1 May 2011AmericasJohn Pegram and Mark Ellinger

US Patent Law changes appear imminent

Major revisions to US patent law now appear likely in 2011. Members of Congress have discovered that patent legislation is an area in which they can agree on a bipartisan basis and potentially create a good public image.

Patent legislation has moved quickly and decisively this year. The Senate adopted its bill, S. 23, by a vote of 95 to 5 on March 8, 2011. A similar House of Representatives bill, H.R. 1249, was approved by the Judiciary Committee on April 14, by a 32 to 3 vote. That bill and a proposed manager’s amendment, being prepared by the committee staff in co-operation with the US Patent and Trademark Office (USPTO), may be considered by the full House as soon as mid-June 2011.

PTO fees and funding

Both of the current bills would establish a revolving fund to receive USPTO fees, for exclusive use by the USPTO without fiscal year limitation. Those provisions would end diversion of USPTO fees and would be a great victory for the patent community.

Neither bill would grant substantive rulemaking authority to the USPTO, which should relieve fears that it might again propose rules sharply limiting the ability to file continuation applications. Both bills, however, would grant fee-setting authority, with a public and Congressional review procedure.

Because the USPTO needs money now, both bills would impose an interim 10 percent increase over current fees, to be effective when President Obama signs the new law. While the current funding proposals have received broad support, the USPTO may later propose increased fees for large applications and many claims, based on costs of examination. Industry concerns can be addressed in the review procedure.

First-inventor-to-file and the grace period

Both bills propose that priority of invention be accorded to the first patent application disclosing the invention described in the patent claims. This system is described as ’firstinventor- to-file,’ including the word ‘inventor’ because the new law would deny a patent to a person who has derived the claimed invention from the true inventor. On March 3, the Senate overwhelmingly rejected a proposal to remove first-inventor-to-file provisions from S. 23, by a vote of 87 to 13.

Both bills also include a personal prior art exception or grace period. The applicants’ own prior disclosures within one year before their first effective filing date would be excluded from prior art that could be cited to refuse a patent claim or invalidate it. This provision is intended to permit academics and other researchers to publish articles and make presentations about their inventions before filing a patent application.

The USPTO and many industry representatives hope that US adoption of the first-inventor-to-file system can help it eventually secure a similar personal grace period for patents filed in other countries, through international harmonisation negotiations.


Opposition to a first-to-file system by academic and small entity groups has received extraordinary attention and sympathy. Some have complained that it is too hard or too expensive to file a patent application before publication or marketing, and that the present system gives them the opportunity to prove an earlier invention date. One might expect that these scientists and engineers would provide data to support their position; however, they have failed to do that.

Indeed, in our experience, persons who fail to file a timely patent application in our present system almost always lack the documentary evidence sufficient to prove that they have been first to conceive of and complete the claimed invention. The process of writing a patent application, including patent claims, provides a well-focused description of all aspects of an invention, which often is lacking from an inventor’s notes and scientific publications.

For that reason, reliance on any grace period—current or as proposed—should be avoided. In addition, we note that a large percentage of US pharma and biotech patent applications also are filed in countries outside the US with first-to-file priority and absolute novelty requirements, but no comparable grace period. In practice, therefore, most such applicants have been following a first-to-file policy for many years.

The pending bills would alleviate some of the first-to-file opponents’ concerns, for example, by providing a personal prior art exception (grace period) and—in H.R. 1249—providing 75 percent fee reductions for micro-entities including public universities, when no private funding is involved.

Prior user rights

Most foreign first-to-file patent systems include prior user rights, which permit continued use of an invention claimed in a patent by an entity that used that invention before the patent’s filing date, but did not obtain its own patent. Currently, US patent law has only a limited prior user right for certain business methods. H.R. 1249, but not S. 23, would create prior user rights in all technologies, but those rights would not apply to patents of certain government-funded researchers and institutions.

Post-grant review

The current proposals would continue ex parte re-examination by examiners in the Central Re-examination Unit (CRU), but would end inter partes reexamination. The CRU also would handle the new ‘Supplemental Examination,’ which in some cases would permit patent owners to ask the USPTO to consider prior art and information not previously considered, thereby potentially strengthening the patent and purging claims of taint due to failure to disclose.

The renamed Patent Trial and Appeal Board would handle the new ‘post-grant review’ and ‘inter partes review’ proceedings on an expedited basis, normally within one year. Post-grant review could be initiated by a third party shortly after a patent is issued or reissued, probably within 9 or 12 months. Any grounds for refusing a patent could be considered in this procedure.

Inter partes review could be initiated by a third party after the later of the period for requesting or the date of completion of post-grant review; however, that procedure would be limited to consideration of patents and publications.

It appears likely that biotech and pharma companies will be carefully watching pending US patent applications for opportunities to file a post-grant review request, as they now do in opposition jurisdictions.

John Pegram is a senior principal at Fish & Richardson, P.C. He can be contacted at: pegram@fr.com

Mark Ellinger is a senior principal at Fish & Richardson, P.C. He can be contacted at: ellinger@fr.com

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