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AMERICA INVENTS ACT - Derivation Proceedings

By James A. O'Malley / Jan 18, 2013

This is the tenth and final article in a series relating to the Leahy-Smith America Invents Act of 2011 (AIA). The AIA is the first major change to U.S. Patent Law in more than five decades, with the first provisions of the AIA having gone into effect on Sept. 16, 2011.

This article discusses the new derivation proceedings that will be implemented under the AIA. The derivation proceedings become effective on March 16, 2013, and apply to all patents and patent applications subject to the new first-inventor-to-file system.

As discussed in a previous article in this series, the AIA will change the U.S. patent system from a first-to-invent system to a first-inventor-to-file system for all patent applications having an effective filing date of March 16, 2013, or later. Under the first-to-invent system, interference proceedings were conducted to determine which party was entitled to a patent when two separate patents or patent applications were filed that claimed the same invention. With the implementation of the first-inventor-to-file system, interference proceedings will soon only be conducted for those patents or patent applications that have an effective filing date before March 16, 2013.

Under the current first-to-invent system, a person is allowed to obtain a patent unless "he did not himself invent the subject matter sought to be patented . . . ."  35 U.S.C. §102(f). In other words, a person cannot obtain a patent if he/she derived the invention from another. While the AIA removes any issues regarding who was the first person to invent, it is still important to ensure that the person being issued a patent is, in fact, the true inventor.

A derivation proceeding requires that an applicant for patent file a petition to institute the proceeding.  The petition must be filed within the one-year period beginning on the date of the first publication of a claim to an invention. This claim to an invention must be the same or substantially the same as a claim in the application of the first applicant to file (the "respondent"), who has been alleged to have derived the invention. The petition must further show that the petitioner has at least one claim that is the same or substantially the same as the respondent's claimed invention, and the same or substantially the same as the invention disclosed to the respondent. The petition must also be accompanied by a fee of $400. The petitioner must also serve the petition and any exhibits relied upon in the petition on the respondent. A filing date will not be accorded to the petition until payment and service are complete.

In addition to the previous requirements, the petition must: (1) provide sufficient information to identify the application or patent for which the petitioner seeks a derivation proceeding; (2) demonstrate that a claimed invention was derived from an inventor named in the petitioner's application, and that the inventor from whom the invention was derived did not authorize the filing of the earliest application claiming such invention; and (3) for each of the respondent's claims to the derived invention, (a) show why the claimed invention is the same or substantially the same as the invention disclosed to the respondent, and (b) identify how the claim is to be construed. A derivation showing will not be sufficient unless it is supported by substantial evidence, including at least one affidavit addressing communication of the derived invention and lack of authorization that, if not rebutted, would support a determination of derivation.

A derivation proceeding may be instituted by an administrative patent law judge on behalf of the Director of the United States Patent and Trademark Office where the petition sets forth a basis for finding that the inventor named in an earlier application derived the claimed invention and there is substantial evidence to support the allegations raised in the petition. The decision by the Director as to whether to institute a derivation proceeding is final and non-appealable.

The AIA provides that where a derivation proceeding is instituted and not dismissed, a three-judge panel of the Patent Trial and Appeal Board (the Board) shall conduct a single-phase trial similar to an inter partes review proceeding or a post-grant review proceeding (which have been discussed in previous articles in this series). Once the trial has been conducted, the Board shall issue a written decision that states whether an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner's application without authorization. The Board's written decision may also address issues of patentability that arose during the derivation proceeding when there is good cause to do so. A party that is dissatisfied with a final decision in a derivation proceeding may appeal to district court or the Court of Appeals for the Federal Circuit.

Alternatively, the parties to a derivation proceeding may resort to binding arbitration to determine inventorship, however, the Patent Office is not a party to the arbitration and, therefore, the Board is not bound by, and may independently determine, any question of patentability. The AIA also permits the parties to a derivation proceeding to settle.  A settlement in a derivation proceeding will be accepted by the Board, and the derivation proceeding will be terminated, unless the settlement is inconsistent with the evidence of record. If the Board finds that the settlement is inconsistent with the evidence, the Board may disregard it and continue the derivation proceeding. If either party to the derivation proceeding makes a request, the settlement will be treated as business confidential, will be kept separate from the file of the involved patents or applications, and will be made available only to government agencies on written request, or to any person on a showing of good cause.

For more detailed information about the AIA or any other intellectual property matter, please contact Jim O'Malley, jomalley@clarkhill.com , or any member of Clark Hill's IP practice group.

Copyright 2012 Law Bulletin Publishing Co. Reprinted with permission.