A Different State of Grace: The New Grace Period under the AIA

Vol. 5 No. 6

By

Heath W. Hoglund is a vice president and chief patent counsel at Dolby Laboratories Inc., where he has global responsibility for patents. He can be reached at hhogl@dolby.com. Jay A. Erstling is a professor of law at William Mitchell College of Law and of counsel at the intellectual property law firm of Patterson Thuente IP. He can be reached at erstling@ptslaw.com or jay.erstling@wmitchell.edu. Frederik W. Struve is a 2014 J.D. candidate at William Mitchell College of Law. He has a B.Sc. in International Comparative Business Administration from Copenhagen Business School, Denmark. He can be reached at frederik.struve@wmitchell.edu.

T here is a new normal in American patent law. For anyone currently practicing in intellectual property, U.S. patent law has always included a novelty grace period that protected against the disclosure of an invention within one year prior to the filing of a patent application. The America Invents Act (AIA)1 has amended the novelty grace period in its scope and perhaps its usefulness. Unless and until the courts provide a broader interpretation, the AIA grace period requires applicants and their counsel to adopt new best practices.

The first-to-file system created by the AIA forces practitioners to think about issues of disclosure, novelty, and priority in ways that differ considerably from pre-AIA practice. The pure novelty grace period, which had been a core feature of the U.S. patent system, no longer exists.2 Pre-AIA, any publication within one year prior to an applicant’s filing date would not destroy the novelty of a claimed invention, while an inventor’s own or a third-party’s publication made more than a year before the filing date would destroy novelty even where an inventor had an earlier invention date. The AIA grace period is conceptually different because it does not rely on a novelty determination alone, but requires an inventor to be first in time to make a public disclosure to trigger the ability to exclude subsequent public disclosures of the same subject matter.3 In addition, the underlying switch to first-to-file from first-to-invent eliminates the ability under first-to-invent to swear behind another’s disclosure to obtain protection for all invented subject matter by establishing priority to claimed subject matter otherwise meeting the novelty requirement under pre-AIA § 102(b).

It is important to separate these two pre-AIA concepts, because the mechanical construction of the grace period under AIA § 102(b) must be understood as a limited remedy crafted for a first-to-file system. Section 102(b) does provide novelty protection against independently invented subject matter publicly disclosed, or contained in an application filed, subsequent to the inventor’s initial public disclosure. However, because the AIA grace period is not crafted to protect the novelty of first-in-time inventors’ subject matter from anyone but themselves, the grace period protection is limited to the “same” subject matter publicly disclosed.

That is, if inventor Patrick publicly discloses genus A and species X and Y, but inventor Lamar subsequently publicly discloses species Z, an obvious variation over Y, then Patrick can only obtain a patent on A, X, and Y—Z is prior art against any species subsequently publicly disclosed or claimed by Patrick. Under the same facts, even if Patrick had invented genus A, and species X, Y, and Z, but did not publicly disclose Z, Patrick cannot obtain rights on Z, because he was not the first inventor to publicly disclose Z—destroying its novelty to him.4

The AIA grace period only protects the novelty of publicly disclosed subject matter. If a third party subsequently publicly discloses an obvious variation of the subject matter, that variation becomes prior art against the inventor who was otherwise first in time to publicly disclose. As a result, applicants should strive to file an application before any public disclosure, which often means that they should be prepared to file provisional applications on short notice.

Statutory Analysis

AIA § 102 replaces former § 102, known for its overlapping definitions of prior art subject to a one-year grace period.5 The pre-AIA grace period under § 102(b) provided that an invention was not prior art if it was patented or described in printed publication anywhere, or in public use or on sale in the United States, one year or less before the U.S. filing date.6 By itself, this was the extent of the pre-AIA novelty grace period. However, the pre-AIA grace period worked in conjunction with the ability to swear behind another’s publication or filing, thereby allowing applicants to obtain rights for all invented subject matter with an earlier invention date, assuming the novelty grace period requirements were met.

Under AIA § 102, the applicant will fare differently. The definition of prior art in § 102(a) expands the types of prior art available against applicants compared to pre-AIA § 102. For example, under new § 102(a), public use of an invention outside the United States can now constitute prior art. Section 102(b) in parallel allows applicants to exclude all prior art meeting the § 102(b) requirements. The significant limitation to AIA § 102(b) is that only the same subject matter publicly disclosed by the inventor may be excluded from prior art.7

As a result, § 102 allows only a narrow application of the grace period. First, the statutory language contains no modifiers to “subject matter” that would permit exclusion of intervening prior art with minor variations, such as a species not publicly disclosed by the inventor. Second, compared to the pre-AIA grace period, AIA § 102(b) narrows the grace period by requiring public disclosure by the inventor to invoke its protection.

In addition, § 102 makes prior art available as of its effective filing date.8 The effective filing date is the actual U.S. filing date, or if available, the earlier foreign priority or Patent Cooperation Treaty (PCT) filing date. Therefore, when applicants are not able to take advantage of AIA § 102(b), they are faced with additional prior art that was not available against applicants under pre-AIA § 102, under which U.S. applications with foreign priority claims could not be asserted as prior art before their earliest U.S. filing date.9

Pre-AIA, prior art was defined in various § 102 subsections. The AIA centralizes the definition of prior art under § 102(a). Section 102(a)(1) pertains to publicly disclosed prior art in any form or manner. Section 102(a)(2) in turn additionally defines prior art as unpublished U.S. nonprovisional or PCT applications10 as of their effective filing date, which may be the filing date of a foreign priority claim.

“Disclosures” under § 102(b) are identical to all § 102(a) prior art. Subsections (A) of § 102(b)(1)–(2) define the subject matter excludable from prior art when publicly disclosed by the inventor, if the inventor was the first in time to publicly disclose the subject matter. In other countries with a grace period, this is the only novelty grace period protection available to applicants. Subsections (B) of § 102(b)(1)–(2) provide additional protection against independently invented subject matter, but again, only when the inventor was first in time to publicly disclose and only to the extent that the subject matter is the same.

Scope of Subject Matter

Under the AIA, the definition of prior art excludable under the grace period is extremely important because that definition alone determines the scope of protection afforded to applicants with prefiling disclosures. The United States Patent and Trademark Office (USPTO) relied on the construction of § 102(b), which uses “subject matter” in a single instance to describe both the inventor’s public disclosure and the content of the prior art.11 Therefore, the USPTO contended, § 102(b) “cannot reasonably be read as concurrently describing two discrete subject matters.”12 Additionally, the USPTO emphasizes the absence of a modifier (e.g., “substantially”) in justifying its interpretation that only the same subject matter is protected by the grace period under § 102(b).13 “Substantially” is included as a modifier in other sections where variation is intended, including AIA §§ 135(b)(1), 135(a), 154(d)(2), and 252.14

The AIA grace period is mechanical—some might say rigid—because there is no such modifier. The inclusion of a modifier in § 102(b) to allow protection for obvious variations from the subject matter publicly disclosed could have bridged some of the gap from pre-AIA protection lost due to the inability to swear behind novelty-defeating prior art under first-to-file. Instead, AIA § 102(b), consistent with first-to-file principles, essentially only protects first-in-time inventors from their own prefiling disclosures, and from (the rare) occurrences of subsequent disclosures of identical subject matter by independent third parties.

The examination guidelines do not require an intervening disclosure to be word-for-word copy (“ipsissimis verbis” in the words of the guidelines) in order to benefit from the grace period, and they exclude from prior art disclosures that are “simply a more general description of the subject matter previously publicly disclosed by the inventor.”15

It is then imperative to understand the basics of same subject matter. Unfortunately, those basics exist only in theory and will continue to do so until the USPTO and the courts have had an ample opportunity to weigh in on the matter. For now, it is easy to understand that if an inventor publicly discloses A, B, and C, and an intervening disclosure discloses A, B, C, and D, the first inventor will only be able to claim the grace period with respect to A, B, and C; D will become prior art.16 However, what happens if D is a minimal variation of publicly disclosed C? It is not at all clear when a minimal variation of publicly disclosed C will be deemed to be an obvious variation and become prior art as D. Further, we do not know to what extent D can render obvious the combination of publicly disclosed A, B, and C with other elements not previously publicly disclosed but claimed in the application.

Similarly, the examination guidelines make it clear that an intervening disclosure of a genus does not become prior art to a previously publicly disclosed species of that genus, while the intervening disclosure of a different species becomes prior art to a previously publicly disclosed species or genus. As above, the dividing line between same subject matter and a variation will impact novelty, but also determine when an intervening public disclosure of a species will render obvious combinations of the previously publicly disclosed genus and/or species with subject matter not publicly disclosed by the inventor, but claimed in the application.17

Required Public Disclosure

The public disclosure requirement is a partial, yet important, departure from the pre-AIA grace period, because it impacts the mechanics of the grace period. The pre-AIA grace period protected first-in-time inventors for one year against their own as well as independent third-party disclosures.

By comparison, under the AIA, unless the subject matter is disclosed by someone who obtained it, directly or indirectly, from the inventor, § 102(b) requires affirmative public disclosure of the subject matter by the inventor to protect it against subsequent public disclosures of the same subject matter by others.

As a result, the statutory language under § 102(b) intertwines the concepts of novelty and priority. First, subsections (A) of § 102(b)(1)–(2) exclude from prior art public disclosures made by the inventor—the novelty grace period. Second, subsections (B) of § 102(b)(1)–(2) establish that a first-in-time inventor who publicly discloses has a superior right over a subsequent independent inventor to obtain a patent on identical subject matter—creating a priority-like right to the subject matter publicly disclosed.

The process and outcome under the § 102(b) grace period therefore constitutes a limited exception to first-to-file priority. For example, if inventor Patrick is first to publicly disclose certain subject matter, but second in time to file an application claiming that subject matter, Patrick may still prevent Lamar, an independent inventor who was first to file, from obtaining a patent, provided Lamar’s application was filed subsequent to Patrick’s public disclosure.

The public disclosure requirement represents the public policy tradeoff between the inventor and the public for the protection of exclusive rights granted to the publicly disclosed subject matter. Public disclosure, however, may have disastrous consequences when applicants attempt to seek patents in foreign countries. Prefiling disclosure results in loss of rights in many countries normally considered strategically important by U.S.-based applicants, including the member countries of the European Patent Organisation. Further, prefiling disclosure introduces an increased risk of loss of rights in the countries with a grace period that only protects against the inventor’s own disclosures, and not filings of the same subject matter by independent third parties. The loss of foreign rights is no different than pre-AIA, but it is important to emphasize this consequence in light of the fact that it is only publicly disclosed subject matter that qualifies for exclusion of prior art under § 102(b).

Expanded Grace Period Protection (for Some)— The Effective Filing Date

The concept of the effective filing date expands the scope of the AIA grace period because it allows the grace period to run from the earliest priority filing date, whereas the pre-AIA grace period ran from the earliest U.S. filing date (including a PCT application in English designating the United States). Therefore, under AIA § 102(b), the definition of effective filing date will primarily work in favor of foreign applicants hoping to take advantage of the AIA grace period. The effective filing date is defined as:

(A) if subparagraph (B) does not apply, the actual filing date of the patent or the application for the patent containing a claim to the invention; or
(B) the filing date of the earliest application for which the patent or application is entitled, as to such invention, to a right of priority under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date under section 120, 121, or 365(c).18

In plain English, the AIA grace period is calculated from the earliest filing date from which an application is entitled to claim benefit, or to which it is entitled to claim priority, including the filing dates of foreign applications. For U.S.-based applicants, the effective filing date will change little in practical terms, compared to pre-AIA patent law, if applicants calculate the grace period as one year from the filing date of their provisional or nonprovisional application.

For foreign applicants, however, the effective filing date will allow applicants to calculate the grace period from the earliest foreign priority date.19 Pre-AIA, foreign applicants desiring to utilize the U.S. grace period were required to file a U.S. provisional or nonprovisional application within one year of a prefiling publication. AIA § 102 permits outside counsel with foreign applicants, who have a limited grace period under applicable national law, to first file in a foreign national office, and subsequently file in the United States either directly by Paris Convention or by filing a PCT application.

Exposure to (and Maybe Even Exclusion of) More Foreign Prior Art

Section 102(a)(2) incorporates former § 102(g) and establishes that an application can constitute prior art as from its effective filing date. The provision encompasses foreign applications, which can constitute prior art as from their foreign priority filing date. The AIA eliminated the Hilmer doctrine, and in so doing exposes U.S. applicants to more foreign prior art under the AIA than under the pre-AIA law. The Hilmer doctrine, a court decision interpreting pre-AIA § 102(e), prevented U.S. applications with foreign priority claims from being asserted as prior art before their earliest U.S. filing date.20 Consequently, the elimination of the Hilmer doctrine will allow examiners to cite as prior art subject matter described in a U.S. or PCT application as of its foreign priority date.

Because the definition of prior art is identical under § 102(b)(2), the AIA grace period allows an applicant with an earlier public disclosure to exclude from prior art any identical subject matter described in an application with a later effective filing date. This symmetrical treatment of prior art under the grace period, however, is limited by the narrow definition of subject matter as only the same subject matter.

In practical terms, the elimination of the Hilmer doctrine allows foreign language applications to which even unpublished U.S. or PCT applications have claimed priority to become prior art against U.S. applications. U.S. applicants will need to find ways to appropriately translate foreign language priority applications when completing prior art searches, both in foreign language applications used for Paris Convention priority, and foreign language PCT applications designating the United States, including any claimed priority applications.

Legislative History and USPTO Interpretation

But why is § 102 interpreted to only narrowly protect the same subject matter, when members of Congress stated the grace period would remain untouched? The publication of the proposed examination guidelines was greeted with great criticism by the practitioner community and led to a furious parsing of the legislative history to show the perceived misguidance of the USPTO in its interpretation of § 102(b).21 The criticism was to no avail. Although the USPTO ultimately discarded the “mere insubstantial changes, or only trivial or obvious variations” language in the proposed examination guidelines that had caused the initial uproar, the office maintained its position that the plain language of the statute cannot support protection of subject matter that is not the same as previously publicly disclosed.

In the final examination guidelines, the USPTO refers to the House Judiciary Committee Report22 to show that the legislative history is inconclusive as to the definition of subject matter.23 A further look at the legislative history shows that floor debates and colloquy also failed to address the definition of subject matter under § 102(b) in any consistent manner. A persistent problem in the legislative history is the casualness with which the lawmakers treated the conclusion that the AIA grace period would be identical to the pre-AIA grace period, perhaps not understanding the limited ability of the grace period to exclude prior art when applicants can no longer swear behind otherwise novelty-destroying prior art. During a March 9, 2011, colloquy, Senator Leahy assured that “[a] simple way of looking at new subsection 102(a) is that no aspect of the protections under current law for inventors who disclose their inventions before filing is in any way changed.”24 However, a few exchanges later Senator Hatch followed up, (correctly) stating that “[t]he inventor is protected not only from the inventor’s own disclosure being prior art against the inventor’s claimed invention, but also against the disclosures of any of the same subject matter in disclosures made by others.”25

The ability by Senators Leahy and Hatch to get the mechanics of the AIA grace period both wrong and right during the colloquy is characteristic of the legislative history. Since it is not possible to show that Congress intended “substantially” to be read in as a modifier to “subject matter” in § 102(b), the USPTO could not interpret the grace period to operate in a first-to-file system as espoused by Senator Leahy, because “subject matter” is used in a single instance to describe both the inventor’s public disclosure and the content of the prior art.

Advice for Practitioners

File Early and Often

The best general advice under AIA § 102 is to file early and often. The AIA grace period is not constructed for use as a filing strategy. Filing is the only way to definitively protect applicants against subsequent disclosures. It will also help prevent delays in examination and grant arising from §§ 102 and 103 rejections based on intervening disclosures of the same subject matter and prevent burdensome recourse to the proceeding to establish the applicant’s right to the subject matter.26 For applicants who have filed a provisional application and subsequently develop additional subject matter, for example a new species, it is highly advisable to file a second provisional application as soon as possible. The practice of “serial” provisional applications is not new, and it is an inexpensive way to provide certainty against intervening disclosures under the AIA.

Another reason to file as early as absolutely possible is the demise of the Hilmer doctrine, as described above. Subject matter is now prior art as of the effective filing date of the invention, regardless of whether the priority application was filed in the United States or abroad. Therefore, U.S. applicants should file an application as soon as possible to eliminate as much legal uncertainty as possible.

Unintentional Disclosure

Any unintentional disclosure should be followed promptly by the filing of a provisional or nonprovisional application. Section 102(b) leaves little room for error, because it is a limited safety net and only protects publicly disclosed subject matter. As with intentionally disclosed subject matter, the key is to disclose all subject matter relating to the invention. The inventor of unintentionally disclosed subject matter has the option either to publicly disclose any remaining subject matter, or to file an application containing the remaining subject matter. Filing a provisional application, which involves minimal formality requirements, will establish a priority date and eliminate further risk of loss of rights.

Intentional Disclosure

So what should you do if it is necessary to make an intentional prefiling disclosure? For example, a university researcher, in competing with other researchers, may be forced to publish to be the first to publicly describe particular subject matter.

The key to disclosing intentionally under the AIA grace period is to disclose all subject matter pertaining to the invention to eliminate the risk of subsequent disclosures of obvious variations of the subject matter. The ability to exclude subsequent disclosures of, and applications on, the same subject matter essentially creates a limited “first-to-publish” grace period. In effect, this creates a very primitive provisional application allowing priority-like rights in exchange for the disclosure of the subject matter. Using this mechanism may, in theory, also allow an applicant to defer the costs of filing an actual provisional or nonprovisional application.

This first-to-publish grace period, however, only protects against subsequent independent public disclosures of, or applications on, the same subject matter. Variations not included in the initial disclosure that are incorporated into a subsequent disclosure by another will be prior art. As explained above, if for example disclosing a genus, all species of the invention’s subject matter must be disclosed to prevent intervening prior art.

As with pre-AIA prefiling disclosures, a significant consequence of disclosure—intentional or otherwise—prior to filing an application is the potential or immediate loss of rights abroad. While some other major offices (e.g., Japan and Korea) have grace periods, they do not run from the effective filing date as under the AIA. Instead, the grace periods are calculated from the application date in those countries. A U.S. applicant would have to file directly in those countries within 12 months from the date of the public disclosure. Further, foreign grace periods only protect against an inventor’s own disclosures and do not allow exclusion of identical independently invented subject matter. Other countries, primarily the 38 member countries of the European Patent Organisation, have no grace period at all, and U.S. applicants disclosing prior to filing will be unable to obtain rights in those countries. This is a significant limitation on the benefits of prefiling disclosures, and the importance of foreign rights must be considered carefully by any disclosing party.

Secrecy—Nondisclosure and Delayed Filing

Pursuant to the AIA, applicants may now keep subject matter from becoming prior art even when the subject matter is sold or used, provided it is made subject to a nondisclosure agreement. Metalizing Engineering27—a 1946 decision by the Second Circuit that held that secret commercialization by the inventor barred patenting—was done away with in the AIA. Any subject matter kept secret can later be patented if desired, even where it was offered or actually sold pursuant to a nondisclosure agreement. The major risk of this strategy under the AIA is that the owner of the secret subject matter cannot swear behind another’s public disclosure or application. Nevertheless, if applicants are confident that they can keep the subject matter secret, the elimination of Metalizing Engineering presents the antithesis to the grace period for the applicant seeking to defer the costs of filing an application. It must be kept in mind, however, that foreign patent law may find information publicly accessible, and therefore available as prior art, even where it is subject to a nondisclosure agreement.

Review Invention Disclosure and Application Filing Processes

Finally, counsel—whether in-house or outside—should review invention disclosure and application filing processes to make sure that they have taken the AIA changes into consideration. First, invention disclosure forms should ensure that they allow for all possible disclosures, keeping in mind that any public disclosure of subject matter triggers the clock on the one-year grace period, whether it is a social media posting, or a written product description. Second, counsel should ensure that subject matter is disclosed internally as early as possible to allow for an appropriate determination of whether to proceed with patenting. Third, once the decision to patent is made, in-house counsel should require prompt turnaround from outside counsel in drafting an application. In-house counsel in turn should approve completed applications swiftly for filing.

Conclusion

The AIA grace period was not crafted to be an extensive remedy for prefiling disclosures. Accordingly, applicants and counsel will benefit by appreciating the AIA for what it is—a true first-to-file system—and by treating the grace period accordingly. The AIA grace period is primarily a safety net against unintended disclosures and should not be relied upon unless it is necessary for nonpatenting reasons, or the applicant believes it is beneficial to preempt others from obtaining rights on the disclosed subject matter. The developing USPTO examination history, and ultimately the courts, will inevitably settle many of the current ambiguities in the application of § 102(b). Until then, the best advice is to be cautious and establish procedures for quickly filing provisional applications.

Endnotes

1. Leahy-Smith America Invents Act (AIA), Pub. L. No. 112-29, 125 Stat. 284 (2011) (codified in scattered sections of 35 U.S.C.). The first-inventor-to-file provisions became effective March 16, 2013.

2. 35 U.S.C. § 102(b) (2006), amended by AIA, Pub. L. No. 112-29, 125 Stat. 284 (2011).

3. 35 U.S.C. § 102(b) (2013).

4. Examination Guidelines for Implementing the First Inventor to File Provisions of the Leahy-Smith America Invents Act, 78 Fed. Reg. 11,059, 11,077–79 (Feb. 14, 2013) (to be codified at 37 C.F.R. pt. 1).

5. See Robert A. Armitage, Understanding the America Invents Act and Its Implications for Patenting, 40 AIPLA Q.J. 1, 40 (2012).

6. 35 U.S.C. § 102(b) (2006), amended by AIA, Pub. L. No. 112-29, 125 Stat. 284 (2011).

7. See Examination Guidelines for Implementing the First Inventor to File Provisions of the Leahy-Smith America Invents Act, 78 Fed. Reg. at 11,066.

8. 35 U.S.C. § 102(a) (2013).

9. See infra text accompanying note 21.

10. The PCT application must designate the United States.

11. Examination Guidelines for Implementing the First Inventor to File Provisions of the Leahy-Smith America Invents Act, 78 Fed. Reg. at 11,066.

12. Id.

13. Id.

14. Id.

15. Id. at 11,077.

16. See id.

17. See id. at 11,077, 11,079.

18. 35 U.S.C. § 100(i)(1) (2013).

19. See Examination Guidelines for Implementing the First Inventor to File Provisions of the Leahy-Smith America Invents Act, 78 Fed. Reg. at 11,073.

20. See In re Hilmer, 359 F.2d 859 (C.C.P.A. 1966).

21. See supra text accompanying note 12.

22. H.R. Rep. No. 112-98 (2011).

23. Examination Guidelines for Implementing the First Inventor to File Provisions of the Leahy-Smith America Invents Act, 78 Fed. Reg. at 11,066.

24. 157 Cong. Rec. S1496 (daily ed. Mar. 9, 2011) (statement of Sen. Leahy).

25. Id. (statement of Sen. Hatch) (emphasis added).

26. See 37 C.F.R. § 1.130 (2013).

27. Metallizing Eng’g Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946).

Advertisement

The TASA Group: When the property is intellectual, the smart choice is TASA.

 

 

 

Support Hurricane Relief

 

  • About LANDSLIDE

  • Subscriptions

  • More Information

  • Contact Us

Advancing Intellectual Property Law®