Nuts and Bolts of the America Invents Act - MICHAEL SCARPATI, 3L - IPLS Patent Chair

The Leahy-Smith America Invents Act (AIA) was signed into law on September 16, 2011, and is a major step in the process of harmonizing U.S. patent law with that of the international community. Patent reform has proven to be a contentious topic, as each of the past three Congresses has failed to overhaul the patent system. As such, the AIA represents the first major update to the patent laws since 1952. The Act institutes a variety of changes to the system, including adjustments to the current fee schedule for patent prosecution. The United States Patent and Trademark Office (USPTO) has been granted fee-setting authority to adjust fees so as to recover the cost of its activities. This change adds a 15% surcharge to all patent fees and a new $4,800 option for prioritized examination. These new fees will help to balance out the 75% reduction in fees offered to the new “micro-entity” class applicants. Micro-entities are defined as independent inventors with an income below a specified threshold with at most four non-provisional patent applications. By carving out a niche for micro-entities, Congress hopes to incentivize start-ups and lone inventors to pursue research that might be too radical or revolutionary to garner investment upfront. In terms of substantive modifications, the AIA has implemented several provisions that will better align the U.S. patent system with those of the other major developed countries. The most significant change in this area is the switch from “first-to-invent” to “first-to-file.” Under the existing law, an invention is defined as comprising two steps: conception of the invention, and reduction to practice. If multiple parties were to claim rights to an invention, the USPTO can bring an interference proceeding, wherein the first-to-invent will generally prevail. Proponents of this system highlight the perceived fairness of this method, though in practice determining the date of invention can be a difficult process. Under the AIA, the U.S. will switch to a first-to-file system for applications filed on or after March 16, 2013, phasing out interferences as current patents expire. A new derivation proceeding will ensure that the first to file is actually an inventor. Other changes include the creation of a limited prior user right, which will allow those using an invention more than one year prior to the filing of an application to continue in a limited capacity. In addition, the requirement that an inventor submit the “best mode” for a given application has been greatly reduced; though the requirement remains, it cannot be used to invalidate an issued patent. The nature and scope of patent rights will always be subject to disagreement. Yet the passage of a wide-ranging bill of this type is remarkable, and should be viewed as a step in the right direction, as it updates U.S. patent law to bring it closer in line with international norms.