USIndoPatent

The Difference between Patentability and Infringement

Often, many first time inventors seeking patent protection for their invention are confused about the difference between patentability and infringement. The two concepts are equally important to understand.  At the outset, you need to understand that just because your invention is patentable, it does not mean that you are shielded from being sued by another patent owner for patent infringement.  In fact, many patent infringement lawsuits in the U.S. involve two patent owners who each believes that the opposing party infringed his/her patent.

Quick review: a patent does not give the patent owner the right to use the patented invention.  A patent gives its owner the right to exclude and prevent others from making, using, selling, or distributing the patented invention without his/her permission.  Thus, if you own a patent, and another party makes, uses, sells, or distributes a product that is covered by your patent without your permission, that party is infringing your patent.

Patentability, on the other hand, refers to the determination by the USPTO whether your invention is novel and incorporating any new features or elements that are not shown in the prior art.  Prior art refers to any relevant information, including any issued patents owned by another party, that are already publicly known before your date of invention and anticipates or makes obvious all of the elements of your claimed invention.  Keep in mind that claims are the heart of a patent; they are the intellectual property that you claim to own. A claim may comprise several elements.  For purposes of my examples, I will use alphabetical letters (A, B, C, D, etc.) to illustrate elements of a claim.

Example 1:  In Example 1, it is possible to obtain a patent (because you have a feature that is unique over the prior art, i.e., feature D) and yet infringe someone else’s patent (because you have all the elements claimed in the prior art, i.e., features ABC).

Result: Patentable?  Yes.  Infringement?  Yes.

Example 2:  In Example 2, you may obtain a patent (because you have a feature that is unique over the prior art, i.e., feature D), and you are not infringing someone else’s patent because you do not have all the elements claimed in the prior art, i.e., your product does not have Element C in the prior art.

Result: Patentable?  Yes.  Infringement?  No.

Effective Dates and Applicability of the New Provisions of the AIA

Here are the effective dates of the new provisions discussed in my previous two articles on the AIA, Overview of the U.S. Patent Reform for Patent Applicants – Part I and Overview of the U.S. Patent Reform for Patent Applicants – Part II.

If you are unsure about any other dates pertaining to any provisions of the AIA that are not discussed here, consult your patent counsel.

Overview of the U.S. Patent Reform for Patent Applicants – Part II

I have briefly discussed some highlights of the changes to the newly reformed U.S. patent law in my previous article Overview of the U.S. Patent Reform for Patent Applicants – Part I.  Here is the continuation of Part I.

1. Expanded Third-Party’s Right to Submit Citation of Prior Art and Written Statements.  Currently,  35 U.S.C. § 301 allows any person at any time to cite to the USPTO in writing any prior art consisting of patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent. Under the new law, a third-party submitter may now include statements of the patent owner filed in a proceeding before a Federal court or the USPTO in which the patent owner took a position on the scope of any claim of a particular patent.  Additionally, under the new 35 U.S.C. § 122(e), a third party may now submit any publication of potential relevance to a pending patent application, so long as such submission is made before the earlier of (1) the date a notice of allowance is mailed; or (2) the later of (i) 6 months after the date of publication, or (ii) the date of the first rejection of any claim.
2. Post Grant Review.  A new post grant review (“PGR”) proceeding allows a third party to request review of recently issued patents based upon virtually any invalidity ground, including failure to satisfy the requirements of sections 101, 102, 103, or 112 (except for best mode).  A PGR petition must be filed within 9 months of patent issuance or reissue issuance. Under this new provision, the USPTO may grant a PGR petition based upon “a showing that the petition raises a novel or unsettled legal question that is important to other patents or patent applications.”  Also, this new provision protects a patent holder against multiple attacks against a patent through both a PGR and a declaratory judgment civil action alleging invalidity. If such a civil action has already been filed, the party in interest cannot later file for a PGR. Likewise, if a PGR has already been initiated, the statute requires an automatic stay of the civil action.
3. Inter Partes Review.  Under the new law, a petitioner for an inter partes review faces a higher standard to convince the USPTO that such review is warranted.  Rather than the previous standard of “substantial new question of patentability,” the AIA now requires a showing of “a reasonable likelihood that the requester will prevail with respect to at least one challenged claim.”  A party seeking an inter partes review must also wait until 9-months after the patent grant date, corresponding with the new PGR proceeding that must be filed within 9-months of the grant date or reissue date.  Be aware that unlike the new PGR proceeding, the new inter partes review is much narrower and limited to prior art challenges based on patents or printed publications.  However, just like the PGR, the new inter partes review prohibits multiple attacks against a patent through both an inter partes review and a declaratory judgment civil action alleging invalidity. If such a civil action has already been filed, the party in interest cannot later file for inter partes review. Reciprocally, if the review has already been initiated, the statute requires an automatic stay of the civil action. In addition, a defendant in an infringement lawsuit may not file for inter partes review after delaying more than 1-year from the date of being served with the complaint.
4. Supplemental Examinations.  The AIA now provides a new Supplemental Examination procedure to consider, reconsider, and correct information related to a patent.  Under this provision, a patent holder may request the USPTO to order reexamination if “a substantial new question of patentability is raised by at least one item of information in the request”. Unlike the (amended) 35 U.S.C. § 251 reissue application, however, a patent owner does not need to believe that his/her patent is “through error, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent.”  The purpose of Supplemental Examination is mainly to ensure that all correct information is fully considered by the USPTO to clear a patent from potential inequitable conduct charges and strengthen validity claims in litigation.
5. Unpatentable Inventions.  The AIA deems inventions relating to all strategies for reducing, avoiding, and deferring tax liability as unpatentable prior art, except for two narrow categories of (1) technology solely for tax return filing and preparation (such as Turbo Tax computer program) and (2) technology solely for financial management that is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor. Additionally, the new law is very specific that no patent may issue on a claim directed to or encompassing a human organism.
6. Virtual Markings.  The AIA now permits patent holders to “virtually mark” a product by providing a publicly and freely accessible website address that associates a patented article with the number of the patent. However, note that the burden will remain on the patent holder to demonstrate that the marking is effective.
7. Best Mode Requirement. The AIA eliminates the patentee’s failure to comply with the best mode requirement of § 112 as a basis for invalidity and unenforceability defenses to patent infringement.   However, the best mode requirement for patent prosecution remains intact; namely, an applicant for a patent must still disclose: (1) a written description of the invention; (2) a written description of the manner of making and using the invention, sufficient to enable one skilled in the art to practice the invention; and (3) the best mode contemplated by the inventor of carrying out the invention.

These are just a few highlights of the AIA that might be helpful to new and seasoned patent applicants alike.  As I mentioned in Part I, some of the changes took effect immediately on the date of enactment, while others take effect in phases over a period of 18 months from the date of enactment.  Thus, it is highly recommended that you seek the assistance of experienced patent counsel in determining which law to apply, as well as understanding the minute requirement of the new law, during the course of your patent prosecution.

Overview of the U.S. Patent Reform for Patent Applicants – Part I

On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act (the “AIA”), bringing the most significant reform of the U.S. patent law since 1952.  While some changes to the law are effective as of the date of enactment, the rest take effect in phases over a period of 18 months from the date of enactment.  The foremost change brought by the AIA is the switch from the “first-to-invent” system to the “first-to-file” system.  The “first-to-invent” system was unique to the U.S. and essentially the only one of its kind among the industrialized countries in the world.

In the “first-to-invent” system, when there are two separate inventors applying for a patent on the same invention, the inventor who could prove that he/she was the first person to conceive the idea and reduce the invention to practice would be awarded the patent.  In contrast, other foreign countries adopt the “first-to-file” system, which rewards the patent to the first person who files a patent application for that invention at the patent office.  The AIA is intended to conform to this latter practice of the rest of the world.  However, unlike the harsh “absolute novelty bar” adopted by foreign countries, the AIA continues to permit a limited 12-month grace period for inventors to file a patent application after disclosure of the claimed invention by the inventor or another who obtained the subject matter from the inventor.

There are many substantial changes to the patent law that are complex, and as the AIA is still relatively new, the legal interpretation of many of its provisions will require further clarification from the courts through litigation in the coming years.

For the time being, here are the highlights of some of the substantial changes to the patent prosecution process brought by the AIA, which I will break into two parts:

1. Fees Surcharge and Fees Reduction.  As of September 26, 2011, a 15% surcharge on all USPTO fees took effect.  Also, as of November 15, 2011, a $400 fee is imposed on non-electronic filing of original patent application.  However, small entity applicants (e.g., independent inventors, small businesses, or nonprofit organizations) may continue to receive 50% discount on certain fees.  Additionally, a new category of micro entity – an even smaller group than small entity that includes truly independent inventors – may receive 75% discount on certain fees.  To be eligible as a micro entity, the applicant must (1) qualify as a small entity as defined in regulations issued by the Director; (2) not be named as an inventor on more than four previously filed patent applications; (3) have gross income less than 3 times the median household income in the previous calendar year as defined in the IRS code, and (4) have not transferred ownership interest in the application to an entity with gross income exceeding the limit set in (3).
2. Prioritized Examination.  For a fee of $4,800 ($2,400 for small entity), an applicant can request a prioritized examination, which puts an application ahead of the line.  Unlike a regular examination which may take years due to the USPTO backlog, an applicant requesting a prioritized examination can expect to receive a final disposition – either allowance or final rejection – within one-year of filing. As a requirement, an application requesting prioritized examination cannot contain or be amended to contain more than 4 independent claims or more than 30 total claims.  Also, be aware that the USPTO limits only 10,000 requests for prioritization in any fiscal year.
3. Revisions to Inventor’s Oath or Declaration.   The AIA now makes it easier for an assignee to file and prosecute patent applications.  35 U.S.C. §115 is amended to allow a substitute statement to be submitted in lieu of an inventor’s oath when either the inventor (1) is unable to submit an oath, or (2) is both unwilling to do so and under an obligation to assign the invention.  35 U.S.C. §118 is also amended to make it easier for an assignee to file a patent application. The amendment now allows obligated assignees – entities to which the inventor is obligated to assign the application – to file applications. It also allows a person who has a sufficient proprietary interest in the invention to file an application to preserve that person’s rights and those of the inventor.
4. Expanded Definition of Prior Art.  The new definition of prior art under AIA is quite complex, and its impact remains to be seen.  In gist, prior art will be measured from the filing date of the application and will include all art that publicly exists prior to the filing date, other than disclosures by the inventor within 1 year of filing.  Additionally, any public use or sale of the claimed invention prior to the filing date of the application that occurs anywhere in the world, and not just in the U.S., can be used as a basis for novelty and/or obviousness rejection to bar the granting of a patent.
5. Replacement of Interference Proceeding with Derivation Proceeding.  An interference proceeding is a contest under 35 U.S.C. § 135(a) between an application and either another application or a patent, to determine priority.  In other words, interference is a proceeding that determines which party first invented the commonly claimed invention within the meaning of 35 U.S.C. § 102 (g)(1).  As the AIA eliminates § 102(g)(1), effective March 16, 2013, the interference proceeding will be replaced with a derivation proceeding.  A derivation proceeding determines whether an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s later application and, without authorization, filed a patent application claiming the same claimed invention.  Thus, in essence, a derivation proceeding determines which of two applicants is the true inventor as opposed to who invented the claimed invention first.  A dissatisfied party to a derivation proceeding will have a right to either file a civil action in the E.D. Virginia district court or file an appeal to the Federal Circuit.  This will undoubtedly open up an interesting area of patent litigation.

I will continue the discussion on the highlights of the new provisions of the AIA in my next article Overview of the U.S. Patent Reform for Patent Applicants – Part II.  Stay tuned.