CHICAGO (Legal Newsline) – While several provisions of the America Invents Act (AIA) have already been implemented, the practical effects of reforming the U.S. patent system won’t be seen for some time.
Even certain aspects of the legislation that took effect in September, like the new Post Grant Review system, won’t be able to be utilized for another year or two, as applications filed in the spring will take time to work their way through the new system.
Many of the AIA’s major reforms will go into effect on March 16, 2013. Among other changes, that’s when the nation’s patent system will shift from a first-to-invent system to a first-inventor-to-file system.
“From my perspective, this transition is primarily a major step in harmonizing the U.S. with the rest of the world,” said Robert Titus, senior director and assistant general patent counsel at Eli Lilly and Co. in Indianapolis.
Titus, who joined the legal field after working as a medicinal chemist for the first 15 years of his career, said the upcoming system switch won’t be “a big deal” for him and his client because it “doesn’t really change the global strategies” that he deals with.
But, attorneys and inventors already accustomed to global patent protection, he said, still have plenty of other upcoming changes to prepare as the New Year approaches.
Titus spoke about some the AIA’s changes affecting patent portfolio management during a recent American Bar Association webinar, “America Invents Act: Practical Considerations for Practitioners and Inventors.”
In addition to Titus, Jonathan Sick of McAndrews, Held & Malloy in Chicago discussed the AIA’s new review proceedings and Alysa Youngson of MH2 Technology Law Group in Virginia honed in on due diligence and IP transactions under the one-year-old law.
Titus said one of the major changes under the AIA is an expansion of the “prior user right” defense to patent infringement, something he said could produce a “strategic shift.”
This defense aims to protect parties that have previously used the patented invention when being sued by the patent holder for infringement and allows them to continue to use the invention as a prior user.
Once this defense evolves, Titus said that “maintaining certain inventions as trade secrets could become much more important.”
While this expansion might lead some inventors to hold onto their invention “as a trade secret instead of fully disclosing it in a patent,” Titus said he believes it would be unwise.
Titus said there are also some “curious” exceptions to the prior user right defense when the invention is owned by an institution of higher learning.
These exceptions could lead some inventors and patent attorneys to rethink “the scope of doing collaborative research with universities,” he said.
Alysa Youngson, another panelist of the recent ABA webinar, said since higher learning institutions have these and other restrictions, attorneys and inventors should “be mindful of disclosure with those entities.”
“Collaboration in any case should be protected by written agreement,” she said, explaining that the use of agreements – non-disclosure, license, collaboration – should evolve as the relationship evolves.
The scope of disclosure and use of information, as well as who can use it, should be defined in these agreements, she said.
They should also include mechanisms to resolve disagreements and a right to review and revise, which Youngson said “allows people a collaborative fix to what could be a potentially expensive problem.”
Youngson and Titus both stressed how important record keeping is under the AIA.
“Notebook records are more important than ever before,” Titus said.
“Robust written records,” he said, will show the timing of an invention, which is critical to establishing control over inventions, maintaining developments of trade secrets and defending against actions in the AIA’s new derivation proceedings.
Kind of like a trial, these proceedings intend to make sure that the first person to file a patent application is the real inventor and didn’t just derive the invention from another person.
“The devil is going to be in the details with derivation” and “with what is going to be required,” Titus said.
Youngson said her background is in the electrical arts and that “record keeping never has been something of grave concern.”
The AIA, however, makes it “clear record keeping is critically important even in electrical arts,” she said.
Pointing to various patent proceedings and defenses, Youngson said the importance of record keeping under the new law “cannot be understated.”
Sick, a shareholder at McAndrews, Held & Malloy who represents clients in the life science industry, said another big change under the AIA is post grant and inter partes review (PGR and IPR, respectively.)
These trial proceedings will be conducted by the newly-created Patent Trial and Appeal Board. And although both went active in September, Sick said that he doesn’t expect to see the first, true PGR until late 2014 or early 2015.
“It will take that long for an application filed in March” to get through the system, he said.
PGR requests must be filed within the nine-month period after a patent has been granted and can only be used to attack patents with a priority date on or after March 16, 2013.
IPR, on the other hand, is only allowed after that period has passed or after the PGR has been terminated and can be used to review any patent, Sick said, noting that petitions for both reviews can be filed by third-parties.
While these new proceedings are not of immediate concern to practitioners, Sick said it’s not too early to start adjusting monitoring strategies to prepare to use and defend against them.
The fee structure to file petitions for these reviews intends to discourage “claim heavy petitions,” Sick said.
For instance, he said, it costs $35,800 to file a PGR petition to attack one to 20 claims and $99,800 to attack 100 claims. IPR petitions are cheaper to file at a cost of $27,200 to attack one to 20 claims and $75,200 for 100 claims, he said.
Sick said it’s important to recognize that these figures only represent the filing fees, not attorneys’ fees.
“If you’ve got a really important case you want to shield from post grant and inter partes review,” Sick said that one might “consider increasing the claim account” to deter third parties and “smaller players from coming after your portfolio.”