The Leahy–Smith America Invents Act (AIA) is a United States federal statute that was passed by Congress and signed into law by President Barack Obama on September 16, 2011. The law represents the most significant legislative change to the U.S. patent system since the Patent Act of 1952 and closely resembles previously proposed legislation in the Senate in its previous session (Patent Reform Act of 2009).
Named for its lead sponsors, Sen. Patrick Leahy (D–VT) and Rep. Lamar Smith (R–TX), the Act switches the U.S. patent system from a "first to invent" to a "first inventor to file" system, eliminates interference proceedings, and develops post-grant opposition. Its central provisions went into effect on September 16, 2012 and on March 16, 2013.
Provisions
First to file and grace period
The law switched the U.S. rights to a patent from the previous "first-to-invent" system to a "first inventor-to-file" system for patent applications filed on or after March 16, 2013. The law also expanded the definition of prior art used in determining patentability. Actions and prior art that bar patentability under the Act include public use, sales, publications, and other disclosures available to the public anywhere in the world as of the filing date, other than publications by the inventor within one year of filing (inventor's "publication-conditioned grace period"), whether or not a third party also files a patent application. The law also notably expanded prior art to include foreign offers for sale and public uses. Applicants that do not publish their inventions prior to filing receive no grace period.
Proceedings at the U.S. Patent Office for resolving priority contests among near-simultaneous inventors who both file applications for the same invention ("interference proceedings") were eliminated, because priority under the Act is determined based on filing date. An administrative proceeding—called a "derivation proceeding," similar to that currently used within some interference proceedings—is provided to ensure that the first person to file the application is actually an original inventor, and that the application was not derived from another inventor.
The AIA refers to the new regime as "First-Inventor-to-File (FITF)". This new regime operates differently from the "First-to-Invent" (FTI) regime previously in effect in the U.S. and the various "First-to-File" (FTF) regimes in place in the rest of the world. Different outcomes can occur under each of these three different regimes, depending on whether and how two different inventors publish or file patent applications.
Opposition procedures The Act revised and expanded post-grant opposition procedures. The Act retained existing ex parte reexamination; added preissuance submissions by third parties; expanded inter partes reexamination, which was renamed inter partes review; and added post-grant review.
Additional changes The America Invents Act included the following changes: Tax strategy inventions: Any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, is deemed insufficient to differentiate a claimed invention from the prior art. False marking: The Act eliminated false marking lawsuits, unless filed by the U.S. government or a competitor who can prove competitive injury. In addition, marking a product with a patent that formerly covered the product, but has since expired, is no longer a violation. Also in 2011, the United States Court of Appeals for the Federal Circuit clarified the standards for pleading False Patent Marketing Claims, which had become a source of prolific litigation, by providing a standard a false patent marking complaint must provide some objective indication to reasonably infer that the defendant was aware that the patent expired. Filing by other than inventor: An entity can file an application on behalf of an inventor who assigned or is under an obligation to assign the invention rights to the entity (or if the entity otherwise has financial interest in the invention), without seeking the inventor's execution of the application. However, any patent that issues belongs to the inventor, absent a written assignment from the inventor or inventor's estate to the entity. Best mode: Although an inventor is still required to "set forth" the best mode for accomplishing the invention, failure to disclose a best mode is not a basis for invalidating or rendering unenforceable an issued patent.Patent Reform Becomes Law: The Leahy-Smith America Invents Act The law formally retains the best mode requirement, but by making insufficient disclosure no longer an allowable defense against patent infringement, the law renders best mode unenforceable. This has left many patent lawyers wondering why the requirement was kept at all.Jan Wolfe, Patent Reform's Reduced 'Best Mode' Requirement Creates Uncertainty, law.com, October 10, 2011. Consulted on October 30, 2011. Prior user rights defense: If an individual/entity begins using an invention ('user') more than a year before a subsequent inventor files for a patent on the same invention, then the user will have the right to continue using the invention in the same way after the subsequent inventor is granted a patent, as long as the user did not derive the invention from the subsequent inventor. These prior user rights are limited in scope and transferability, and have limited applicability to patents held by universities. Micro-entity: The AIA added a micro-entity status. A micro-entity includes an independent inventor with a previous calendar year gross income of less than 3 times the national median household income who has previously filed no more than four non-provisional patent applications, not including those the inventor was obligated to assign to an employer. A micro-entity also includes a university or an inventor under an obligation to assign the invention to a university. A micro-entity is entitled to a 75% reduction in many of the patent fees payable to the US Patent Office during prosecution of a US patent application. The patent office is expected to develop regulations to identify which fees will be eligible for the reduction and how joint inventors may qualify as a micro-entity. Confidential Sale: The Supreme Court in Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc. unanimously ruled that the AIA has not overturned the long-standing rule that confidential sales of products containing the patented technology marks the beginning of the 1-year period to file the patent.
Savings from small entity (prior to act, based on small entity fees & includes 15% surcharge), to micro entity (post act):
USPTO Fee Type*BeforeAfterDifference Basic Utility Fee $165$70$95 Utility Search Fee$270$150$120 Utility Exam Fee$110$180−$70 Issue Fee$755$240$515 3.5 Year Fee$490$400$90 7.5 Year Fee$1240$900$340 11.5 Year Fee$2,055$1,850$205 TOTALS$5,085$3,790$1,295
USPTO practice changes Fee Setting Authority. The USPTO is given authority to adjust its fees in a way that "in the aggregate" recover the estimated costs of its activities. Review of inter partes reexamination. Direct appeal to the Federal Circuit is the only option for judicial review in inter partes reexamination cases. Additional USPTO facilities. Establishes additional USPTO satellite offices, the first to be located in Detroit, Michigan. Third-party submission of prior art. Third parties may submit prior art to a published application, if the prior art is submitted prior to the later of: the mailing date of the first office action, or six months after publication.
Legislative history Senator Patrick Leahy (D-VT) introduced similar bill in the United States Senate on January 25, 2011, with seven co-sponsors (also members of the Judiciary Committee) that include Senators Coons (D-DE), Grassley (R-IA), Hatch (R-UT), Klobuchar (D-MN), Kyl (R-AZ), Lieberman (I-CT), and Sessions (R-AL). The Judiciary Committee unanimously approved the bill, and the United States Senate passed it March 8, 2011, by a vote of 95–5. H.R. 1249: was passed by the House Judiciary Committee on April 14, 2011, by a vote of 32-3.
The House of Representatives passed their version of the Act () on June 23, 2011 by a vote of 304–117, with sixty-seven Republicans and fifty Democrats voting against the bill. On September 8, 2011, the Senate approved the House version by an 89–9 bipartisan vote.Senate Approves Patent Reform Bill On September 16, 2011, President Barack Obama signed the bill into law at a ceremony at Thomas Jefferson High School for Science and Technology in Northern Virginia.
Policy debate
Proponents of the bill argued that it may even the playing field by removing the tricks a well-funded infringer can currently use against a startup owning patented technology.
Proponents of the bill suggested that technology companies are subject to an unprecedented wave of patent lawsuits, stifling innovation and creating an overburdened and lethargic patent system. Advocates for the America Invents Act argued that it will create jobs, bolster innovation, streamline the patent system, reduce patent litigation, and keep the U.S. competitive globally.
Opponents of the Bill contended that it will lead to results similar to other nations' patent systems on which the bill is modeled — market incumbents will become further entrenched, the rate of startup formation will fall to levels in other countries, and access to angel and venture capital will fall to the levels of other countries, as described in the Impact of the Changes section below. A startup that relies on patents for protection from competitive risk, would, under the AIA, lose the protections of the previous regime to assemble the capital, strategic partners, and time for R&D and testing. The startup, exposed to the risk of copying by an established player in the marketplace, will be unable to attract venture capital, and so will lack the financial resources necessary to commercialize the startup's invention and grow the company. The weakening of patent protection diminishes incentives for investments and development.
In addition, opponents of the bill pointed out that the proposed revisions create greater options for accused infringers, and weaken the rights of patentees, and that patent reform should remain in the hands of the court system. Opponents argue that patent reform should be confined to administrative reforms at the USPTO. The time, effort and money that will be spent after issuance under the AIA on inter partes review and post-grant review would be better spent improving initial examination. According to patent attorney and reexamination specialist Taraneh Maghame, "the root of the problem trying to be addressed by the reexamination process could be better solved if quality patents are issued in the first instance."
First Inventor to File and grace period Proponents of the AIA submitted that it would simplify the application process and bring U.S. patent law into better harmony with the patent law of other countries, most of which operate on the "first-to-file" system. Proponents also claimed that it would eliminate costly interference proceedings at the USPTO and reduce U.S. applicants' disadvantages in seeking patent rights outside of the United States.