On September 16, 2011 president Obama signed the long-debated patent reform bill into law („The America Invents Act“), thereby marking the first substantial modification to the U.S. patent system since 1952. Congress has been wrestling with the legislation for seven years. When Congress initially began considering patent reform, the bill was designed to fix a broken litigation system – the main problem being that new patents were broad in scope and vague in definition, allowing their owners to launch lucrative lawsuits against companies making generally unrelated products.

The America Invents Act provides for some major changes in federal patent law, however fails to address some of the biggest problems. The key pieces included in and missing from the reform explains the following summary:

 1. Switch from a “first to invent” rule for issuing patents to a “first to file” rule:

As the name suggests, this new system would grant a patent to the first person to file an application with the Patent and Trademark Office itself (USPTO), even if someone else had previously invented the same technology (an original inventor can challenge a grant if he can show that the applicant got the idea from him). The new system will take effect on March 16, 2013.

2. The creation of a “post-grant review” process:

That provision creates a new way to challenge patents within nine months of their issuance by presenting evidence of invalidity directly to the USPTO. A third party can petition for cancellation of a patent claim based on any ground for invalidity, e.g., lack of enablement, lack of written description or prior art.

3. Prior commercial use defense:

This defense will be expanded to infringement claims involving any type of patent. This method may therefore be used also by alleged infringers of controversial business method patents. Doing so will protect innovators who have chosen to maintain inventions or processes as trade secrets against infringement claims brought by later claimed inventors.

4. False marking:

The Act eliminates the private enforcement of false marking claims except as to those who can show a competitive injury. (Frequently, patentees fail to remove patent markings from their products following the expiration date of their patents and continue to mark goods sold after that date as patented).

5. Best mode:

While an inventor is still required to “set forth” the best mode for accomplishing the invention (i. e. the disclosure of a patent in sufficient detail for the notional person skilled in the art to carry out that claimed invention), failure to disclose a best mode is not a basis for invalidating or rendering unenforceable an issued patent.

6. Higher fees:

On September 26, 2011 all patent fees – including filing fees, national fees, examination fees, issue fees, disclaimer fees, appeal fees, maintenance fees, patent search fees and continued examination fees – rose by 15 percent. On the other hand, newly defined “micro-entities” will enjoy a 75 percent reduction in most typical patent fees.

7. Changes to the collection of patent fees and USPTO funding:

Under the current system, both fee levels and the USPTO`s budget are set directly by Congress. The America Invents Act gives the USPTO the authority to set its own fees and to retain them.

8. Lack of patent lawsuit (litigation) reform:

Although it was included in some earlier versions of the bill, there`s no new process for determining damages included in the America Invents Act. That means jury awards for patent violations may continue to be huge and the patent infringement damages does not need to be aligned with any actual value of a patented invention.

9. Patentability of software and “business methods”:

There has been much debate in recent years about the propriety of software patents or business methods patents, and the America Invents Act does little to clear that up, except in a few minor niches, e.g. patents will not be granted to any strategy for reducing, avoiding, or deferring tax liability, or to claims covering human organisms.

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