Wednesday, March 6, 2013

America Invents Act - Narrow Grace Period with High Cost

Under current law, the United States grace period protects an inventor from disclosure of the invention before the filing date. The grace period lasts for 12 months, is unconditional, and it doesn't matter who disclosed the invention.

Beginning March 16, 2013, the one-year grace period only protects a much more limited set of activities, namely, inventor disclosures and disclosures derived from the inventors. I discussed this in more detail in America Invents Act - Uncertain Grace Period for Filing US Patent Application. It's too bad the grace period has become so narrow especially for innovative startups that engage in pre-filing activities.

Not only is the new grace period narrow, it will be costly for applicants. The expense will show up in two ways. First, in prosecution if a prior art rejection is based on a disclosure that the inventor seeks to shield using the grace period, 37 CFR 1.130 requires a declaration describing the details and dates of inventor's disclosure and disclosure to others. Such a declarations will be time consuming and expensive, because it will require talking to all the people involved, and cross-checking facts. Second, to be effective the declaration must be 100% accurate. Even if the examiner allows the case based on the  declaration, litigators may have a large budget and time to attack the declaration as (1) incomplete; (2) inaccurate; and/or (3) misleading. Thus, it will add a large expense to prosecuting U.S. patent applications.

Further, these costs will be unavoidable if an applicants seeks to use the grace period to overcome a prior art rejection. If an applicant files a declaration that a court finds incomplete or inaccurate, the prior art that was overcome in prosecution may be used to invalidate the patent in litigation or in a post-grant proceeding. The patent owner may be forced to file reissue or reexamination papers. Of course this may result in intervening rights or no patent. If the court holds the declaration is misleading, the patent may be held unenforceable.

For a copy of the final rules, comments on the rules, and the examination guidelines please see USPTO - Final Rules and Examination Guidelines to Implement the First-Inventor-to-File Provision of the America Invents Act.

Copyright © 2013 Robert Moll. All rights reserved.