First-to-File System. The effective change from the current U.S. first-to-invent system to the more internationally recognized first-inventor-to-file system remains a key provision of the Patent Reform Act of 2010. Rather than moving to an absolute novelty system, however, the new proposal calls for a limited grace period for certain disclosures made one year or less before the effective filing date of the claimed invention. To qualify for the grace period, the disclosures must be determined to have come directly from, or be derived from, the inventor.
Post-Grant Review. The bill also provides a new system of post-grant reviews that may be requested by the patent holder. The proposal calls for a “supplemental examination” to permit the patent holder to provide additional potential material prior art regarding its patent to the U.S. Patent and Trademark Office (USPTO).
If the USPTO finds the new information to have no effect on patentability, that material cannot later serve as the basis for an inequitable conduct claim in litigation. The new bill requires that no litigation will proceed until the reexamination is complete.
Those who routinely defend against claims of patent infringement, such as generic drug companies, will likely object to this provision because it allows patent holders to cure inequitable conduct by disclosing previously withheld relevant prior art, and delays ultimate resolution by patent litigation.
Inter partes Examination. Pre-issuance submissions of prior art by third parties are allowed, as under the original bill. However, inter partes challenges to patents have been limited to requests made within only nine months of a patent’s issue or reissue, instead of the initially proposed 12 months.
The bill is intended to transition the law from the current re-examination model to a more European opposition model. The standard for instituting a proceeding requires a “reasonable likelihood” that a challenger will prevail in invalidating at least one claim of the patent. These provisions again favor the patent holder by providing estoppel against a challenger from later raising in court an argument that reasonably could have been raised during the inter partes review.
Best Mode Requirement. The best mode requirement remains a part of U.S. patent law in name; however, paradoxically, the failure to fulfill the best mode requirement would no longer be an invalidity defense nor could it serve as a basis for holding a patent unenforceable.
Patent Fee Authority. The USPTO would be given the authority to adjust its fees to the extent they are set to recover the estimated costs of running the office. Given that continued patent fee diversion by Congress has not been prohibited, this authorization could result in significant patent fee increases in attempts by the USPTO to keep up with productivity goals. The bill also establishes a newly defined “micro entity” entitled to a 75% reduction in fees, whereas traditional small entities will still qualify for a 50% fee reduction.