Who's first? New rules on filing patents

On February 14, 2013, the US Patent and Trademark Office (USPTO) released the relevant rules and associated guidelines pertaining to the ‘first inventor to file’ provisions of the America Invents Act (AIA). Th is article considers two sections of the new laws and associated rules and guidelines, which may particularly affect the life sciences industry and should be considered when conducting business.

Because of their reliance on investment funds, biotech companies often make public disclosures/press announcements regarding technology developments. In addition, the sale of technology is oft en important to life science companies. Th e following two sections of AIA 35 USC§102 will have important implications for the disclosure and/or sale of technology.

Sale of invention to create prior art

Under AIA 35 USC§102: (a) Novelty; prior art—A person shall be entitled to a patent unless (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.

This paragraph contains some significant changes as to what will constitute prior art, which may influence business decisions. Pre-AIA disclosures of an invention through a public use or sale are prior art only if the disclosure took place in the US.

So a company could sell the technology or offer it for sale outside the US and not be concerned as to the impact of this decision on its ability to patent the technology in the US.

However, under AIA 35 USC§102(a)(1), there is no geographic limitation on disclosures that constitute prior art and a public use or sale, or offer for sale, that takes place anywhere in the world can be considered a disclosure of the invention for prior art purposes. Companies should therefore be aware that activities which previously would not have been considered a prior art disclosure of the invention in the US, may now constitute prior art.

“COMPANIES SHOULD THEREFORE BE AWARE THAT ACTIVITIES WHICH PREVIOUSLY WOULD NOT HAVE BEEN CONSIDERED A PRIOR ART DISCLOSURE OF THE INVENTION IN THE US, MAY NOW CONSTITUTE PRIOR ART.”

However, there is a useful additional change to the ‘on-sale’ bar under AIA. The existing USPTO guidelines note that, pre-AIA 35 USC§102, any sale or offer for sale in the US of the claimed invention, even a secret sale or secret offer for sale, could create prior art under 35 USC§102(b). With regard to AIA 35 USC§102(a)(1), the USPTO states that the sale or offer for sale must be public.

The guidelines state that: “The ‘or otherwise available to the public’ residual clause of AIA 35 USC§102(a)(1), however, indicates that AIA 35 USC§102(a)(1) does not cover secret sales or offers for sale. For example, an activity (such as a sale, or offer for sale, or other commercial activity) is secret (non-public) if it is among individuals having an obligation of confidentiality to the inventor.”

Therefore the new provisions regarding the sale or offer for sale of an invention can be more favourable to a company if particular cautions are followed. While a company needs to be cognisant of the fact that a sale or offer for sale of the invention may create an on-sale bar to patenting the invention regardless of where the sale or offer for sale took place, now a company may offer the invention for sale to another party, and as long as the offer is maintained in secrecy, the offer will not create prior art against patenting the invention.

Grace period exception

The AIA maintains a limited ‘grace period’ for a disclosure of the invention by the inventor or for an inventor-originated disclosure (ie, by one who obtained the subject matter from the inventor).

AIA 35 USC§102(b)(1) states: “A disclosure made one year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if … (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.”

What this means is that if (within one year of the filing date) the inventor publicly discloses the invention prior to the disclosure of the subject matter by a third party, but the patent application is later than the third party disclosure, the third party disclosure is disqualified as prior art.

However, AIA 35 USC§102(b)(1)(B) has been interpreted by the USPTO in such a way that may significantly limit the ability of an applicant to rely on the grace period exception. The guidelines state on page 11,077 of The Federal Register, Vol 78, No 31, Part IV that: “What is required for subject matter in an intervening grace period disclosure to be excepted under AIA 35 USC§102(b)(1)(B) is that the subject matter of the disclosure to be disqualified as prior art must have been previously publicly disclosed by the inventor or a joint inventor.”

The guidelines then provide three examples, which set significant limitations on the ability of an applicant to rely on this grace period. The guidelines discuss the following three scenarios:

The last scenario can significantly limit an applicant’s reliance on the grace period. For example, company A attends a trade show or scientific conference and presents a very general disclosure (genus) of an invention in hopes of attracting investment money. Competitor company B subsequently publicly discloses an exemplified embodiment (species) of the invention prior to the patent application being filed by company A.

“EVEN A GENERAL DISCLOSURE MAY ALLOW A COMPETITOR TO CREATE INTERVENING PRIOR ART, WHICH WOULD PREVENT OR SIGNIFICANTLY LIMIT THE PATENTABILITY OF AN INVENTION IN THE US.”

Under the USPTO interpretation of AIA 35 USC§102(b)(1)(B), the disclosure of the species by company B would likely prevent company A obtaining a broad patent in the US on the general invention because the disclosure of the species falling within a genus by company B would be considered to anticipate the entire genus.

Alternatively, if company B discloses an obvious variant (alternative species) of the invention, company A may not be able to obtain a patent unless it can be shown that what is claimed is not obvious over the alternative species. Company A will not be able to rely on its earlier disclosure of the invention and assert the disqualification under AIA 35 USC§102(b)(1)(B) of company B’s disclosure as prior art.

Because of the limitations on being able to assert the grace period under AIA 35 USC§102(b)(1) (B), companies should be cautious about making any disclosure of an invention prior to filing the patent application. Unfortunately, even a general disclosure may allow a competitor to create intervening prior art, which would prevent or significantly limit the patentability of an invention in the US.

MaryAnne Armstrong, PhD, is a partner at Birch Stewart Kolasch & Birch, LLP. She can be contacted at: maa@bskb.com.