America Invents Act

On September 16, 2011, U.S. President Barack Obama signed into law the Leahy-Smith America Invents Act. Albert Tramposch, Director of International and Governmental Affairs at the United States Patent and Trademark Office (USPTO), discusses the implications of this milestone in the history of the U.S. patent system.

The America Invents Act creates an innovation-friendly patent system that will reduce costs, level the playing field for businesses small and large, and spur economic growth. The new law enables a better-resourced USPTO to grant patent rights with greater speed, predictability, clarity, and quality.

Over the decades, patent law harmonization negotiations have contemplated a system with two major elements: (1) first-to-file and (2) a 12-month grace period (e.g., the draft Patent Law Treaty of 1991). On March 16, 2013, the U.S. will transition to a first-to-file (FTF) system to provide the transparency that banks, venture capitalists, and other investors need to invest in new businesses while establishing the stability that companies need to bring new products to globalized markets.

Along with a transition to a first-to-file system, the America Invents Act also provides for an improved grace period, which will help secure investment. Under the current system, an inventor who discloses an invention to a potential buyer or investor without entering into a confidentiality agreement risks losing patent rights. The new provisions allow the inventor to engage in critical negotiations with potential buyers or investors without fear of losing their right to a patent.

Provisional U.S. applications will continue to be available. Since 1995, inventors who wish to preserve their rights in their invention while evaluating its potential can do so by submitting a provisional application and paying a nominal fee, thereby establishing an internationally recognized priority date. The inventor may, within a 12-month period, convert that provisional application into a full U.S. application if the invention is worth pursuing.

The America Invents Act further harmonizes U.S. law by broadening the definition of prior art, eliminating the Hilmer doctrine and virtually eliminating the best mode requirement. The reform provides that prior art under U.S. law includes non-printed disclosures, including oral disclosures, made available to the public anywhere in the world. New provisions also provide an incentive for early disclosure (i.e., one year or less before the effective filing date) by insulating inventors who disclose their inventions against third party disclosures, if the inventor’s disclosure precedes that of a third party. The elimination of the Hilmer doctrine ensures that patents and published applications filed in the U.S. are prior art as of the earliest effective filing date to which they are entitled to claim a right of priority. Additionally, the earliest effective filing date is no longer limited to only U.S. filings; it can now also originate from a foreign filing. The new U.S. law also eliminates the best mode requirement as a defense in infringement actions in court and USPTO post-grant review.

The law supports small businesses and independent inventors by creating a pro bono program in conjunction with intellectual property law associations. The law also requires the USPTO to maintain a Patent Ombudsman Program to provide patent filing services to qualifying small businesses and independent inventors. Additionally, to help foster innovation by independent inventors and universities, various fees are reduced for micro-entities. Transitioning to an FTF system will also support small businesses in attracting the investments they need to startup their operations and bring new products to market. -WIPO Magazine