Intellectual Property Directions

If you’ve ever watched a patent application flow through the USPTO examination process and said “What the heck is going on? I know of some prior art that should wipe that application out ASAP.” Well, your time is coming. But be careful what you wish for!

Under the new America Invents Act, third parties – outsiders like you – get several new chances to muck up someone else’s patent and/or application. Of course, you may actually end up making that inventor’s patent stronger, so think twice before acting. There are actually three opportunities for non-inventors to interject themselves:

First, you can submit information to the patent office during the examination process. This new, pre-issuance submission process is limited to printed materials such as patents, published patent applications and other printed publications. What is new is that these submissions are accompanied by “concise” descriptions of their relevancy. Thus, rather than just dump prior art on the examiner and hope s/he will read and understand their significance, under this program you get to point out why they should block your competitor’s pending application.

• Can be anonymous
• Must be submitted within 6 month of application publication (as a practical matter)
• Effective 16-Sept-12 BUT applies to any pending application.

Like many pieces of major legislation, the September 16th passage of the “America Invents Act” had some people running around with their hair on fire… whereas the reality is that many of its most ballyhooed provisions don’t come into play for a year or more. In the next couple of posts I’ll review what you need to think about now…and eventually review what you need to think about later.

The provisions of the act can be broken down into three groups; those coming into effect on or before November 15, 2011, those coming into effect on September 16, 2012, and those coming into effect on March 16, 2013. [For the nit-pickers, yes, some of the later provisions will apply to pending or even issued patents, so there is some earlier impact than their effective dates]. Anyway, let’s look at the most significant provisions that are or will be in effect by a month from now.

Provisions that affect everyone (financial):

1. There is now a 15% surcharge on Patent Office fees.
2. Starting 11/15 there is a $400 “electronic filing incentive” (actually a paper filing disincentive surcharge)
3. There is now a “Micro-Entity” filing category that qualifies for a 75% discount off filing fees.

Item 1. is pretty clear and is already incorporated into the fee schedule from the PTO.
Item 2. is also clear – so if you are almost ready to file a (non-provisional) application on paper, do it before 11/15 to save yourself $400 ($200 small entity).
Item 3., when you read who qualifies as a micro-entity, is really directed at the independent inventor. Here are the qualifications:

• Qualifies as a small entity;
• Has not been named as an inventor on more than 4 previously filed patent applications;
• Did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding 3 times the median household income [approximately $50,200]; and
• Has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income.

Note that being named as an inventor on a patent assigned to a prior employer doesn’t count against you.

Prior User Rights (trade secrets):

The only other immediately effective provision of importance to most of my clients is the expansion of “prior user rights”. Prior user rights means that you can be protected from an infringement suit IF you can prove that you were using the invention commercially in secret for at least a year before the patent holder disclosed the invention publicly.

Under prior law you had a Catch-22 situation; you could maintain your trade secret for years and suddenly risk being sued for infringement should someone else patent your invention, or you could file a patent application, which made your secret public, and risk never being able to enforce your patent (since the actual invention in a trade secret is inherently not visible to the outside world).

Under the new law you can maintain your secrets and still have an infringement defense. It would appear that you will be okay if you maintain an evidentiary chain showing that you were using the invention in commerce. For example, keep process control records that show use of the invention to make a product that you sold. Even stronger as evidence - involve a third party who has no financial interest in the invention. For example, a trusted customer to whom, under NDA, you have revealed the processes you used to fill his orders.