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Litigation Update - Patent Reform Act Signed Into Law

September 23, 2011 | Alert

The “America Invents Act”—the long-delayed patent reform act which will initiate significant changes in the way that patents will be obtained, enforced, and litigated in the United States—was signed into law by President Obama on September 16, 2011. Certain provisions of the Act go into effect immediately, and others take effect in 12 or 18 months.

The Act will have important consequences for patent litigation. Among the most important are the following:

False Marking Claims: Plaintiffs who claim products were falsely marked with an incorrect patent number now will have to prove they have suffered a competitive injury before they recover on a claim, and the available relief for plaintiffs will be damages “adequate to compensate for the injury.” This provision will address the recent trend of patent “trolls” filing qui tam actions for false marking without having any competitive stake in the outcome of the action. In addition, marking a product with the number of a patent that covered the product but which has expired will no longer constitute false marking.

Prior Commercial Use Defense: A party will be able to defend against all patent claims—not just business method claims—based on the defendant’s prior commercial use of an invention.

Best Mode Defense: The failure by a patent applicant to disclose the “best mode” of the patent will no longer be available as a defense in patent infringement actions.

Limitation of Joinder: A plaintiff’s ability to join unrelated accused infringers in one lawsuit will be limited. This change is intended to prevent plaintiffs from naming dozens of alleged infringers, who are not related but for the accusations of infringement, into one lawsuit.

In addition, the Act also makes important changes to the patent prosecution process, including the following:

First to File: Under the new “first to file” system, priority is given to the first inventor to actually file an application for a patent, rather than the inventor who may have invented first but delayed and filed the application second. The provision is intended to provide greater certainty for inventors and harmonize the U.S. patent system, which formerly followed a “first to invent” system, with that of other nations. The first to file system will not be implemented until March 2013.

New Review Procedures: The Act creates two new processes for challenging patents after they are issued. In a post-grant review, within nine months after issuance of a patent, a third party may petition for cancellation based on invalidity. In these reviews, parties will be allowed to take discovery regarding the other party’s factual assertions—meaning that post-grant reviews will combine aspects of reexamination proceedings and ordinary civil litigation. After nine months have passed, the act allows for a narrower inter partes review if the party requesting review demonstrates a “reasonable likelihood of success” of showing one of the claims is invalid.

Submissions of Prior Art: The Act also increases opportunities for third parties to submit to the patent office prior art that the party believes is relevant to either an issued patent or a pending patent application.

Higher fees: Many fees will be significantly increased (although a discount is allowed for “micro-entities”), and an option that allows “prioritized examination” upon payment of a $4,800 fee is created.

Gray Plant Mooty’s patent litigation team works with clients on issues including patent infringement, inventorship, and licensing disputes. To discuss a patent litigation issue, please contact Dean Eyler at 612.632.3016, or John Krenn, Norman Abramson, or Greg Merz—other principals on the firm’s patent litigation team.

 

This article is provided for general informational purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. You are urged to consult a lawyer concerning any specific legal questions you may have.

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