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Supplier Global Resource Magazine March/April 2012 : Page 36

Obama stated that the AIA “will help startups and small-business owners turn their ideas into products three times faster than they can today.” At the sign-ing ceremony, Obama touted the AIA as a way to “improve patent quality and help give entrepreneurs the protection and the confidence they need to attract investment to grow their businesses and to hire more workers.” The AIA also provides the protec-tions sought by the technology industry to protect themselves against infringement cases. Costly litigation and patent defense expenses will be greatly reduced because interference proceedings have been repealed, and priority will be based solely on the filing date. One por-tion of the new law places limits on who can be named as respondents in a single lawsuit, a measure aimed at lawsuits that name 50-100 defen-dants in a single case. “In theory, this looked like a serious blow to NPEs. However, in practice, we are seeing NPEs simply filing multiple suits. Over-worked judges have little choice but to consolidate them, at least for discovery,” says John Ward, Partner at Ward & Zinna, LLC, a patent law firm based in New York City specializing in intellectual property. The new law also updates the supplemental examination process allowing the USPTO to “con-sider, reconsider or correct information believed to be relevant” at the request of a patent-holder. That examination can be used by a patent-holder to bolster the strength of their existing patent, protect-ing the patent from third-party attempts to declare the patent unenforceable. Several other cost-saving measures are included in the AIA. The new law reduces the filing fees charged to small entities applying for patents, and allows the director of the USPTO to set and adjust other fees. Importantly, the AIA decreases the percentage of invention-related royalties that must be given to the government, while increasing the per-centage that goes to small-business firms. Post-Grant Opposition Although the AIA eliminates interfer-ence proceedings, it includes provisions for post-grant opposition. This opposi-tion allows third parties to review newly-granted patents and, if applicable, provide the USPTO evidence in objection to the grant of the patent, including that the pat-ent application was derived from another inventor. Third parties may also introduce evidence of “prior art” (e.g. proof the invention had already been invented) to Ward says. “Previously, prior user rights only applied to business method patents. Now they apply broadly. So, for example, a manufacturer using a trade secret pro-cess to make a product will have a per-sonal defense against a later patent. Prior user rights are, however, limited in scope and transferability, and manufacturers will need to document their prior uses.” Pros & Cons Opponents of the AIA argue that the FTF system will favor large corporations with vast resources over small business and indi-vidual inventors. Such small businesses and individuals are unlikely to have the financial wherewithal to quickly file new patent applications. Addition-ally, there are questions about the potential cost-savings claimed by proponents of the AIA. Many argue that the FTF system creates a race to the USPTO with every new idea – increasing the amount of applica-tions filed and associated costs in connection with the preparation and filing of such applications. As a result of increased filings, there will be increased examina-tions at the USPTO and the atten-dant backlogs similar to those in the current system. Although interfer-ence proceedings are repealed, post-grant opposition reviews can be used similarly by deep-pocketed corporations to pre-vent the issuance of new patents and tie up small companies’ resources. “These are all legitimate concerns,” Ward says. “It will be years before we see whether the AIA benefits one group or another. In the short term, the only clear winners are patent attorneys.” In fact, the USPTO has planned a series of cross-country road shows to dis-cuss the proposed rules that will imple-ment the various provisions of the AIA (schedule can be found on USPTO web-site at www.uspto.gov ). The USPTO will use these road shows to educate the public about the various provisions of the new The AIA decreases the percentage of invention-related royalties that must be given to the government, while increasing the percentage that goes to small-business firms. block patents from being issued. “These changes provide new weapons for entities accused of patent infringe-ment,” says Ward. The definition of prior art has also been expanded to include pub-lic use, sales, publications and other disclo-sures available to the public as of the filing date, other than publications by the inven-tor within one year of the patent filing. The AIA also includes provisions for prior user rights. For example, if an indi-vidual or corporation was already using an invention more than a year before a sub-sequent inventor files for a patent on the same invention, then such individual or corporation will have the right to continue using the invention in the same way after patent is granted to another inventor. “This is an important provision,” 36 MARCH/APRIL 2012 WWW.SUPPLIERGLOBALRESOURCE.COM

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