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FEWER PATENTS

More patents invalidated in court;

Fewer patents issued by the Patent Office.

Although not necessarily the goal, any effective patent reform will necessarily have these results.


America Invents Act (AIA)

This page is a commentary on the AIA and is still a work in progress. More helpful info on the AIA can be found here: tidge.com's AIA documentary history

AIA Implementation Dates

Sept. 16, 2011:

Sept. 16, 2012:

March 16, 2013:

SOURCE: PTO AIA Effective Dates

LINKs to other sites:

PTO's AIA webpage

Fish & Richardson's Patent Reform Update webpage

McDonnell Boehnen Hulbert & Berghof AIA webpage

Sterne Kessler Goldstein Fox AIA webpage

Alston + Bird AIA webpage

U.S. House of Reps.' Judiciary Ctte AIA webpage

White House Signing Press Release

LINKs re: specific subject:

 

Talk to me: feedback@tidge.com

America
Invents Act (AIA):
A Failure By Any Measure

Posted: 2012-03-12 | Last revision: 2012-10-05

Too Soon to Judge?

It may seem presumptous to judge an act all of whose provisions have yet to be implemented, and before one can see the effects of those provisions which have been implemented--but, in this particular instance, it's not, because we have all we need to answer the following questions:

Will the Patent Office Be More Efficient?

In the short run (~3 years), no way. Besides having to teach the patent bar what to do and expect, the PTO is burdened with rewriting large sections of the MPEP to reflect, e.g., the new §102 (this will be the most massive rewrite in at least 30 years); establishing 3 or more satellite offices within 3 years (AIA §28), a new pro bono program (AIA §32), a new diversity of applicant program (AIA §29), and a new Office of Patent Ombudsman for Small Business (AIA §28); implementing a new derivation proceeding to replace the interference proceedings (AIA §3), a new inter partes review (AIA §6), and a new post-grant review (AIA §6); and compiling and producing 9 separate reports it must make to Congress (AIA §§3, 16, 23, 26, 27, 31, 34), the subject of some of which the PTO has neither the expertise nor the tools to generate any meaningful analysis. And this is a partial list, of course, but the Patent Office will be way too busy implementing changes in the next couple of years to suddenly make any leaps in efficiency over their past performance.

In the long run (once everything has been implemented), ... why would the AIA make the PTO more efficient? Hiring more examiners will, and possibly the existence of satellite offices, but we certainly didn't need the whole AIA for these changes. The most-discussed provision, changing over to a first-to-file system, only replaces one PTO procedure (interference) with another (derivation). The earlier House Reports admitted how little this change would affect anything:

... as a practical matter, most applicants simply use their date of application as their date of invention, and therefore most applicants already operate as if the United States has a first-inventor-to-file patent system, so there would be little disruption to formally change to such a system. Likewise, statistics show that less than 1 in 1000 patent applications are ever subject to an interference proceeding. Since the first-to-invent aspects of our patent system are rarely used, serious doubt is cast on the need of having a first-to-invent system.

- pp. 22-3, 9/4/2007 House Jud. Ctte. Report 110-314 (HR 1908)

The death of conception and reduction to practice under first-to-file will have some effect (e.g., no more "swearing back"), but will hardly make a systemic change to efficiency at the PTO.

The present increase in patent issuance (and corresponding decrease in application backlog) may continue, but it has nothing to do with the AIA--as shown by the fact it started before the AIA was signed into law. No, this increase is the result of Director Kappos' efforts. And I strongly suspect we will all regret it in the coming years.

Will "Harmonization" Make
Multi-National Filing & Prosecution
Cheaper, Easier, and/or More Efficient?

No. First off, it ain't really harmonization. Absolute novelty is the key in many other national patent systems, and the AIA's 1 year grace period destroys any "harmony" with those systems. Once again, earlier House Reports tacitly admitted this non-harmonization by expressing a questionable and forlorn hope:

Finally, so that American inventors are not disadvantaged by the lack of an inventor’s grace period in other important countries, the implementation of these changes are conditioned on the major patent authorities in Japan and Europe adopting a similar kind of grace period.

- pp. 23-4, 9/4/2007 House Jud. Ctte. Report 110-314 (H.R. 1908)

Second, besides law professors and out-of-touch corporate executives and government apparatchiks, no one could possibly think the AIA's first-to-file system would change the standard operating procedures of any corporation on the planet. I've seen various computer systems for maintaining and monitoring patent applications--they will not change. I've seen various patent departments in various multinational companies--the number of employees will neither increase nor decrease because of the AIA. As far as patent opinions are concerned, any responsible corporate officer will obtain one for each country/system involved--e.g., no IP executive will suddenly get only one opinion for both the U.S. and Europe because of the AIA's so-called harmonization.

Where's the beef? There is none. The only effect will be the complete waste of the PTO's time and resources on the implementation of this new derivation proceeding, the re-writing of the MPEP, etc.

Will the AIA Ensure
Higher Quality Patents?

Highly unlikely. Re-exams and then inter partes re-exams were also supposed to increase the quality of patents, and they were a dismal failure (as an effort to increase overall patent quality). In the first five years after implementing the inter partes re-exams, only 53 requests were received (the PTO predicted 600 per year). p. 46, 6/1/11 House Jud. Ctte Rep. 112-98 (H.R. 1249). Similarly, there is no reason to believe that the revised inter partes re-exam, the new post-grant review, and/or the slightly revised 3rd party pre-issuance prior art submission, will have any effect on the quality of 99.9% of issued patents. The removal of the threat of invalidation by the lack of best mode will ensure that patent specifications will be even less rigorous and thorough.

Indeed, it is Kappos who will have the greatest effect on the quality of issued patents, and my bet is it won't be good. While issuing patents left and right may make Kappos the darling of patent prosecutors, doing things like increasing the use of interviews to resolve problems will sabotage the prosecution record (as the written interview summaries are rarely substantial, and often create more questions than they answer). In my view, a single-minded focus on the speedy issuance of patents guarantees a decrease in patent quality. In the coming years, as companies being to run up against the roadblocks formed by this plethora of new Kappos patents, everyone will rue this single-minded focus.

Will the AIA Increase
the Number of Patents?

No. To be clear (and as stated above), the number of issued patents has been skyrocketing, but this increase started before the AIA was passed and is the direct result of David Kappos being made director of the PTO. See, e.g., USPTO Patent Grants: Another Record Year (3rd in a Row) (Patently-O 9/4/2012). Kappos' single-minded devotion to the rapid issuance of as many patents as possible will (barring judicial and/or legislative efforts to tighten the reins of patent validity) harm the economy of the U.S. for decades to come.

Will the AIA Decrease
the Number of Patent Litigations?

In one specific case--false marking, yes.

Otherwise, no. To the extent that the AIA joinder provisions mandate that multiple defendants cannot be joined in the same suit based merely on the allegation of infringing the same patent, the number of litigations will technically increase. [tidgenote: see more below concerning the stupidity of this nonjoinder provision.]

Will the AIA Decrease
the Number of "Patent Troll" Litigations?

No. In fact, as stated above, because the AIA joinder provisions mandate that multiple defendants cannot be joined in the same suit based merely on the allegation of infringing the same patent, and patent trolls typically sue many, many defendants at once, the number of patent troll litigations will technically increase.

This stupid nonjoinder provision was based, I guess, on the delusional belief that such a provision would hurt "patent trolls" who tend to sue many defendants at once. See, e.g., America Invents: A Simple Guide to Patent Reform, Part 1 (IP Watchdog 9/28/2011) ("The joinder and consolidation provisions of the AIA should substantially curb patent trolling, which is a good thing").

Of course, who it really hurts is judges, while "patent trolls" and others will happily file 30 complaints rather than one complaint naming 30 defendants. See, e.g., TQP Development, LLC v. Priceline.com, Inc., E.D.Tx. 2:12-cv-00054 ECF 26 (June 21, 2012, Order) (Craven, M.J.) (p. 4: “In light of the new joinder provision, the Court has experienced an increase in 'serially' filed cases, i.e., separate cases involving the same patent(s) filed near in time naming different individual defendants. Such cases present administrative difficulties for the Court ... ”).

Will the AIA Decrease
the Cost of Patent Litigation?

In one specific circumstance--business method patents, there is the possibility of decreasing the costs of litigation, but it remains to be seen how many defendants will use the new PTO procedure established by the AIA, how much the new procedure will decrease the costs of litigation, and whether the PTO involvement in on-going litigations will actually complicate matters much more than helping to simplify them. Under AIA §18, a defendant in a patent infringement suit (or ITC fight) may petition the PTO for a post-grant review of the asserted business method patent on §§102/103 grounds. Although the AIA provides a list of factors to consider, whether the litigation will be stayed is still essentially in the court's discretion. And the defendant is estopped from asserting the grounds for invalidity from the PTO petition as grounds for invalidity in the litigation (or before the ITC, as the case may be).

My prediction: this provision will have no substantial effect on the costs involved in the vast majority of litigations involving business method patents.

[4/6/12 tidgenote: the Supremes' Mayo decision increases the chances that defendants accused of infringing a business method patent may be helped by using the return-to-PTO procedure in AIA §18, but it still remains to be seen whether defendants will end up risking it. Based on the judge (and the client's resources), I might want to keep my §101 argument in court (with the ability to appeal) rather than risk losing it forever at the PTO.]

Other than the slim possibility of reducing costs for business method patent litigations, no, the AIA will not reduce the cost of patent litigation.

Will the AIA Decrease
the Cost of Patent Prosecution?

No, except for the unreasonable and extremely unfair inclusion of "institutions of higher eduction" in the definition of "micro-entity," thereby ensuring Stanford University, WARF, and other institutions who are well capable of paying--and indeed should pay, considering the benefits received therefrom--will be treated like small businesses and/or destitute/sole inventors. Disgusting.

Will the AIA
Have an Overall Beneficial Effect on
the U.S. Patent System, U.S. Patent Law,
and/or Innovation in the U.S.?

No.

Luckily for us, the AIA is not likely to have an overall detrimental effect either.

[4/6/12 tidgenote: but the Kappos-inspired surge in patent issuances and the low standard of patentability currently used in courts will act as a drag on many businesses' ability to ... well, to do business as non-inventive patents block new products, processes, and materials, as non-inventive patents force unnecessary design-arounds and changes to manufacturing/production, as non-inventive patents force businesses to pay unjustifiable royalties, etc., etc., etc.]

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