Asked & Answered: Eric Sosenko on Patent reform

Aimed at streamlining the patent process, the America Invents Act signed into law by President Obama last September is the largest overhaul to U.S. patent law in more than a century. Eric Sosenko, an intellectual property attorney and shareholder at Brinks Hofer Gilson & Lione in Ann Arbor, speaks to local groups about the changes. He agreed to answer questions from The Legal News about the changes.

By Jo Mathis

Legal News

Q: What's the most important thing people should know about the America Invents Act?

These patent reform changes are the most dramatic changes to patent law in over 50 years. The impact is not only on obtaining patents, but also the way in which patents may be challenged.

Q: What are the most important changes affecting the protection of intellectual property?

I think the top 5 changes, not necessarily in order of importance, are virtual marking, first-inventor-to-file, the new post-issuance proceedings, prior art submissions and priority examination.

Q: What is virtual marking?

One factor in being able to claim damages for patent infringement is to provide notice that a product is covered by a patent. Virtual marking makes it easier for manufacturers and consumer products companies to provide this notice. Under the prior law, it was required to place the actual patent number on the product or its packaging. Updating patent numbers for marketing purposes was costly, particularly when the product went to market before the patent was issued or when additional patents were obtained after market entry.

With virtual marking, patent owners can comply with the marking requirements by using a web address. Basically, all that a patent owner needs to do is mark the product with the web address and then, at that web address, correlate a product with the patents covering the product. In this way, the patent owner can readily update the listing of patents covering a particular product.

Q: Who should use it, and how?

Any patent owner who has a product going to market before the issuance of the patent covering the product should consider utilizing virtual marking. Companies with a number of consumer products should consider virtual marking because it readily allows them to comply with and monitor their marking activities. In the auto industry, virtual marking gives suppliers an opportunity to re-open the conversation with Original Equipment Manufacturers (OEMs) about marking products in general. Historically, OEMs do not like to have any patent marking on components incorporated into their products. The imprinting of a web address seems much less objectionable, so I think some suppliers will pursue the concept of product marking again now that virtual marking is an option.

Q: What is First-Inventor-to-File?

This issue relates to who is entitled to the patent. The U.S. is the only country that operates under a paradigm where the first person to invent is the one entitled to receive the patent. That system, while having an altruistic air about it, puts burdens on the inventor to document the date of invention and can result in challenges to a patent based on the provable date of invention.

The first-inventor-to-file system, which is how the rest of the world operates, will change this. Under the first-inventor-to-file paradigm, not only must you invent, you must also be the first to file on the invention. In the new system, there are two events that have to take place: inventing and filing.

There has been some confusion on this topic. Some commentators have left out the fact that you still must invent the subject of the patent. If a person learns of the invention from the inventor or other third party, that person is not entitled to a patent because they did not invent the subject of the patent. The new law implements procedures that allow a subsequent filer to actually obtain a patent when they can show that an earlier filer derived the invention from them.

Q: What actions should firms take now to have the greatest impact on their IP?

There are benefits to the First-Inventor system. One benefit is that, during the proceedings before the Patent Office, it is sometimes possible to utilize a date of invention that is earlier than the filing date in order to eliminate a reference from being used to prevent one from obtaining the patent. In other words, one may be able to assert, based on the date of invention, that certain references are not ''prior art'' and that the Patent Office cannot rely on these references.

The First-Inventor-to-File system will go into effect on March 16, 2013. If an inventor or company has inventions that they have not made decisions on regarding proceeding with patent protection, these inventions should be reviewed and a decision made. If the decision is to proceed with patent protection, filing on these inventions prior to March 16, 2013 will be beneficial so as to limit the prior art that can be applied against the patent application.

Q: What is Third-party submission of prior art, and how can companies take advantage of this tool?

Prior art submissions by a third-party can take two different forms under the AIA: pre-issuance submissions and post-issuance submissions. I think the pre-issuance submissions offer a unique opportunity for companies to prevent competitors from obtaining overly broad patents. This mechanism allows a company, for a fee, to submit to the Patent Office a reference(s) that it believes impacts the scope of the claims of a pending patent application. When filing one of these submissions, the submitter must explain how the reference impacts the scope of the claims in the application. There is a limited window of time within which these submissions may be made, which is generally within 6 months of publication of the pending patent application. An additional benefit is that the submitter can remain anonymous.

Q: Why is being anonymous beneficial?

By submitting prior art to restrict or prevent another from obtaining their patent, you are invoking an adversarial situation. The entity seeking the patent most likely will not welcome this intervention. If you have other dealings with that entity, they could be negatively impacted. Also, and perhaps the more probable scenario, they may start monitoring your patent applications and look for opportunities obstruct your patent activities.

Q: Can you explain the new post-issuance proceedings?

The two major post-issuance proceedings are post-grant review and inter partes review. These reviews are administrative proceedings at the Patent Office that allow interested parties the opportunity to challenge the validity of an issued patent without having to undergo the full expense of litigation. Post-grant review affords broader grounds under which a patent can be challenged, but this type of review can only be implemented within the first 9 months after issuance of the patent. Inter partes review has more limited grounds to challenge a patent. However, it can be implemented at any time during the life of the patent (except during the time that post-grant review can be filed).

Q: You also mentioned prioritized examination. What is this?

Prioritized examination may be a very valuable tool for patent filers who need to obtain patents on their inventions quickly. Currently, it takes about 3 years to obtain a final decision from the Patent Office on whether a patent will be issued or denied. With prioritized examination, for a fee, an applicant can proceed to the front of the line to have their applications immediately acted upon. Recent statistics show that first office actions are being issued within a little over month of the granting of prioritized examination. Final decisions are being received on average in less than 4.5months. For fast-paced technologies, or for companies needing protection on their technologies in order to obtain funding, the extra expense may be well worth having the patent in hand.

Published: Thu, Jun 21, 2012