SC Lawyer, September 2012, #3. Patent Reform 101.

• Author: By Ammon Lesher and Tom Vanderbloemen

South Carolina BAR Journal

2012.

SC Lawyer, September 2012, #3.

Patent Reform 101

South Carolina LawyerSeptember 2012Patent Reform 101What Every South Carolina Lawyer Should KnowBy Ammon Lesher and Tom VanderbloemenOn September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act (AlA), which many are calling the most significant overhaul to U.S. patent law in more than half a century. The AIA is a complex piece of legislation that will change how patents are granted, how patent litigation will proceed and what types of inventions are eligible for patents, among other things. ln particular, the AlA represents an overall recognition of the increasing economic value of patents, a trend that will certainly continue in today's knowledge based economy. Just recently, the U.S. Commerce Department released a comprehensive report showing that lP-intensive industries support at least 40 million jobs and contribute more than $5 trillion dollars to the United States' GDP. See Econ. Statistics Admin., U.S. Patent Trademark Offices, Intellectual Property the U.S. Economy (March 2012), www.uspto.gov/news/publications/ lP_Report_March_2012.pdf.

While many people have criticized specific provisions of the AlA, almost everyone agrees something needed to be done to alleviate the problems associated with an overburdened patent office and exploding litigation costs. Through passage of the AlA, Congress most notably sought to accomplish the following: 1) harmonize the U.S. patent system with the majority of foreign jurisdictions; 2) increase the quality of issued patents; and 3) reduce the increasing costs of patent litigation by providing an alternative forum for challenging the validity of a patent.

As South Carolina continues to focus its future economic growth on innovation and entrepreneurship, the state's business community will need to familiarize itself with the AlA. Therefore, South Carolina's lawyers should have a working knowledge of the new law, whether or not their practice regularly involves intellectual property issues. What follows is an introduction on some of the major provisions in the AlA and the potential effects it may have on individual inventors, small businesses and large corporations.

First to file

At the heart of the AlA is the change to who can seek patent protection. The system in place in the U.S. has granted a patent to the inventor who first conceives the claimed invention, even if that inventor was not the first to file an application at the U.S. Patent Trademark Office (USPTO). Under this "first-to-invent" system disputes frequently arose about who was the first inventor, whether an invention had been abandoned and other related issues. Under the new system, which is effective March 16, 2013, an inventor who is the first to file a patent application will be entitled to a patent, assuming all other patentability requirements are met. This change places the U.S. system into alignment with a majority of foreign jurisdictions, including those of the European Union.

Shifting to a first-to-file system will almost certainly simplify the protracted and costly disputes that arose when multiple applications were filed for similar inventions. These disputes could span years and were typically decided on suspect notes and research records that may have been kept at the time an invention was conceived. For example, a recent opinion issued by the U.S. Court of Appeals for the Federal Circuit, the court that hears appeals from patent cases in the district courts, affirmed a finding of infringement of a patent for a prosthetic vascular graft. Bard Peripheral Vascular, Inc. v. W.L. Gore Assocs., Inc., 670 F.3d 1171, 1193 (Fed. Cir. 2012). The application that became the patent at issue in Bard was filed on October 24, 1974, was subsequently issued as U.S. Patent No...