christopher j. fildes fildes & outland, p.c. derivation proceedings and prior user rights

Christopher J. FildesFildes & Outland, P.C.

Derivation Proceedings and Prior User Rights

Leahy-Smith America Invents Act (AIA)

• Section 3 of the AIA, in part . . .• Amends Section 135 of the Code to replace

interference practice with derivation proceedings

• Amends Section 291 of the Code to replace interference actions with derivation actions

• Section 7 of the AIA renames the Board of Patent Appeals and Interferences (BPAI) as the Patent Trial and Appeal Board (PTAB)

© AIPLA 20122 Fildes & Outland, P.C.

Leahy-Smith America Invents Act

• Elimination of interference practice and implementation of derivation proceedings coincides with change from a first-to-invent system to a first-inventor-to-file system


New Section 135 – Derivation Proceeding

• Institution of Proceeding – Section 135(a)• An applicant for patent may file a petition to

institute a derivation proceeding in the USPTO• Petition must “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”



• Institution of Proceeding – Section 135(a)• The petition must be made under oath• The petition must be supported by “substantial

evidence”• The petition must be filed “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”



• Institution of Proceeding – Section 135(a)• The Director’s decision to institute (or not

institute) a derivation proceeding is final and nonappealable



• Determination by PTAB – Section 135(b)• Parties must provide sufficient evidence to prove

and rebut a claim of derivation• PTAB must determine whether an inventor named

in the earlier application derived the claimed invention from an inventor named in the petitioner’s application

• PTAB must determine whether the earlier application claiming such invention was filed without authorization



• Determination by PTAB – Section 135(b)• Remedy – the PTAB may correct the naming of

the inventor in any application or patent at issue



• Deferral of Decision – Section 135(c)• PTAB may defer action on a petition for a

derivation proceeding three months from the issue date of a patent that includes the claimed invention that is the subject of the petition

• PTAB may defer action on a petition, or stay a proceeding after it has been instituted, until the termination of an ex parte reexamination, post-grant review, or inter partes review involving the patent of the earlier applicant



• Effect of Final Decision – Section 135(d)• The final decision of the PTAB, if adverse to

claims in an application for patent, constitutes the final refusal by the USPTO on those claims

• The final decision of the PTAB, if adverse to claims in a patent, and if no appeal or other review of the decision is taken, constitutes cancellation of those claims



• Settlement – Section 135(e)• The parties may terminate a proceeding by

filing an agreement of the parties as to the correct inventors of the claimed invention in dispute

• Arbitration – Section 135(f)• The parties to a derivation proceeding may

agree to submit to arbitration to determine any or all aspects of the derivation proceeding


Proposed Rulemaking for Derivation Proceedings

• The USPTO projects that the proposed rules for derivation proceedings will be published in the Federal Register by mid- to late January 2012


New Section 291 – Derived Patents

• Creates a civil action for derivation• Owner of a patent may have relief against the

owner of another patent if . . .• The other patent claims the “same invention” • The other patent has an earlier effective filing date• The invention claimed in the other patent was

derived from the inventor of the invention claimed in the patent owned by the party seeking relief


New Section 291 – Derived Patents

• Timing• A derivation action must be filed “before the

end of the 1-year period beginning on the date of the issuance of the first patent containing a claim to the allegedly derived invention and naming an individual alleged to have derived such invention as the inventor or joint inventor”


Effective Date for Derivation

• Changes to Sections 135 and 291 of the Code are effective March 16, 2013

• Changes to Sections 135 and 291 are not retroactive• Derivation applies only to applications (and any

patent issuing thereon) having an effective filing date on or after March 16, 2013

• Interference practice continues to apply to applications (and patents) having an effective filing date before March 16, 2013


Interference Statistics


Interference Statistics

• Majority of Interferences are currently in TC 1600 (Biotechnology & Organic Chemistry) and TC 1700 (Chemical & Materials Engineering)

• Assuming that derivations are a subset of current interferences, the number of derivation proceedings instituted per year is likely to be low

• It appears that it is even more unlikely for a derivation to involve an invention that is outside of the art areas of TC 1600 and TC 1700


New Section 273 - Prior User Rights

• Leahy-Smith America Invents Act• Section 5 of the AIA amends Section 273 of the

Code (Defense to infringement based on prior commercial use)• The previous “prior user defense” that was

available for a person accused of infringing a business method patent is now extended to all patentable subject matter under Section 101



• Exception• Defense not applicable if the claimed invention

was developed by a nonprofit institution of higher education or an affiliated technology transfer organization whose primary purpose is to facilitate the commercialization of technology developed by such institutions of higher education



• To apply the defense, the alleged infringer must show that • “[A]cting in good faith, [the alleged infringer]

commercially used the subject matter in the United States, either in connection with an internal commercial use or an actual arm’s length sale or other arm’s length commercial transfer of a useful end result of such commercial use”



• To apply the defense, the alleged infringer must also show that • The commercial use occurred at least 1 year

before the earlier of• the effective filing date of the claimed invention, or• the date on which the claimed invention was

disclosed to the public in a manner that qualified for the exception from prior art under section 102(b)

• Burden of proof – clear and convincing evidence


Conclusion

• Thank you• Leahy-Smith America Invents Act, Public Law

112-29 (September 16, 2011), is accessible at http://www.uspto.gov/aia_implementation/20110916-pub-l112-29.pdf


christopher j. fildes fildes & outland, p.c. derivation proceedings and prior user rights

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