be taken or had, constitute cancellation of those claims, and notice of such cancellation shall be endorsed on copies of the patent distributed after such cancellation.
(e) SETTLEMENT.—Parties to a proceeding instituted under subsection (a) may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct inventors of the claimed invention in dispute. Unless the Patent Trial and Appeal Board finds the agreement to be inconsistent with the evidence of record, if any, it shall take action consistent with the agreement. Any written settlement or understanding of the parties shall be filed with the Director. At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents or applications, and shall be made available only to Government agencies on written request, or to any person on a showing of good cause.
(f) ARBITRATION.—Parties to a proceeding instituted under subsection (a) may, within such time as may be specified by the Director by regulation, determine such contest or any aspect thereof by arbitration. Such arbitration shall be governed by the provisions of title 9, to the extent such title is not inconsistent with this section. The parties shall give notice of any arbitration award to the Director, and such award shall, as between the parties to the arbitration, be dispositive of the issues to which it relates. The arbitration award shall be unenforceable until such notice is given. Nothing in this subsection shall preclude the Director from determining the patentability of the claimed inventions involved in the proceeding.
The Final Rules
The Final Rules are included in new Subpart E of Part 42 of 37 CFR. I will not reproduce all of the rules here, but this table of contents provides an overview of specific topics covered by the rules:
Subpart E – Derivation
42.400 Procedure; pendency.
42.402 Who may file a petition for a derivation proceeding.
42.403 Time for filing.
42.404 Derivation fee.
42.405 Content of petition.
42.406 Service of petition.
42.407 Filing date.
Instituting Derivation Proceeding
42.408 Institution of derivation proceeding.
After Institution of Derivation Proceeding
42.409 Settlement agreements.
42.411 Common interests in the invention.
42.412 Public availability of board records.
Some of the key requirements set forth in the rules and commentary are highlighted below.
Who can be a derivation petitioner?
When must a derivation petition be filed?
What must a derivation petition establish?
These showings must be supported by substantial evidence, including at least one affidavit addressing communication of the derived invention and lack of authorization that, if unrebutted, would support a determination of derivation. The showing of communication must be corroborated.
The commentary in the Federal Register Notice encourages petitioners to “set forth their entire case and supporting evidence in their petitions.”
What happens after a derivation petition is filed?
By statute, the USPTO may defer acting on a petition until three months after a patent is granted. According to the Federal Register Notice, the USPTO plans to take this flexibility even further:
Generally, once the petition has been accorded a filing date, the Office will hold the petition until the petitioner’s claim is otherwise in condition for allowance.
What happens in a derivation proceeding?
Arbitration and Settlement
Costly and Complex
The proposed rules highlight the costs and complexity of derivation proceedings. Applicants who believe that their inventions have been “stolen” may want to act promptly to gather appropriate evidence (including corroborating evidence) and should consider monitoring WIPO and USPTO patent application publications for the “first publication” of a derived claim. The proposed rules and commentary in the Federal Register notice also indicate that even an applicant who is confident of prevailing in a derivation proceeding may want to consider filing its own application as early as possible.