Congress Approves Patent "Corrections and Improvements" Act, President's Signature Expected Shortly

04 January 2013 Publication

Legal News Alert: Intellectual Property

On January 1, 2013, a bill (H.R. 6621) cleared both houses of Congress to “correct and improve certain provisions” in the Leahy-Smith America Invents Act of 2011 (AIA) and in other parts the Patent Act. With the most controversial provisions having been left out or removed from the bill during deliberation, it is expected that the legislation will be signed into law by President Obama.

Although most of the bill is intended to cure minor, non-substantive mistakes in the AIA as passed in 2011, several provisions in H.R. 6621 could have a noticeable impact on patent prosecution and litigation.

Entire Patent Term Now Subject to USPTO Post-Grant Oppositions

One of the bill’s significant “corrections” to the AIA is to ensure that no issued patent is immune at any point in its life from a USPTO post-grant challenge. The AIA, as originally enacted, inadvertently created two so-called “dead zones,” or periods in a patent’s life in which neither an inter partes review nor a post-grant review could be filed against the patent. One of these dead zones would have occurred during the first nine months after any first-to-invent patent is granted. The second would have occurred during the first nine months after any first-to-file patent was reissued with either narrower or identical claims as the original patent. In both scenarios, no third party would be able to challenge the patent in the USPTO during those nine months.

The effect of the bill that Congress passed on January 1, 2013 is to eliminate these dead zones by allowing an inter partes review to be filed during these two periods. Patent owners can now expect that the entire term of their issued patents will be available for a third-party challenge.

Less Patent Term Adjustment, More Administrative Hurdles

The bill makes three significant changes to the way that patent term adjustments (PTA), based on USPTO delays, are calculated and challenged. 

  • The first change would impact PTA for U.S. national stage applications, and would treat “commencement of the national stage” as equivalent to the filing date of a direct U.S. application. This change may permit applicants to take advantage of the option to delay submission of the inventor oath/declaration without losing the ability to accrue PTA. 
  • The second change would permit the USPTO to provide its initial PTA determination “no later than the date of issuance of the patent,” rather than with the notice of allowance, as required under current law. Unfortunately, by delaying the USPTO’s decision date, this means that the patent holder will have less than two months to assess the USPTO’s determination and file a request for reconsideration. 
  • The third change to the PTA statute imposes a new requirement on patent holders to first request “reconsideration” at the USPTO before filing a civil suit in district court, and makes these civil suits the “exclusive” remedy for challenging PTA mistakes. Patent holders will therefore need to bear the additional time and expense of petitioning for reconsideration, and awaiting the USPTO’s decision on that petition, before seeking a judicial remedy.

For more analysis on the bill’s PTA implications, please see Foley’s PharmaPatentsBlog.

More Time to File a Derivation Proceeding; A New Right of Appeal for Existing Interferences

The AIA eliminated interferences and replaced them with derivations, which are a new type of USPTO trial based on an allegation that an earlier applicant “derived” an invention from the true inventor. However, as originally enacted in the AIA, a victim’s deadline for seeking a derivation proceeding was one year after the date the victim’s claims were published. A deriver could have intentionally avoided a derivation proceeding by waiting until this deadline had passed before adding a claim to the derived invention.

The bill that Congress passed on January 1, 2013 closes this loophole. It gives the victim one year to file a derivation after the deriver’s claim is published, rather than after the victim’s claim is published. The bill also makes explicit judicial review of interference proceedings that were declared after enactment of the AIA but before March 16, 2013.

Changes Unrelated to Patent Practice

The bill modifies the appointment terms of members of the Patent and Trademark Public Advisory Committees to run for three years (beginning on December 1 of each year), and provides for the selection of a chair and vice chair from among existing members for a one-year term. The bill also permits the USPTO to use patent fees and trademark fees to cover administrative costs of the agency at large, rather than for patent- and trademark-specific functions.

Controversial Provisions NOT in the Law

Earlier versions of the bill would have eliminated the term of any pending patent applications that were filed before June 7, 1995 (so-called “pre-GATT applications”) which will enjoy a 17-year term from the date those patents issue. This provision was later replaced with a requirement that the USPTO submit a report to Congress with detailed information regarding still-pending pre-GATT applications. Ultimately, however, even the report was removed from the final bill.

Another controversial change absent from the final bill would have narrowed the post-grant review “estoppel” provision. Such a change would have allowed a post-grant petitioner to challenge the same patent claim in a later civil litigation based on invalidity arguments that the petitioner “reasonably could have raised” (but did not raise) in an earlier post-grant review. That change, however, was not included in H.R. 6621 after USPTO Director David Kappos called such a change “beyond technical” during a Senate oversight hearing.

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues. If you have any questions about this Alert or would like to discuss the topic further, please contact your Foley attorney or the following:

Andrew S. Baluch
Special Counsel
Vice Chair, Patent Office Trials Practice
Shanghai, China